Dr Verghese Kurien was the man responsible for Operation Flood, which helped India achieve a high level of self-sufficiency in milk production. He answered Outlook's queries on the possible impact of milk imports.
Do we need to import milk?
Our per capita access to milk now is more than 200 grams a day. That seems to be in line with our purchasing power. If there were a rapid increase in incomes, then possibly there would be a need for imports at the margin. As of today, some of our urban elite may feel the need for speciality cheeses. If they want to import cheese or foil-wrapped chocolates, thats up to them.
Will imported milk be cheaper than Indian milk, given the heavy subsidies the Wests dairy sector enjoys?
We produce milk at a very competitive cost. Therere indeed subsidies in the West. If domestic prices for milk powder in the US are $700 or $800 per tonne more than the price at which they sell milk powder abroad - and if the same is true for the EU - then clearly therere subsidies. The Uruguay Round agreements on agriculture did not do away with those subsidies. Its more a matter of modest reductions of tonnage and subsidy amounts thatll still end up being very substantial. Indian milk is safe unless these subsidies are further raised.
What effect do you think such subsidised imports will have on Indian milk producers and manufacturers of milk products?
Theres little doubt, and youve only to look at edible oil prices to see its true, that if large volumes of subsidised or low cost commodities come in, itll have a negative effect on farmers. Producing milk isnt a hobby for our farmers, its their source of income. If a competitor has access to his governments exchequer and drives down our farmers milk prices, in time well have farmers reducing investments in producing milk. If it continues, farmers will sell their milch cows and exit dairying. Our milk prices will rise and foreign milk will start coming in at a much higher cost to our foreign exchange and to our consumer.
How can we prevent Indian dairy farmers sinking into the morass they were in prior to Operation Flood?
As the government seems committed to globalisation the responsibility lies with farmers and our cooperatives. Theyve to redouble efforts to produce more milk, raise productivity and ensure quality. We need a government policy. Support-import duties should serve national interests no less than that of the Western nations do. We need legislation in areas like animal disease prevention. We need to provide cooperatives with a level playing field legally, in terms of subsidies etc. We need to recognise that enacting laws to protect quality are a governments legitimate role, not an unnecessary obstacle to free enterprise. As to the wtos effect on Indias milk producer, one should look at its effect on the world. If our dairy industry grows, India will be a threat to advanced dairying nations.