A Comfed Zone In Lalooland

Bihar today is a synonym for all things bad. From economy to education and governance to social degradation—everything is at its nadir. Most of all, the economy. In a depressing scenario where a total of 54 state-owned corporations are helplessly swimming in an ocean of red, a lone cooperative federation is quietly spearheading the state's white revolution and actually making a tidy profit.

Comfed, or the Cooperative Milk Producers' Federation Ltd, is Bihar's only cash cow. Its "Sudha" brand milk and products are already the flavour of the state. The federation's annual turnover of Rs 300 crore accounts for almost 10 per cent of the state's gross domestic product of Rs 3,200 crore, easily outstripping any other state unit in performance. During 2000-01, Comfed clocked an operating profit of Rs 15 crore. "Today, Comfed is the only glittering star on the industrial horizon of the state," boasts its managing director, Dr Arunish Chawla.

Comfed made a modest beginning as part of Operation Flood, the government's name for the white revolution which gave us Amul. But it took off as a cooperative federation in April 1983 during the second phase of Operation Flood. It's an autonomous cooperative federation with the secretary, animal husbandry and fisheries department, as its chairman. The story of the initial years was one of losses, just like any of the four dozen corporations of the state. In the early '90s, the accumulated losses stood at Rs 18 crore. "This was mainly because Comfed was expanding," explains Chawla.

The expansion bore fruit. Even a decade ago, Comfed was only 1 per cent of Amul in terms of turnover, but now it has grown to one-sixth. "There's been a complete turnaround. Even the Gujarat Cooperative Milk Marketing Federation (GCMMF at Anand in Gujarat, owner of the Amul brandname) admits that if there is one milk cooperative federation running close to them, that's Bihar's Comfed," gushes Chawla. "The day is not far away when like Amul in Gujarat, Bihar too would be known by Sudha," he hopes.

Today, Comfed has around 30 small and big milk plants covering 32 districts of the state. There are 4,000 milk cooperatives under it, which serve more than 2 lakh rural homes. The average daily production is 3.31 lakh litres. The number of artificial insemination centres has shot up from 293 in 1994-95 to 743 last year.

Under the Sudha brandname, Comfed has a range of products catering to different categories of consumers. It sells four types of milk, ghee (clarified butter), peda (sweets), curd, lassi (curd drink), butter, sweets and a variety of ice-creams. Marketed through thousands of Sudha milk parlours and retail outlets in the state, the ice-cream range especially enjoys about 50 per cent marketshare and has cut into the slice of big brands like Kwality and Vadilal.

Comfed has several firsts to its credit. The federation is the first in the country to introduce sugar-free ice-cream aimed at diabetic and health-conscious people. It has also introduced free home delivery of milk. This scheme is based on a pass-book system and the milk is delivered at the customer's doorstep. But Comfed's most important contribution has been the difference it has made to lives of the women in a state where gender discrimination and repression has had a long history.

Bihar's women have not only got a fair representation in Comfed, but among state dairy federations, it has employed the largest number of women in its various programmes, including in the decision-making process and tasks that need superior managerial skills. While the women's dairy development programme was started in 1987, Comfed has managed to organise around 475 women's dairy cooperative societies. These are about 13 per cent of the total dairy members.Last year, Sita Sinha, secretary of the Sarairanjan village dairy (Samastipur district), which handles about 70,000 litres of milk a day, received a national award for women.

Comfed has drawn up big expansion plans for the next six months. It is all set to enter the fruit and vegetables business and will develop litchi products for exports. Honoured with three awards from the National Productivity Council and the National Commission for Women, Comfed has received global recognition recently. It has bagged two prestigious international food quality certifications, ISO 9001: 2000 and HACCP (ISO 15000: 1998), which only GCMMF had before it.

Apart from being the largest milk manufacturer in eastern India, Comfed transports one lakh litres of milk every day to Mother Dairy, Delhi. "The quality of our products is unbeatable in the markets of eastern India today and that is why we're better than Mother Dairy, Calcutta, and Mother Dairy, Delhi. Besides, we've already entered the markets of Calcutta, Uttar Pradesh, Orissa and parts of the northeast," says Chawla.

That's very good news in a state that's been reeling under severe industrial and economic decline since it was bifurcated, with Jharkhand taking away most of its natural resources and big industry. Its per capita income is now Rs 4,000. In fact, Bihar's state units could well be bringing up the rear of loss-making public sector units in India, with huge accumulated losses and debts. Till 1999-2000, the Bihar State Road Transport Corporation had made a loss of Rs 455.60 crore, the Bihar State Finance Corporation had notched up a figure of Rs 541.03 crore, and the Bihar State Sugar Corporation's losses till 1994-95 was Rs 428.42 crore. The Bihar State Electricity Board (BSEB), a statutory corporation of the state government, had a whopping accumulated deficit of Rs 3,654.26 crore against loans of Rs 5,143.80 crore at the end of March 1999. Out of these loans, Rs 610.23 crore is share capital and the remaining Rs 7,558.39 crore is made up of long-term loans. Total investment in 54 units (50 government companies and four statutory corporations) of the state government as on March 31, 2000, was Rs 8,168.62 crore. According to latest finalised accounts (which are difficult to find as some companies have not finalised accounts for 23 years!) for 37 companies and three corporations (apart from BSEB), these had incurred an aggregate loss of Rs 133.83 crore and Rs 2,647.15 crore respectively.

The latest CAG report for the year ending March 31, 2000, has been scathing in its criticism of the state's economic performance. It concludes that "unless the state government improved its financial and fiscal management and took steps to prevent the endemic frauds and financial irregularities in its departments and improved tax compliance, the financial decline of the state cannot be checked". The state's liabilities grew by 13 per cent, while assets declined by 0.72 per cent in 1999-2000, mainly due to a 48 per cent growth in the deficit. A huge Rs 2,060.67 crore was drawn during the year from the cash balance, over and above the receipts, to meet mounting deficits. The revenue deficit, for instance, increased by Rs 1,436 crore (63 per cent). Even as revenue receipts increased by 15 per cent, their relative share in government spending went down from 71.7 per cent in 1998-99 to 63.95 per cent in 1999-2000.

Against such a backdrop, Comfed stands out as a bright beacon of hope, breaking the pessimistic belief that no industry can survive in the state, forget making profit. The federation claims to plough back Rs 250 crore every year directly into the hands of rural farmers. It gives 65 per cent of its earned profit to farmers and cooperatives as bonus, dividend and development fund, while 35 per cent is used for plant and machinery maintenance.Comfed's growth has certainly been in geometric progression. "Dairy cooperatives act like a bridge between rural farmers and an organised market. This cannot be brought about by any multinational company," says Chawla. He feels such organisations must remain the core of all efforts to develop a primarily rural economy like Bihar's. And may their tribe increase.