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Aarey to get an upgradeBy: Vinod Kumar Menon Date: 2010-03-21 Place: Mumbai

New equipment and a private player to

get Aarey back in form, says minister.Aarey employees fear lay offs, allege prime Aarey property in Worlimay be sold

The Aarey cow milk supply has dried up and more workers are set to be laid off by year end. Theadvertising revenue has fallen. A number of slow and surreptitious measures are being taken to turnAarey into a sick unit, sources suggest. The closure might mean megabucks, with several partieseyeing the sprawling Aarey plots at Kurla, Goregaon and Worli Sea Face.

Pics/ Rane Ashish, Pradeep Dhivar, Sayed Sameer AbediWorli dairyArea: 14 acresValue:Rs 3,000 cr

goregaonArea: 25 acresCommercialUse not allowed

Kurla dairyArea: 25 acresValue: Rs 700 cr

Price at which milk is procured (approx.)

per litreMadhya Pradesh: Rs 16.04

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Aarey rescue plan

On March 16, 2010, MiD DAY had first reported how Aareywas cutting down on its milk production from 2.5 lakh litresto 1.5 lakh litres per day. Senior political leaders andMantralaya officials are now underplaying the issue, statingthat they have chalked out a mission document for the dairy

which will help resolve all issues. Officials said, "ast month, the daily distribution of Aarey milk was2.50 lakh litres per day, but the supply has now come down to 97,000 litres per day, which isshocking and unheard of in the last 45 years. People are compelled to switch to other brands of cow'smilk and if this continues, the Aarey cow milk supply will only decline further."

RD Shinde, dairy development commissioner confirmed that the supply of cow's milk was affected dueto the procurement price of the milk going up. "We are still paying the old rate of Rs 12.50 per litre tothe cooperatives, while private players are already paying the farmers a higher price ranging betweenRs 14 to Rs 16 per litre. This has affected the supply coming to Aarey. We have requested thegovernment to increase the rate from Rs 12.50 to Rs 13.50. They are considering it."

The inside story

Officials attached to the dairy have a different version tooffer. Some of them on condition of anonymity told SundayMiDDAY that the problem would not have erupted if the highpower committee constituted by the state government hadtaken firm decisions on the fluctuating milk prices in acabinet meeting held in July 2009. The committee includedsenior dairy officials and officials from the financedepartment, who have been unable to resolve the issue tilldate.

Vested interests

According to dairy officials, a few individuals in positions of power have vested interests and it's intheir interest to portray the Aarey milk unit as a sick unit. The ad revenue for the dairy, which used tobe approximately Rs 80 to Rs 90 lakh a year, was withdrawn by the government a decade ago. Allrecruitments have been frozen.

Earlier, the dairy employed over 13,000 people, but with thegovernment saying manpower was in surplus, the numberswere cut down to 8,000. Since production has beenadversely affected, the dairy carried out an internalassessment and found that over 2,000 employees wereunder-utilised. This means the numbers could further dropto 6,000 by the next financial year. Officials clarified thatthose relieved from the dairy will have to be shifted toanother government department. Ironically, of these 6,000employees, 80 per cent are expected to retire in the nexteight years, leading to the dairy's possible closure.

The officer further added that the dairy equipment had notbeen upgraded for years, and the production capacity hadbeen underutilised. The annual budget for the dairy, whichincludes staff salary for 8,000 odd people, is Rs 600 crore;that's not even 0.55 percent of the entire state budget ofapproximately Rs 30,000 crore. "Today, we are forced tosupply toned milk due to the non-availability of cow's milk in Mumbai, and ifnothing is done to sort out the issue, it won't be long before the dairy shuts down," the officer said.

TamilNadu: Rs 15.08Andhra Pradesh: Rs 14.82Gujarat: Rs 14.18,Karnataka: Rs 13.22Maharashtra: Rs 12.50

Price at which cow's milk is procured by

Aarey VS private brands in

Maharashtra (approx.)Mahananda: Rs 13.50Gokul: Rs 13.00Dynamic: Rs 13.00Parag: Rs 13.00Amul (Vashi): Rs 17.30Haldiram: Rs 15Aarey: Rs 12.50

Current status of dairy development

department>>Decline in Government milksale in last 10 years: 66 per cent(6.85 Lakh Liter Per Day (LLPD) in1997-98 to 2.35 LLPD in 2208-09)>>Increase in other Co-operativesale in last 10 years: 84 per cent(3.63 LLPD in 1997-98 to 25.09LLPD in 2008-09)>>Dairy department has 8,472staff members out of which 2,233are in surplus.

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RD Shinde, dairy development commissioner told Sunday MiDDAY, "The matter is being discussedwith the state government and we are hopeful that the issue will be sorted out."

Uncertain future

Officials working in all three units of Aarey at Worli, Kurla and Goregaon are anxious about theirfuture. They claim that the Worli dairy is a gold mine. Spread over 14 acres of prime real estate, it

has a market value of over Rs 3,000 crore, while the Kurla and Goregaon dairies take up 25 acres ofland each. While Kurla can easily fetch a market value of approximately Rs 700 crore, Goregaon beingin the Green Zone area, cannot be used for commercial purposes.

Aarey makeover

The buzz is that the state government may bring in a thirdparty like the National Dairy Development Board (NDDB)and appoint consultants to review the capacity of all threedairies. One dairy may be shutdown, and the other twomodernised, suggest sources. The prime plot may soon besold and a commercial structure may come up in its place.

Sachin Ahir, Minister of State Housing and Environment, inwhose constituency the Worli dairy falls, said, "Thegovernment move is not to sell the dairy or dairy land butupgrade the dairy with the assistance of a private player.Aarey could not sustain market competition due toglobalisation. The production of milk and milk products isless and demand is more. The brand (Aarey) is strong andwe need to revive it by modernising the dairy and installingnew equipment. I am closely working with the State Ministerfor Animal Husbandry, Dairy and Fishery Dr Nitin Raut,whose ultimate aim is to give a face-lift to the dairy."

Ahir clarified that the dairy land cannot be used for anyother purpose, so the question of selling the property didnot arise. He said the dairy staff needs to work towardshigher goals rather than sticking to defunct ideologiesdevoid of an action plan.

"A mission development plan was recently discussed recently in the cabinet. Here, we laid downproposals to upgrade the state-run dairy. The special task force consisting of dairy experts from theNational Dairy Development Board would carry out a feasibility study of Aarey and submit a report tothe cabinet. NDDB is responsible for making brands like Amul in Gujarat, Nandini in Karnataka mostprofitable. Maharashtra, which was earlier called the pioneer in milk supply and slipped to fourthposition, leaving Gujarat at number 1, followed by Karnataka and Andhra Pradesh. We need to comeback to the number one position. Only NDDB under the leadership of Sharad Pawar, can sail the Aareyship out of rough weather," said an NCP leader. Sunday MiD DAY has a copy of the plan. Whencontacted, State Minister Nitin Raut said, "As the assembly is in session, I cannot comment on thesubject but we are working towards the upgradation of the dairy and the problems will be sorted outsoon."

AareyMilk Colony was set up in 1949. The dairy at Goregaon East was the first to be set up

This is the first in a four-part series investigating problems that ail the Aarey dairy

Highlights from the Dairy Development

Vision 2015 Plan>>Goals of the dairy departmentinclude merging two or moresocieties if their average milkcollection is less than 36 litres perday during the last year. Try tokeep one DCS only per village.>>Inviting NDDB (National DairyDevelopment Board) to promoteproducer company/ newgeneration cooperatives inMumbai, Vidarbha, Marathwadaand Konkan.>>Immediate steps requiredinclude initiating action to convertAarey milk colony in to 'WorldDairy Centre'>>Preparing a state dairy plan asa part of the National Dairy plan

and get the required funds.

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