Onderstaand artikel is gepubliceerd in: New Age, 29-12-1985      

Lid Off Operation Flood Indian Dairy Being Destroyed


NEW DELHI: "Operation Flood" has been a big disincentive to our milk producers. The whole operation or the socalled white revolution is like the green revolution, the brainchild of the transnationals, imposed on us to depress our bid for self-reliance and increase our dependence on the European Economic Community's surplus milk and butter. Operation Flood I started in 1970.

The India Committee of the Netherlands has unleashed a campaign exposing the game behind the 'operation flood' and demanding "EEC MILK OUT OF INDIA". It aims at stopping the vicious circle of India importing EEC milk and milk products and exporting animal feed to fatten EEC cattle and other animals.
Through this scheme India was to have become self-reliant in milk supposedly by end of 1985. The year is ending but we are nowhere near self-sufficiency. The whole point is that with the total export India has made to the EEC of animal feed, it could produce six to 10 times the amount of milk it has received from the EEC, under the 'operation flood II, 1978-85'.
The EEC dairy aid actually assists the TNCs engaged in food business to produce the socalled babyfood milk-formula that is causing malnutrition to millions of our babies. Also, under this program crossbreeding of animals is being carried out which is bringing considerable genetic changes to the detriment of our cattlestock. This export business is also treating a shortfall in coarsegrains.
For the ]986-1990 period too India has sought the EEC dairy aid. The final decision is to be taken by April next year. But must this happen? What do the facts indicate?
The decision about possible new dairy aid to India and the conditions under which this takes place, will also be or great importance for EEC dairy aid in general. The EEC is spending around Rs 1800 million a year on dairy aid out of its surpluses.

Ineffective form of food aid
Even the European Commission (and more particularly the European parliament) have criticized this ineffective and often harmful form of food aid. Pressure from the European Parliament has brought down the amount of donated milkpowder from 150,000 ton in 1983 to 108,600 ton; the amount of butter-oil has been brought down from 40,000 ton to 28,700 ton.
The objections to dairy aid as a costly and dangerous type or aid (in the sense that new consumer habits are created and lead to commercial imports in the future) are sound.
According to a recent EEC statement it is 'an ideal mannner of development cooperation', which can be a model for other developing countries. Pakistan, the Philippines, Sri Lanka and China have now also asked for EEC dairy aid for program similar to Operation Flood.
Is a spreading of the Operation Flood model a good reason for the EEC to keep on giving massive amounts of dairy aid? Or is it just another manner of developing export markets for dairy products under the guise of aid, at least as long as the dairy surpluses last?
The recent cut backs in milk production in the EEC will probably make massive dairy aid much too expensive, both for export promotion and for the 'humanitarian purposes' it is supposed to serve.
India's bovine population of more than 240 million plays a very important role in economy. More than three quarters of all the energy used in the rural areas is provided by animal draught power. Milk is usually not the first purpose but an important by-product of catlle-keeping. Buffaloes produce around 60 per cent of India's total milk production.
In 1970 the biggest dairy program in the world was launched in India to improve the flow of milk to the cities and to increase milk production. The project is being implemented by the National Dairy Development Board (NDDB) and the Indian Dairy Corporation (IDC). For this project the EEC agreed to give the following amounts or dairy aid to India:

Skimmed Milk Powder (SMP)
Butteroil (BO)
Operation Flood I
1970-1975 (extended to 1981)
126,000 tons
42,000 tons
Operation Flood II
186,000 tons
76,000 tons

The donated milk powder and butteroil is recombined here into milk and sold in the cities. The proceeds of this are being used for building dairy and cattle-feed plants, transporting milk the cities, developing improved dairy-cattle and other expenses.
All of it is being handled through a system of cooperatives, cooperative unions and state-level federations of unions (the socalled Anand model of Gujarat). The operation Flood II program has recently been extended to 1990, because of considerable delay in the implementation.
The results of Operation Flood are disappointing, especially judged against the original objectives. The target of providing more milk to the rural poor in order to improve their protein-intake, has been tacitly discarded.
For more than half of the city population milk is too expensive as a food product. Not so for higher income-groups in the city who can now buy milk for a price reasonable for them.
In the rural areas it is especially the bigger farmer and to a much lesser extent the small farmer who profit from the project. For landless labourers it hardly offers any perspective, primarily because they lack their own animal feed resources.
Women, who usually take care of the cattle, are rarely members of the cooperative. The village cooperatives themselves are mostly dominated by the (relatively) rich in the villages. About two-third of all the funds for Operation Flood were spent on building large-scale dairy plants.
This has caused loss of gainfull employment in the villages. For increasing milk production NDDR and IDC have also chosen a capital-intensive strategy of exotic cross-breeding and growing green fodder on irrigated land.
One of the main objectives of Operation Flood II was to create a self-sustaining dairy industry by mid-1985. Instead we are now more dependent on imports than ever. The Operation Flood dairy plants in New Delhi are still making 55 per cent of their total milk output out of skimmed milk powder and butteroil. In Calcutta this is 74 per cent.
Between 1979 and 1985 India received 20,000 tons of skimmed milk powder (SMP) in excess of the earlier agreed amount for that period. In 1975 commercial imports of SMP stopped but in 1984 India imported more than 25,000 tons of SMP from the USA.
More than three quarters of this were commercial imports at dumping prices and the rest was donated. (See table I for further details.) For the period 1986-1990 India has again asked the EEC for dairy aid. An internal EEC note states: "The Operation Flood system itself appears largely dependent on the EEC food aid".
An important cause of the continuing dependence on dairy imports is the political importance of supplying relatively cheap milk to the middle and higher income-groups in the cities. EEC dairy aid and cheap American milk powder are used for this.
The imported milk powder and butteroil is being resold by the IDC from a national bufferstock to the Operation Flood dairy plants for a price which makes recombined milk cheaper than fresh milk.

A closed circle
The National Cooperative Dairy Federation of India, the umbrella organisations of federations and unions under Operation Flood, has condemned this because it has depressed the price of milk for the local producers (especially in the northern and eastern parts of India). This reduces the supply of milk to cities like New Delhi and Calcutta which in turn necessitates dairy imports. This has become a closed circle.
A second cause of import-dependency is the fact that most of the indigenously produced milk powder and butteroil is used for manufacturing luxury dairy products like table butter, chocolate and and in particular, babyfood.
This milk powder and butteroil is officially meant to supply the cities with extra milk. Now imported dairy products are used for this. Continuing dairy aid or cheap imports is also attractive for the project-authorities because reselling these products brings in money for further investments in Operation Flood.

Export of dairy products from the EEC to India (in tons)

skimmed milk powder
non-skimmed milk powder
butter, fat content till 85%
butter, fat content more than 85%
condensed milk
infant food
Source: Commodity Board for Diary products, world trade in dairy products reports.

The Operation Flood dairy plants are fast increasing their production of baby milk powder or socalled breast-milk substitutes. Especially AMUL, the brand name of the cooperative federation of Gujarat, is a market leader in this field. Multinational companies like Nestle, Glaxo and Unilever operate in this lucrative market also.
The increase in bottle feeding of babies is a big problem. Baby milk powder is often too much diluted with frequently contaminated water and people are in no position to sterilize water and bottles. The result is that hundreds of thousands of babies suffer from diarrhoea and malnutrition.

Baby-foods herald death
A number of them die because of this. The baby-food industry now tries to influence mothers to use baby milk powder, even though 98 per cent of all Indian women are perfectly able to breastfeed their baby. Furthermore bottle feeding is inferior to breast feeding in many respects and it is very expensive.
Research shows that the incidence of bottle feeding in urban areas of different parts of India is around 20 per cent in poor families and 60 per cent in middle class families. AMUL is especially active in promoting baby milk powder in rural areas.
In December 1983, after much pressure of voluntary organisations of concerned citizens, the ministry of social wellfare published the national code for protection and promotion of breastfeeding.
This code is the Indian follow-up of the international code of the World Health Organization (WHO), which was signed by 118 countries including India. Both codes include a ban on any advertising or other forms of promotion to the general public of breast milk-substitutes, besides urging a number of other measures.
The cooperative and multinational dairy industry in India is still violating many articles of these codes. For example, advertising continues and contrary to the code there is still a big picture of a similar baby on the can.
What is the link between EEC dairy aid and the production of baby-food in India? Dairy aid enables the cooperative dairy industry to use about half of India's indigenously produced milk powder for manufacturing baby-food, because the donated dairy products make up the shortage of milk in the cities.
Dairy aid also provides the finances to build dairy plants with facilities for producing baby-food. A relatively small part of the EEC dairy commodities is being sold directly by IDC to both cooperative and multinational baby-food manufacturers.
One of the main objectives of Operation Flood is rearing a national milk herd by 1990 of about 15 million cows and she-buffaloes with a high milk production potential. This will be done through a large-scale cross-breeding program of Indian cows with western dairy cattle and by the indigenous cross-breeding of buffaloes.
The cross-breeding programme has thus far only partly been implemented (there are now about two million upgraded milk animals) but the democrates are pleading for vigorous steps to reach the target. If this happens it will have far-reaching consequences for small farmers in particular.
What are the problems? Indian cows and buffaloes are very well adapted to the heat and humidity of most regions in India. Cross-bred cows are much less adapted to Indian conditions. They need good shelter, a lot of clean water and are susceptible to tropical diseases. Research also shows that a cross-bred milk animal is a risky and hardly profitable investment for a small farmer or a landless labourer.
The cross-breeding program, if fully executed, will cause a considerable reduction in the number of suitable (male) draught-animals. The male progeny of cross-bred cows are generally less fit as draught-animals and need 50 per cent more feed.
Therefore cross-bred bull calves are usually starved or slaughtered by their owners. Focusing un cross-breeding will also lead to an even bigger shortage of animals, need a lot of concentrate feed and the green fodder to be useful for their purpose, while the indigenous cattle population can mostly be fed with crop-residues and natural herbage and small amounts of concentrate feed.
Large scale cross-breeding will also have a negative effect on the food supply situation. Even now coarse grains like burley and millet - often the only food that the poor can afford - is partly being used as animal feed.
According to recent research, ten million cross-bred cows (as planned in 1990) will eat so many more calories in the form of grain than they produce in the form of milk, that at least 13 million people could be fed on this negative energy balance.
Other research shows that distributing the scarce amount of concentrate feed in small quantities to the cows and buffaloes which are now undernourished, would lead to a higher national milk-production, than feeding most of this same feed to cross-bred cows.
A number of organizations and scientists in India have sharply criticised the cross-breeding program. Nevertheless the Dutch ministry of development cooperation has plans to finance the delivery of frozen semen of Dutch bulls and cryogenic storage facilities (produced by Philips) in order to support cross-breeding programs in India.
While receiving dairy aid, India at the same time exports large quantities of concentrate feed (mainly oilcakes) to the EEC and other parts of the world. At present India is exporting more than 1.5 million tons of feed a year, with a value of around Rs 800 million. Despite this, most experts view the shortage of animal feed in India as the biggest constraint to the development of milk production.
With a share of around 50 per cent the EEC is by far the biggest importer of Indian animal feedstuffs. These feedstuffs are being used as ingredients by the European compound-feed industry to produce balanced high-protein and high-energy food for cows, pigs and poultry.
The EEC does not import from India or elsewhere because of a shortage of animal feed. In fact there is a enormous surplus of feed-grains, but grain-substitutes are used because they are cheaper.
The Netherlands, West Germany and Britain are the most important importers of Indian animal food. The Netherlands alone importod in 1983 about 15 per cent of India's total feed-export.
The export of Indian feed is promoted by Indian and multinational animal-feed manufacturers who build their factories close to the cities. In rural areas there is very often hardly any concentrate feed available or it is too expensive.
Because of the export the already existing shortage of feed becomes even bigger, which leads to a higher price for these products on the Indian market. This is especially detrimental to small farmers and landless labourers with only one or a few dairy animals, because they have little or no crop-residues.
The export of feed also has negative effects on the food situation of the poor because it stimulates the use of coarse grains for animal consumption. The first increasing production of soyabeans (mainly in Madhya Pradesh) is even directly threatening food production.
This is because the beans are specially grown for the export of the 'residual' protein-rich oilcak as animal feed. Soyabeans are replacing nutritive foodcrops like pulses, and oilseeds like groundnuts which give a much higher output of edible oil.
If India did not export any animal feed, it could produce between six to ten times more milk, than it received on average in the form of EEC dairy aid during Operation Flood II. Stopping the export of animal feed would very probably have a positive effect on India's dairy development.
The price of concentrate feed would decrease, which would make it more attractive for the milk producers to feed their animals better. A lower price for oilcakes would also discourage green fodder production which would be positive for food production.
A number of independent Indian scientists and even the UN mission that evaluated Operation Flood I, have supported the idea of stopping Indian animal food exports. Quite a number of organizations and scientists in India have pleaded for an alternative dairy policy, sometimes focussed on specific aspects. Operation Flood has not lived up to its promise.
The original objectives like improving the incomes of small farmers and landless labourers should still be the premises for any dairy policy in India. Such a policy can hardly be divorced from more radical steps, like land reforms. In the general situation of inequality and poverty for the majority.
For landless labourers specifically no other dairy policy by itself offers any significant chance on extra income. They do not have free crop-residues at their disposal, this being almost indispensable for keeping dairy cattle.
Improving the income of the small milk producers with some land, could be achieved by increasing the price he or she gets for the milk and by lowering the price of concentrate feed. Stopping dairy aid and feed exports will contribute to that.
An alternative dairy policy should also pay much attention to improving the traditional processing of milk in the villages and supplementing this with small-scale factory processing. This will have positive effects on employment.
It will also make available more dairy-products for consumers in the rural areas, especially the cheap and nutritious buttermilk, a byproduct of the production of clarified butter (ghee).
An appropriate dairy policy for India would be one where animal husbandry (including dairying) and food crop production supplement each other and do not compete for land or other means of production. About half of the Indian population is still undernourished and does not even have enough elementary food like grains, pulses and vegetables.
Therefore the increase in milk production should not be pushed at the expense of food crop production, as happens now. Instead of the present cross-breeding strategy more attention should be given to the breeding of 'dual-purpose cattle', suitable as draught-animals and more productive milk-animals.
The buffalo should remain the pre-eminent milk-animal because it converts crop residues and natural herbage most efficiently into milk. Improving the now heavily overgrazed village commons can be another important contribution to a better feed and fodder supply.


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