We are urging:
- phase out dairy aid to India within two years
- no dairy aid for bottle feeding
- no aid for exotic cross-breeding in India
- stop EEC animal feed imports from India
India Committee of the Netherlands / Landelijke India Werkgroep, 1985
For 15 years already the EEC is supplying India with large amounts of dairy aid for the national dairy development programme called Operation Flood. The official aim of this programme is to make the country self-sufficient in milk production. At the same time India is exporting even larger amounts of highly nutritive concentrate feed to the EEC, while there is a serious shortage in India itself. With this feed India could produce many times the amount of milk that it has received as dairy aid for Operation Flood. One of the reasons for this strange situation is that dairy aid is depressing the local milk price for producers and because export is sending up the price of concentrate feed exports. Dairy aid also plays an important role in the production of babyfood, to the detriment of hundreds of thousands of babies. As part of Operation Flood a cross-breeding programme of Indian cows with western dairy animals is being implemented. The programme will lead to a reduced availability of coarse foodgrains, concentrate feed and animal draught-power.
India has asked the EEC for dairy aid from 1986 to 1990. In the first half of 1986 (probably March) a decision will be taken on this. The Operation Flood programme in India has already been extended to 1990, whether the extra dairy aid will be given or not. Another five years of dairy aid to India and the continuation of EEC animal feed imports, will most probably reinforce the more objectionable aspects of this programme and constrain a healthy development of dairying in general.
The decision about possible new dairy aid to India and the conditions under which this takes place, will also be of great importance for EEC dairy aid in general. The EEC is spending around 1800 million rupees a year on dairy aid out of its surpluses. 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 butteroil has been brought down from 40,000 ton to 28,700 ton. According to a recent EEC policy paper (Food Aid for Development, 1983) objections to dairy aid as a costly and dangerous type of aid (in the sense that new consumer habits are created and lead to commercial imports in the future) are generally sound. Depression of local food prices by food aid should be avoided, according to this document.
An exception to all this self-criticism is made for Operation Flood. According to a recent EEC statement it is 'an ideal manner 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 programmes 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.
Operation Flood: disappointing results
India's bovine population of more than 240 million (181 million zebus and 63 million buffaloes) plays a very important role in its 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 cattle-keeping. Buffaloes however do produce around 60% of India's total milk production. In 1970 the biggest dairy programme 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 European Economic Community (EEC) agreed to give the following amounts of 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 in India into milk and sold in the cities. The proceeds of this are being used for building dairy and cattle-feed plants, transporting milk to the cities, developing improved dairy-cattle and other expenses. All of it is being handled through a system of village cooperatives, cooperative unions and state-level federations of unions (the so-called Anand model of Gujarat). The Operation Flood II programme has recently been extended to 1990, because of considerable delay in the implementation. It is not yet sure whether EEC dairy aid for Operation Flood will be extended after 1985 as well.
Compared with the way EEC dairy aid is often used in other developing countries Operation Flood certainly has positive aspects. In India the donated dairy products are not dumped indiscriminately: revenues are being used to expand the indigenous Indian dairy industry. Also the cooperative approach has clear advantages for milk producers, because it gives them a guaranteed outlet for their milk against a stable price.
As a whole the results of Operation Flood are nevertheless 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 thirds of all the funds for Operation Flood were spent on building large-scale dairy plants. This has caused loss of gainful employment in the villages. For increasing milk production NDDB and IDC have also chosen a capital-intensive strategy of exotic cross-breeding and growing green fodder on irrigated land.
The EEC constantly praises Operation Flood as an exemplary dairy project. That claim turns out to be a considerable exaggeration. It is even more important to look much closer at the role the EEC is playing in India's dairy development.
That's what the following four Points for Action are all about.
point for action 1
phase out dairy aid to India within 2 years
One of the main objectives of Operation Flood II was to create a self-sustaining dairy industry by mid-1985. Instead India is now more dependent on imports than ever. The Operation Flood dairy plants in New Delhi are still making 55% of their total milk output out of skimmed milk powder and butteroil. In Calcutta this is 74%.......................................................................................................
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 56,000 tons of SMP from the USA. More than three-quarters of this were commercial imports at dumping prices and the rest was donated. 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. The National Cooperative Dairy Federation of India, the umbrella organization of federations and unions under Operation Flood, has condemned this because it depresses 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. The circle is closed.
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 in particular, babyfood. This milk powder and butteroil is officially meant to supply the cities with extra milk. Now imported dairy products are usedfor 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.
Because of the created dependency, Indian dairy imports can probably not be done away with immediately. The EEC is now in the process of reducing its dairy surpluses. Five more years of unconditional dairy aid will probably confront India with a situation in 1990 in which dependancy on imports has again increased, dairy aid is no more available and the world market price for dairy products has risen considerably. At the same time this aid will keep on depressing the milk price for the local producer.
Instead, phasing out dairy aid and stopping all commercial dairy imports within a few years, in the meantime taking care that it does not compete with fresh milk, will very probably lead to a higher producer price in the north and the east. This could cause an increase in the milk supply to the cities and a better capacity utilization of the dairy plants. Whether to subsidize specific groups of producers or consumers becomes a clear matter of internal political choice, where it now is a more or less 'covert consequence' of the way dairy aid is being used.
We urge the governments and parliaments of the EEC member countries, the European Parliament and the European Commission to:
phase out dairy aid for Operation Flood within two years.
For this period dairy aid should only be given under the following conditions:
the milk prices for the producers in some northern and eastern states should be simultaneously raised by a certain amount
the donated dairy products should be sold to the dairy plants for a price which makes recombined milk slightly more expensive than fresh milk
the National Code for Protection and Promotion of Breastfeeding should be observed fully by the dairy federations who want to buy donated dairy products from the Indian bufferstock.
|Export of dairy products from the EEC to India (in tons)|
|skimmed milk powder||27,333||67,424||55,977||4,876||38,709|
|non-skimmed milk powder||388||153||100||25||32|
|butter, fat content till 85%||538||3,340||4,325||29||3,053|
|butter, fat content more than 85%||13,655||15,205||11,321||156||13,491|
|Source: Commodity Board for Dairy products, Worldtrade in dairy products reports. |
point for action 2
no dairy aid for bottle feeding
The Operation Flood dairy plants are fast increasing their production of baby milk powder or so-called breast-milk substitutes. Especially AMUL, the brand name of the cooperative federation of Gujarat, is a market leader in this field. Multinational companies like Nestlé, Glaxo and Unilever operate in this lucrative market also.......................................................................................................
The increase in bottle feeding of babies is the cause of big problems. Baby milk powder is often too much diluted with - frequently contaminated - water. Most people in India are in no position to sterilize water and bottles. The result is that hundreds of thousands of babies suffer from diarrhoea and malnutrition. A number of them die because of this.
Nevertheless the baby-food industry tries to influence mothers to use baby milk powder, even though 98% 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% in poor families and 60% in middle class families. AMUL is especially active in promoting baby milk powder in rural areas also.
In December 1983, after much pressure of voluntary organizations of concerned citizens, the Indian ministry of Social Welfare published the National Code for Protection and Promotion of Breast-Feeding. 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 smiling baby on the can. Many organizations, cooperating in the National Alliance for the Nutrition of Infants, are protesting against this.
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 babyfood-manufacturers.
In May 1981 all member countries of the EEC voted for the international code of the WHO. The European Parliament has twice adopted a resolution in which the European Commission was asked to introduce a directive to ensure the strict application of the international code, including the promotional and sales activities of EEC-based firms in developing countries. Because of pressure of the babyfood industry in the EEC, which want only some watered-down 'company codes', there is yet no directive.
We urge the governments and parliaments of EEC-member countries, the European Parliament and the European Commission to:
take the necessary steps to implement the international code for the marketing of breastfeeding substitutes in the form of a directive for EEC-based firms and for dairy aid of the European Community itself;
deliver donated dairy products to India (during a period of not more than two years), only if it is definitely established that the companies to whom these products will be sold are abiding by the Indian National Code for Protection and Promotion of Breast-Feeding.
point for action 3
no aid for exotic cross-breeding in India
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 programme 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 Indian government commissions 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 suited 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 programme, 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% more feed. Therefore cross-bred bull calves are usually starved or slaughtered by their owners. Focusing on cross-breeding will also lead to an even bigger shortage of animal feed than already exists in India today. This is because upgraded milk animals need a lot of concentrate feed and 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 barley 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 criticized the cross-breeding programme. 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 programmes in India.
We urge the governments and parliaments of the EEC member states, the European Parliament and the European Commission to:
We urge the Dutch ministry of Development Cooperation:
- not to support any cross-breeding programmes in India.
point for action 4
stop EEC animal feed imports from India
While receiving dairy aid, India at the same time exports large quantities of concentrate reed (mainly oilcakes) to the EEC and other parts of the world (mostly Eastern European countries). At present India is exporting more than 1,5 million ton of feed a year, with a value of around 800 million rupees (around US $ 250 million). Despite this most experts view the shortage of animal reed in India as the biggest constraint to the development of milk production.......................................................................................................
With a share of around 50% the EEC is by far the most important 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, Germany and the United Kingdom are the most important importers of Indian animal feed. The Netherlands alone imported in 1983 about 15% 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 especiall 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 fast 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 oilcake 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 feed exports.
We urge the governments and parliaments of the EEC-member countries, the European Parliament and the European Commission to:
We urge the compound feed industry:
- to stop the import of animal feed from India.
an alternative dairy development policy
Quite a number of organizations and scientists in India have pleaded for an alternative dairy policy, sometimes focussed on specific aspects. Some of their main arguments are given here below.
According to most critics of present dairy policy, Operation Flood has not lived up to its promises. Nevertheless the original objectives like improving the incomes of small farmers and landless labourers should still be the premises for 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 in India. 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 by-product 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.
Supplying the cities with milk will remain of great interest for both the rural milk producers and consumers in the cities. A cooperative dairy system, according to the Anand model or other locally more appropriate models, is certainly usefull for this. Even more important is to ensure that this system will benefit in particular the interests of poor milk producing families. Possible subsidies for the dairy-sector should be given more specifically to these families and to low income consumers in the cities and the rural areas.
This strategy might bring about India's self-sufficiency in milk and increase her political autonomy, without endangering the food supply of the poor majority.
support our campaign: 'EEC milk out of India'
In December 1985 the India Committee of the Netherlands (ICN) started a campaign with the slogan 'EEC milk out of India' against the vicious circle of EEC dairy aid to, and animal feed-imports from India. The campaign is based on a book which we wrote in Dutch: 'India as EEC Milch Cow'. A shorter version of this hook will soon be available in English.
The campaign is directed at the European Parliament, the European Commission (the 'executive board' of the EEC), the EEC member countries and the compound feed industry in the EEC countries.
The ICN will send information and write letters to the institutions and persons involved, bringing forward our demands. We will also try to get support from other non-governmental organizations and concerned individuals. Publicity should bring the campaign issues to the attention of a more general public. Later on we hope, possibly together with representatives of other organizations, to talk with EEC officials, members of the European Parliament and others.
We are asking your support for this campaign. If you agree with our demands as a whole or with specific ones, please write to the authorities involved and send us a copy of your letter. You can either write on behalf of your group or organization or as an individual. Some relevant adresses are:
- Commission of the European Communities
attn. of Mr. L. Nathali
Directorate General of Development Cooperation
Rue de la Loi, 200
B-1049 Brussels, Belgium.
- European Parliament
Committee on Development and Cooperation
attn. of Mrs. K. Focke (chairwoman)
L-2929 Luxemburg, Luxemburg.
- European Parliament
Committee on Agriculture, Fisheries and Food
attn. of Mr. T. Tolman (chairman)
L-2929 Luxemburg, Luxemburg.
Other things you can do: write a letter to your government or to members of your parliament and send copies of this Campaign Manifesto to the media in your country and to possibly interested organizations and individuals. Please keep us informed of your activities in this respect.
Copies of our report 'India as EEC Milch Cow' will, on request from India, be sent free of cost. From other countries the report can be ordered by sending a letter or postcard and by simultaneously booking through SWIFT-system $ 3,- per copy via any bank to ABN-bank, Neude 4, Utrecht, The Netherlands, account no. 184.108.40.2069, of Landelijke India Werkgroep, Oudegracht 36, Utrecht, the Netherlands.
India Committee of the Netherlands
The India Committee of the Netherlands (ICN) is a non-governmental voluntary organization. Its aim is to critically inform public opinion in the Netherlands on social, economic, political and cultural developments in India and on the relations between India and the Netherlands/the EEC. Additionally the ICN organizes action on matters where it is of the opinion that Dutch, EEC or more general western influences or policies have a negative effect on the poor majority in India and the economic and political self-reliance of India. In this and other ways the ICN tries to support progressive developments and movements in India, without any party-political affiliation either in the Netherlands or in India.
The Committee is an association consisting of local and issue-oriented groups. Groups exist on Bhopal, tribals, health care, World Bank, social forestry, women's situation, human rights and Operation Flood. One of our actions was concerned with delivery of Dutch fishery trawlers to India, which were to be financed by the Dutch ministry of Development Cooperation. Together with the National Forum of Traditional Fishermen in India (the federation of fishermen's unions) we succeeded in stopping this type of 'development aid', which otherwise would have been harmful to the small scale fishermen. There have also been other critical publications and actions on Dutch development aid to India.