Dairy unions defend cooperative model against privatisation threat in India, the world’s largest milk producer

By Gunnar Brulin and Malin Klingzell-Brulin

The advertisement in the Bangalore morning paper shows milk being poured into a brimful glass. Next to it, three smiling state ministers avow that they welcome foreign investors. For S. Prakash at the dairy union federation, this invitation came as a shock.

“I was aware the government wanted to privatise, but not that the plans were that concrete,” says Prakash, and continues to translate from Hindi into English:

“It says that the rich state of Karnataka offers investment opportunities in the buoyant dairy industry and that a conference will be held at the international trade fair in Bangalore on 16 December. The entire global food industry is invited.”

We are sitting in a hotel room in Bangalore, south India. It is evening and we have to get up early the next morning to follow the milk on its way from the farmer, via the cooperative dairy, to the consumers in the city.

It is a little-known fact that India is the world’s largest milk producer.

The dairy industry is cooperatively owned by the farmers and provides jobs for 70 million dairy farmers in the countryside and a further 15 million dairy workers in the cities. Milk is crucial to the country’s food supply.

The Indian system is similar to that in Sweden before the depopulation of the countryside. The villages have centres where milk is collected, controlled and rapidly cooled. These milk collection centres are owned by the farmers themselves through their dairy associations. The farmers also own the cooperative dairies in the cities, which provide them with veterinaries, fodder, breeding stock and further education. Tanker trucks transport the milk from the collection centres to the dairy, where it is pasteurised, homogenised and packaged in half-litre plastic bags for the quickest possible distribution to the retailers.

It is necessary to know these facts in order to understand what is at stake when India’s enormous dairy market is to be exposed to private competition and investments and purchases by transnational corporations.

Stacks of milk crates

Half past five in the morning, crates of milk are stacked outside the hotel in the street. This is milk that was produced the day before. Retailers on mopeds collect the milk to deliver it. Along the streets in Bangalore, which has more than six million inhabitants, there are thousands of grocery shops with refrigerators. These are small dairy shops. The supermarket chains have not yet established themselves here.

We wait for a taxi together with Rasendu Oza from the IUF, the global trade union federation that launched a mega organising project four years ago. A national federation for all dairy unions in India, both in the cooperatives and in the emerging private sector, has been created. Its acronym is DEFOI, and its aim is to build bargaining power through common demands and coordination.

Oza was a union activist at the Unilever Research Centre at Andheri (Mumbai). He is retired now, but continues to work for the IUF. When he first started organising, he didn’t know much about the dairy sector. But now there is nothing he doesn’t know. Karnataka has excellent trade unions, and they are in a good position for further organising efforts. 

“We have to grab the chance to organise the unions in this sector before the transnationals establish themselves. It is crucial that we protect the cooperative model, which is based on social responsibility for the farmers. The price of fresh milk is still regulated by the state,” he says.

The danger of private companies is that they can use the milk for processed products such as ice cream and confectionery with longer sell-by dates and larger margins.

A thriving association

It is still dark as we set off by taxi to accompany a veterinary on a call to Tarahunese, a dairy association a few miles north of the city. This is one of 1,822 associations in the Bamul cooperative, the Bangalore Milk Union Limited, which weighs in 600,000 litres of milk daily.

On our arrival the place is bustling with activity. The sun is up and farmers who have milked their cows at home arrive with milk pails of all sizes. The smallest volume they are allowed to weigh in is two litres, and the lowest acceptable fat content is 3.6. Farmers living nearby come with their cows to milk them using the cooperative’s stable which has milking machines.

This is a thriving association that can serve as a model for others. In the 1980s, they weighed in 50 litres per day, but now they are up to just over 1,000 litres. The dairy has four employees: one to handle the computer, one secretary, one milk controller and one assistant.

The farmers have financed the association premises themselves with subsidised loans. They are doing well. On average, each family has two or three cows. They get paid for their milk every two weeks.

The regular income from milk is very important. Many farmers are in a vulnerable position. Those who have borrowed money for seed and inputs won’t get paid until their produce is sold.

“Many farmers have defaulted, leading to a series of farmer suicides across India,” says Oza.

Veterinary Rangaswamy Baum has worked for 25 years at the cooperative. Every day, he visits the dairy associations to check up on the livestock.

“The Bamul cooperative is well-organised. We could increase our dairy production, I’m sure,” he says.

o What is the biggest obstacle?

“That the cows are undernourished.”

o How could production be increased?

“A cow currently produces five to eight litres of milk per day and is milked twice. We need better breeding to get locally-adapted breeds that give more milk, we need better fodder and more cows per farmer.”

But this is easier said than done. He says that the cooperative imported cows from Germany, but they turned out to be so valuable that the farmers sold them.

Motorway on pillars

On the way back to the city and the dairy, we see modern India in the making. Bangalore is the capital of the south-Indian State of Karnataka. The countryside is green, the climate is pleasant, and this also partly explains why Bangalore has become India’s IT capital.

Modern high-rise buildings are cropping up on the outskirts, and large billboards advertise “3-Bedroom Luxury Apartment, Exotica”.

A motorway on pillars, The Flyway, is being built above the old approach, by hand and with mechanical equipment. Women carry buckets of cement on their heads and tip it into the large moulds. This is a multifaceted panorama. 70 per cent of the state’s population still live in the countryside.

At the dairy, we are greeted by Prakash, union president and secretary of the DEFOI, and Bhagya Tadagali Krishnamusthy, who is a member of the women’s committee in her workplace and in the IUF’s regional committee for Asia.

Bhagya checks the quality of the milk that arrives in tanker trucks from the rural dairy associations. She is deeply committed to the project of producing hygienic milk, that is, milk with the lowest possible bacteria content. For a couple of years, she has been a union activist. Women union activists are still uncommon. It was Prakash who first noticed her communication and leadership skills.

Bhagya, a mother of two, says that she has two jobs, just like most other women workers in India; the housework also depends on her. They are three generations living together.

Later, we meet the women who work at the dairy and belong to the women’s committee. They are all white-collar workers and union activists. They have changed into their own clothes and are wearing brightly-coloured saris as they sit round the table studying their foreign visitors with curiosity. They have just as many questions as we do. They want to know everything about living conditions in Sweden and tell us about their own.

Travelling to work with public transportation is a big challenge, often requiring many changes. The union has negotiated a petrol premium. There is no unemployment benefit, no social welfare and no state pension.

Full-time workers earn 300-400 rupees (around SEK 30-55) per day, depending on how long they have been employed and their tasks.

The men perform the heaviest tasks, and only men are allowed to work the night shifts.

“This is not something we wish to change,” says Bhagya.

That statement may appear provocative, but when she adds that the shift allowance is no more than three rupees per day, we can understand that it is not that desirable.

Conditions deteriorating in every way

We follow the milk through the dairy. One major problem facing the union is the large number of contract workers, which divides the workforce. Out of the 1,440 workers at the cooperative, 600 are contract workers. Out of these, 50 per cent are women.

Everyone working at the packing line is a contract worker. They work on a day-to-day basis and are not union members. They have completely different terms than the permanent workers. They only get paid for the days they work. They have no shift allowances, no travel allowances, no free work uniforms, no sick pay or other benefits such as parental leave. They are employed by a third party and are not covered by the cooperative’s welfare system.

“Contract work was introduced 15 years ago. “It has weakened our union. When the transnational corporations start pushing prices down, this situation will be even harder to handle,” says Prakash.

He explains how the system with contract labour works in the dairy industry.

The wages are 130 rupees per day (less than SEK 20) but the company pays 160 rupees. 30 rupees go to the contractor who doesn’t do much apart from collecting the money. These temporary labour agencies are often owned by powerful people, either senior politicians, or even mafia-like operators that are hard to stand up against.

Contract workers and permanent workers are kept apart, they eat at different times in the canteen. Meals are more expensive for contract workers even though they earn less than the permanent workers.

The contract workers don’t have as good housing, often living in the slums, and their wages are so low that the whole family, including the kids, has to work to make ends meet. A family with three children needs to earn 350 rupees per day to survive.

“This is why we have child labour. If we want to put an end to that, the contract workers must be paid enough to live on,” says Oza.

The picture of the dairy cooperatives is contradictory. On the one hand, it takes responsibility for the welfare of the permanent workers and its owners, the dairy farmers, who earn a crucial and stable income from dairy production. On the other hand, the contract workers are exploited.

Prakash says that his union is campaigning for the contract workers’ right to join the union. This is a change he believes to be necessary, but it must be supported by the current members. And the issue is controversial. If the contract workers get the same wages and working conditions as the permanent workers, the dairy’s costs will increase, and the money has to come from somewhere. Nevertheless, he says the aim must be equal treatment of all workers.

Footnote: India will soon pass China as the country with the world’s largest population. In order to fill the growing food demand, India wants to double its milk production by 2020. More information on how this will be achieved is in the next article.