www.waikatotimes.co.nz WAIKATO FOCUS SATURDAY, APRIL 2, 2011 B3

EXPORTS TO INDIA Year ended Value of two-way trade exports imports Oct 2007 $352m $614m Oct 2008 $514m $821m Fonterra Oct 2009 $640m $976 m Oct 2010 $840m $1.2 billion has eyes NZ dairy giant in on India milk bid Fairfax reporter Charles Anderson travelled to India on an Asia Andrea Fox Fonterra is shrugging off India’s plan to New Zealand grant to see the connections being made between become a major world player by doub- ling its growth in milk production. the two countries. He discovers that India has plans for dairying. The world’s biggest dairy exporter says it is confident increasing global de- ven though Malkit Singh- Australia and New Zealand. A mand will keep pace with any rise in Khangura’s calf is a skinny, feasibility study is still being carried output. India is the world’s biggest miserable looking thing, out, however, director of GDH Paresh single dairy market. standing in the courtyard of Chaudhry hopes the first cows will be The Gujarat Co-operative Milk Mar- hisE rural Punjab home in the biggest milked by June next year. keting Federation, the world’s largest dairy consuming nation in the world, But there are hoops to jump through. Family farming: Dairy farmer Malkit Singh Khangura, his wife Devander Kaur and sister in law Kamalgit Kaur at their home in the dairy group by member, has said India the metaphor is difficult to ignore. At the time of writing the government Punjab village of Latala expected to boost output by 10 per cent a In India, the cow is a sacred beast. It still had in effect a 30-year-old ban on year in two to three years, but Fonter- is revered as a source of food, a symbol dairy cow imports. The joint venture industry in the money in their pockets, their sentiment ra’s director optimisation, trading and of life and may never be killed. ‘‘They has been negotiating with the Indian world but the for tradition was replaced by a sourcing, Ian Palliser, said the an- are embodiments of merit,’’ according to Ministry of Agriculture to ease the genetics are very sentiment for cash. nouncement ‘‘won’t mean a great deal’’. one ancient Hindu text. And they are restrictions and allow their vision to poor. We could It could be a sign of things to come, ‘‘It has been growing (production) by worth almost NZ$65 billion a year. come to reality. produce twice the according to New Zealand trade five per cent a year for five years. I The cow lives among India’s people, ‘‘Ultimately the endgame is to ensure milk with half the commissioner in New Delhi Cliff Fuller. would say the forecast is at the optimis- outside their front doors, on what we can feed young India and reduce the cows.’’ But he is As more companies look to build large tic end of our own forecasts but equally passes for their footpaths. The country’s deficiencies in the present product,’’ Mr adamant it can be scale dairy farms in India, and as a we look at demand, which will be keep- almost 1.2 billion people rely on it every Chaudhry says. He is confident the done. His product Free Trade Agreement comes to ing pace with production growth.’’ day to produce for their dairy-heavy restriction will come down and farm TruMilk is now sold fruition, the opportunity is there for The Indian federation said it wanted diet. Seventy million farmers rely on it will go ahead. to Punjab’s upper New Zealand companies specialising in to cash in on rising global commodity for their livelihoods. The end product will be 100 per cent class and the MDH general high end processing equipment and prices. Its members produced 3.3 billion But the demand outweighs supply by organic pure milk – a rarity in India. If company’s model manager: Dr expertise to enter the market, he says. litres of milk in 2009-2010 from 2.9 about 30 per cent. Production is low the initial pilot, modelled on Fonterra’s allows more than Amarpreet Sidhu. Rabobank senior agribusiness million farmers. In the same year considering the industry’s size, quality Tangshan indoor farm in China, is 1000 rural Punjabi analyst Hayley Moynihan said the Fonterra collected 14.7 billion litres from is poor and distribution difficult. successful it will be expanded to eight women the opportunity to work and growth in India was striking. The likely around 12,000 farmers. Late last year, Fonterra announced it to 10 farms across the country. buy their own cows in an area where scenario was that domestic production Mr Palliser said India had always would be making a bold attempt to It won’t come cheap. Though the many cannot afford to eat. would not fulfil demand. exported, mostly casein and butter. break into the Indian market to try and project will use land already owned by ‘‘When I was in London I thought It was expected to have a milk deficit take advantage of a growing sector of IFFCO, the Indian Economic Times that type of poverty didn’t exist in rural WITH the fourth round of New at times, he said. There was an export the population with a new-found, ever pegs the cost at 10 billion rupees India. But it does.’’ That pressure to Zealand-India trade deliberations just ban in India now, after weather events increasing disposable income. (NZ$285m). The agreement will be split produce also pushes farmers to large held, its lead representative is hoping to cut production, and previously it had For hundreds of years Indian farmers into 45 per cent ownership for IFFCO, adulteration of their milk supply. Like make ‘‘substantial progress’’ toward the imposed export tariffs to try to keep have relied on a dairy model of one or 35 per cent for Fonterra with GDH the Sanlu melamine scandal in China, Women at work: Rural Punjabi women end of the negotiations. enough milk for its own people. two cows attached to their homes. Sixty holding the remainder. where a 43 per cent owned Fonterra work at Macro Dairy Health’s community Lead India negotiator Julian Mr Palliser expected India to review seven per cent of livestock is owned by company contaminated its raw milk development dairy farm near Ludhiana, Ludbrook said the third round of the export ban at the start of its new small or landless farmers. JASSI KHANGURA likes a supply, Indian farmers also experiment. Punjab. negotiations for a bilateral Free Trade dairy season in September. Mr Singh-Khangura, who lives in the challenge. He bought land to build Chalk, starch, urea even caustic soda Agreement or Comprehensive India’s dairy herds are tiny in com- village of Latala, is one of those. His calf Punjab’s first five-star hotel in the are added to milk to fool fat-testing the hard line Hindu nationalist party Economic Co-operation Agreement parison to New Zealand’s and most of is an experiment. Cows are difficult to 1980s when sectarian violence was equipment. ‘‘They have tried it all,’’ says Shiv Sena which saw the move as finished positively in October last year. the national herd is buffalo. India has raise in the notorious heat of the Indian widespread and bullets were still flying Macro Dairy Health’s site manager Dr threatening to local farmers. The group He was hoping that trend would have two milk markets. The biggest is the in- summer so his main income comes from overhead. Then several years ago the Ampreet Sidhu. drained thousands of litres of foreign continue in the next round recently formal market, in which local farmers the more adaptable buffalo. His Indian-born London-raised doctor Mr Broad admits all the issues that milk across the country. Mr Broad says concluded in New Delhi. provide milk to their local village, Mr profession has been handed down handed in his British passport to start led to Sanlu are present in India. ‘‘But in any society there are ranges of how Discussions included talks on goods palliser said. through generations over hundreds of Macro Dairy Health, a company that doesn’t change that China and people think about foreign involvement. market access, customs, trade The formal market sees milk go to a years but in that time methods have dedicated to producing high quality India are still a huge opportunities.’’ ‘‘And there are extremists on each remedies, technical barriers to trade, processing factory and then into hardly changed. milk and creating social change. end of the spectrum. The extreme ones sanitary issues, services, investment branded product in supermarkets. In November, Fonterra signed an He says the difficulty is not only to FONTERRA has tried before. The co- will tend to have a fairly extreme view.’’ and economic co-operation. The Gujarat federation said pro- MOU with India’s largest farmer co- convince Indians high quality milk is operative’s managing director for Asia He hopes common sense will prevail. The New Zealand High Commission- duction had likely expanded five per operative, IFFCO, which represents 50 desirable when they are used to having and the Middle East, Mark Wilson, said ‘‘That two- or three-cow model is a er in New Delhi since January, Jan cent to 118 million metric tonnes in the million farmers, and Global Dairy theirs ‘‘fly invested’’ but also to convince in 2009, after it exited another joint tradition but hundreds of years ago we Henderson, said there was much 12 months to end February. Health (GDH) to help modernise that traditional farmers modernising is an venture with an Indian company, that weren’t dealing with a GDP growth of 8 impetus from all levels to make sure Wholemilk powder prices climbed to a tradition. attractive proposition. investing in India’s consumer market to 9 per cent and an explosion of the a free trade deal went through. record high on Fonterra’s latest global General manager for Fonterra’s ‘‘Whenever you introduce a new ‘‘was not a core priority’’. wealth.’’ Dr Sidhu likens the revolution The New Zealand trade internet auction. Fonterra last month international operations David Broad model there is always a degree of However, it has still had a in modern dairy farming to how poultry commissioner in New Delhi Cliff Fuller said milk prices could remain at least 50 admits the market is a challenge. skepticism,’’ Mr Khangura says. relationship with the country. After a was farmed in the 1980s. ‘‘Most Indian said India was an economy under per cent above their historical averages ‘‘It is a logistical nightmare,’’ he says. The concept of selective breeding to poor monsoon last year Fonterra farmers only had 100 chickens on their transformation. in the long term, driven by strong de- The proposal, earmarked for the north create high producing cattle is almost supplied 30,000 tonnes of milk power farms then. Now there are some with mand from Asia and tight international east Indian state of Uttar Pradesh, will unknown among farmers. ‘‘The only and 17,000 tonnes of ghee to the Indian half a million. It is the same transition.’’ I Charles Anderson’s trip to India was supply. be spread across 160 acres and house thing that is important is ‘has my cow national dairy board. While there was some apprehension to supported by the Asia New Zealand Fonterra is currently in talks to start 3000 Jersey and Holstein heifers from conceived?’ We might have the biggest Milk was spilled. The deal angered start with, as soon as farmers saw more Foundation. up a major dairy farm in India.

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