Gujarat Cooperative Milk Marketing Federation founder and chairman Verghese Kurien has offered to make peace with the National Dairy Development Board.
Kurien has suggested three shareholding options if NDDB decides to go ahead with its proposal to enter into joint ventures with various state cooperatives.
Kurien has spelt out the shareholding patterns in a recent letter to Union Minister for Agriculture Ajit Singh.
The first option entails offering 51 per cent equity to the state cooperative federation and the rest to NDDB's subsidiary Mother Dairy Foods Ltd.
While the federation brand would remain with the local federation, the `milk drop' logo would remain with NDDB, the letter elaborated.
The other suggestion calls for offering 49 per cent equity each to MDFL and to the state cooperative federation.
The remaining 2 per cent equity would go to the National Cooperative Dairy Federation of India and the 'milk drop' logo as well as the Mother Dairy brand would be transferred to NCDFI.
Kurien has offered a third option. Under this, NCDFI or member dairy cooperatives (in proportion to their procurement) would hold 51 per cent equity in MDFL. The remaining 49 per cent would be retained by NDDB. The joint ventures would then be created with state federations so that MDFL holds 51 per cent equity while the local federation would have 49 per cent stake.
However, this would need the board representation to be increased to nine members -five members would have to be from MDFL, and 4 the rest from the farmers' cooperative.
Kurien and Amrita Patel, his successor as head of NDDB, have had serious differences over NDDB's move to allow its wholly-owned subsidiary, Mother Dairy Fruits and Vegetables Ltd, to set up MDFL, a wholly-owned subsidiary. MDFL, in turn, will set up joint venture companies with state-level cooperative dairy federations to market their products.
While the existing dairy will produce and process milk into products, the new joint venture companies will sell them under the Mother Dairy brand.
The existing brands of the dairy federations will have to be surrendered to the joint venture, in which MDFL will have 51 per cent equity. The Amul brand, owned by Kurien's GCMMF, will thus have a formidable rival in Mother Dairy.
In his letter to Ajit Singh, Kurien said: "I am confident you will act in the best interests of farmers and advise the NDDB to abandon its joint venture plans and pursue the `cooperative strategy' to give a further impetus to dairy development in India. In case, they wish to support the cooperatives in form of market development through forming joint ventures with cooperatives, we recommend that the government advises the NDDB to consider following options for shareholding pattern in the JVCs."
