Number Theory: Will Nandini versus Amul have an impact on Karnataka elections?

Amul's entry into Karnataka's market has sparked fears of a fight with local dairy cooperative Nandini.

A March 29 editorial in the Hindustan Times described the Karnataka elections as a contest based on three Cs, namely, caste, communalism and corruption. A few days later a fourth C; cooperatives, was added to the Karnataka contest when India’s dairy cooperative giant Amul announced its plans to enter Karnataka’s markets. The main opposition party Congress has described this as a move to weaken Karnataka’s own dairy cooperative Nandini. The BJP, as expected, has dismissed these fears. Will Nandini versus Amul fight be a factor to reckon with in the 2023 Karnataka’s contest? The answer to this question is rooted in the importance of dairy cooperatives in Karnataka’s economy. Here is what data shows.

Bengaluru, Apr 17 (ANI): Congress leader Rahul Gandhi, Karnataka Congress President DK Shivakumar and general secretary KC Venugopal visited Nandini Milk parlour at JP Nagar, in Bengaluru on Sunday. (ANI Photo) (Congress Twitter)

Karnataka is in the middle of the pack when it comes to state rankings for share of households producing milk …

Data from the 2018-19 Situation Assessment Survey (SAS) can tell us about the share of rural households that produce milk. For Karnataka, this number is 23.6%. Given the fact that rural households have a share of 56% in Karnataka’s population, according to 2023 population projections by the National Commission on Population, this means that around 13% of Karnataka’s households are milk producers.

How does this compare vis-à-vis other states in India? If major agricultural states of India (states that house at least 1% of India’s agricultural households) were arranged in order of how important dairy farming is in the state, Karnataka would lie in the middle of that table. It is ranked 9th among 20 major agricultural states by share of rural households producing milk (23.6%) and 11th by share of agricultural households producing milk (43.1%). The 2018-19 SAS defined agricultural households as those that produced agricultural products worth at least ₹4,000 in the year preceding the survey and had at least one member self-employed in agriculture.

This statistic would suggest that Amul versus Nandini should not be much of an issue in the Karnataka polls.

… but milk production for cooperatives is one of the highest in the state

The SAS also asks households about the importance of cooperatives in the sale of milk. Data shows that cooperatives are among the most important in Karnataka when it comes to overall and per capita share in the value of milk sold to cooperatives. In terms of overall value of milk, more than 50% is sold to cooperatives in Karnataka, second only to Gujarat, the home of dairy giant Amul. Karnataka is also ranked second or third in terms of per capita value of milk sold to cooperatives depending on whether one looks at milk sold by rural or agricultural households. While SAS does not ask details about the exact cooperative to which milk is sold, it is reasonable to assume that Nandini is the biggest buyer of milk from Karnataka’s dairy farmers. This makes fears (even unfounded ones) about Nandini allegedly losing its market share to Amul a potent political issue in Karnataka.

Has Nandini been losing its importance in Karnataka’s dairy economy?

A simple comparison of the share in value of total milk sold to cooperatives in the 2018-19 and 2012-13 SAS survey suggests that it has. The share of cooperatives in total value of milk sold fell from almost two-third to just above half between 2012-13 and 2018-19. To be sure, these numbers need to be read with a caveat that they are not exactly comparable because of a difference in methodology in the two surveys. In the 2018-19 SAS, the household was specifically asked about the amount used for self-consumption; and the amount sold to other households, cooperatives, and private processors. This leaves only 3.6% of disposal amount in the miscellaneous “others” category. In the 2012-13 survey, households were asked details about their first and second major disposal, but not the rest. The destination of around 30% of disposal therefore remains in a miscellaneous category.

The political geography of the Nandini issue

This is an important question as far as the political impact of the issue is concerned. If all of Karnataka’s dairy farmers are concentrated in a small geographical pocket, it is more likely to influence the overall outcome of the elections. While SAS does not give disaggregated data beyond the state level, we have some information from Karnataka’s own livestock census which was last conducted in 2019. It shows that geographical pockets which have a large share of cattle and milk production are not necessarily the same in Karnataka. While the former is concentrated an arc along the coast going into a few districts of southern Karnataka, such as Chikmagalur, Ramanagara, Hassan, and Mandya; milk production (per 1000 households) is much more concentrated in southern Karnataka districts. Of course, local politicians will have a much better information about places where the Nandini versus Amul narrative will have a bigger traction than official data can tell us.