Dairy farmers are planning to seek legal intervention against the divestiture of State-owned Milco Ltd., following the legal case filed at the Court of Appeal by unionists attached to the company, who claim that proper guidelines are not being followed for the divestiture.
“We are not saying that the company shouldn’t be privatised. However, the proper procurement process and certified guidelines must be followed so that these assets can be valued better,” Milco Executive Officers’ Union member Sampath Gunarathne told The Sunday Morning.
“They are trying to sell this under the table and that is what we are against,” he added.
Cabinet Memorandum No.PS/CM/SAD/162/2023, as seen by The Sunday Morning, states that since the valuation process of Milco will take around three months, it is expected to transfer assets to the Joint Venture Company (JVC) for speedy implementation.
The JVC comprises the National Dairy Development Board of India, Cargills PLC, and India’s Amul.
“While asset valuation is underway, the assets shall be immediately handed over on lease basis at a nominal value to the JVC until the formal valuation is completed, through a management agreement between the Government and the JVC for the immediate handing over of the management of Milco and the National Livestock Development Board (NLDB) in a manner that is inconsistent with the Government’s restructuring guidelines,” the union said.
The union further noted that the newly-formed company was solely a private entity and the Government would not have any control of any of its activities thereafter.
Meanwhile, People’s Movement to Protect the Local Dairy Industry and Farms Convenor Namal Karunaratne told The Sunday Morning that farmers and farmer collectives affiliated with Milco were also planning to seek legal intervention against the divestiture.
Milco operates by collecting dairy milk from local farmers and distributing stocks around the island for consumption.
“A skilled and trained workforce of about 1,300 employees runs an islandwide operation of milk collecting, processing, and selling, and there are about 3,500 direct dependents who depend on the livelihoods of aforesaid employees. However, about 800 of them are above 40 years of age and will face serious repercussions and difficulties in finding alternative employment if they lose their jobs at Milco.
“Moreover, the livelihoods of approximately 16,000 dairy farmers and their families will be burdened, together with their social security fund, which has assets worth over Rs. 113.7 million,” stated the union.
It was reported that former Chairman of Milco Renuka Perera resigned from his post in December in protest of the Government’s plans to privatise the company.
Multiple attempts by The Sunday Morning to contact Agriculture Minister Mahinda Amaraweera and Agriculture Ministry Secretary Janaka Dharmakeerthi proved futile. State-Owned Enterprise Restructuring Unit Head Suresh Shah was also unavailable for comment yesterday (3).