Prior to 1984, four private firms were registered with the Army Purchase Organisation (APO) for the supply of Whole Milk Powder (WMP) to the MoD. By forming a cartel, they used to quote unreasonable and exorbitant rates. Dr G Sunderam, Joint Secretary (O), MoD vide telegram dated April 23, 1984 informed the scenario and requested Dr Verghese Kurien to arrange supply of WMP from cooperative dairies.
As advised by Dr Kurien, NCDFI coordinated the supplies of 1,660 MT WMP from cooperative dairies of Rajasthan (650 MT), Gujarat (610 MT), Punjab (200 MT) and Andhra Pradesh (200 MT) with ex-factory price of ₹36/- per kg. and requested the MoD to enter into an agreement with the NCDFI to procure milk and milk products on negotiated contracts system.
MoD vide letter dated August 13, 1985 issued a policy to procure milk and milk products from NCDFI on negotiated contract basis for a period of one year. Considering the satisfactory performance of NCDFI, MoD renewed the said policy from time to time.
WMP, Butter Tinned, Desi Ghee, Tetrapak Milk, Sweetened Condensed Milk (SCM) and Cheese Tinned are being supplied on negotiated contracts system apart from fresh dairy products viz. milk fresh, butter fresh, cream fresh and paneer fresh through a system of negotiated contracts.
The NCDFI coordinates supply of these products to MoD from more than 100 Dairy Cooperatives spread across the country. In line with procurement by MoD, ITBP also procures milk products from NCDFI dairy cooperatives on negotiated contracts system. The table below shows the contracts concluded by the NCDFI during last ten years: