Milma’s Malabar union is dissolved over milk and theft allegations

India 19.09.2026

Kerala’s Dairy Development director has dissolved the Malabar Regional Co-operative Milk Producers’ Union, citing a rejected-milk incident in Kasaragod, alleged theft at a Malappuram dairy and financial and administrative lapses. The union’s chairman, K S Mani, called the decision politically motivated and said it would be challenged in court.

Milma’s Malabar union is dissolved over milk and theft allegations

The Malabar Regional Co-operative Milk Producers’ Union (MRCMPU), controlled by Kerala’s Left Democratic Front, was dissolved on Friday, September 18. Varkey George, the Dairy Development Department’s deputy director in Wayanad, was appointed administrator. The dissolution order cited several grounds, including the handling of contaminated milk in Kasaragod, alleged theft of dairy products in Malappuram, failures involving accounts and audits, and other financial and administrative irregularities.

The Kasaragod episode began on March 19, 2025, when the Kasaragod Dairy bought 33,062 litres from Maharashtra’s Sampathrao Deshmukh Co-operative Milk Union after making an advance payment. Findings cited in the order said the consignment was suspected of containing chemicals and had a smell resembling kerosene. The dairy then combined it with 55,000 litres supplied by the Karnataka Milk Federation and processed the mixture without carrying out quality tests.

The order said the union consequently lost 88,000 litres of milk and incurred a loss of ₹27.45 lakh. Customers in Kasaragod later returned packets to shops after reporting a strong, unpleasant odour. Tankers carrying tonnes of the rejected milk were sent to the Central University of Kerala in Periya, where the material was used as manure. The order said the managing committee wrote off the loss rather than recovering the money or beginning disciplinary proceedings. It also stated that milk purchased from another dairy should be inspected on arrival and paid for only after its quality has been confirmed.

Another allegation concerned products valued at ₹84.45 lakh, including ghee, said to have been removed from the Marketing Products Store at the Malappuram Dairy depot in Moorkanad during the 2025-26 financial year. According to the order, invoices and gate passes were altered or cancelled. The alleged removal took place under the leadership of Fazul Vaidyan, a contractor working for the Malappuram Dairy. The managing committee took no legal action after he repaid the money before March 31, 2026, the order said.

Vaidyan nevertheless retained several contracts with the union. These included running the Kottakkal Chenakkal chilling centre from 2012, a marketing depot from 2018, the Malappuram Dairy marketing depot from 2019, and a products-store cash-collection contract beginning March 1, 2026. The order described the continuation of the contracts as evidence of an “illicit nexus” between the contractor and the managing committee.

The government also questioned spending linked to the new Malappuram Dairy. About ₹25 lakh was spent on an event to sign an agreement for a ₹50 lakh state grant, while ₹1.5 crore was spent on a three-day inauguration held on December 22-24, 2024. The order said such spending, alongside alleged misuse and misappropriation of funds, affected resources intended for dairy farmers.

The dissolution order further cited the Malabar Rural Development Foundation, an MRCMPU subsidiary. The Dairy Development Department said the foundation’s accounts had never undergone a statutory audit and that audited accounts had not been presented to the general body as required by the Kerala Co-operative Societies Act. It also said the managing director had failed to prepare and submit annual accounts and audit documents within the prescribed period.

Milma, the Kerala Co-operative Milk Marketing Federation, has three regional unions. The government dissolved the LDF-led Thiruvananthapuram union in July, while the Ernakulam union is controlled by a United Democratic Front panel. K S Mani, Milma’s chairman, said the action against the Malabar union was politically motivated and that it would be contested in court. Animal Husbandry Minister Bindu Krishna denied a political motive. The union was dissolved without a show-cause notice or consultation with the State Co-operative Union and the financing institution. The director said following those procedures could have allowed records to be altered, destroyed or tampered with.