Scope-Significance of Dairy Sector

Top five Milk producers (World) 1. India HIGHEST PRODUCTION 2. United States of America 3. China 4. Pakistan (as per NDDB, but Im baffled nonetheless.) 5. Russian Federation

LARGEST POPULATION CONTRIBUTION TO GDP

India has the worlds largest livestock population half the world population of buffaloes 1/6th of the world goat population

Livestock sector (milk, meat, eggs) contributes 3.6% of GDP. (2010s data)

Per capita milk availability All India: ~290 gm; Punjab (highest): >900gm.

Availability

still per capita milk availability in India less than world average

EMPOWERMENT

To Farmers, Women And Consumers more details under operation flood

India has proximity to milk deficit countries e.g.

1. Bangladesh 2. Indonesia 3. Malaysia 4. Philippines 5. South 6. Korea 7. Sri-Lanka 8. Thailand

Hence Indian dairy production could be utilized to earn good foreign exchange by targeting those markets. More under Downstream=>Export.

Location: Dairy cooperatives

STATE GUJARAT Brand Name Amul official name Gujarat Cooperative Milk Marketing Federation (GCMMF) Andhra Pradesh Dairy Development Cooperative Federation (APDDCF) Karnataka Cooperative Milk Producers Federation (KMF) Maharashtra Rajya Sahakari Maryadit Dugdh Mahasangh (Mahasangh) Punjab State Cooperative Milk Producers Federation (MILKFED) Tamilnadu Cooperative Milk Producers Federation Ltd (TCMPF)

ANDHRA

Vijaya

KARNATAKA

Nandini Mahanand, Gokul, Dhawal, Dudh Pandri Verka

MAHARASHTRA

PUNJAB

TN

Aavain

Issue: there is a regional imbalance in production and processing capabilities. e.g. UP contributes over 17 percent of Indias total milk production. Ironically, only one percent is procured by co-operatives, remaining milk goes to privatedairy players, who exploit farmers, and do adulteration.

Anand/Amul Model/dairy cooperative model

Sardar Patel encourage the farmers of Anand region in Gujarat, to form their own milk 946 cooperative, to protect themselves from exploitation from private milk traders

National Dairy development board setup @Anand, to replicate the dairy cooperative 1965 model throughout country.

(PM Lal Bahadur Shashtri)

1971 Gujarat Cooperative Milk marketing federation setup (GCMMF)

GCMMF starts maketing milk products under single brand name Amul (Anand Milk Union 1974 Limited)

Amul Supply Chain

In the given village, a dairy Cooperative Society (DCS) is formed. Every dairy cooperative society has ~110 farmers. Combined, all DCS together handle more than 18 million kg milk / day. theyre equipped with Automatic milk collection unit (AMCUS): computer analyses fat content of milk, automatic printing of receipts etc.

VILLAGE

they process milk=> butter, ghee, milk powder, cheese, ice cream etc. E.g. Banaskantha District Cooperative Milk Producers Union Limited known as Banas Dairy. They manufacture a large number of dairy products under AMUL, SAGAR and BANAS brands. Usually Banas products sold locally, and Amul products sent to other states. similarly Gandhinagar District Co-operative Milk Producers Union Ltd.=Madhur dairy.

DISTRICT MARKETING COOP.UNION

Surat= Sumul Dairy Surendranagar District Co =Sursagar Dairy. They can sell their products under the brand name Amul as long as they meet the requirements of GCMMF. (e.g. must collect 30,000 litres milk daily for a period of three years)

STATE MILK COOP. FEDERATION

The main boss is Gujarat Cooperative Milk marketing federation (GCMMF). All of above district cooperative unions (Banas, Madhur, Sumul Sursagar) etc. fall under GCMMF umbrella. Amul has more than 5000 outlets of own- at high streets, residential areas, Railway Stations, Bus Stations, Educational

RETAIL

Institutions, across India.

2012: Amul planned to setup 10000 retail outlets across India. Other than that, even private shops, hotels, restaurants etc. too sell Amul products.

this Amul Model eliminates middlemen and directly engages farmer with the processor (dairy) These cooperatives form part of a national milk grid which links the milk producers throughout India with consumers in more than 700 towns and cities

] Cooperative sector limitations

While dairy Cooperatives have played an important role in Indian milk industrys development, but still dairy cooperatives reach barely ~20% of the Indian farmers.

Reach

Dairy cooperatives face increasing competition from private dairies: both in procurement + retailing of milk.

Competition

Private players are more agile, offering better incentives to farmers compared to the cooperative.

Even the largest Indian dairy player (Amul)s annual turnover is quite lower than a large MNC dairy company like Nestle.

Dairy cooperatives are subject to state laws /regulations. But often, the elections in dairy cooperatives are won using money and caste equations.

When such fraudsters get key positions in the dairy board, all they care is how to recover their investment by taking bribes in appoint of dairy staff=> inefficiency + lack of new initiatives.

Management

Hence, State governments need to make these dairy cooperatives more accountable, democratic and professional in their functioning.

http://mrunal.org/2013/09/food-processing-milk-dairy-sector-supply-chain-upstream-downstreamissues-amul-model-operation-flood.html#1043

PROBLEM 1. Most of the ethnic milk products are made by local halwaii / sweet shop= unbranded, unorganized. Cant compete in foreign market. You need to create a brand first to earn the respect and trust of foreign customers. 2. Since this is done on small scale = they use cheap quality packaging material, even harmful colors and preservatives used, =Doesnt meet quality norm in US/EU market. 3. To make Indian ethnic milk products famous like cakes, pastries, pastas and noodles => have to invest a lot in marketing promotions abroad. Small

SOLUTION 1. Train small manufacturers of ethic dairy products, such as halwaiis: make them to adopt hygienic practices, use state / district level bodies, cooperatives, ITIs can be involved in such efforts 2. Catalyze R & D for commercialization of ethnic dairy products 3. The Ministry of Food Processing, in conjunction with the NDDB, needs to undertake generic promotional campaigns to enhance the image of Indian ethnic dairy-based products in US/EU markets.

scale firms cant do that.