BIZ n BYTES - a quarterly published Journal of Business & Information Management - ISSN No (0976 - 0458) Volume 2 May 2012

Milk Procurement and Marketing System :A Case Study of Ludhiana District

Dr. Balbir Singh* ABSTRACT After achieving green revolution great efforts have been made in the Punjab state to bring white revolution. The dairy enterprise is gaining importance as more business aspects are being introduced in this enterprise. Due to increase in population and per capita income,there is more demand of milk as a result of this the price of milk is rising and dairying is becoming more profitable enterprise . The present study is an attempt to locate the weak links in the present milk marketing system and identify the problems faced in milk marketing . Efforts are also made to suggest appropriate measure for sound milk marketing system. SECTION I Introduction Milk is the most complete food available in nature for maintenance of health and preparation of body system. The importance of milk in human dietary does not need any recognition. It also increase the duration of life and act as vitalizer, its also extremely valuable in increasing height, resistant to disease cheerful and happiness. Its also makes our bone strong, teeth healthier and strengthens our muscles and gives energy. Punjab produced about 8931 Lakhs tones of milk annually. The availability of per capita milk is 898 grams per day in Punjab, which is much higher than the natural per capita availability of 23 grams per day .Thus Punjab state processes a milk potential in the country due to its many favorable resources and endowment like fertile land, assumed irrigation, good quality animals and the adoption of improved milk production technology. The Punjab is therefore roughly called the milk bowl of the country. There are various hindrances and difficulties faced In milk procurement and marketing. This study highlights the milk procurement and marketing system in Ludhiana district. The study locates the weak links in the present milk marketing system and identifies the problems faced in milk marketing. Efforts are also made to suggest appropriate measure for sound milk marketing system. SECTION II REVIEW OF LITERATURE Yadav , Mali and Patil (1995)1 attempted to find out the constraints in dairy enterprise. The result of study revealed that weak financial status cost factor and management difficulties were the main constraints is not maintaining good quality animals on the farms. The respondent for families strongly * Associate Professor ,Department of Economics, Desh Bhagat College Bardawal(Dhuri) Page 1

BIZ n BYTES - a quarterly published Journal of Business & Information Management - ISSN No (0976 - 0458) Volume 2 May 2012

expressed the desire need for finance for the purchase for much animals and also for feed and fodder. They opined that good quality feed and fodder should be made available to them at reasonable prices and they need to be assumed reasonable and stable prices of milk throughout the year to make the dairy enterprise the supplementary and paying proposition. Chopra (1996)2 observed that Amul campaign is the only one which not only withstood the onslaught of timeout has grown to hold to its image of being classic due to effective procurement and marketing channels. It is the ideal and mentor for all the dairy co-operatives in the country. Other dairy co-operatives should follow its footprints and prepare a master plan to tackle problems and achieve the growth. Chand and Dixit and Ram(1997)3 out a study in Saharanpur city of western Uttar Pardesh to access income elasticity of demand for milk and milk products. The study revealed that expenditure and income elasticity for western type milk products was 2.92 and 2.54 respectively, while milk and indigenous milk products had relatively low income elasticity. Goel B.B (2001)4 that in the context of indias rural development, co-operative organization are considered to be an important agencies for promoting economic and social welfare. It also helps in building moral and material strength of people. World dairy situation (2006)5 reported that the growth of the world milk production in continuing in 2006 having already been strong in 2005. The quality expected in 2006 is 644 million tons which compares to 632 million tons in the year 2005 and 543 million tons in (1996). This has been projected by the international dairy federation (IDF) in their recent report on the world dairy situation for (2006) Main areas of growth are China, India and the US. However European production in declining in 2006, despite increased in quotas in the EU. In Russia and other CIS states, no significant recovery is yet expected after years of stagnation for oceanic only a modest increase of milk production is expected, mainly in NewZealand. Chander Datt kaidan, Singh and Datta (2007)6 reported that major milk production form cattle followed by buffaloes only with a little contribution from Goat and Joks. The milk production of the region increased from 966.63x103MT in 1022.84x103MT in the year 1999-2000. The highest milk production (733.00) x103MT was in state of Assam followed by Manipur (67.00x103MT) and Meghalaya (62.00x103MT). The above mentioned studies has thrown a light on milk procurement and marketing system in India. The present study can be seen as continue in the same direction where the focus is on to identify the weak links in present milk marketing system in Ludhiana district. SECTION III DATA AND METHODOLOGY The study is based on primary and secondary data primary data was collected personally interviewing the producer and separate interview schedules were used for milk plans. The secondary data required obtained from the record maintained by milk plan Ludhiana. The data analysis through simple arithmetic means, percentage method and least square method to accomplish the objectives of the study, four blocks namely Pakhowal,Dehlon,Sudhar and Doraha from four zones were purposively selected . Among * Associate Professor ,Department of Economics, Desh Bhagat College Bardawal(Dhuri) Page 2

BIZ n BYTES - a quarterly published Journal of Business & Information Management - ISSN No (0976 - 0458) Volume 2 May 2012

these four blocks, one village each was selected randomly- Barundi fom Pakhowal Block,Pahir from Delhon Block, Boparai kalan from Sudahr Block, Gudhani from Doraha Block. The study has been divide into five sections. SECTION I, is introductory in nature. In SECTION II literature pertaining to the milk procurement and marketing system is required. In Section III Data Methodology for the present study is discussed process of procurement, marketing practices, problems in procurement and milk marketing are discussed in Section IV. Concluding remarks followed by suggestions regarding milk procurement and marketing are carried out in Section V. Process of procurement; milk is procured by two methods through assembling and through co-operative societies. The milk procurement through co-operative societies is very successful. And the members are increasing continuously year by year. TABLE I TIME SERIES ANALYSIS OF MILK PROCURMENT years 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 N=11 x -5 -4 -3 -2 -1 0 1 2 3 4 5 X=0 y 216 242 269 256.7 261.6 272.6 2955 265 217 207 201 2703.4 X2 25 16 9 4 1 0 1 4 9 16 25 110 xy -1080 -968 -807 -513.4 -261.6 0 295.5 530 651 828 1005 320.5 yc 231.9 234.10 237.02 240 242.84 245.76 248.67 251.58 254.49 257.41 260.32

X= AVERAGE YEAR, Y= PROCUREMENT OF MILK, Yc= TREND VALUES SHARE OF VERKA PLANT IN PROCUREMENT TABLE II

Total procurement of Ludhiana district

S.No 1 2 3 Name of channels Private Dairies Verka Milk Plant
Halwai,milk vendor Bhajis,contractors

Procurement(per day) 1,50,020 2,70,455 2,00,025 6,20,500

%share in total procurement 24.2 43.6 32.2 100.0

Total Procurement
Source field survey

* Associate Professor ,Department of Economics, Desh Bhagat College Bardawal(Dhuri)

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BIZ n BYTES - a quarterly published Journal of Business & Information Management - ISSN No (0976 - 0458) Volume 2 May 2012

The verka milk plant has 43.6 percentage of share marketing practices involve analysis planning implementation and control of programs designed to creates, build and maintain beneficial exchanges with target buyers for the proposal of achieving organizational objectives. Marketing management involves managing demand, which is return involves managing customer relations. TABLE III SHARE OF MILK PLANT IN MARKETING TOTAL MILK MARKETING IN LUDHIANA DISTRICT S.No 1 2
Source field survey

Name of Channels Private Dairies Verka Milk Plant Total Procurement

Marketing (per day) 2,70,000 1,80,000 4,50,000

%share in procurement 60.0 40.0 100.0

total

PROBLEMS IN PROCUREMENT OF MILK PROBLEMS OF MILK PRODUCERS The various important problems which the milk producers face in procurement of the milk are presented in Table IV and discussed follow. TABLE IV PROBLEMS OF THE PRODUCERS (FROM 120,RESPODENTS). S.NO 1 2 3 4 5 6 7 8 9 10 Problems Low market price of milk High cost of production High price of milk animals Lack of veterinary facilities Lack of credit facilities Irregular and delayed payments Wrong weights and measures Collection time Wastage of time Wrong report of fat and SNF tests
No of Producers Reporting Problem

Percentage 87.52 58.3 41.6 25.0 20.83 16.67 13.3 6.67 5.0 15.0

105 70 50 30 25 20 16 08 06 18

PROBLEMS OF THE MILK MARKETING ; Problems of the Agents : about 92% respondents reported that the less margin is given by the milk plant to the agency holder as compare to private milk plant.

* Associate Professor ,Department of Economics, Desh Bhagat College Bardawal(Dhuri)

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BIZ n BYTES - a quarterly published Journal of Business & Information Management - ISSN No (0976 - 0458) Volume 2 May 2012

Supply is not at time: more than 50% agency holders complained that the milk supply is not at time sometime the customer goes back as milk is not available. Trays are not neat and clean : the plastic trays in which the milk is supplied are not properly clean and sometime they are broken also. Leakage problem: about 70% agency holders complained that due to bad attention of transporters the pouches are leaked with the result the tray in which the milk is supplied become dirty along with the milk due to dust and this milk cannot be returned back to the milk plant.

SECTION V CONCLUSION The result of present study indicates that these days, people have become more and more economic minded and to fulfill daily needs, they join dairy farming. They try to consume relatively less quantity of milk (33.98%)and try to dispose off the maximum quantity of milk(66.02%) due to better milk markets and other facilities available now. Milk procurement and marketing system prevailing was not very sound or healthy. There were many weak links found in the milk marketing and procurement system and number of problems were faced by producers, agents and consumers and Verka milk plant. The major problems faced by the producers were low price of milk animals, lack of veterinary facilities, wrong reporting of fat and SNF tests, irregular and delayed payment wastage of time.

The major problems faced by the distributor or consumers were less margin as compare to private competitor, leakage problem, high price of milk, wrong weights and measure and wastage of time. The major problems faced by the Verka milk plant in the state process and sell milk by minor alternations in the brand name of Verka and are slowly eating up the share of Verka by using a similar packages design and color combinations of Verka. The fat contains in these brands of milk is quite less than quoted on the packets. To make the milk procurement and marketing system more Sound, the above discussed problems are needed to be removed by taking appropriate ameliorative measures. A remunerative price should be ensured to milk producers, taking care of consumers interest as well price of feed should be decrease; veterinary facilities should be available to producers time to time. Milk fed officials should have a regular check at the existing centers to check the practice of wrong reporting of fat and SNF. Credit facilities should be made available to people at lower interest rates. * Associate Professor ,Department of Economics, Desh Bhagat College Bardawal(Dhuri) Page 5

BIZ n BYTES - a quarterly published Journal of Business & Information Management - ISSN No (0976 - 0458) Volume 2 May 2012

Non milk animal should be disposed off. The need is to improve the local breeds for rapid daily development. There is a need for taking up promotional measures to build up import trade in cattle and buffaloes for increasing milk production. Use of different means of advertisement in different areas, sales promotion, punctuality and neatness in all types of activities i.e. collections, processing, marketing etc consumer should be supplied hygienic and clean milk at their doorstep. Agency is given in untapped areas. Health department should take the more samples more frequently to check the adulteration of milk.

REFERENCES
1. Yadav,D.B Mali,S.L & Patil,B.R (1995). Constraints of Diary enterprise Indian Journal Of Agricultural Ecnomics . 50(3):355. 2. Chopra Sheeba (1996)" God made Milk ,man created brands" Indian Diaryman . 48 (10):5-9. 3 Chand , S.Dixit,P,K And Ram ,K.(1997). income elasticity of demand for milk products in uraban areas of westyern uttar pardesh indian j. Diary science 50 (4): 268-271. 4. Goel ,B.B 2001 " Role of co-operative in Rural Development", indian co-operative review. 5. The world diary situation 2006" a report".59(3):17-19. 6 Chander Datt, K.S. Kaidan, N.P Singh And M. Datta Reserch Articles " Milk Production Scenario in North Eastern Region of Indian and Future Approaches to Enhance Productivity"Indian Diaryman, March 2007,Vol.59 NO .3(57-63). 7 Prakash Daman (1999) The contribution of co-operatives of social development. Indian Cooperative Review.26 (1):183-192. 8 Ganesh Kumar B and Prabhnath R (2000) Dairying in India (Thurst for 21st century.) India Cconomic Panorama 9 (1): 18-21. 9 S.Koli, Dr. P.A (2000) Can Talk co-operatives sustain in 21st century. India Cooperative Review.38(1):38-43. 10. Dalip P.K Gosain & J.C Markanday (2005) . Dairy Cooperative societies In selected states of Indian Reveiw and Analysis. Dairy planners. Vol 4 : 35-37

* Associate Professor ,Department of Economics, Desh Bhagat College Bardawal(Dhuri)

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