INTRODUCTION:

India has had a rich tradition in dairying since the time of lord Krishna.

Dairying has been inherent in Indian culture, for centuries. Milk and milk

products have always been an integral part of our consumption habits. In the

vast field of Animal Husbandry, the contribution of dairying has been the

most significant in terms of employment generation, as well as income

generation. In post independence India cooperative dairying has been one of

our major successful stories having a profound impact on socio-economic

development of rural area. Agriculture and animal husbandry are the two

main supporters on which the entire structure of the village life rests in India.

Apart from land and irrigation, live stock is the largest productive resource in

the rural economy of India.

Milk and milk products, being the largest agricultural commodity

contributing to Rs. 1,50,000 crores to the country’s GDP annually, play a vital

role in agricultural economy.1 In India, dairying also provides sustenance to

the millions of farmers distributed over 5,50,000 villages constituting the bulk

of rural people with an annual income of less than 3,800 per family. Among

food products demand for milk increases relatively at higher rate as education

makes people conscious of the value of nutritious food. Milk constitutes the

most important source of nourishment for both vegetarian and non-vegetarian.

According to the National Sample Survey, expenditure on milk

and milk products constituted seven percent of the total expenditure in Urban

area.2 According to the world Health Organization’s recommendations, per

capita milk requirement is 210 gms., but India has crossed the requirement

due to the greatest success of Operation Flood, lies to in increasing the per

capital availability of milk in India from only 132 gms per day in 1950-51 to

225 gms per day in 2004-2005.3 4

The cost of milk production in India is the lowest in the world which is

about 70 percent of USA. However, the prices of dairy products are amongst

the highest in the world. For example, butter and whole milk powder are both

130 percent of international prices, only 5-6 percent of the total milk
produced is traded as liquid milk globally.

The trade is confined to the products such as skimmed powder (spm),

whole milk powder (wmp) butter and ghee. Dairy sector provides additional

income and generates job opportunities for 80 million farm families. Live

stock contributes about 9 percent of the Gross Domestic Product. But an

estimate shows that the organized sector handles only 15 percent of the milk

produced while the 45 percent is still handled by the unorganized sector with

remaining 40 percent retained by the producers for home consumption/* The

National Commission on Agriculture (1976), observed that, animal husbandry

has got the largest employment potential next only to the agriculture. In rural

areas, it provides subsidiary occupation, offers gainful employment and help

in better utilization of women and child labour. It helps in diversification in

agriculture and in increasing the incomes of the rural households. Prof.

Raj Krishna pointed out that dairying required one million rupees to create an

employment potential for 290 persons years as against 120 to 200 person

years for crop production. 5 The daily industry provides off season work

steady income and keep the rural population employed all the year round.

Agriculture is only seasonal in certain areas, it has been observed that as

much as 50 percent of the income, derived by rural households, is from

dairying alone.

Small and marginal farmers collectively own 60-70 percent of the cattle

population. Major share of milk is from buffaloes (52%) followed by cows

(45%) and goats (3%). During 1999-2000 total value of output of dairy in

India was estimated to be Rs. 1,08,000 crores. This is was crossed over

Rs.2,25,000 crores by the year 2005. The annual milk production was more

than double in the last three decades i.e. from 51.50 million tonnes in 1989-

90 and 91.5 million tonnes in 2004 now ranked first in the world

leading countries. The dairy cooperative structure has provided the

institutional support in this effort. More than one lakh primary dairy

cooperative societies have been organized. Most of them are serving in one or

more villages. These societies operate in 174 of the country’s major milk
sheds managed by milk unions. This structure is topped by 23 state

cooperative dairy cooperative federation.6

The states of Punjab, Haryana, Gujarat and Andhra Pradesh are the

leading milk producers. The expenditure on housing machinery and

equipment is very low. Except few North Indian States usage of green fodder

is limited. The present per capita availability is 225 grams and crossed the

requirement, but feed and fodder are not available in the required quantities.

The number of veterinary doctors in India is around 30,000 for about

285 million milk animals (1 doctor for 9500 animals) which is very less, but

the contribution to the GDP is much from livestock. The market value of

Indian livestock is around Rs.82.74 crore in 2000-2001.

The dairy industry in India is spread over the entire country in

innumerable small units in a very disorganized form. There are 10 million

farm households participating in 1 lakh village dairy cooperatives with around

40 million family members benefit the every year. Milk payment to farmers

rose from 2.1 billion in 1972 to close to Rs.40 billion in 2003, at constant

prices. There has been a substantial increases in employment, both direct and

indirect. The number of women who are involved in the running of dairy

cooperatives has gone up from 622000 in 1986-87 to 1967000 in 1999-2000.

The landless and small farmers who are members of dairy cooperatives

constitute over 75% of the total memberships of dairy cooperatives. The

benefits of the white revolution were, therefore, able to reach for more

landless, small and marginal farmers than they do for the wealthier rural

population.
2.1 Development of Dairy Industry in India:

No attention was paid to the promotion of dairy farming in India before

independence, apart from military dairies and few private dairies. The usual

pattern was that cattle keepers bought high-yielding buffaloes from Punjab

and Gujarat and kept them in primitive insanitary sheds in the vacant sites in

the metropolitan cities of Bombay, Calcutta and Madras. A familiar site in

Bombay was that of railway wagons carrying buffalo-dung to the sub urban

areas and green fodder from the rural area to the cities. It was strange type of

traffic! the worst part of this situation was that buffaloes when became dry

they sent to slaughter houses. The cities became dirty, and valuable high

yielding buffaloes were destroyed. To meet this situation the Bombay

Government provided larger area in the hilly area of Aarey to buffalo keepers

and also set up a dairy plant. For a while, this scheme caught the attention of

the planners. In this time Aarey was fascinating people concerned with milk

supply to the cities. Another experiment being carried on in > Gujarat

established Kaira District Cooperative Milk Producer’s Union Limited

(KDCMPU) in 1946. This cooperative milk marketing system emerged as an

alternative to the traditional marketing system..

Before establishing a dairy cooperatives in Kaira district, the rural milk

economy was operated as a subsidiary system within the agricultural

economy. Farmers were exploited by unscrupulous middlemen and private

contractors. The farmers were paid the lowest possible. The dairy industry in

Kaira was also not an exception with the prevalence of exploitative market, in

which traders were able to influence the price of their own advantage on the

contrary, the total milk production in India was only 17 million tonnes in

1950’s and we were heavily dependent on import of milk powder from New

Zeeland and Europe to fulfil the domestic demand. Dependence on import

was causing a heavy drain on our precious foreign exchange reserves. The

transformation since then, has been dramatic and can be attributed to

emergence of rural cooperatives in the dairy sector. It all started .in 1945,

when farmers of Kaira district in Gujarat went on strike, protesting against the
economic exploitation at the hands of contractors, who were collecting milk

on behalf of the British Government.

The British government had granted monopoly over milk collection in

Kaira district to a private firm called Poison, which, in turn, had hired

contractors to do the job. In that time Saddar Vallabai Patel advised the farmers

to form their own cooperatives. The strike succeeded in its objectives as

monopolistic restrictions on procurement, were removed. However, the humble

organization that started with two small village- level societies collecting only

247 litres of milk per day went on to become a billion litre idea.

This is the genesis of Kaira District Cooperative Milk Producers Union

better known to the world as “AMUL”. The success ofKaira Co-operative

Union ignited the spirit and thereafter, the cooperative movement spread like

wildfire across the nation. Similarly, the government of India established the

National Dairy Development Board (NDDB) in 1964 for the development of

dairy industry and to replicate KDCMPU’s pattern of Cooperative Dairying

throughout the country on a comprehensive basis.

The major objectives of the National Dairy Development Board are as

follows:

1) To promote projects of general public utility relating to dairying,

animal husbandry, food and agriculture, fisheries and cold storage.

2) To make available, the information, skills and technical services needed

to increase production of milk and dairy technical inputs and to speed

up procurement, processing and distribution ofmilk on request.

3) To prepare initial feasibility studies and to design, plan and start up of

the operations.

4) To provide manpower development services for dairy and allied

projects by organizing technical programmes for training personnel.

5) To help in the selection of equipment and undertake bulk procurement

services.

6) To offer consultation services on dairy and allied operations in the field

of planning control, including quality controlling, organization and

marketing, backed up, wherever necessary by research within the

NDDB and outside, in other organizations.

7) To serve as international liaison to other National Dairy Boards and

international agencies and to facilitate, the exchange of information and

personnel as also to assist other country’s dairy development.

8) To conduct research in the field of dairying of animal husbandry.

This programme was meant to produce a ‘flood’ of milk by providing

incentives to milk producers to organize village dairy cooperatives on the

pattern of ANAND. The remarkable success of the ‘ANAND Pattern’ of dairy

development and marketing in the Kaira District arouse interest in the scheme

at high in the Government. Lai Bahaddur Shastri, the then Prime Minister of

India, was the man who categorically recommended to set up the NDDB.

During the visit to ANAND in October 1964 to perform the opening

ceremony of the Feed Factory of AMUL, he stayed that night in a village of

Ajarpur, near ANAND. He personally watched the entire process of milk

collection, fat testing, payment to the producers and feed sale by the village

cooperative society early in the morning. He was greatly impressed by the

working of the dairy cooperatives and immediately proposed that a national

level institution should be established to help the milk producers all over

India to organize their dairy cooperative on the ANAND pattern. Out of this

suggestion grew the organization known as the National Dairy Development

Board, which was registered as a Non-Profit Charitable Trust in 1965 with its

headquarter at ANAND, and Dr. V. Kurien was appointed as the first

Chairman of the Board of Directors. The notable feature of the NDDB was

that it developed into self-supporting institution. The Board provides technical

assistance for cooperative unions and for the state Government who went to

set up modem dairy plants. The Board makes feasibility study and prepares a

project report.

Table 2.1
The Important Dairy Centres in the Country

SINo. State Centre of Dairy Industry

1. Assam. Guwahati, Shilong.
2. Punjab. Amritsar, Jind, Hissar, Dasuya, Gohna, Hudiana.
3. Chandigarh Chandigarh.
4. UP. Agra, Aligarh, Aliahabad, Almora, Holdwani, Kanpur,
Mathura, Varanassi, Lucknow, Barelly, DehraDun
Moradabad, Gorakhpur.
5. Tamil Nadu. Ootacamund, Kanyakumari, Coimbatore, Kodaikanal,
Tiruchirapalli, Thanjarur, Maduroi, Erode, Madras,
Chidambaram.
6.. Gujarat. Baroda, Mehsana, ANANDi, Rajkot, Ahmedabad,
Bhavnagar, Jamnagar, Juhagarh, Suredranagar, Surat.
7. Andra Pradesh. Vijaiwada, Hyderabad, Vishakpatanam, Warangol,
Rajmahmundry, Guntar, Kumool, Nellore, Chittur.
8. Kerala. Trivendrum, Calicut, Kottayam, Cannanore, Alleppey,
Emakulam, Palghat.
9. Delhi. Delhi.
10. Maharastra. Bombay (Arey), Dhorwar, Aurangabad, Nagpur, Akola,
Amaravati, Dhulia, Kolhapur, Nasik, Pune, Udgir,
Miraj, Solapur, Ahmednagar, Kudigee.
11. Madhya Pradesh. Khandwa, Kanti, Raipur, Ratlam, Sagar, Chindawara,
Guna, Rewaujjain, Bisalapur, Bhopal, Gwalior, Indore,
Jabalpur.
12. Orrissa. Cuttack.
13. West Bengal. Hooghly, Haringhta,
14. Rajashtan. Jaipur, Udaipur, Bikaner, Jodhpur, alwar, Bharapur.
15. Karnataka. Bangalore, Belguam, Gulbarga, Dharwad, Mysore,
Mangalore, Devanagari, Bhadravati.
16. Bihar. B3hagalpur, Gaya, Patna, Dharbhanga, Dhandabad,
Ranchi, Barun.
17. Haryana. Jind, Biwani, Ambala.
Market Growth of Indian Dairy Products

Since India is a major consumer of tea and coffee, it would be a very large

market if only the price was not a constraint. In addition to domestic consumption,

the whiteners/creamers find a high level of institutional acceptance, especially

by railways, hotels and restaurants, airlines, hospitals and nursing homes

and corporate offices. The institutional market can be tapped first, in particular, the

airlines, railways and hotels. The penetration can then be extended to the household

sector. The potential for exports, especially to neighboring countries and the

countries in the Middle East, the Gulf and Africa, also exist and could be exploited.

Table 3.7 Market Growth of Dairy Products

Year Growth (%) Incremental Change. Change %. Trend %

1990-91 - 1996-97. 3.6. 0. 0 100
1996-97 - 2001-02 10.1. 6.5 180.56. 281
2001-02 - 2006-07. 8.7. -1.4. -13.86 242
2004-05 - 2009-10 8.3 -0.4 -4.60. 231
2009-10 - 2014-15. 8. -0.3 -3.61 222
Average. 7.74 0.88. 31.70. 215

Three Tier Structures of Milk Cooperatives

Tier-1-Village level: Primary Dairy Cooperatives are formed at village level as

“Anand Model”. It forms the base level of the 3 tier system which has direct contact

with milk producers at villages.

Tier-2-District level: District level Milk Producers Cooperative Union (DCMPU)

comprises of all the village level Primary Dairy Cooperatives in a district. It procures

surplus milk from the societies, processes it and sells it to milk consumers.

Tier-3- State level: The Tamil Nadu Cooperative Milk Producers Federation

(TCMPF) is the apex level society in which all the District Unions are members.

Federation is arranging for marketing of own liquid milk and products produced by

all DCMPUs in the brand name of “Aavin”

Milk production and trade mainly operate as a cottage industry in the rural
areas. A majority of those involved in this activity are women, for whom it provides

employment and helps to supplement their family income. Traditionally, dairying

and pasturing activities were done to meet the domestic requirement. Urbanisation

has increased the demand for milk in urban areas and this necessitated procuring,

processing and distribution of milk in a scientific manner. Further, to eliminate the

middlemen and to protect the interest of the producers in the villages, Milk

Producers’ Cooperative Societies (MPCS) have been formed. This has assured a

remunerative price, market support to the producers and improved the rural

economy, besides catering to the needs of the consumers. India is one of the largest

milk and milk products producing countries in the world. The Dairy Development

Programmes are implemented in Tamil Nadu through a network of milk cooperatives

organized on ‘Anand Pattern’ model. The institutional framework has a three tier

structure viz., societies at village level, unions at district level and federation of

unions at the apex (State) level. The milk procurement by the 17 District Cooperative

Milk Producers’ Unions (DCMPU) affiliated to the Tamil Nadu Cooperative Milk

Producers’ Federation (TCMPF) has steadily increased during the Eleventh Five

Year Plan period. The main objective of milk cooperatives is to procure milk at a

reasonable price and make it available to the consumers throughout the year at

nominal cost. The dairy cooperatives are keen to meet the growing liquid milk

demand in the State and keep the prices under control. The dairy development

activities have grown at a faster rate in western region than other regions. The dairy

cooperative sector in the State has benefited by Government of India (GOI) schemes

such as ‘Intensive Dairy Development Programme’, ‘Strengthening Infrastructure for

Quality and Clean Milk Production’, ‘Assistance to Cooperatives’ and ‘National

Agriculture Development Programme’. Funds are also availed from the State

Government. In the recent years, private dairy operators play a key role in the dairy

sector. They actually take care of the farm level production management to increase

the productivity of animal, land, water and labour by scientific and partial

mechanisation. The inputs like selection of animal, shelter, fodder, veterinary

services, procurement of milk, training to farmers and financial tie ups with banks

are provided by the private dairy operators. Also, they extend insurance
arrangements followed by prompt and regular payment which have created an

increasing trend in the dairy sector. At processing units, the value addition at plants

is taken care by advanced technologies.

Abstract

India is the world’s largest producer of dairy products by volume, accounting for more than 13% of

world’s total milk production, and it also has the world’s largest dairy herd. As the country consumes

almost all of its own milk production, India was neither an active importer nor an exporter of dairy

products prior to year 2000. However, since the implementation of Operation Flood Programme, the

situation changed significantly and imports of dairy products reduced to very small quantities. From

2001, India has become a net exporter of dairy products and after 2003 India’s dairy import has

dipped while exports have increased at a fast rate. Yet the country’s share in global dairy trade still

remains at minor levels of 0.3 and 0.4 percent for exports and imports respectively. This is due to the

direct consumption of liquid milk by the producer households as well as the demand for processed

dairy products that has increased with the growth of income levels, which have left little dairy

surpluses for export. Nevertheless, India consistently exports specialty products such as casein for

food processing or pharmaceuticals. The Indian dairy sector is also different from other dairy

producing countries as India places its emphasis on both cattle and buffalo milk. In 2010, the

government and the National Dairy Development Board have drawn up a National Dairy Plan (NDP)

that proposes to nearly double India’s milk production by 2020. This plan will endeavour to increase

the country’s milk productivity, improve access to quality feeds and improve farmer access to the

organised market. These goals will be achieved through activities that focus on increasing

cooperative membership and growing the network of milk collection facilities throughout India.

Despite its huge production volume, India nevertheless faces a milk supply gap due to increasing

demand from a growing middle class population. Estimation suggests that Indian dairy production is

growing at a rate of about four percent per year, yet consumer demand is growing at approximately

double that rate. Apart from the rapidly increasing demand for milk and dairy products, other

reasons such as the increased cattle feed cost and low availability of dairy farm labour in the rural

areas have also resulted in increase in the cost of production. On the other hand, the strong

pressure from EU to open up its market as well as the proposed free trade agreement with Australia

and New Zealand may also put India’s dairy sector in the risk of being jeopardised. In order to

maintain the development of its dairy industry, focus needs to be placed on several areas. First, cost

of production has to be reduced through increasing productivity of animals, improve animal health

care and breeding facilities and management of dairy animals. Second, Indian dairy industry needs to
further develop proper dairy production, processing and marketing infrastructure, which is capable

of meeting international quality requirements. Third, India can focus on buffalo milk based speciality

products, such as Mozzarella cheese, in order to meet the needs of the target consumers.
LITERATURE REVIEW

The review is arranged in the sequence as given below

The authors analysed the value chains of milk and milk products in the co-operative and

private dairy plants in the Salem district of Tamil Nadu, based on primary data that they have

collected form one cooperative and one private dairy plant, five transport routes and six

chilling plants. The authors have observed that the procurement cost per litre of milk was

higher for the co-operative dairy plant than the private plant due to increase in the

transportation, chilling and reception costs. The value chain analysis revealed that the

products such as peda, khoa and SMP could earn a higher value after passing through the

value chain in the co-operative plant while ice- cream, Mysore and ghee in the private plant.

The marketing margins and marketing efficiency was found higher in toned milk,

standardized milk and butter for the private plant and in full cream milk, ghee and SMP for

the co-operative plant .

The study was conducted to analyse the marketing efficiency of cooperative and privet

dairy plants in Tamil Nadu. To evaluate the marketing efficiency, primary data was collected

from 20 milk producers’ cooperative societies, 20 milk collection centres, 20 transportation

routes (from cooperative and private each). The marketing efficiency of cooperative dairy

plant for all dairy products has been observed relatively less than that of private dairy plant,

except toned milk .

The study was intended to develop a price determination model for milk. In developing the

price determination model different factors like input prices, non-price factors like

technology were considered. The authors through the study developed a price model based on

cost of production. According to them the model can be used to project the future price of

milk. The authors revealed that the elasticity of cost of production with respect to prices of

variable inputs was positive and less than one. The prices of dry fodder and concentrate had a

major impact in raising the cost of milk production for buffalo milk. Based on the primary

data, collected from 160 households in financial year 2002-03 the study explained that the

milk price should be adjusted within that range where net income elasticity floats between

zero and one .

The study was aimed to find the impact of performance of dairy cooperatives on milk

production, income and employment. The primary data was collected from four milk
cooperatives from Kolar District of Karnataka. A trend analysis of physical indicators like

total membership, total employees and total milk production showed an increasing trend year

on year for the period 1995-96 to 2004-05. And for the same period financial performance

was analysed based on financial indicators like share capital, sales value, net profit net worth

etc. It was observed that all financial indicators showed a positive trend during the period.

The employment generation and income earned by the members of dairy cooperatives were

higher compared to the non members because the members of cooperative societies received

different services from the societies at low cost or free of cost .

The paper assessed the impact of Karnataka Dairy development project on dairy

development in Karnataka.The Primary data was collected through survey of 21 villages with

cooperatives And 10 villegeswith non cooperative dairy units. The author found a positive

impact of the project on milk production, as the average production in villages with milk

cooperatives was twice the production in villages without cooperatives.The increase in milk

production was achieved through a shift in herd composition. The indigenous cows were

replaced by cross bred cows or buffaloes. Project led to increase the herd size and investment

in cattle. The project had no impact on wage earnings and changes in labour pattern however

it had an impact on milk prices in cooperative villages.

The study dealt with the concept of profitability, measurement of profitability in relation to

total investment, sales and shareholders’ funds in Dairy Industry in Andhra Pradesh during

2001 to 2011. It also dealt with the evaluation of earning power, analysis of operating

efficiency, Analysis of financial efficiency and measurement of financial health of Dairy

Industry in Andhra Pradesh, using Z score analysis. The data was collected from 5 dairy

enterprises of Andhra Pradesh for a period of 10 years (2000-01 to 2010-11). Four out of five

dairy units were found financially sound.While one was found in bankruptcy zone .

It was a case study of “Gokul” cooperative union, western Maharashtra. A SWOT analysis

was carried out for the cooperative union. Through a pretested interview scheduled, data was

collected from 150 dairy farmers. The study explained about the 46 livestock services

delivered by “Gokul” and the feedback of 150 respondents about the services rendered. The

author expressed his opinion that the union had successfully strengthen the dairy production

and marketing by providing the livestock services. However the author found that the union

had to improve upon the quality of the services rendered and had to reduce the cost attached
to these services .

The study was carried out to understand the issues faced by the dairy farmers and the staff

members of the cooperative union. With this purpose the data was collected through

interview method, from 150 farmers and the staff members.The constraints were divided into

4 categories as Human Resource, Financial, Policy-Related and Administrative Constraints.

Lack of veterans, lack of medical facilities, high cost of concentrates, complex insurance

procedure were the major constraints expressed by the farmers. Whereas lack of job

satisfaction, low payment, poor coordination among various agencies, lack of proper

diagnostic and cold storage facilities were the major issues related to cooperative staff .

The author studied marketing and distribution strategies of different types of dairy units.

The study was based on the data collected from cooperative, private and public sector dairy

units of Kolhapur district of Maharashtra. It was found that all the dairy units advertised their

product only at local level. Local newspapers, local TV/radio channels, point of purchse

advertisement were the advertisement media selected. A few had their own out lets at various

places of Maharashtra. Majority of them did not have a wide distribution network .

Agriculture and allied sectors like dairy are not commercialised in India. They are still

considered as source of livelihood for millions of small farmers. There is a need to

comercialise agriculture and dairy industry in order to face the world wide competition. The

study was intended to find the commercial viability of different size of dairy units. An

analysis of capital investment, cost, return and profitability was carried out, based on the data

collected from 40 dairy farms of Ahmednager district in Maharashtra.The selected farms

were of three types, large medium and small. The commercialisation in dairy leads to increase

in production and income. The cattle productivity in terms of milk was found higher for small

dairy farms compared to medium and large farms. The authors concluded that the dairy

farming is highly capital intencive but the investment pattern was different for small and

large farms as large farms invested more in cattle while the major investment of small farms

was in development of infrastructure .Commercial dairy farms preferred to have their own

fodder cultivation instead of dependence on purchased fodder. As feed cost was the highest

contributor of the total cost .

A trend analysis of composition of different spices in total milch animals and the

productivity of these spices was carried out based on secondary data for 18 years: 1990-91 to
2008-09. The authors found that the local cows have consistently improved their performance

across the state(Gujrat). The increase in number of animals was found as the main driver of

the growth in milk production. However beyond a limit the incremental number was found

unfaverable.The authors have suggested that the milk yield of the milch animals needs to be

paid attention for sustainable growth of milk production .

The performance of dairy industry of Gujrat was analysed and appraised through the

study. The study assessed financial health of 9 district milk porducer’s unions of Gujrat based

on the secondary data for 10 years (1993-94 to 2002-03). The cost components of sales were

analysed and the reasons of high costs were identified.It was revealed that the procurement

costs was about 75% to 80% of the total cost. Increase in transportation cost year after year

led to increase in procurement cost.The processing expenses were the second largest cost in

the total cost structure, followed by personnel expenses .

The study was carried out to analyse the effectiveness of dairy cooperatives and the

economies of scale in milk production. The study included varying cost components (such as

fodder, shelter, cattle feed, labor cost) as well as varying costs of milk produced during the

summer and winter. A survey was administered covering 300 milk producers. It was found

that though buffalo milk earned higher procurement price than cow milk, owing a buffalo

resulted in negative income. But still there were more farmers who own buffalos than cows.

Milking found to be the secondary source of earnings for most of the farmers. It was found

that the total costs including labor resulted in a negative income for both cow and buffalo

owners. The author commented that milking is an economic activity that generates wages

(similar to a job) rather than a business .

An ISO-9002 dairy plant having installed capacity of 60,000 litres per day (LPD); situated

in the north-eastern area of the Haryana state was selected for the study. The costs and

revenue generation for the four products were analysed. It was observed that raw material

was the major cost component, contributing 90% of the total costs, followed by packaging

cost for the entire four products. The study has revealed that all the products, except the

double-toned milk were being produced above the calculated break-even levels. Ice-cream

manufacturing was found to be the most profitable proposition [14].

The author has studied the operational performance of MILKFED (The Punjab State

Cooperative Milk Producers’ Federation Limited)and HDDCF (Haryana Dairy Development

Cooperative Federation Ltd) on the basis of various indicators; using 5 years financial data. It

has been observed that the MIKFED and HDDCF have set up their milk booths in urban and

semi-urban areas but they have no milk booth in the rural areas. It was found that societies of

HDDCF were reduced in the year 2009-10.The proportion of interest income to total income

of HDDCF was found higher as compare to MILKFED but Milkfed was earning more from

other sources as compared to HDDCF. It has been found that the HDDCF spent larger

proportion of total expenses on its employees as compare to MILKFED but Milkfed had

utilized its resources more efficiently than HDDCF. HDDCF earned high rate of return on its

investments as compare to MILKFED. The author concluded that financial performance of

HDDCF was better than MILKFED [15].

A comparative analysis of economic performance of members and non members was the

basic intent of the study. A comparison of cost and returns of milk production among

different herd size was also carried out. In order to serve these purposes, data from 75

members and 75 non members from Alwar District of Rajastan was collected. The Per day

net maintenance cost was found to be higher for membergroup than that of non-member

group. It was found to be higherin case of buffalo than that of cow and also observed more in

thesummer season.Per litre cost of buffalo and cow milk productionwas observed to be higher

for the non-member as compared tomember group. Per litre cost of buffalo milk

productiondecreased with increase in herd size across differentseasons while same trend was

not observed in case of cow milkproduction. Further, it was found higher in summer season.

Daily net return was found relatively higher in member group ascompared to non-member

group and also found higher in winter. Per litre cost of buffalo and cow milk productionwas

observed to be higher for the non-member as compared tomember group [16].

In this study the miltch animals were categorised into crossbred cows, local cows and

buffaloes. It was found that the farmers with large herd size(10-12); preferred crossbred cows

against the local cows or buffaloes, while farmers with small herd size (6); preferred local

cows and buffaloes. The author found that improved scientific dairy farming practices and

increase in proportion of crossbred cows in the total miltch animals, led to increase in average

daily milk production in the state. It was further observed that Increase in herd size led to

decrease in the productivity.The members of single family maintained dairy animals more

carefully than those of joint family. Herd size, period, season and type of animals had
significant effect on average daily milk contribution by dairy farmers to DCS milk pool. Herd

size did not differ with each other with respect to their share in consumer’s rupee. The study

further analysed that per litre milk production is one of the components for farm level

decision making and it was found that per litre cost of milk production was comparatively

low in case of crossbred cows (10.4) than local cows (13.99) and buffaloes (14.34). Per litre

cost of milk production in urban areas was found relatively high in comparison to rural and

semi-urban areas, probably due to higher feed, labour and fixed costs [17].

This paper has explored the major constraints faced by cooperative and non cooperative

dairy farmers on the basis of primary data collected from 320 dairy farmers. The important

issues were included under 38 constraints under 5 groups —Infrastructural Constraints (11),

Economic Constraints (10), Marketing Constraints (6),Technical Constraints (5) and Socio-

Psychological Constraints (6). It was found that: The non-cooperative farms faced major

constraints and high severity compared with cooperative dairy farms in expanding milk

production. The financial problem was found to be the most significant constraint faced by

the cooperative farms. Among infrastructural constraints, unavailability and infrequent visit

of veterinary medical practitioners were the main constraints. Among marketing constraints,

not excercising proper management practices by cooperative societies in favour of their

attached farms was the major constraint. For technical constraints, lack of technical guidance

was severe for members of cooperative farms. As regards the sociopsychological constraints,

the lack of time due to busyin domestic / agricultural work and lack of cooperation and

coordination among members were major constraints [18].

It was a comparative study of cost, return and profitability of cooperative and non

cooperative dairying in West Bengal. A survey of 320 household was conducted. The

analysis of costs revealed that the variable cost was the major component of total cost for

both cooperative and non cooperative dairy farms. Feed cost and Labour cost were found to

be the two major components of variable costs. Interest cost was found to be the major

component of fixed costs. NPV, IRR and Benefit cost ratios were the techniques used to

evaluate the financial performances of dairy farms. The authors found that some

cooperatives, named as good cooperatives showed better performance than rest of all dairy

farms which included bad cooperatives and non cooperative dairy farms .

Assam initiated organised development of milk processing way back in the mid 1960s.
The total installed capacity of pasteurisation and chilling plants in the State was 159 thousand

and 28.5 thousand litres per day, respectively. However the study found that the created

infrastructure was either largely defunct or grossly under-utilized. In the authors’ opinion the

poor performance of the plants was due to the establishment of milk processing units without

an appropriate assessment of output demand and input supply and ascertainment of

economic viability of the plants. It was identified that the functional plants had a limited

product profile, high returns of marketed milk, substantial handling and curdling losses, low

productivity of capital and labour and huge operational losses. The study also found that the

supporting institutional and infrastructural mechanism had not been put in place and a

systematic business and management plan to run the system had not been formulated. The

factors identified by the authors for the poor performance were: Low procurement of milk,

Lack of effective milk collection network, absence of non price incentives etc. Moreover the

overall demand in the state was found less than national average .

The study was intended to identify the issues of milk production and marketing in

Nagaland. The analysis of data collected from 120 households revealed that low availability

and high price of concentrate and lack of green fodder availability were the major production

constraints. Low price of liquid milk was the major constraint faced by cooperative members

and the delay in payments was the major constraint for non-cooperative members. It was

found that the net returns were positive for cross-bred cows while net returns were negative

for local cows. The net returns were highest for small farms as compared to the other two.

The authors found that Assam, Tripura and Manipur were the highest milk producing

states and with highest cross bred naimales, of north east region. Hence these states were

selected for the study. Total 90 house holds were interviewed to find out the factors affecting

the milk yield of cross bred animals. The major factors affecting the milk yield of crossbred

animals in the N-E states were the technological and socio-economic constraints, which could

be addressed by adopting improved management practices, better feeding practices,

controlling of diseases and improvement of the socio-economic conditions of the farmers

through training, education and enhancing access to the funds. Authors opinioned that

addressal of these constraints will increase actual milk yield by about 66 per cent which will

be sufficient enough to meet the deficit of milk requirement in the region. The authors have

conducted a categorywise (small, medium and large) yield gap analysis and found that the
highest increase in milk yield will be obtained on medium category households. The factors

significantly affecting the milk yield at the household level according to the authors and as

per the study were: allocation of human days per animal, expenditure on concentrate,

economic status of the farmer and availability of the green fodder in the surroundings. While

no major breakthrough was expected immediately, improvement in these factors would meet

the milk deficit in the region.

The study was based on secondary data. The authors found slow growth of livestock sector

in north east region. However they identified several factors influencing the households’

decision to rear livestock like availability of labour, occupation, caste, farm-size, availability

of irrigation, and access to information sources. The assured irrigation ensured the

availability of fodder and further induced farmers to keep livestock. The study recommended

that that the NE states should take technical, institutional and policy initiatives for the

improvement of breeds, feed availability, and disease control and food safety of livestock. A

comparative analysis of number of vaternary institutions, land under fodder cultivation,

average milk productivity of different types of animals, statewise was also a part of the study

CONCLUSION

24 research papers are studied to understand various issues related to India dairy industry.

Each of these papers is related to a specific geographical region of India. These papers are for

6 geographical regions of India viz Southern region, Western region, Northen region, North-

Eastern region, North – Central region and Eastern region.

14 out of 24 studies were based on primary data collected from dairy farmers (members of

cooperative societies and non members). The major issues reflected in these studies were

relalted to the scarcity and high cost of fodder and concentrates, irregular and lack of

veterinary and diagnostic services and lack of coordination among different government

agencies. The Common findings of majority of the 14 research papers were as follows:

• Small herd size. The herd size on an average is found to be below 10-15 animals.

• Dairy farming is still in the form of a source of livelihood and not commercialised.

• Fodder and concentrate together contributes the highest proportion of the total costs.

• Cattles and Infrastructure are the two major contributors of total dairy farm investment.

• Imputed labour costs and cost of land used for fodder are many times not considered by

the farmers, in deriving the earnigs from the dairy farming.

• The members of cooperatives receive the livestock services either free of cost or at a

reasonably low cost. Hence the non members incurred more costs compared to members of

the cooperatives.

• Cooperatives have positive impact on milk production and income generation.

• There is a shift to corssbred cattles from local cows and buffaloes.

• Though buffalo milk earns higher procurement price, owing a buffalo resulted in negative

income.

• Per litre cost of milk decreases with increase in herd size.

The remaining 10 studies were either related to the performance analysis of cooperative or

private dairy plants or federations or the general dairy scenario in the region selected. For the

milk processing plants, the procurement cost was found the major component of the total

costs, followed by the processing cost. For some dairy products; cooperative dairy plants

were found cost effective while for some other products, private dairy plants were found cost

effective. Some of the papers studied the economic viability of dairy plants or cooperative

units.