Module 10. System of milk procurement and processing, pricing and marketing of milk and milk products
Lesson 22
SYSTEM OF MILK PROCUREMENT FROM RURAL MILK PRODUCER’S
22.1Introduction
India is a largest milk producing country in the world. Milk production in India during the last two decades is increased from 53.9 million tons in 1990-91 to 112.5 million tons in 2009-10. Consequently, per day per capita availability of milk has also increased from 176.9gram (g) to 263.9 g during this corresponding period. Milk in the rural India is produced in the scattered villages where 70 percent of the milk is produced by the resource poor households like landless laboures, marginal and small farmers. Therefore, collection of milk from the scattered farmers, majority of them are having 2-3 milch animals is a challenging task. Processing is an important component in the value chain of perishable commodities. Among the agricultural commodities, milk is highly perishable and need either to be immediately chilled or transformed from raw product into processed products. The perishable nature of milk is a major limitation for the milk producers. Milk producers had to sell their milk to private companies through middlemen. To eliminate the middle men from the milk marketing system a programme on the advice of Sardar Vallabhbhai Patel was formulated in the year 1946. The milk producers of Kaira district in Gujarat, registered the Kaira District Cooperative Milk Producer’s Union, and was started, now popularly known as AMUL. Therefore, the co-operative movement gained momentum. Impressed by its socio-economic impact suggested replicating the AMUL model across India. Thus National Dairy Development Board (NDDB) born in 1965.
Under the Operation Flood Programme launched by NDDB, Indian dairy sector went through a paradigm shift. The main component of the programme involved:
· Organizing dairy cooperatives at the village level,
· Creating the physical and institutional infrastructure for milk procurement,
· Processing, marketing and production enhancement services at the union level and establishing dairies in India’s major metropolitan centers.
The organized modern sector is handling around 20 million litres per day, in more than 400 dairy plants making India the hottest milk market of the world. India is the largest milk producer in the world but only 20% of its milk production is being processed by the organized sector. Thus, about 80% of the total production is still in the unorganized fold. In order to boost their milk procurement, many dairies have setup societies or collection centers in the rural areas. The society network has reduced the role of the unorganized ‘doodhiyas’ (milk vendors) in milk procurement as also protected the interest of the producers in the villages. This has assured a remunerative price and market support to the producers.
22.2 Sectors of Milk Procurement from Rural Areas
22.2.1 Organized sector
· Milk Supply Chain Model: Milk Producer’s Cooperative Societies.
22.2.2 Unorganized sector
· Milk Supply Chain Traditional Unorganized Dairying System (Vendors, Halwaies, Direct consumers, Contractors).
22.3 Procurement of Milk by the Organized and Unorganized Sectors
After milking the animals, milk being a perishable good, it is to be immediately cooled, boiled or dispose off to the milk marketing agencies. In the present system, milk is procured from the rural milk producers by the milk cooperative societies in the Organized system of milk marketing and the milk vendors, halwaies, creameries, contractors and direct consumers, the agents of unorganized sector. The agencies of unorganized sector like vendors, creameries halwaies etc., collect milk from the rural milk producers from their farms, whereas in case of organized sector, the producer have to go to the milk collection centres established by the milk cooperative societies.
Due to organizational or economic difficulties, it may not be possible to cool the milk on the farm. In areas far away from the dairy plant it may be troublesome to collect milk and take it directly to the plant. In such cases, especially if there are many small suppliers, it is preferable to take milk first to a collection point, and then transport it from there to the dairy plant or milk collection centre.
22.3.1 Can collection
Milk that is available in cans, whether on the farm or at the collection point, can be picked up and transported by many convenient means of transportation (bicycles, small barrows or trucks). The cans should be protected against the sun, both while they are at the roadside awaiting collection and during transportation. It is advisable to use insulated, or even refrigerated trucks to transport cooled milk in cans over long distances and under high ambient temperatures. When there are many individual suppliers, there are many different types of milk cans, providing logistic and cleaning problems. It is, therefore, advisable to use standard shape milk cans with a smooth surface.
22.3.2 Bulk collection
Milk available from the farm in bulk, for instance from farm cooling tanks, should also be picked up in bulk. It is not a good practice to use cans to transport milk that is already available in bulk (storage) tanks, because there is an extra risk of contamination. Furthermore, the temperature of milk in cans is more difficult to control than milk in bulk, and filling, emptying and cleaning of milk cans demands much labour and is costly affair. Truck-mounted tanks or road tankers can be used for the transport of milk in bulk. The tanks should be insulated and may be covered by a shield to protect against strong sunshine. On the farm, or at the collection centre, the loading hose from a milk transport truck is connected to the outlet valve on the storage tank, and the milk is pumped over. Pumping is stopped as soon as the cooling tank has been emptied, thereby preventing air from being mixed into the milk. The tanker is fitted with a flow meter and pump so that the volume is automatically recorded. In other cases, the storage tank has to be calibrated to make dip-stick measurements reliable. The tank of the bulk collection vehicle is divided into a number of compartments in order to prevent the milk from slushing around during transportation.
22.3.3 Milk collection points and centres
In scarcely-populated areas, or areas where individual suppliers are far away from the dairy plant and difficult to reach, milk has to be transported over long distances. Transportation to the dairy plant will also take much time. In these cases, it is advisable to collect and cool milk in a milk collection centre (MCC) before transportation takes place.
The difference between a collection point and a MCC is mainly based on cooling and size. A milk collection point can be a small, central place where small suppliers can deliver their milk. The reception capacity is likely to be between 50-500 litres a day in cans or milk containers. There is no cooling equipment present at the milk collection point, so the milk should be collected and brought to the MCC within two hours after milking. At the MCC, there is always cooling equipment and, in most cases, quality testing facilities are also available. The milk must be collected and cooled to <4°C not later than three hours after milking has been completed.
22.3.4 The traditional system of milk collection in the dairy cooperative societies included mainly to accept milk by
· Volumes,
· Carrying out fat testing by Gerber method and
· Entering the milk Fat and SNF data manually in the registers.
This at that times resulted in unreliable data, possible malpractice leading to loss of fat and thereby eroding the confidence of the members. In order to avoid such issues, a unique system to automize milk procurement operations of village milk cooperative society was developed.
The Automatic Milk Collection Station is an integrated unit, combining different functions of a milk collection center, such as measuring the weight, fat content and providing the price output of the milk poured in the center.
The equipment also helps the milk co-operatives/ milk collection centers in maintaining summary of milk collected and supplied together with the rate on a daily, monthly and yearly basis. This state-of-the-art equipment operates both on battery and main electricity line and is able to process and record 120-150 milk collections per hour. The system comprised of an Electronic Milk Weighing Unit, the Electronic Milk Tester and Data Processing Unit.
Conclusions
Low cost, energy-efficient, environment friendly smallholder enterprise is a better option for the entrepreneur. Milk quality is a serious constraint, especially for the small dairy holder. Lack of institutional support vis-à-vis supply chains are affecting the growth of the smallholder dairying. Lack of accessibility to the benefits of research/education/ manpower system by the smallholder. Milk production and processing should commensurate as well as easily accessible to the smallholder. Smallholders are prone to higher financial risk due to unaffordable high cost funding and poor price realization.
· Milk cooling requires an adequate supply of electricity and water. These are not always available on the farm and sometimes can only be arranged at relatively high costs.
· Even though electricity and water may be available, the volume of daily milk production may be too small to justify a cooling system, and it would be too expensive to cool a small amount of milk on the farm and also too expensive to collect it. Due to regulations, smaller amounts of milk are sometimes cooled on the farm, but this milk is then expensive to transport. In such cases, it is possible to transport the cooled milk in an insulated vessel to a collecting point, where a tanker collects milk from several suppliers.
· Bulk collection of milk on farms not only requires a supply of water, electricity and a certain daily production of milk, but also good road access for milk transport trucks.
· If a dairy intends to introduce bulk collection of cooled milk in areas with many low producing farms (where the milk is not cooled), substantial resources are required.
Selected references
Chauhan A.K., Dhaka, J.P, Chandel, B.S. and Singh Surendra 2007. Economics of milk products manufacturing units in Haryana, Research Bulletin, NDRI, publication No. 34/2007: 1-29.
Pundir R.S 1988. Economic analysis of milk procurement in a public sector plant under Co-operative setup in Haryana, M.Sc. Thesis, Deemed University, National Dairy Research Institute, Karnal (Haryana)
http// www.milkfed.nic.in/scheme.htm