Milk Procurement: Provide Rural Milk Producers a Greater Access to the Organized Market

Milk ProcurementMilk is a versatile wholesome food, fresh and ready to consume. India is the largest producer of milk. It is a perishable product, and dairy industries experience seasonal fluctuation. Dairy plants in the co-operative and public sector domain have adopted dairy co-operative structure as a system, not only for milk procurement, but also for dairy development.

Some 70 million rural households are engaged in milk production, the majority of them being small and marginal farmers. Dairy cooperatives ensure inclusiveness and livelihoods especially for women. In a market driven economy, it is all the more important to have producer-centric institutional structures that strictly conform to cooperative principles and provide rural milk producers a greater access to the organized market.

National Dairy Plan Phase I, Guidelines on Village Milk Procurement Systems, It is necessary to simultaneously work in providing milk producers greater opportunities for sale of their surplus to the organized sector by expanding village based milk procurement systems that facilitate fair and transparent transactions.

This would require: 

  • Strengthening of milk procurement system in the existing dairy cooperatives
  • Promoting Producer Companies in areas where cooperatives are not present or have low coverage and procurement.
  • Setting up a sustainable milk procurement system, ensuring fairness and transparency.
  • Ensuring that quality milk is collected by bringing in maximum milk producers under the organized sector.
  • Creating more village level institutional structures following cooperative principles and safeguard the interest of small producers.
  • Helping provide rural milk producers with greater access to the organized milk processing sector and thereby enhance income of small rural dairy farmers.

Milk ProcurementDairies have cut milk procurement prices by 11 percent as per the reports in October. Strategically, dairies have reduced milk procurement prices by Rs 3 a litre in three equal phases to offer it currently at Rs 24 a litre. The first cut of one rupee a litre was reported in around the first week of August when all the milk farmers in Maharashtra were demanding farm loan waivers. A second one-rupee price cut was announced in early September this year. Dairies reported a third cut of similar amount on Dusshera- IndoAsian Commodities Report.

As per the Business Stand Report, Prabhat Dairy launched its new corporate identity and set a target to achieve the turnover of Rs 2,000 crore by 2020, and also raised its revised milk procurement target of 1.4 million litres a day by 2020, from the level of one million liters now. This is hopes to achieve with the same number of farmers and milking animals. The Kaira District Co-operative Milk Producers Union Limited popularly known as Amul Dairy, has decided to increase milk procurement price paid to farmers by Rs 20 per kilo fat.

The need for promotion of dairy in India arises due to several considerations such as low per capital availability of milk. The unorganised milk procurement channel to the organised channel is a slow process. Ultimately, the need for dairy development in India arises due to various reasons which stand out prominently as supply of adequate quantity of milk at reasonable price to urban consumers, lack of marketing facilities and extension services.

India wants to forge partnership globally in the food processing sector to bring the best practices of the world into its food value chain. World Food provided a platform for companies which looked at expanding their footprints outside their country for new opportunities. The national Food Processing Policy is of enormous significance for India’s development because of the vital linkages between the two pillars of the economy: Industry and Agriculture. Overall, the development of dairy industry will help to satisfy the nation’s nutrition requirement, tap the market growth, and generate employment to small farmers.

Share Button

Webmaster LBA

Food Marketing & Technology is a monthly magazine published by L.B. Associates Pvt Ltd

Comments are closed