A STUDY ON THE PRODUCTION AND MARKETING ASPECTS OF KOLAR

MILK UNION, KARNATAKA STATE

BY
M.N. SRINIVASA
B.Sc (Ag)

PROJECT REPORT SUBMITTED TO THE

SCHOOL OF AGRIBUSINESS MANAGEMENT
ACHARYA N.G.RANGA AGRICULTURAL UNIVERSITY
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS
FOR THE AWARD OF THE DEGREE OF

MASTERS IN AGRIBUSINESS MANAGEMENT.

SCHOOL OF AGRIBUSINESS MANAGEMENT

COLLEGE OF AGRICULTURE
ACHARYA N.G.RANGA AGRICULTURAL UNIVERSITY
RAJENDRANAGAR, HYDERABAD-30.

AUGUST 2007
 ACKNOWLEDGMENT

I wish to extend my deepest gratitude to Mrs.P.Radhika, Assistant professor and

Major Advisor, School of Agribusiness Management, ANGRAU for her enduring

guidance and support throughout the project work.

My special thanks to Dr.Seema, Associate professor and Member, SABM,

ANGRAU for her help during the course of study.

I wish to extend my deepest gratitude to Dr.A.Janaiah, Professor and Head,

School of Agribusiness Management, ANGRAU for his support.

I am thankful to Mr.Manjunath Reddy, Director, Kolar Milk Union for

providing me an opportunity to carryout the project work and for his valuable suggestions

and guidance during project.

I express my sincere thanks to my family members for their support during the

study.

I thank all those who have directly or indirectly helped me during the course of

this project work.

(Srinivasa M.N)
 DECLARATION

I, Srinivasa M.N, hereby declare that the project report titled “A study on the

production and marketing aspects of Kolar milk union, Karnataka state” submitted

to the School of Agribusiness Management, Acharya N.G. Ranga Agricultural University

in partial fulfillment of the requirements for the award of the degree of Master of Agri

Business Management (MABM) is the result of the original work done by me.

(Srinivasa M.N)
 CERTIFICATE

This is to certify that the project titled “A study on the production and

marketing aspects of Kolar milk union, Karnataka state” submitted in partial

fulfillment of the requirement for the degree of Masters in Agribusiness Management,

School of Agribusiness Management, College of Agriculture, Acharya N.G.Ranga

Agricultural University, Hyderabad is the record of the bonafide project work carried out

by Mr. Srinivasa M.N under our guidance and supervision. No part of the project has

been submitted for any other degree or diploma. The project report is approved by the

guide.

Date: (Chairman/Internal Guide)

Place: Hyderabad Mrs. P. Radhika
Assistant professor
School of Agribusiness Management,
College of Agriculture, Rajendranagar.

Member
Dr. Seema
Associate professor
School of Agribusiness Management,
College of Agriculture, Rajendranagar.
 CONTENTS

Chapter No. Title Page No.

Executive summary

I Introduction

II Methodology

III Results and Discussion

IV Conclusions

V Suggestions

Appendix
 LIST OF TABLES

Table No. Description Page No.

1.1 Processing facilities of the Kolar milk union

3.1 Growth pattern of milch animal population

3.2 Demographic characteristics of the dairy owners

3.3 Land holdings of sample dairy farmers

3.4 Size of the sample herds and distribution of milch animals

in different dairy units.

3.5 Pattern of feeding green fodder, dry fodder and concentrate

in different dairy units

3.6 Kinds of labour and pattern of labour employment in dairy

Units.
3.7 Physical input output analysis of milch animals

3.8 Costs and returns of crossbred cow milk production

3.9 Costs and returns of local cow milk production

3.10 Costs and returns of buffalo milk production

3.11 Pattern of milk production in different dairy units

3.12 Pattern of milk retained for family consumption in different

dairy units

3.13 Pattern of milk sales in different dairy units

 LIST OF FIGURES

Sl no Name of the figure Page no

1 Organizational structure of District Cooperative Milk

Union Limited, Set up by KMF

2 Kolar district map

AUTHOR : SRINIVASA M.N

TITLE OF THE PROJECT : A STUDY ON THE PRODUCTION AND

MARKETING ASPECTS OF KOLAR MILK UNION,
KARNATAKA STATE
DEGREE : MASTERS IN AGRIBUSINESS MANAGEMENT
FACULTY : AGRICULTURE.
DISCIPLINE : AGRIBUSINESS MANAGEMENT.
MAJOR ADVISOR : Mrs. P.RADHIKA
UNIVERSITY : ACHARYA N.G. RANGA AGRICULTURAL
UNIVERSITY, RAJENDRA NAGAR, HYDERABAD.
YEAR OF SUBMISSION : 2007.

EXECUTIVE SUMMARY
The project entitled “A study on the production and marketing aspects of Kolar milk

union, Karnataka state” was carried out in Kolar district of Karnataka for Kolar milk

union (KOMUL).

In spite of existence of Kolar Milk Union in dairy business from the past two

decades it is still facing problems in procurement and marketing of milk. Socio economic

condition of dairy farmers is a concern for the union, and the union is trying to explore

solutions to these issues. Therefore this study has been undertaken with the following

objectives, in Kolar district of Karnataka state.

Main objectives of the project are

1. To document the growth of dairy animals in the study area.

2. To study the socio economic condition of sample dairy farmers

3. To analyze the cost and returns of milk from different dairy animals.

4. To study the pattern of milk production, consumption and sale in different dairy

units
1
 The project work has been undertaken to know the efficiency of Kolar milk union in

Kolar district so as to have an insight into the working of the union, the problems faced

by the dairy farmers and also the difficulties in marketing and procurement of milk.

In Karnataka, Kolar district ranks first in milk production as well as cattle population.

Karnataka Milk Federation (KMF) is the mother dairy for all the milk unions in

Karnataka state. KMF’s turnover increased substantially with the proportionate increase

in the demand for milk. Required information for the study was collected from primary as

well as secondary sources. A questionnaire was administerd to dairy farmers to collect

the primary data. Secondary data was collected from various journals and websites. The

collected data has been tabulated by using Ms Excel and is illustrated appropriately to

make meaningful inferences. The data was subjected to appropriate statistical treatments

like averages, percentages and range technique and the same has been presented in the

form of tables.

The major results obtained from the study have been summarized here under

The census to census fluctuation of milch animal population and their growth rates in

Kolar district revealed that growth in number of cows was at the rate of 3.71 percent per

annum from 1990-2001 indicating good scope for dairy development in the Kolar

district. The growth rate of cows in Kolar district was more than that at the state level.

Buffaloes grew at the rate of 1.95 percent in Kolar district indicating lot of scope for

buffalo based dairy enterprises.

The age of the heads of dairy owners ranged between 38 to 42 years. This is a healthy sign,

since the head of the family should be young with good experience in dairy management.

The average family size was 6.26 persons, this was mainly because of joint family system

prevalent in the study area. Total land holding was 8.18 acres in low milk producers
2
(767litres/annum) group as compare to 8.06 acres in medium (1105litres/annum) and 7.95

acres in high milk producing group (1675litres/annum). The herd size appeared to be

inversely related to the milk producing category that is high group had the lowest cattle

strength and vice versa.

It was observed that the average milk production of a crossbreed cow was higher than local

cows and buffaloes. The benefit cost ratio was higher in crossbreed cows (1.99) than local

cows (1.74) and buffaloes (1.71).

It was observed that milk consumption remained almost same with different size of dairy

units. This was due to nature of joint family and good economic condition of these dairy

groups. Total milk consumption per annum was the highest in medium group followed by

high group and low group.

It was seen that the sale of milk increased with an increase in the size of dairy units. It

was revealed that average daily surplus milk was 7.49 litres per dairy unit which was 81

percent of total production.

Certain suggestions are given to the Kolar milk union to improve the operational

efficiency. It is suggested that the dairy owners may be given training regularly on

various aspects like animal health care and animal management. The milk union can

make arrangements for the training of the dairy owners, officials and policy makers. The

dairy cooperative should have sufficient working capital. The payment could be made to

dairy owners as for as possible at least every week without fail for their milk sold which

helps the dairy owners to operate the household budgets. The milk procurement routes

that are not cost effective can be discontinued.

3
 The union should achieve at least 85 percent of its capacity utilization to break

even all its fixed costs. Instead of present low density polythene (LDPE) film being used

for pouches, the union can go for linear low density polythene (LLDPE) film for pouches

which will reduce the cost of milk packing with least leakage. The consumers can be

educated about the KMF products by using appropriate promotional techniques like

advertising in Radio, Television and News paper.

In Kolar district, dairy farmers are more efficient and are adopting new

technologies in milk production. In marketing also Kolar milk union has taken lot of

initiatives for marketing and procurement of milk. Hence there is good scope for dairy

development in Kolar district.

4
 CHAPTER I

INTRODUCTION

1.1 Importance of dairying

Dairying is the most ancient occupation in rural India. The dairy sector has

emerged as an important segment of an expanding and diversified agricultural sector in

the Indian economy. The importance of milch animals in India’s rural economy has long

been recognized and widely accepted. Dairy farming in India is dominated by small,

marginal farmers and agricultural labours especially by women sections of the village

community, to supplement their livelihood. In India milk production alone involves more

than 70 million producers, each raising one or two cows/ buffaloes primarily for milk

production. Indian dairy farming has experienced a major breakthrough in the last two

decades. Farmers now are no more considering dairying as a subsidiary occupation. With

the advent of green revolution, the fodder availability for the cattle has been increased.

Dairying has helped India in phasing its rural development programmes through various

schemes. Today the country has almost one dairy animal for every eleven human heads.

Now it has been recognized that cattle provides milk, dung, milch and draught animals

wealth. Dairying is recorded as an instrument for reducing inter-class disparities in the

rural areas. Land and cattle have traditionally been the two basic income yielding assets

of Indian farmers. Among food production, demand for milk is income elastic and it

increases relatively at higher rate as education makes people conscious of the value of

nutritious food. In India, milk is the only source of animal protein that is accepted and

consumed by majority of the population irrespective of community and caste. The per

capita availability of milk in 1972 in India was 172 grams per person per day which rose

5
to 245 grams by 2006-07. However, it is still far away from the present world average of

285 grams per day per person.

1.2 Dairy farming in India

In India, mixed farming involving crop and livestock integration has been a way

of life since the dawn of civilization. In olden times, the richness of a household was

measured based on the cattle strength. In India about 70 per cent of the population of the

country lives in 6 lakh villages cultivating over 142 million hectares of land. In India,

41.10 per cent of the households are landless, 45 per cent of the households are small

holders and 13.90 per cent of the households own large land holdings.

India has the largest cattle, buffalo and goat population in the world, with breed

able 7.5 million crossbred cows, 57.5 million local cows, 39 million buffaloes and 87

million goats. The average milk yield per lactation is 800 liters for cow, 1250 liters for

buffalos and 1,800 to 2,400 liters for crossbreed cow, 30 to 60 liters for Indian goat and

360 liters for crossbreed goat. Total milk production in India during 1994-95, 1995-96

and 1996-97 and 2006-07 was 63.50, 65.50, 68.0 and 100 million tones respectively. The

contribution of buffalo, cow and goat milk to the total milk production in the country has

been 52.80, 43.70 and 3.5 percent respectively. The production of milk products stood at

3.07 lakh tones, production of milk powder including infant milk food has risen to 2.25

lakh tons, whereas that of malted food is at 65000 tons in 2005-06. Marketing of milk

products has received lot of impetus in the recent past.

The dairy cooperative structure has provided the institutional support in this

effort. Most of the primary dairy cooperative societies have been organized and serving

one or more villages. This structure is topped by 22 state cooperative dairy federations.

As much as 90 percent of the total milk production in India comes from 12 potential

6
states, in which Karnataka occupies 9th place by producing 8 million tones. Milk and milk

products being the second largest contributor next to agriculture produce, plays a vital

role in the country’s economy. The contribution of agriculture to Gross Domestic Product

(GDP) reduced from 46.45 percent in 1980-81 to 20 percent in 2006, whereas the

contribution of livestock to the agriculture GDP increased from 8.65 to 21percent during

the corresponding period.

The country has now achieved the objective of “operation flood” programme to

increase milk production and to stop importing milk powder. India exported US $1

billion milk products in 2006.Indias major exports consist of butter, baby food and milk

powder to the west Asia, Bangladesh, and Srilanka.

The investment on dairying programmes by the government shows that great

emphasis is given to this sector by the government for increasing the production and

productivity. The expenditure on dairy sector increased from Rs. 77.8 million in the first

five year plan to Rs. 15000 million in tenth five year plan.

As a matter of fact, a large number of dairy production related tasks like

harvesting and transporting of fodder, chaffing of fodder, feeding of the animals, milking,

cleaning of cattle sheds and sale of milk are all done by rural women. The nature and

extent of women’s involvement in dairying vary greatly from region to region and it

depends upon castes and socio economic status of families. Dairying has spread to nearly

8.7 million households in the country. It was expected that about 67,225 men would be

employed just for running the dairy cooperative societies in 2005-06. The number of

persons to be employed by NDDB would be about 43,498 for establishment and

management in 2006-06.

7
Of the total milk produced in the country, nearly 45 percent is consumed as liquid milk.

The human population in the country is nearly 103 crores and milk production is 100

million tones in 2006. Per capita availability per day is 245 grams. A comparison of milk

availability in various countries showed that in terms of per capita availability, India

ranked 57th in the world, where as in terms of milk production it ranked first.

Traditionally, milk production has only been incidental to provision of draught

power by cattle but it is now an important source of supplementary income and nutrition

to the farm family. Availability of regular fluid cash from daily sale of milk not only

helps dairy production through purchase of feed and other inputs but also helps in

improving crop production through purchase of off- farm inputs like improved seed,

fertilizers and pesticides.

Manure from dairy animals provides a good source of organic material for

improving soil fertility and crop yields. It was estimated that the livestock wealth of the

country produces about 1200 million tons of wet dung per year which has a potential of

producing 70,000 million cubic meter gas annually equivalent to about 16 million tons of

firewood. It would also give 423.7 million tons of organic manure in the farm of slurry

valued at Rs. 1269 crore. One third of the total dung in India is used as fuel in rural areas.

The dairy animals like cows and buffaloes provide the male young stock which

would be reared for drought power in crop husbandry. India posses 80 million work

animals which generate energy of about 40 million H.P. The total requirement of energy

in the agriculture field is 68 million H.P. for the country. But most of the buffalo male

young stock after further rearing is used for slaughtering purpose.

8
1.3 SWOT Analysis of Indian Dairy Industry

A SWOT analysis of Indian dairy industry would highlight the strengths, weaknesses,

opportunities and threats of the dairy industry, these paving the way for better

management of dairy units by taking advantage of opportunities and by initiating certain

measures to mitigate weaknesses.

Strengths

 Demand for milk and milk products is showing a raising trend.

 Margins are quite reasonable, even on packed liquid milk.

 Flexibility of product mix with balancing equipment can facilitate a wide product

line.

 Availability of raw material is abundant. Presently, more than 80 per cent of milk

produced is flowing into the unorganized sector, which requires proper

channelization.

 Technical manpower, professionally-trained, technical human resource pool, built

over last 30 years.

Weaknesses:

 Perishability: Pasteurization has overcome this weakness partially. UHT gives

milk long life. Surely, many new processes will follow to improve milk quality

and extend its shelf life.

 Lack of control over yield: Theoretically, there is little control over milk yield.

However, increased awareness of developments like embryo transplant, artificial

insemination and properly managed animal husbandry practices, coupled with

9
 higher income to rural milk producers should automatically lead to improvement

in milk yields.

 Logistics of procurement: Woes of bad roads and inadequate transportation

facility make milk procurement problematic. But with the overall economic

improvement in India, these problems would also get solved.

 Problematic distribution, absence of cold chains linking the producers and

distributors is a major problem

 Competition, with so many newcomers entering this industry, competition is

becoming tougher day by day

Opportunities:

Value addition: There is a phenomenal scope for innovations in product development,

packaging and presentation. As there is a wider acceptance of value added products

by the consumers. Given below are potential areas of value addition

 Steps should be taken to introduce value-added products like shrikhand, ice

creams, paneer, khoa, flavored milk, dairy sweets, etc. This will lead to a

greater presence and flexibility in the market place along with opportunities in

the field of brand building.

 Addition of cultured products like yoghurt and cheese lend further strength -

both in terms of utilization of resources and presence in the market place.

 A lateral view opens up opportunities in milk proteins through casein,

caseinates and other dietary proteins, further opening up export opportunities.

10
 Export potential: Efforts to exploit export potential are already on. Amul is

exporting to Bangladesh, Sri Lanka, Nigeria, and the Middle East. Following the

new GATT treaty, opportunities will increase tremendously for the export of agri-

products in general and dairy products in particular

Threats:

Presence of number of unorganized players poses threat to the organized sector as well

as for systematic procurement and marketing of milk and milk products.

1.4 Dairy farming in Karnataka

Karnataka has livestock population of 24.97 million of which cattle population

accounts for 10.32 million and buffalo’s population is 4.34 million (according to 2001

census) which forms 40.8 percent and 16.2 percent respectively of the total livestock

population. The government of Karnataka prepared a dairy development project and

submitted it to the World Bank for funding in 1973. The integrated dairy development

based on Anand Cooperative Milk Union Limited (AMUL) pattern was initiated under

Karnataka Dairy Development Project (KDDP). The World Bank aided project with an

Outlay of Rs. 510 million and an aid component of $ 30 million were initiated in 1974. A

new organization known as Karnataka Dairy Development Corporation came into

existence to implement the project and the actual field work was taken up in 1975.

Initially, the project covered eight southern districts of Karnataka. Later, during 1983,

under operation flood (OF) II, all the districts were covered. After closure of operation

flood II, the ongoing activities were covered under operation flood III which started from

April 1987.

11
 The Karnataka Cooperative Milk Producers Federation’s (KMF) ‘Nandini’ brand

of milk products is a household name today, with the one of the highest annual sales

turnover in the dairy industry. KMF’s turnover was Rs.1753.00 crores in 2006. KMF has

come into existence in May 1984. KMF’s high processing capabilities and wide

distribution network has ensured the wide penetration of Nandini in the remotest parts of

Karnataka. Even the private sector dairies hire the cooperative network for their

procurement purposes. KMF pays an average of Rs 258 lakhs a day to milk producers.

The philosophy of dairy development has always been to eliminate middlemen and

organize institutions to be owned and managed by the milk producers themselves, by

employing professionals. This is to achieve economies of scale in order to ensure

maximum returns to the milk producers and at the same time provide milk at the lowest

possible prices to urban consumers. Ultimately, the complex network of a cooperative

organization would be to build a bridge between masses of rural producers on one side

and millions of urban consumers on the other.

The KMF has shown a good progress in physical terms over the years. The

number of dairy cooperatives increased many folds from 47 during 1974-75 to more than

1, 80,951during 2006. Milk procurement also increased from 50,000 kgs per day during

1975 to 29, 65,667 kgs per day in 2006. This has resulted in the growth in total milk

production in Karnataka.

KMF has around 30 chilling centers, 13 farm coolers, 14 liquid milk plants and

two product dairies for chilling and processing conservation and marketing of milk. To

supply balanced cattle feed, three cattle feed plants have been established. To ensure the

supply of quality germplasm, a bull breeding farm and frozen semen bank were

established in 1984 which are well stocked with high pedigree cattle.

12
 To impart training, KMF also runs one central training institute and three regional

training centers. Three diagnostic laboratories have been set up for disease monitoring.

The Karnataka government felt the necessity of dairy industry and started the dairy

business during 1971. Initially the animal husbandry department controlled this dairy

business. During 1985 this was handed over to KMF which was then an enterprise of

Government of Karnataka. The KMF carried out and conducted the dairy activities till

1991. In the mean time cooperative milk producers union was registered in 1985 to

promote milk producers societies and to take steps to increase the milk production. Now

KMF is a enterprise jointly under government and cooperative body. To support the dairy

unit all its assets and liabilities were transferred to cooperative milk producers union in

1991. Since then the union is carrying out activities related to milk procurement and

disbursement.

1.5 Company profile

The milk union selected for the study is Kolar Milk Union which covers 11 taluks

of Kolar district in Karnataka. Kolar milk union occupies first place in the state with

regard to cattle population and in the milk procurement. Kolar milk union was formed on

bifurcation of the Kolar district from the Bangalore jurisdiction under World Bank

assistance. The dairy has processing capacity of 2.0 lakh litres per day and three chilling

centers at Gowribidanur, Chinthamani and Sadali with total chilling capacity of 3.0 lakh

litres per day. Its daily average milk procurement is 6.57 lakh litres per day and sells on

an average 1.14 lakh litres per day. There are 365 bulk coolers, 118 automatic milk

collection centers and 94 community centers in the union. The union also sells milk in

parts of Bangalore city. The union produces butter, ghee, buttermilk and peda. The

13
diversification of the union in the year 2000 into UHT (Ultra High Temperature)

treatment processing of milk has seen the launch of the GOOD LIFE pure cow milk, with

a shelf life of 60 days without requiring refrigeration. Table 1.1 presents the details of

processing facilities of the union.

Table 1.1 Processing Facilities of Kolar Milk Union (as on March 2007)

Sl No Facility Location Capacity

1. Dairy plant Kolar 2 LLPD

2. Ghee making Kolar 250 kg/batch of 3hrs

3. Peda making Kolar 23kg/batch

4. Butter making Kolar 300 kg/batch

5. Milk packing station Kolar 2500 packs of 1 lit/hr

1250 packs of ½ lit/hr

6. Chilling center Gowribidannur 1.20 LLPD

7. Chilling center Sadali 1.10 LLPD

8. Chilling center Chinthamani 70 TLPD

Source: Kolar milk union

TLPD: Thousand liters per day
LLPD: Lakh litres per day

Milk union is the middle tier of the cooperative organization network. The milk unions

are formed by federating the Dairy cooperative society (DCS) in earmarked geographical

area. The milk unions are organized to make them economically viable and the

jurisdiction extends from one revenue district to three districts. There are 13 milk unions

14
whose territories cover the entire state. The milk unions organize new DCS, assist DCS

with their management including audit of accounts, supervise, purchase, process and

market the liquid milk. Provisions of input facilities are also made by the union and

chanalised to the dairy farmers through DCS. Each union has a board of directors

comprising eighteen members. Day to day management is the responsibility of the

Managing Director who is appointed by the board with the approval of the KMF. The

presidents of the various milk union boards in the state will become automatically

members on the Board of director of the KMF. The organizational structure of the union

is presented in the following figure

General body
Members

Board of directors
President
Managing Director

General Manager General Manager Accounts officer Administrative officer

(P & I) (Dairy & mktg)

Deputy Manager Technical Accounts Administrative

Officer superintendent superintendent
Assistant Manager Supervisors staff staff
Staff staff

Figure 1.1 - Organizational Structure of District Cooperative Milk Union Limited, Set
by KMF.

Future vision of KMF

To consolidate the gains of dairying achieved in the state of Karnataka and with a view to

efficiently chill, process and market ever developing and increasing milk procurement

with an utmost emphasis on the Quality and in the process conserve the socio-economic

15
interests of rural milk producers, the Govt. of Karnataka through KMF has proposed to

undertake several projects with financial and technical support of NDDB for which an

MOU was signed between Govt. of Karnataka and NDDB on 10th Nov. 2004.

At present, there are only a few studies on the performance of primary dairy

cooperative societies and milk union limited in Karnataka and elsewhere. But there are

hardly any in depth and comprehensive research studies on the performance of Kolar

milk Union. Considering the vast growth and development of the union over the years, it

is appropriate to study the milk producers’ cooperative union limited and assess its

impact on dairy development in the region with a view to improving its operational

efficiency and effectiveness. The present study of production and marketing aspects of

Kolar milk union is an attempt in this direction.

1.5 The specific objectives of the study were

1. To document the growth of dairy animals in the study area.

2. To analyze the cost and returns of milk from different dairy animals.

3. To study the socio economic condition of sample dairy farmers

4. To study the pattern of milk production, consumption and sale in different dairy

units

1.6. Scope of the study

The study is made in the Kolar region of Karnataka state. An attempt has been

made to study the cost and returns of milk production and performance of the milk union

by using indicators based on both qualitative and quantitative data compiled from a

16
variety of sources. The data has been gathered from policy makers and officials of the

union and DCS and also farmer beneficiaries of the DCS. The data pertaining to the costs

and benefits is collected for the year January 2006 to December 2006. The study on

performance of union will help the planners, policy makers and administrators in taking

the future course of action. The results of the study will be helpful to understand the

successful working of the district level organizations and it will also help us to know the

extent of knowledge of improved dairy management practices which are essential in

increasing the milk production, and how best its products can be made use of. The results

of the study will also help in identifying the constraints in the working of the union which

may serve as an eye opener for the administrators and suggest appropriate package of

policy measures, which will provide guidelines for the planners and policy makers for

developing effective programmes for implementation.

1.7 Limitations of the study:

 The results of the present study cannot be applied in the area other than the locale

of the study, as such the results can not be generalized except in similar situations

prevailing in other regions/ states of the milk unions.

 Some respondents were unable to crystallize their answers to some questions in

the questionnaire.

17
 CHAPTER II

METHODOLOGY

In this chapter, features of the study area, sampling procedure, sources and methods of

data collection and analytical techniques employed are discussed.

2.1 General characteristics of the study area:

Figure: 2.1 Map of Kolar district

Kolar is the eastern district of Karnataka state surrounded by Andhra Pradesh and

Tamil nadu. Kolar cooperative milk producers’ societies union limited was established on

19-8-1985 as a cooperative organization. The study unit is being referred as ‘union’ here

18
after. The union is one among thirteen milk unions operating in Karnataka state with

mother dairy at Bangalore which does not undertake procurement activity but markets

milk. The union covers two regions of the district i.e. Kolar and Chickkaballapur. In

Kolar region the milk procurement is high whereas in Chickkaballapur milk distribution

is high. The union has three chilling centers in Gowribidanur, Sadali and Chinthamani

and dairy plant is located at Kolar. The main dairy plant has capacity to process 2 lakh

litres per day (LLPD). The Gowribidanur chilling center has a capacity to processes 1.20

LLPD and it is at a distance of 110 kms from Kolar dairy. The Sadali chilling centre has a

capacity to processes 1.10 LLPD and is located 60 kms away from Kolar. Chinthamani

chilling centre is situated at a distance of 40 kms from Kolar plant and has a capacity of

70 TLPD.

2.3 Sampling Techniques

2.3.1 Selection of the milk union:

Kolar cooperative milk producers’ societies union limited was purposively

selected for the study. This union’s performance stands first among 13 milk unions of

Karnataka both in procurement and marketing of milk.

2.3.2 Selection of Dairy Cooperative Societies

The criteria followed in the selection of Dairy cooperative societies (DCS) for

opinion survey are basically two,

1) The DCS should have business transaction with the union and

2) The DCS should not be defunct.

From the union, 14 DCS were chosen randomly out of 254 DCS to elicit the opinions

of policy makers, officials and farmer beneficiaries of DCS.

19
2.3.3 Selection of respondents and sample size

The respondents were categorized into three groups’ viz., policy makers, officials

and Dairy farmer beneficiaries. Based on the average milk production, dairy owners were

categorized into three groups viz., low milk producing groups (767 liters), medium milk

producing group (1105litres) and high milk producing group (1675 liters).

Policy makers:

The presidents and directors of the DCS were considered as policy makers of the

respective organizations. Out of 9 directors on the board of management in each DCS,

three directors were selected randomly. Thus a total of 42 policy makers (constituting

33.33 percent) of the total strength of the Board of Management of the sample DCS

formed the size of the sample.

Officials:

Fourteen secretaries who manage each DCS (100 percent of the total strength)

were selected for opinion survey. 10 officials from the Kolar milk union were also

selected for the opinion survey.

Dairy farmer beneficiaries:

The dairy farmer beneficiaries were selected at random at the rate of 10

beneficiaries from each selected DCS. Thus in all, 140 dairy farmer beneficiaries were

selected from 14 selected DCS.

In all a total of 206 respondents were selected at random for the opinion survey

comprising policy makers, officials and farmer beneficiaries.

2.4 Study period

The duration of the project is limited to 60 days only, starting from 1st June to end

of July 2007. The study period considered was from Jan 2006 to Dec 2006.

20
2.5 Sources and methods of Data collection

2.5.1 Primary Data:

The sample dairy owners were interviewed personally using pretested

questionnaire to collect various information such as family size, educational level,

landholdings, current asset, owned funds, quantity of inputs viz, dry fodder, green fodder,

concentrates, human labour and other expenditure items, milk yield, manure and young

stock. Constraints in production and marketing of milk were collected to arrive at

conclusion. For this purpose seven taluks from Kolar district i.e. Chickkabalapur,

Chinthamani. Bagepalli, Malur, Srinivasapur, Gudibandae, and Kolar were chosen and

from each taluk two DCS were selected for eliciting the opinion of policy makers,

officials and farmer beneficiaries. The data from policy makers and officials was

collected by interviewing them.

2.5.2 Secondary Data:

The secondary data on milch animal population in the selected taluks of Kolar

district, Karnataka state, and about different activities of the union were obtained from

various sources like annual reports, financial statements and records of the union,

journals and reports of the various stakeholders also prooved to be of great help in

collecting the data.

2.6 Methods of Analysis:

The collected data was tabulated by using Ms Excel and is illustrated

appropriately to make meaningful inferences. The data was subjected to appropriate

statistical treatments like average, percentage and range technique and the same has been

presented in the form of tables.

21
2.7 Various formulas used in the analysis are:

Cost of milk production:

In dairy units, average milk yield (liters) of the milch breed would be considered as main

product while Farm yard manure (FYM) is considered as byproduct. Total cost includes

both operational cost and fixed cost. When we subtract the byproduct values from total

cost, then we can get the net cost. Cost of milk production is the net cost divided by liters

of milk of the breed during the year.

Cost of milk production per Total cost – value of the byproducts

Liter =
Annual milk yield (liters) of the breed.

Present worth of gross returns

Benefit cost ratio =
Present worth of costs

The benefit cost ratio for a profitable business will always be more than one.

22
 CHAPTER III

RESULTS AND DISCUSSION

In this chapter results of the data collected from different sources on the aspects of

production and marketing of milk by the union are analyzed and interpreted

The results of the investigation are presented in the following sections.

3.1 Growth rates in milch animal population

3.2 Socio – economic features of sample dairy farmers..

3.3 Utilization pattern of physical inputs in different dairy units.

3.4. To analyze the cost and returns of milk from different dairy animals.

3.5 Pattern of milk production, consumption and sale in different dairy groups.

For the purpose of analysis each dairy farmer surveyed is considered as a dairy unit.

3.1 Growth rates in milch animal population

The changes in the milch animal population over the period of nine census from

1951 to 2001 were analyzed by percent increase or decrease over previous census. The

results of the growth rates of cow and buffalo population in Kolar district, Karnataka

state and India are presented in table 3.1

3.1.1 Cows:

In Kolar district, cow population decreased by 1.76 percent in 1951 to 1956 and

increased to 7.20 percent in 1961 census period and it was the highest growth rate of

14.17 percent was noticed from 1972 to 1977 census. In 1990 census it recorded as 4.35

percent decline in cows’ population again in 2001 census it recorded 3.71 percent

increase in cows’ population.

23
 Table 3.1 Growth pattern of milch animal population

Sl Milch C E N S U S
No animal/
location 1951 1956 1961 1966 1972 1977 1983 1990 2001
Cows
1. Kolar
624.97 614.16 658.87 642.25 625.64 714.29 802.9 769.40 797.00
district
(-1.76) (7.20) (-2.58) (-2.65) (14.17) (12.40) (-4.35) (3.71)
(000)

2. Karnataka
89.59 89.65 96.73 96.85 100.18 102.22 113.00 101.75 103.20
state (0.06) (7.89) (0.12) (3.43) (2.03) (10.50) (-11.05) (1.42)

(lakhs)

3. India
176.20 178.20 180.10 192.50 199.70 204.50 206.5
( millions) - - (1.07) (1.12) (6.88) (3.74) (2.40) (1.02)

Buffaloes

1. Kolar
146.64 140.09 165.68 151.56 137.44 153.65 169.85 194.50 198.3
district (-4.67) (18.26) (-9.31) (-10.27) (11.79) (10.54) (14.51) (1.95)

(000)

2. Karnataka
25.56 26.68 30.25 29.45 32.15 32.782 36.480 40.37 43.4
state (4.38) (13.38) (-2.71) (9.16) (1.95) (11.28) (10.66) (7.50)

(lakhs)

3 India
53.00 57.40 62.10 69.80 76.00 83.40 86.8
(millions) - - (8.30) (8.19) (12.40) (8.88) (9.73) (4.07)

Figures in brackets indicate the growth or decline percentage.

Source: company records and census data

24
In Karnataka and India there was increase in the growth of cows among various census

periods. It recorded increase in cows’ population as 1.42 percent during 2001 census in

Karnataka and a marginal increase in cows’ population that is 1.02 percent in India as

whole during same period was noticed.

Buffaloes:

In Kolar district an increasing trend in growth of buffaloes was noticed. Similar

trend was observed in Karnataka and also in all India in growth of buffaloes. In Kolar

district highest growth rate was recorded during 1961 census i.e. 18.26 percent fallowed

by 14.51 percent in 1990 census. The buffalo growth rate in the study area has below all

India level. The farmers in the study area prefer crossbred cows because of high benefit

cost ratio of crossbreed cow than buffalo

The analysis revealed that growth in cows was at the rate of 3.71 percent per

annum from 1990-2001 in Kolar district indicating better scope of this component of

dairy development. The growth rate for cows in Kolar district was more than growth in

the state and all India average.

Buffaloes grew at the rate of 9.65 percent on all India level during 1990-2001.

Where as in the Kolar district the growth rate was only 1.95 percent indicating a lot of

scope for initiating measures to increase buffaloe population in the district.

3.2 socio- economic features of sample dairy farmers

3.2.1 Demographic features of sample dairy owners

The demographic feature of sample dairy owners are presented in table 3.2

25
Table 3.2 Demographic characteristics of the dairy owners (2006-07)

Particulars Dairy unit Overall

Low Medium High

I FAMILY SIZE (Nos)
Males 1.85 1.98 1.86 1.90
. Females 1.35 1.56 1.34 1.42
. Children 3.05 2.98 2.69 2.94
Total 6.25 6.52 5.89 6.26

II AGE (average years) 42.09 41.76 38.51 41.08

III EDUCATIONAL
STANDARD( percentage)
. Illiteracy 45.45 56.00 51.43 50.71
Primary 14.54 24.00 8.57 16.43
Middle school 12.73 8.00 28.57 15.00
High school 19.99 10.00 2.85 12.14
Intermediate 5.45 0.00 5.72 3.57
Graduate 1.81 2.00 2.85 2.14

Family size

The number of members in the family was 6.52 in the case of medium group as

compared to 6.25 in low group and 5.89 in high milk producers group. The combined

average family size of all the groups was 6.26 members.

Age of dairy owners

The average age of the dairy owners in low milk producing category was 42 years

followed by 41 years in medium and 38 years in high milk producing groups respectively.

In general, the average age of dairy owner was found to be 41 years.

26
Educational standard

Illiteracy percentage was relatively high (56.00%) in medium milk producing group

followed by 51.43 and 45.45 percent in high milk producing and low milk producing

groups respectively. It was clear from the table that majority of literate dairy owners were

exposed to only school level education. The literacy rate of the sample was 49.29 percent.

Age of the head owners ranged between 38 to 42 years. This is a healthy sign,

since the head of the family if young with good experience in dairy management will be

in a position to accept new initiatives in dairy management more easily. These dairy

owners being mature and energetic will be able to sustain higher degree of responsibility

and risk in dairy business. The proportion of literate persons from primary to graduate

level was relatively high in high milk producers group, thus making them adopt new

technologies and methods to increase productivity. The average family size was worked

out to be 6.26 persons, and this was mainly because of joint family system prevalent in

different dairy farmers in the area. Due to good economic condition of this group of dairy

owners, they have better access to education when compare to the other two groups.

3.2.2 Pattern and nature of land holdings of dairy farmers

The details regarding the land holdings, rainfed area, irrigated area, grazing land,

net sown area and area under fodder crops of sample dairy farmers in the Kolar region are

presented in table 3.3

27
Table 3.3 Land holdings of sample dairy farmers (Acres/household).

(2006-07)

Sl Particulars Dairy unit

No Low Medium High Overall

1. Average holding size 8.18 8.06 7.95 8.07

(100.00) (100.00) (100.00) (100.00)

2. Rainfed area 6.44 6.22 6.06 6.26

(78.72) (77.17) (76.22) (77.57)

3. Irrigated area 1.55 1.65 1.76 1.64

(18.94) (20.47) (22.13) (20.32)

4. Grazing land 0.53 0.46 0.23 0.45

(6.48) (5.70) (2.89) (5.57)

5. Net sown area 7.66 7.67 7.57 7.65

(93.64) (95.16) (95.22) (94.79)

6 Area under 0.48 0.40 0.41 0.44

fodder crop (5.86) (4.96) (5.15) (5.45)

Note: figures in the brackets indicate the percentage to the total holdings

Average size of land holdings is 8.18 acres in low milk producers group, 8.06 acres

in medium milk producing group and 7.95 acres in high milk producers group. The

proportion of rainfed area to total holding was more (78.72%) in low group followed by

77.17 percent in medium and 76.22 percent in high group. The proportion of irrigated area

was relatively higher (22.13%) in high milk producers group followed by 20.47 percent in

medium and 18.94 percent in low group. The land available for grazing was 6.48 percent in

28
low group as against 2.89 percent in high group. The proportion of net sown area was the

highest (93.64%) in low group.

There was not much difference in the size of holding between the three different

groups. The high milk producing group is characterized by the higher proportion of

cultivated land and lower proportion of grazing land under fodder crop, mostly due to

their small herd size and milch. The operational land holding was 8.18 acres in low milk

producing group followed by 8.06 acres in medium and 7.95 acres in high group. It was

almost same in all the dairy groups. The area irrigated was more in high dairy group

followed by medium and low group of dairy farmers because of high investment in the

irrigated structure by high group. The existence of large proportion of area under fodder

crop for the low milk producing groups was due to the groups attempt to maximize

fodder production alongside food crop production for the family. These crops mainly

comprised of Jower, maize and leguminous fodder crops such as green gram and black

gram.

3.2.3 Size of the herd and distribution of total milch animals in different dairy units

The distribution of total milch animals and herd size are presented in table 3.4.

The herd size appeared to be inversely related to the milk producing category that

is, the high group had the lowest cattle strength and vice versa. However, the proportion

of crossbreds was same in low and high groups, with the medium group showing a slight

preference for local cows as well. In all, there were almost equal proportions of buffaloes

and cows in the herd size of the groups. This pattern of data suggests that the farmers had

undertaken the crossbred cows as a subsidiary enterprise within their dairy groups. The

low maintenance required in the case of local cows and buffaloes are one of the factors

attributing to this pattern.

29
Table 3.4 Size of the sample herds and distribution of milch animals in different dairy

units.

Sl No Particulars Dairy unit overall

Low Medium High

1 No. of crossbred cows 1.33 0.76 0.63 0.95

(30.09) (25.17) (30.58) (28.53)

2. No. local cows 0.80 0.76 0.43 0.69

(18.10) 25.17) (20.87) (20.72)

3. No. of buffaloes 2.29 1.50 1.00 1.69

(51.81) (49.67) (48.54) (50.75)

4. Total milch animal 4.42 3.02 2.06 3.33

(100.00) (100.00) (100.00) (100.00)

Note: figures in the brackets indicate percentage to the total milch animals.

 In the case of low milk producers group, the average herd size was 4.42 milch

animals which comprised of 1.33 crossbred cows, 0.80 local cows and 2.29

buffaloes.

 In the case of medium group, the average herd size was 3.02 milch animals which

comprised of 0.76 crossbred cow, 0.76 local cows and 1.50 buffaloes.

 In the case of high group, the average herd size was 2.06 milch animals which

comprised of 0.63 crossbred cows, 0.43 local cows and 1.00 buffaloes.

 For the overall group the average herd size was 3.33 milch animals comprising 0.95

crossbred cows, 0.69 local cows and 1.69 buffaloes.

30
3.3 Utilization pattern of physical inputs in dairy units

3.3.1 Pattern of feeding green fodder, dry fodder and concentrate in different dairy

units

The data related to the physical inputs like green fodders, dry fodders and concentrates fed

to animal per dairy unit per annum by sample dairy farmers are represented in table 3.5.

Table 3.5 Pattern of feeding green fodder, dry fodder and concentrate in different dairy

units (per annum) Jan 2006 to Dec 2006.

Dairy farmers groups

Sl No Particulars Low Medium High Overall

1. Green fodder (qtl) 14.11 13.28 12.47 13.40

2. Dry fodder (qtl) 21.66 20.15 19.77 20.65

3. Concentrates (qtl) 4.53 4.26 4.53 4.43

The use of total green fodder is maximum (14.110 quintals) in low milk producers group

followed by medium (13.287 quintals) and high milk (12.474 quintals) producing groups

respectively. The use of total dry fodder was maximum with 21.66 quintals in low group

followed by 20.16 and 19.78 quintals in medium and high milk producing groups

respectively. The use of total concentrate was relatively high with 4.53 quintals in both low

and high milk producer groups than in medium group of dairy owners (2.26 quintals).The

overall quantum of fodder per dairy unit was inversely related to the yield category of that

unit, that is, the high group category fed a lower amount of green fodder compared to the

medium and low groups, the later feeding the highest. This pattern was also observed in

case of dry fodder consumption but in case of feeding the dairy animals with concentrates it

31
was same across all the groups. This reverse relation between yield and fodder can be

viewed in relation to the herd size of the units. When the inputs were allocated over the

herd size of each group, it was observed that the per cattle availability of feed increased

with the yield group and the high yield group provided roughly the double the fodder of the

low yield group, while the middle group fed intermediate quantities. Thus the per head

availability of feed was positively associated with the milk yield of the group.

3.3.2 Pattern and nature of employment in dairy units

The details regarding the type of labour and labour employment are presented in table 3.6.

Table 3.6 Kinds of labour and pattern of labour employment per annum (Mandays/unit)

with respect to dairy units (Jan 2006 to Dec 2006)

Dairy unit

Sl No Particulars Low Medium High overall

1. Hired male 70.00 60.00 86.00 72.00

(37.63) (31.92) (39.45) (36.08)
2. Hired female 0.00 0.00 0.00 0.00
(0.00) (0.00) (0.00) (0.00)
3. Hired child 116.00 128.00 132.00 125.00
(62.37) (68.08) (60.55) (63.92)
4. Hired total 186.00 188.00 218 197.00
(100.00) (100.00) (100.00) (100.00)

5. Family male 170.00 182.00 172.00 174.00

(32.38) (34.47) (35.83) (34.05)
6. Family female 135.00 148.00 130.00 137.00
(25.71) (28.03) (27.08) (26.81)
7 Family child 220.00 198.00 178.00 198.00
(41.91) (37.50) (37.09) (39.14)

8. Family total 525.00 528.00 480.00 511.00

(100.00) (100.00) (100.00) (100.00)
Note: figures in the brackets indicate the percentages

32
In all the groups, use of hired child labour dominated and it was the most dependable

labour (63.92%) followed by hired male labour which was found to be 36.08 percent of the

total hired labour force. In the case of family labour, irrespective of the group, the use of

family child labour dominated with 39.14 percent of total family labour force followed by

34.05 percent of family male labour component. The proportion of hired labour component

did not exceed 14 percent of the total labour component for the study unit indicating that

the dairy enterprise was mostly family operated. Family involvement was total in case of

female labour in all the groups and they carried out operations like milking, feeding,

transport of milk to sale point and carrying grass by head loads. It can be noticed that

females are usually not hired as labourers in dairy units. Hired child component which

averaged around 18 percent was mostly used for pasture grazing of cattle and bathing. The

hired male component which averaged around 16 percent was employed mostly for cutting

of fodder, cleaning of sheds and management of sheds.

3.4 To analyze the cost and returns of milk from different dairy animals

3.4.1 Cross bred cows

The physical input-output, cost and returns relating to milch animals per annum are

presented in table 3.7 and table 3.8

33
 Table 3.7 Physical input output analysis of milch animals (Per annum)

(Jan 2006-Dec 2006)

Particulars Dairy unit Overall

Low Medium High

I Cows

A) Crossbred
Inputs
Dry fodder (qtl) 65.18 50.73 60.47 58.92
Green fodder(qtl) 42.45 33.44 65.66 38.25
Concentrate (qtl) 1.36 1.07 1.38 1.26
Labour (mandays) 304.00 240.00 296.00 280.00
Output
Milk (litres) 1580.80 1584.80 1619.72 1591.96
Fym (qtl) 10.86 14.87 23.95 14.16

B) Local cow
Inputs
Dry fodder(qtl) 39.21 50.73 41.27 42.79
Green fodder (qtl) 25.5 33.44 44.81 27.77
Concentrate (qtl) 0.82 1.07 0.91 0.91
Labour (mandays) 205.00 290.00 223.00 239.00

Output
Milk (litres) 731.75 734.25 756.07 738.72
Fym (qtl) 6.53 8.94 14.40 8.51

II. Buffalo
Inputs
Dry fodder (qtl) 11.22 10.01 9.59 10.48
Green fodder (qtl) 73.10 65.99 68.04 68.04
Concentrate (qtl) 2.34 2.11 2.20 2.25
Labour (mandays) 328.00 310.00 300.00 312.00

Output
Milk (litres) 1064.45 1067.95 1098.50 1074.21
Fym (qtl) 16.71 22.60 21.23 20.38

34
Table 3.8 Costs and returns of crossbred cow milk production in rupees (Per annum)

Dairy unit

Sl No Particulars Low Medium High Overall

I. Operating Cost (OC)

1. Dry fodder 1843.38 1259.50 859.13 1388.79

(18.49) (14.20) (11.58) (15.91)
2 Green fodder 1276.80 872.38 595.07 961.93
(12.81) (9.83) (8.02) (11.02)
3 Concentrate 1686.16 1585.24 1686.98 1650.34
(16.92) (17.88) (22.75) (18.90)
4 Veterinary 88.07 204.82 202.80 211.92
(0.88) (2.31) (2.73) (2.42)
5 Labour 1908.54 1833.80 1410.61 1544.32
(19.15) (20.68) (19.02) (17.69)
6 Miscellaneous 101.04 94.66 84.04 92.82
(1.01) (1.06) (1.13) (1.06)
7 Interest on OC 1104.64 936.07 774.18 936.02
(11.08) (10.56) (10.44) (10.72)
8 Total operating cost 8008.64 6786.47 5612.81 6786.15
(80.36) (76.54) (75.72) (77.75)
II Fixed Cost (FC)

1 Depreciation on animal 864.58 914.33 760.00 846.30

(8.67) (10.31) (10.25) (9.69)
2 Dep. On equipment 18.08 19.85 18.20 18.71
(0,18) (0.22) (0.24) (0.21)
3 Dep. On shed 53..25 59.40 66.44 59.70
(0.53) (0.66) (0.89) (0.68)
4 Interest on FC 1020.98 1085.65 955.58 1016.54
(10.24) (12.24) (12.89) (11.65)
5 Total FC 1956.89 2079.23 1800.22 1941.25
(19.64) (23.45) (24.28) (22.24)

III Total Cost (I+II) 9965.53 8865.70 7413.03 8727.40

(100.00) (100.00) (100.00) (100.00)

IV Cost of milk 5.42 4.83 3.96 4.74

Production (Rs/lit)

35
V. Returns

1 Milk 12815.60 12843.60 13088.01 12893.69

(74.16) (74.88) (68.10) (74.23)
2 FYM 2173.94 2974.44 4790.29 2832.77
(12.58) (17.34) (24.92) (16.30)
3 Young stock 2100.00 1050.00 1050.00 1400.00
(12.15) (6.12) (5.46) (8.05)
4 Milk products 191.01 284.69 290.40 243.31
(1.01) (1.66) (1.51) (1.40)
5 Total returns 17280.56 17152.73 19218.62 17369.77
(100.00) (100.00) (100.00) (100.00)
VI Price of milk/ltr 12 12 12 12

VII Net Returns 7315.03 8287.03 11805.59 8642.37

VIII Benefit cost ratio 1.73 1.93 2.59 1.99

Note: figures in the Brackets indicate percentage to the total.

Inputs

The use of green fodder was maximum at 65.18 and 60.47 quintals in low and high

milking groups as against 50.73 quintals in medium group. The use of green fodder was

maximum at 65.66 quintals in high milk producers group followed by 42.45 and 33.44

quintals for low and medium group respectively. The use of concentrates was slightly more

with 1.38 quintals for the high group followed by 1.36 and 1.07 quintals for low and

medium dairy groups respectively. The employment of labour was slightly more with 304

mandays in high and medium units respectively when compare to low milk producing

groups.

Output

The highest milk production per crossbred cow per annum was found to be 1619 litres in

the high group, whereas, milk production was 1585 and 1581 litres in medium and low

36
milk producers groups respectively. Farm yard manure obtained was 23.95, 14.87 and

10.86 quintals in the high, medium and low groups respectively.

Total operating cost

The total operating cost per annum was the maximum in low group (Rs 8008)

followed by medium (Rs 6786) and high group (Rs 5613). The overall average of total

operating cost is Rs 6786. Labour cost was the most predominant item of expenditure in the

case of low and medium groups of dairy farmers followed by dry fodder and concentrates

in the low group and concentrates and dry fodder in the medium group. In case of high

group it was cost on concentrates which topped the expenditure with Rs 1687 followed by

labour and dry fodder. The share of labour ranged from 19 to 21 percent, dry fodder at 14

to 18 percent and that of concentrates from 17 to 23 percent in the total operating cost of

crossbred cow per annum.

Total fixed cost

The total fixed cost was higher in medium group (Rs 2079) followed by the low (Rs

1957) and high groups (Rs 1800). The overall average fixed cost was Rs 1941. The interest

on fixed capital was the most prominent item among the fixed costs followed by

depreciation on the value of milch animals in all types of dairy farmers. The share of

interest on fixed capital ranged from 10 to 13 percent and depreciation on milch animal

ranged from 8 to 10 percent in the total cost of maintaining a dairy crossbred cow.

Total cost

The total cost was found to be maximum at Rs 9,965 in low group followed by Rs

8,866 and Rs 7,413 in medium and high groups of dairy owners respectively, as against Rs

8,727 for the overall dairy unit.

37
Cost of milk production

The cost of milk production per litre was the lowest at Rs 3.96 in the high group

and it was Rs 4.83 and Rs 5.42 in medium and low dairy groups respectively. For the

overall sample, the per litre cost of milk production was Rs 4.74.

Total returns

The total returns were comparatively more at Rs 19,218 per annum in the high

group followed by Rs 17,280 and 17,152 in the low and medium groups respectively per

annum. For the overall dairy group the total return was Rs 17,370. Milk was the most

prominent component of income (74 percent) followed by farm yard income (16 percent)

and young stock (8 percent) in all the types of dairy groups.

Net return

The highest net return derived from crossbred cow was Rs 11,805 in the high group

followed by Rs 8,287 and Rs 7,315 in medium and low groups respectively. For the overall

dairy unit, the net return was found to be Rs 8,642.

Benefit cost ratio

The benefit cost ratio was more in the high group (2.59) followed by medium (1.93)

and low group (1.73). For the overall dairy group, the benefit cost ratio was 1.99.

The use of dry fodder, green fodder, concentrates and human labour for crossbred

cow per annum decreased with increase in the size of dairy groups. The milk production

was higher in high group as compared to medium and low groups. This was mainly due to

higher per cattle fodder, feed consumption and rearing of high milk yielding breeds.

The operating and fixed costs were 78 and 22 percent of total cost (Rs 8,727)

respectively. Since no exclusive cost was incurred towards the creation of infrastructure

such as cattle sheds, and since dairying was practiced within the available space in the

38
premises, the fixed cost component was low. The feed component claimed half of the

operating cost. However, only the concentrates among the feeds was the paid out cost,

and therefore the low yielding group which had the largest number of cattle were not able

to purchase it in adequate quantity. The milk was the main product and also the only

source of cash returns. Byproducts such as FYM, young stock were not sold and utilized

by the dairy farmers themselves. The cost of milk production per litre was minimum in

high group dairy owners followed by medium and low groups. This was due low

operating cost especially low costs of dry and green fodder.

Net return and benefit cost ratio were maximum in high group units as compared to

low and medium group units. This was mainly due to the managerial skills exhibited by

high group farmers in better utilization of their resources in boosting output from dairy

enterprise. The average net return was Rs 8,642 per annum while benefit cost ratio was

2.59.

3.4.2 Local cows

The input- output coefficients, cost- returns and the net return per annum with

regard to local cows are presented in table 3.7 and table 3.9

Inputs

The quantity of dry fodder consumed per dairy unit was 50.73 quintals in the

medium group, followed by 41.27 quintals in high and 39.21 quintals in low groups’ dairy

owners. The quantity of green fodder consumed was the highest with 44.81 quintals in the

high group followed by 33.44 and 25.53 quintals in the medium and low groups

respectively. On the contrary, the consumption of concentrates was the maximum in the

medium group (1.07 quintals) followed by the high group (0.94quintals) and the low

39
groups (0.82 quintals). The employment of labour was more with 290 mandays in medium

group followed by 223 and 205 mandays in high and low groups respectively.

Table 3.9 Costs and returns of local cow milk production (Per annum) Jan 2006- Dec2006

Dairy unit

Sl No Particulars Low Medium High Overall

I. Operating Cost

1. Dry fodder 1166.88 797.28 543.84 879.12

(21.10) (16.83) (13.66) (18.63)
2 Green fodder 808.23 552.23 376.69 608.91
(14.62) (11.66) (9.46) (12.90)
3 Concentrate 843.08 792.68 843.49 825.17
(15.25) (16.73) (21.19) (17.49)
4 Veterinary 12.58 29.26 28.97 20.81
(0.22) (0.62) (0.72) (0.54)
5 Labour 1208.13 1160.82 892.93 977.57
(21.85) (24.51) (22.43) (20.72)
6 Miscellaneous 63.96 59.92 53.20 58.76
(1.15) (1.26) (1.33) (1.24)
7 Interest on OC 656.46 542.74 438.26 540.77
(11.87) (11.46) (11.01) (11.46)
8 Total operating cost 4759.32 3934.87 3177.38 3920.58
(86.09) (83.09) (79.83) (83.09)
II Fixed Cost

1 Dep.on animal 174.65 175.12 169.15 173.54

(3.15) (3.69) (4.25) (3.67)
2 Dep. On equipment 18.26 19.64 18.62 18.47
(0.33) (0.41) (0.47) (0.39)
3 Dep. On shed 52.38 56.84 60.65 58.67
(0.94) (1.20) (1.52) (1.24)
4 Interest on FC 523.65 548.64 554.28 547.02
(9.47) (11.58) (13.92) (11.59)
5 Total FC 768.94 800.24 802.70 797.70
(13.91) (16.90) (20.17) (16.90)

III Total Cost (I+II) 5528.26 4735.11 3980.08 4718.28

(100.00) (100.00) (100.00) (100.00)
IV Cost of milk
production 7.65 6.45 5.26 6.39
(Rs/lit)
40
V. Returns

1 Milk 5122.25 4139.75 5292.50 5171.05

(60.78) (64.22) (57.22) (62.64)
2 FYM 1307.64 1789.14 2881.33 1703.00
(15.51) (22.36) (31.14) (20.64)
3 Young stock 1920.00 960.00 960.00 1280.00
(22.78) (11.99) (10.37) (15.50)
4 Milk products 77.03 113.88 116.17 99.73
(0.91) (1.42) (1.26) (1.20)
5 Total returns 8426.92 8002.69 9249.99 8254.70
(100.00) (100.00) (100.00) (100.00)

VI Price of milk/litre 12 12 12 12

VII Net Returns 2898.66 3267.58 5269.91 3536.42

VIII Benefit Cost Ratio 1.52 1.69 2.32 1.74

Note: figures in the brackets indicate the percentage to the total.

Output

The milk production per annum was 756, 734 and 732 litres in the high, medium

and low group of dairy owners respectively. Farm yard manure obtained was more (14.40

quintals) in the high group followed by 8.94 quintals in the medium and 6.53 quintals in the

low groups respectively. Young stock was observed to be ranging between 0.85 and 0.99 in

number for each dairy group.

Operating cost

The total operating cost was more in the low group (Rs 4759) followed by medium

(Rs 3934), and the high (Rs 3177) dairy units. The overall average of total operating cost is

Rs 3920.Labour was the most prominent item of expenditure followed by dry fodder and

concentrate in all types of dairy groups. The share of labour ranged from 22 to 24 percent,

dry fodder at 14 to 21 percent in the total cost of maintaining local cow per annum.

41
Fixed cost

The total cost was higher in the high group (Rs 803) than in the medium (Rs 800)

and low group (Rs 769). For the overall group, it was Rs 798.

Total cost

The total cost observed to be the maximum at Rs 5,528 in the low group followed

by Rs 4,735 and Rs 3,980 in the medium and the high groups respectively. For the overall

dairy group, it was observed to be Rs 4,718.

Cost of milk production

The cost of milk production per litre was the lowest at Rs 5.26 in the high group

while it was Rs 6.45 and Rs 7.55 in the medium and the low dairy groups respectively. For

the overall group, it was observed to be Rs 6.39.

Returns

Local cows could produce higher return (Rs 5,292) in the high group than in the

low (Rs 5,140) and medium (Rs 5,122) groups. The income from the farm yard manure

was Rs 2,881, Rs 1,789 and Rs 1,307 in the high, medium and low dairy groups

respectively. The maximum income in the form of young stock was Rs 1,920 and was

observed in low group followed by Rs 960 both in the medium and high groups

respectively. The total return was maximum at Rs 9,250 in high group followed by Rs

8,427 and Rs 8,003 in the low and medium groups respectively.

Net return

The highest net returns per annum were found to be the highest at 5,270 in the high

group. The net returns were quite low at Rs 3,267 and Rs 2,898 for the medium and the low

groups respectively.

42
Benefit cost ratio

The benefit cost ratio was the maximum in the high group (2.32) followed by the

medium (1.69) and the low groups (1.52). For the overall groups, it was 1.74.

The use of dry fodder, green fodder and human labour decreased with an increase

in the size of dairy groups but the use of concentrate was almost same in high and low

groups followed by medium group. The milk production was slightly higher in high

group dairy unit followed by medium and low groups. On an average, milk production

was 738 litres per annum.

On an average, operating and fixed cost were 83 and 17 percent of total cost (Rs

4,718) per annum respectively. Economies of scale were very much reflected in the case

of total cost too. On an average, milk was the main product from cow. The returns from

young stock decreased with an increase in the size of dairy units, because low group

farmers provided more milk for sucking to young male calf in order to get good bullock

power for farming purpose. The cost of milk production was minimum in high group

followed by medium and low group dairy units. This was mainly due to fluctuation of

milk yield. On an average cost of milk production per litre of milk was found to be Rs

6.39. Net return and benefit cost ratio were maximum in high group followed by medium

and low group dairy units. This was due to managerial skill exhibited by high dairy group

in better utilization of the resources. On an average, net return was Rs 3,536 per annum

while benefit cost ratio was 1.74.

3.4.3 Buffalo

The input-output coefficients, and cost returns of buffalo husbandry per annum are

presented in table 3.7 and 3.10

43
Table 3.10 Costs and returns of buffalo milk production (Per annum) Jan 2006 to Dec 2006

Dairy unit

Sl No Particulars Low Medium High Overall

I. Operating Cost

1. Dry fodder 3173.94 2168.62 1479.26 2391.23

(31.79) (27.56) (26.25) (31.11)
2 Green fodder 2198.40 1502.07 1024.59 1656.26
(22.02) (19.09) (18.18) (21.55)
3 Concentrate 281.03 264.21 281.16 275.06
(2.82) (3.36) (4.98) (3.58)
4 Veterinary 5.16 8.52 7.94 6.55
(0.05) (0.10) (0.14) (0.08)
5 Labour 2286.13 2157.45 1428.79 159.82
(22.89) (27.42) (25.35) (2.07)
6 Miscellaneous 173.97 162.98 144.71 1659.02
(1.74) (2.07) (2.56) (21.59)
7 Interest on OC 1298.98 1002.22 698.63 983.67
(13.01) (12.79) (12.39) (12.80)
8 Total operating cost 9417.62 7266.07 5065.08 7131.60
(94.33) (92.36) (89.88) (92.81)
II Fixed Cost

1 Dep.on animal 291.58 296.24 266.62 258.31

(2.92) (3.76) (4.73) (3.36)
2 Dep. On equipment 18.26 19.64 18.62 18.47
(0.18) (0.24) (0.33) (0.24)
3 Dep. On shed 32.38 36.55 30.54 28.62
(0.32) (0.46) (0.54) (0.37)
4 Interest on FC 223.65 248.64 254.28 247.02
(2.24) (3.16) (4.51) (3.21)
5 Total FC 565.87 601.07 570.06 552.42
(5.67) (7.64) (10.11) (7.18)

III Total Cost (I+II) 9983.48 7867.14 5635.14 7684.02

(100.00) (100.00) (100.00) (100.00)
IV Cost of milk
production 8.57 6.74 4.70 6.54
(Rs/lit)

V Returns

1 Milk 7451.15 7475.65 7689.50 7519.47

(58.89) (57.36) (62.80) (57.09)
44
 2 Fym 3343.12 4721.40 3716.82 4477.47
(26.42) (36.22) (30.35) (33.99)
3 Young stock 1800.00 750.00 750.00 1100.00
(14.22) (5.75) (6.12) (8.35)
4 Milk products 57.31 85.43 87.14 74.81
(0.45) (0.65) (0.71) (0.56)
5 Total returns 12651 13032.48 12243.4 13171.76
(100.00) (100.00) (100.00) (100.00)
VI Price of milk/litre 12 12 12 12

VII Benefit cost Ratio 1.26 1.65 2.17 1.71

Note: figures in the brackets indicate percentage to the total.

Inputs

The quantity of dry fodder fed to buffalo per annum was 11.22, 10.01 and 9.59

quintals in low, medium and high groups respectively. The quantity of green fodder fed

was 73.10, 65.99 and 64.23 quintals in low, medium and high groups in that order. The

feeding of concentrate was maximum at 2.34 quintals in the low group followed by 2.20

and 2.11 quintals in the high and medium groups respectively. The employment of labour

was higher in the low group followed by (328 mandays) compared to the medium (310

mandays) and high groups (300mandays).

Output

Buffaloes yielded milk in the order of 1,098 litres in the high group, 1068 litres in

the medium and 1,064 litres in the low groups. Farm yard manure obtained ranged from 17

to 23 quintals in the three dairy groups. Young stock produced was the same (0.82 in

number) both in the medium and high groups while it was 0.89 heads in the low group.

Operating cost

The total operating cost was the maximum in the low group (Rs 9,417) and the least

in the high group (Rs 5,065). While it was Rs 7,266 in medium group. For the overall dairy

45
unit, it was Rs 7,131. Dry fodder was the major item of expenditure followed by labour and

green fodder in all the groups of dairy units. The share of dry fodder ranged from 26 to 32

percent, that of labour from 22 to 27 percent and of green fodder from 18 to 22 percent in

the total cost.

Fixed cost

The total fixed cost was the highest in the medium group (Rs 601) followed by Rs 570 in

the high group Rs 566 and in the low group. For overall unit, it was observed to be Rs 552.

Total cost

The total cost was the maximum at Rs 9,983 in the low group and it decreased to Rs

7,867 in the medium group and the high group (Rs 5,635) dairy units. For the overall dairy

unit, it was observed to be Rs 7,684.

Cost of milk production

The cost of milk production per litre was the lowest in the high group (Rs 4.70)

followed by the medium group (Rs 6.74) and the low group (Rs 8.54). For the overall dairy

unit, it was observed to be Rs 6.54.

Returns

The income from milk was Rs7,451, 7,475 and Rs 7,689 in the low, medium and

the high groups respectively. The income from the farm yard manure was Rs 3,343, Rs

3,717 and Rs 4,721 in the low, high and medium groups respectively. The income from

young stock was the highest at Rs 1,800 in the low group and it was Rs 750 for both the

medium and high groups respectively. The total returns were the highest at Rs 13,032 in the

medium group followed by Rs 12,651 in the low group and Rs 12,243 in the groups

respectively. For the overall dairy unit, it was observed to be Rs 13,172.

46
Net returns

The net returns was comparatively more in high group (Rs 6,608) than the medium

(Rs 5,165) and the low groups (Rs 2,668). For the overall dairy unit, net return earned was

Rs 5,488.

Benefit cost ratio:

The benefit cost ratio was the highest in the high group (2.17) followed by the medium

(1.65) and the low (1.26) groups. For an average dairy unit, it was observed to be 1.71.

On an average, the use of dry fodder, green fodder and human labour for buffalo

was 10,868 quintals and 312 mandays per annum. The use of dry fodder, green fodder

and human labour decreased with an increase in the size of the dairy units due to more

availability of dry and green fodder in low group, and also more proportion of

concentrates being fed by medium and high dairy units. The highest milk yield was

recorded in high group followed by medium and low groups. On an average, milk yield

was 1,074 litres per annum.On an average, operating and fixed costs were 93 and 7

percent of total cost (Rs 7,684) per annum respectively. Total cost decreased with an

increase in the size of dairy units. This was due to economies of scale. The return from

the milk was maximum in medium group followed by low group and high groups. This is

because the share of returns from FYM in medium dairy unit was the maximum while in

low dairy unit highest share to return is recorded by the young stock. On an average,

share of return from milk was 57 percent to total returns. The net returns were maximum

in high group followed by medium and low groups due to high milk yield. On an average,

cost of milk production was Rs 6.54 per litre.

47
3.5. Pattern of milk production, consumption and sale in different dairy

units

3.5.1 Pattern of milk production

The results of monthly milk production in different dairy units are presented in table

3.11

Table 3.11 Pattern of milk production in different dairy units (Litres/dairy unit) Jan 2006-

07

Sl no Months Dairy unit Total average

Low Medium High production

1. January 278.55 291.10 297.43 287.75

(8.37) (8.72) (8.69) (8.58)
2. February 271.91 280.60 291.71 279.96
(8.17) (8.41) (8.52) (8.34)
3. March 210.91 204.4 201.43 206.21
(6.34) (6.13) (5.88) (6.15)
4. April 218.18 224.70 237.14 225.25
(6.56) (6.73) (6.93) (6.71)
5. May 202.64 199.90 217.29 205.32
(6.09) (5.99) (6.35) (6.12)
6 June 359.27 345.20 340.86 349.64
(10.80) (10.34) (9.95) (10.42)
7. July 274.18 280.60 292.00 280.93
(8.24) (8.41) (8.53) (8.37)
8. August 289.45 298.60 304.29 296.43
(8.70) (8.95) (8.89) (8.84)
9. September 291.27 283.60 287.43 287.57
(8.75) (8.50) (8.39) (8.57)
10 October 300.27 310.20 300.00 303.75
(9.03) (9.30) (8.76) (9.05)
11. November 318.73 309.20 320.71 315.82
(9.58) (9.27) (9.37) (9.41)
12 December 311.64 308.90 334.00 316.25
(9.37) (9.26) (9.750) (9.43)
Total 3327.00 3337.00 3424.29 3354.88
(100.00) (100.00) (100.00) (100.00)
Note: figure in the brackets indicates percentage to the total production.

48
 The total milk production was higher in the high group (3,424 litres) compared to

the medium (3,337 litres) and low groups (3.327 litres). For the overall dairy units,

production was found to be 3,355 litres. In the low group, June was the peak month of milk

production accounting for 10.80 percent of the annual production whereas, the production

in November, December and October was 9.58, 9.37 and 9.03 percent of the total milk

production respectively. The proportion of milk production was the lowest at 6.09 percent

in May and its share rose to 8.24 percent in July. A similar distribution of milk production

was observed over the different months of the year in the case of the medium and the high

group dairy units. In the medium group, June recorded the highest milk production at 10.34

percent followed by October, November, and December months accounting 9.30, 9.27 and

9.26 percent respectively. The proportion of milk production was the lowest in May

(5.99%) and increased to 8.41 percent in July. In the high group also, June was the peak

month of milk production accounting for 9.95 percent of production whereas, in the month

of November and December, milk production was 9.75 and 9.37 percent of total milk

production respectively. It was observed that the milk production increased with an

increase in the size of dairy units. It was quite natural that total milk production had to

increase on account of increase in the herd size of crossbred animals. Similarly, Sharma

(1975) revealed that the milk yield in general increased with an increase in the land

holdings the same trend was noticed in the study ares. The proportion of milk production

slightly increased with an increase in the size of dairy units from June to December,

because of high calving period of buffaloes. The milk production showed an increasing

trend from August to December. Therefore procurement of milk and its processing need to

be concentrated during August to December. The difference in yield levels indicate

contribution of owned resources, particularly land. This period happened to be the ideal

49
season which favours the flush calving season. In addition, during August to December

plenty of green fodder is available and weather is also usually pleasant during these

months.. Milk yielding capacity of buffaloes would increase on account of favorable

climate as well as availability of green fodder and therefore milk production was maximum

during these months. The stability of milk production was more in high group followed by

medium and low groups. This was reflected in good management of dairy animals by high

and medium group of dairy owners.

3.5.2 Pattern of milk consumption

The monthly milk consumption by family members of dairy groups are presented in

Table 3.12

The total annual milk consumption was the highest at 627 litres in the medium

group and the lowest in the low group (615 litres) whereas, it was 617 litres in the high

group, for the overall group the total milk consumption was found to be 620 litres. In low

group, the proportion of milk consumption by the members of the family was the highest in

November (12.2 percent) and it gradually decreased up to June. The consumption started to

increase again in July and peaked by November. In the medium group, the highest

proportion of milk consumption was 12.50 percent in November followed by December

and January with 12.24 percent and 11.46 percent respectively. The proportion of milk

consumption was the lowest in June (3.58 percent) and July (3.78 percent). In case of the

high group, the highest proportion of milk consumption was in November (12.56 percent)

and December (12.29 percent) and the lowest was in June (3.58 percent) and in July (3.72

percent).

50
Table 3.12 Pattern of milk retained for family consumption in different dairy units (Jan

2006-07) (Litres/dairy unit)

Sl no Months Dairy unit Total average

consumption
Low Medium High

1. January 70.55 71.73 70.57 70.99

(11.46) (11.44) 11.44) (11.45)
2. February 65.81 66.84 65.70 66.03
(10.69) (10.66) (10.65) (10.65)
3. March 61.69 62.51 61.01 61.50
(10.02) (9.97) (9.89) (9.92)
4. April 38.85 39.12 38.37 38.69
(6.31) (6.24) (6.22) (6.24)
5. May 33.86 33.48 31.89 32.67
(5.50) (5.34) (5.17) (5.27)
6 June 23.09 22.45 22.08 22.44
(3.74) (3.58) (3.58) (3.62)
7. July 23.39 23.70 22.95 23.56
(3.80) (3.78) (3.72) (3.80)
8. August 26.35 28.03 28.50 27.96
(4.28) (4.47) (4.62) (4.51)
9. September 57.62 59.06 58.35 58.47
(9.36) (9.42) (9.46) (9.43)
10 October 63.29 64.96 64.15 64.29
(10.28) (10.36) (10.40) (10.37)
11. November 76.09 78.38 77.48 77.56
(12.36) (12.50) (12.56) (12.51)
12 December 75.05 76.74 75.81 75.83
(12.19) (12.24) (12.29) (12.23)
Total 615.64 627.00 616.85 620.00
(100.00) (100.00) (100.00) (100.00)
Note: figure in the brackets indicates percentage to the total consumption.

51
The high consumption in November and December months can be attributed it being a

festive season for the region. In case of the overall dairy group also, the highest proportion

of milk consumption was in November (12.5 percent) and in December (12.23 percent) and

the lowest was in June (3.62 percent) followed by July (3.80 percent).

It was observed that milk consumption remained almost same with different size

of dairy units. This was due to nature of joint family and good economic condition of

these dairy groups. It was interesting to note that per capita dairy milk consumption in

high group (287 gms), medium (263 gms) and in low group (269 gms) was higher than

the national average of 204 gms in 2005-06. It implied that operation flood Programme

would primarily improve the income and also provide better nutrition standard in the case

of farmers. The proportion of milk consumption increased from August to January with

an increase in the size of dairy units because in peak period of milk production high milk

producing groups will retain more quantity of milk for family consumption. On the

contrary, milk consumption percentage decreased with an increase in the size of dairy

unit from February to July, because of slack period in which farmers reduce the

consumption. The stability of milk consumption was more in low group as compared to

medium and high group. This was because that in a low group milk producers, milk is

main nutrient supplement in their diet while medium and high group milk producers

could supplement their nutritional intake by diversifying their consumption due to their

better economic condition.

3.5.3 Pattern of milk sale

The monthly sale of milk by the different dairy groups are presented in table 3.13

52
Table 3.13 Pattern of milk sales in different dairy units (Litres/dairy unit)

Sl no Months Dairy unit Overall

Low Medium High

1. January 208.00 219.37 226.86 216.76

(7.67) (8.09) (8.08) (7.93)
2. February 206.10 213.76 226.01 213.93
(7.60) (7.89 (8.05) (7.82)
3. March 149.22 141.89 140.42 144.71
(5.50) (5.24) (5.00) (5.29)
4. April 179.33 185.58 198.77 186.56
(6.61) (6.85) (7.08) (6.82)
5. May 168.78 166.42 185.40 172.65
(6.22) (6.14) (6.60) (6.31)
6 June 336.18 322.75 318.78 327.20
( 12.40) (11.91) (11.35) (11.96)
7. July 250.79 256.90 269.05 257.37
(9.25) (9.48) (9.58) (9.41)
8. August 263.10 270.57 275.79 268.47
(9.70) (9.98) (9.82) (9.82)
9. September 233.65 224.54 229.08 229.10
(8.62) (8.29) (8.16) (8.38)
10 October 236.98 245.24 235.85 239.46
(8.74) (9.05) (8.40) (8.76)
11. November 242.64 230.83 243.23 238.26
(8.95) (8.52) (8.66) (8.71)
12 December 236.59 232.16 258.19 240.42
(8.73) (8.57) (9.20) (8.79)
Total 2711.36 2710.00 2807.43 2734.88
(100.00) (100.00) (100.0) (100.00)
Figures in the brackets indicate the percentage to the total.

The highest volume of milk sales was recorded in high group (2807 litres) followed by low

group (2711 litres) and medium group (2710 litres). In the overall dairy group, the total sale

of milk was found to be 2735 litres.

In the low group, the highest proportion of milk sales was 12.40% and was

observed in June followed by 9.70% in August. The lowest proportion of milk sales of

5.50% was observed in March followed by 6.22% in May. In the medium group, the

53
highest proportion of milk sales of 11.91% was observed for June and sales of 9.82% was

noticed in August. The low sale of milk was observed in March (5.24%) and May (6.14%).

In case of high group, the proportion of milk sales were high starting from June (11.35%)

and extended upto August (9.82%). The lowest proportion of milk sales was observed to be

5.00 percent for March and it was 6.60% in May. In the case of overall dairy group, the

higher proportions of milk sales started from June (11.96%) and extended up to August

(9.82%). The lowest proportions of milk sales were 5.29% in March followed by 6.31% in

May. It was seen that the sale of milk increased with an increase in the size of dairy units. It

was revealed that average daily surplus milk was 7.49 litres per dairy unit which was 81

percent to total production.

The proportion of milk sale slightly increased with an increase in the size of dairy

unit from August to December due to high production but it decreased with an increase in

the size of dairy units from January to July except in the month of June for all groups

because of reduction in milk production in summer season. The stability of milk sale was

more in high group as compared to low and medium groups. This was due to increase in

the milk production of milch animal and also due to high stability in milk production

noticed in this group.

From the above study we conclude that, the growth rates of cows and buffaloes in

Kolar district were more impressive and there is lot of scope for dairy development in the

district. Most of sample dairy heads are young and they having good experience in dairy

management. The herd size is to be inversely related to the milk producing category and

the high milk producing category are more efficient than other two milk producing groups.

The milk consumption remained same with different size of dairy units but sale of milk

increased with an increase in the size of dairy units.

54
 CHAPTER V
SUGGESTIONS

On the basis of findings of the present study and the personnel observations

during investigation of the problem, the following suggestions and appropriate strategies

are recommended to improve the performance of Kolar milk union.

5.1 Production

1. Among three categories of dairy owners, it was seen that high milk producing dairy

owners were more efficient in terms of stabilized milk production and high profit. Hence,

there is need to increase milk production by other categories to achieve efficiency. This

can be achieved by providing subsidies and loans to buy high milk yielding breeds by the

low and medium groups. Supporting these groups for two or three years with respect to

the various costs incurred them, in also help them in stabilizing their incomes.

2. Among the various milch breeds, crossbred cows and buffaloes were more profitable

dairy animals in all types of dairy groups. As a result, these animals may be included in

dairy units.

3. Crossbred cows are high milk yielders, so it is suggested to take up cross breeding

programme in local cows. On the other hand, pure breed (Deoni) may be maintained in

order to get good quality of draught power for agriculture.

4. It is suggested that the dairy owners may be given training on various aspects regularly

like animal health care and animal management. The milk union can make arrangements

for the training of the dairy owners, officials and policy makers.

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5. Dairy owners with irrigation facilities may grow the green fodder like maize, jower,

napier grass, leguminous crops such as cowpea, green gram and black gram. By doing so,

the farmer may substitute the nutrients supplied by purchased feed concentrates and there

by reduce feed cost. This will also ensure a stable supply of fodder. The farmer may grow

green fodder on waste lands, along sides of irrigation channels and bunds etc.

6. The dairy cooperative should have sufficient working capital. The payment could be

made to dairy owners as for as possible at least every week without fail for their milk

sold which helps the dairy owners to operate the household budgets.

5.2 Processing

1. The milk procurement routes that are not cost effective are better to be discontinued

2. The union should achieve at least 85 percent of its capacity utilization to break even all

its fixed costs.

5.3 Marketing

1. The union may go for diversifying its liquid milk by introducing high fat milk and

supplying more standardized milk so as to compete with the private traders. The

prospects of selling zero fat content flavoured milk in chilled form may be explored

during the exceptionally hot months in Kolar city.

2. The sales promotional techniques have not materialized during the past years.

Therefore a market research survey is required to identify different sources by which the

consumers receive the information. Improvement of sales promotion measures can be

taken up on the basis of market research results.

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3. The union can use Ultra High Temperature (UHT) process to pasteurize the milk

which will increase the shelf life of milk and reduce the cost of processing.

4. Instead of present low density polythene (LDPE) film being used for pouches, the

union should go for linear low density polythene (LLDPE) film for pouches which will

reduce the cost of milk packing with least leakage.

5. Educating the consumer about the KMF products by using appropriate promotional

techniques like advertising in Radio, Television and News paper and highlighting the

social causes it is serving will lead to developing a more loyal consumer base.

5.4 Monitoring and Evaluation

1. The technical as well as financial audit may be undertaken by third parties periodically

such as the AMUL.

2. Before registering a DCS, the officials of union should survey the village and ensure

the feasible quantity of milk.

In Karnataka, Kolar milk union is performing well in milk procurement and marketing of

milk. It is important to improve the socio-economic conditions of rural families thro

various activities hence it is serving a social causes to the society. It also recommend to

KMF to adopt marketing strategies of AMUL, so it has given better opportunities for

dairy farmers as well as end users of milk and making the dairy farmers aware of the

technical development and various milch breeds available for increasing milk

production. So this makes Kolar milk union rank always first compared to other milk

unions.

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 CHAPTER IV

CONCLUSIONS

Indian dairy farming is poised for a major breakthrough in the last two decades. Dairying

has helped India in phasing its rural development programmes through various schemes.

Today, the country has almost one dairy animal for every eleven human heads. Now it

has been recognized that cattle besides providing home requirements, has become source

of income for improving the economy of the farmer.

In India, mixed farming involving crop and livestock integration has been a way

of life since the dawn of civilization. It is realized that livestock production is one of the

subsections of agriculture providing additional remuneration to the small farmers and

landless family labours.

India has the largest cattle, buffalo and goat population in the world. India has

breedable 7.5 million crossbred cows, 57.5 million local cows, 39 million she buffaloes

and 87 million goats. Total milk production in India during 2006 was 100 million tons.

The per capita availability of milk per day is 245 grams which is lower compared to the

worlds average per capita availability of 280 grams.

The investment on dairying programmes showed that the great emphasis has been

given to this sector by the government for increasing the production and productivity.

The Karnataka co-operative milk producers’ federation’s (KMF) Nandini brand of

milk products is a household name today in Karnataka, with one of the highest annual

sales turnover in the dairy industry. The present study aimed at production and marketing

aspects of Kolar milk union, Karnataka state.

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The specific objectives of the study were:

1. To document the growth of dairy animals in the study area.

2. To analyze the cost and returns of milk from different dairy animals.

3. To study the socio economic condition of sample dairy farmers

4. To study the pattern of milk production, consumption and sale of milk in different

dairy units

The important findings of the study are concluded here

The growth rate in cows was at the rate of 3.71 percent and buffaloes grew at the

rate of 1.95 percent from 1990-2001 in Kolar district of Karnataka. The growth rates in

respect of cows and buffaloes in Kolar district over the different census period are

indicating lot of scope for dairy development in the district.

The average age of dairy owners was 41 years, they are young and having good

experience in dairy management. Most of the dairy owners are illiterate, even if they are

literate at maximum they exposed to school level education.

The herd size appeared to be inversely related to the milk producing category that

is high group had the lowest cattle strength and vice versa. In all dairy groups use of hired

child labour dominated by hired male labour force and it noticed that females are usually

not hired as labourers in dairy units.

Milk production of a crossbred cow per annum was higher in high milk producing

group (1619 litres) as compared to medium (1585 litres) and low milk producing groups

(1581 litres). It was observed that average milk production of a crossbreed cow was

higher than local cows and buffaloes. The benefit cost ratio was higher in crossbreed

cows (1.99) than local cows (1.74) and buffaloes (1.71).

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 The milk yield generally increased with an increase in the land holdings of sample

dairy farmers and also increases with size of dairy units. Milk production was peak in

June month compare to others months in the study area. The stability of milk production

was more in high milk producing group followed by medium and low groups.

. The milk consumption remained same with different size of dairy units but sale of

milk increased with an increase in the size of dairy units. The total milk consumption was

highest in medium milk producing group than low and high milk producing groups. The

highest milk sale was noticed in high group followed by low and medium milk producing

groups

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APPENDIX
 QUESTIONAIRE
1. Demographic features of sample dairy owners

Farmer name:
Age:
Educational level:
Family size:

Male
Female
Children
Total

2. Pattern and nature of land holdings of dairy farmers:

(Acres)
Rainfed area
Irrigated area
Grazing land
Net sown area
Area under fodder
crop

3. Size of the herd& distribution of total milch animals in different dairy units:

Animal Number
Cross breed cow
Local cow
Buffaloes
Total

4. Pattern of feeding green fodder, dry fodder and concentrates in different dairy units:

Feed Quantity(qtl)
Green fodder
Dry fodder
Concentrates

5. Labours requirement in dairy units:

Hired Family
Male
Female
Children
Total

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6. What is the cost of milk production from different dairy animals?

Particulars Cross breed Local cow Buffaloes

Dry fodder
Green fodder
Concentrates
Veterinary
Labour
Miscellaneous
Interest on O.C
Total operating cost
Dep on animal
Dep on equipment
Dep on shed
Interest on fixed
capital
Total F.C
Total cost(O.C+F.C)
Cost of milk
production (Rs/lt)

7. What are the returns of milk from different dairy animals?

Particulars Cross breed cow Local cow Buffaloes

Milk
FYM
Young stock
Milk products
Total returns

8. Month wise milk production in different dairy units:

Month Litres
January
February
March
April
May
June
July
August
September
October
November
December

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9. Month wise milk consumption in different dairy units

Month Litres
January
February
March
April
May
June
July
August
September
October
November
December

10. Month wise milk sale in different dairy units:

Month Litres
January
February
March
April
May
June
July
August
September
October
November
December

11. What are the suggestions for increasing efficiency of dairy business?

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