Environmental Destruction

[T]hose who claim to care about the well-being of human beings and the preservation of our environment should become vegetarians for that reason alone. They would thereby increase the amount of grain available to feed people elsewhere, reduce pollution, save water and energy, and cease contributing to the clearing of forests. [W]hen nonvegetarians say that human problems come first I cannot help wondering what exactly it is that they are doing for human beings that compels them to continue to support the wasteful, ruthless exploitation of farm animals. Peter Singer, Animal Liberation, 1990 The following findings were compiled from the executive summary of Livestocks Long Shadow: Environmental Issues and Options,* a 2006 report published by the United Nations Food and Agriculture Organization:

Hog farm waste lagoons in Georgia (above) and North Carolina (below). Click images for larger views; courtesy of USDA.

Climate change: With rising temperatures, rising sea levels, melting icecaps and glaciers, shifting ocean currents and weather patterns, climate change is the most serious challenge facing the human race. The livestock sector is a major player, responsible for 18 percent of greenhouse gas emissions measured in CO2 equivalent. Livestock are also responsible for almost twothirds (64 percent) of anthropogenic ammonia emissions, which contribute significantly to acid rain and acidification of ecosystems. [See also A Truly Inconvenient Truth.]

Water: The livestock sector is a key player in increasing water use, accounting for over 8 percent of global human water use, mostly for the irrigation of feedcrops. It is probably the largest sectoral source of water pollution, contributing to eutrophication, dead zones in coastal areas, degradation of coral reefs, human health problems, emergence of antibiotic resistance and many others. The major sources of pollution are from animal wastes, antibiotics and hormones, chemicals from tanneries, fertilizers and pesticides used for feedcrops, and sediments from eroded pastures.

Manure runoff from a dairy farm in Maryland (click image for larger view; courtesy of USDA NRCS). Land degradation: Expansion of livestock production is a key factor in deforestation, especially in Latin America where the greatest amount of deforestation is occurring 70 percent of previous forested land in the Amazon is occupied by pastures, and feedcrops cover a large part of the remainder. Biodiversity: Indeed, the livestock sector may well be the leading player in the reduction of biodiversity, since it is the major driver of deforestation, as well as one of the leading drivers of land degradation, pollution, climate change, overfishing, sedimentation of coastal areas and facilitation of invasions by alien species. *Note: The term livestock refers to all farmed animals, including pigs, birds raised for meat, egg-laying hens, and dairy cows. For more information, see the media release and full report. The way that we breed animals for food is a threat to the planet. It pollutes our environment while consuming huge amounts of water, grain, petroleum, pesticides and drugs. The results are disastrous. David Brubaker, PhD, Center for a Livable Future, Johns Hopkins University Environmental News Network, 9/20/99 According to the EPAs Animal Waste: Whats the Problem?:

Above: Algae bloom from runoff. Below: Runoff of waste.

[T]he growing scale and concentration of AFOs [animal feeding operations] has contributed to negative environmental and human health impacts. Pollution associated with AFOs degrades the quality of waters, threatens drinking water sources, and may harm air quality. By definition, AFOs produce large amounts of waste in small areas. For example, a single dairy cow produces approximately 120 pounds of wet manure per day. Estimates equate the waste produced per day by one dairy cow to that of 2040 humans per day. Manure, and wastewater containing manure, can severely harm river and stream ecosystems. Manure contains ammonia which is highly toxic to fish at low levels. Increased amounts of nutrients, such as nitrogen and phosphorus, from AFOs can cause algal blooms which block waterways and deplete oxygen as they decompose. This can kill fish and other aquatic organisms, devastating the entire aquatic food chain.

A single dairy cow produces about 120 pounds of wet manure per day, which is equivalent to the waste produced by 2040 people. That means Californias 1.4 million dairy cows produce as much waste as 2856 million people. U.S. Environmental Protection Agency Notes from Underground, Fall 2001

In 2002, after collecting thousands of records from state and federal regulatory agencies, Sierra Club researchers compiled a report and database called The RapSheet on Animal Factories, documenting crimes, violations or other operational malfeasance at more than 630 industrial meat factories in 44 states.

The two-and-a-half-year investigation revealed that environmental violations by the meat industry add up to a rap sheet longer than War and Peace. Among other findings, the RapSheet documents:

Government files show that approximately 50 corporations, or their managers, racked up a total of more than 60 misdemeanor or felony indictments, charges, convictions or pleas. Criminal fines total nearly $50 million. The criminal counts included animal cruelty, bribery, destroying records, fraud, distributing contaminated meat and pollution. Millions of gallons of liquefied feces and urine seeped into the environment from collapsed, leaking or overflowing storage lagoons, and flowed into rivers, streams, lakes, wetlands and groundwater. Hundreds of manure spills have killed millions of fish.

Despite lax federal and state law enforcement, these companies were assessed tens of millions of dollars in fines, penalties and court judgments. More than 20% of the 220 companies profiled in detail have been hit with criminal charges or convictions.

Intensive pig farms have made the air so unbearable in some rural communities that some residents must wear masks while outdoors 29 and made some people sick. Poultry and pig waste has contributed to the growth of pathogenic organisms in waterways, which have poisoned

humans and killed millions of fish.30 From 1995 to 1997, more than forty animal waste spills killed 10.6 million fish.31 See also: Rethinking the Meat-Guzzler from the New York Times, regarding environmental destruction and resource allocation; Eating as if the Climate Mattered provides more links. For more general environmental information, see this report by Lacey Gaechter of the University of Colorado.

Update, May 2008: The prestigious Pew Commission on Industrial Farm Animal Production just concluded its 2.5-year study of American animal agriculture with unanimous findings from its 15 members. The Commission was chaired by former Kansas governor John Carlin and included, among others, former U.S. Secretary of Agriculture Dan Glickman, former Dean of the University of Tennessees College of Veterinary Medicine Dr. Michael Blackwell, and more. The panel concluded that factory farms pose unacceptable risks to public health, the environment and animal welfare. It also issued a series of recommendations, including a phase-out of battery cages, gestation crates, veal crates, foie gras, and tail docking of dairy cows, along with inclusion of poultry under the Humane Methods of Slaughter Act. The Washington Post story is titled, Report Targets Cost of Factory Farming. USA Todays story begins, The way America produces meat, milk and eggs is unsustainable, creates significant risks to public health from antibiotic resistance and disease, damages the environment and unnecessarily harms animals, a report released Tuesday says. The Wall Street Journals coverage focuses both on the problems caused by factory farming, and the Commissions conclusion that the agriculture industry is exerting significant influence on academic research. And the Des Moines Registers piece highlights the fact that the Commission is accusing some livestock interests of trying to disrupt a wide-ranging study of the industry by threatening to yank financing for scientists and universities. See also: The Union of Concerned Scientists report CAFOs Uncovered: The Untold Costs of Confined Animal Feeding Operations.

.1. General description and concepts

LLR systems have direct and indirect effects on the environment. The livestock - environment interactions (LEI) can be negative, but also positive interactions occur. The LEI are related to the stage of the production process:
(a) the production and delivery of inputs to LLR systems; (b) directly to the production process itself; and (c) the processing and marketing of the products from LLR systems.

The advantage of this classification is that the system becomes more transparent, causes and consequences become clearer and the development of policy recommendations will be easier.

a. LEI related to inputs The main external inputs of the LLR production system are: (1) feed, mainly in the form of concentrates; and (2) livestock for further fattening (or milking). (1) Feed (concentrate) production. The effect on the environment of the demand for concentrates has been described extensively by Hendy et al. (1995). The main aspects are:
-The requirement of land for production of concentrates. The environmental impact includes competition with humans for food, changes in land-use, increased land pressure (use of rangeland or forest), effects on soil, water and the atmosphere (use of fertilizers and herbicides/pesticides), and effects on soil erosion as a result of intensified cropping.

-The utilization of crop-residues and by-products of the agro-processing industry. Large quantities of these types of products are consumed in LLR systems and converted into useful high quality food. If not used, the residues and by-products would form a gigantic environmental problem. -The production of forage for LLR systems. The intensive forage production on a small land area can absorb part of the manure produced by the animals and reduces the land area required for animal production making more land available for wildlife, forest, rangeland etc.. -Energy requirement for transport of feed to feedmills, the feed milling and mixing process, and the transport to the farm. Transport and processing requires fossil energy resulting in emissions to the air/atmosphere of CO2.
(2) Livestock for further fattening and milking.

Cattle and lambs are required for fattening in feedlots, and dairy cows and she- buffalos are required for the urban dairies. The main environmental aspects are:
- Cattle and lambs for fattening. Increased numbers of livestock required for fattening put extra pressure on rangeland and/or results in expanded rangeland areas at the expense of wildlife and nature conservation. On the other hand, the lamb fattening system in the Middle East has been developed and is being subsidized to reduce pressure on the rangeland and prevent rangeland degradation.

- Dairy cows. For the urban dairy systems dairy cows come from the rural mixed farming areas. This trade itself does not have a direct environmental effect on the mixed farming system but because the best animals are selected it forms a drain on the genetic resource.

(b) LEI related to the production process.

LEI are related to (1) the production of manure; (2) the use of drugs, growth stimulators etc.; and (3) the use of fossil energy. (1) Manure production. The main environmental effects are caused by emissions from manure in the stables, during storage, after application to the land or when manure is simply dumped. Emissions are in the form of nitrogen, phosphorus, methane, organic matter and possibly heavy metals. Manure is also a useful fertilizer and an input for crop and pasture production. Biogas production is another form of manure utilization. Brandjes et al. (1995) deal extensively with most of these aspects. The main issues are:
- Manure as fertilizer. The use of manure can improve soil fertility. In certain areas (mainly developing countries) manure is a valuable commodity and sold especially for vegetable production. The small areas of land required for intensive roughage production can absorb a part of the manure from the LLR system.

- Manure for biogas. Manure can be used for the production of energy (Methane) and the remaining liquid slurry can be used as fertilizer. The manure from intensive systems (low roughage consumption resulting in low DM content of the manure) is not very suitable for use as fuel in a dried form. - Nitrogen (N) emissions are in the form of (i) volatilization of NH3; (ii) volatilization of N2 and NxOx; and (iii) run-off and leaching of N-compounds.
(i) Volatilization of NH3 during storage and application on the field. NH3 emissions cause acid rain and eutrophication of the ecosystem.

(ii) Volatilization of N2 and NxOx occurs in anaerobic situations (in lagoons and after application to the soil as (by)-products of nitrification and denitrification processes. N2O is especially harmful as it contributes to global warming and breakdown of the ozone layer. (iii) Run-off and leaching of N-compounds (nitrate etc.) during storage and after application to the land. These compounds can reach the ground water and make the water unsuitable for drinking water, eventually contribute to eutrophication of the surface water.
- Main P emissions are through run-off and causes eutrophication of the surface water. However, if P fertilization is in excess of crop P requirements for longer periods, P saturization of the soil occurs leading to P leaching to the ground water.

- Odours: animal manure contains a number of volatile organic compounds with an obnoxious odour The compounds do not have a direct negative impact on the environment except that they are a nuisance to the people of the surrounding area;

- Methane (CH4) emission is from two sources in LLR systems (1) direct from the digestive process in the rumen; and (2) from the anaerobic decomposition process of organic matter in the manure during storage. Methane causes breakdown of the ozone layer. The impact domain study Methane will deal with this aspect of environmental impact; - Heavy metals in the faeces can form a problem where high levels of manure are used as fertilizer, particularly if removal of heavy metals from the land is low, e.g. in case of predominant livestock farms.
(2) Drugs, herbicides and pesticides.

The following categories can be distinguished:

- drug residues: residues in animal products following preventive or curative treatment of diseases;

- pesticides residues: pesticides in products following spraying or dipping for controlling external parasites; - growth stimulators: effects of the use of hormones etc. to stimulate and regulate growth; - pesticides/herbicides residues: herbicides which enter the system through concentrates and crop-residues and appear as residues in the animal products or in the manure.
(3) Fossil energy utilization.

Fossil energy is used as energy source for the operation of equipment and transport. Emissions are in the form of CO2, SO2 and NxOx contributing to global warming and acid rain problems. (c) LEI in relation to processing and marketing of animal products. Environmental effects are in the form of waste production from slaughterhouses, tanneries and dairy processing plants and for the use of fossil energy for transport and conservation (e.g. chilling) of products. These aspects are described in the impact domain study 'Environmental effects of animal product processing' by Verheyen et al (1995). (1) Environmental effects of slaughterhouses; meat and by-product processing. Emissions are in the form of:
- Solid waste: manure, paunch, hooves, horns and solid slaughter offal and by-products. Most of the solid waste can be composted and used as fertilizer, but may pose a threat to human health and surface water if not treated well.

- Waste water: water from cleaning can contain slaughter offal and by-products (e.g. blood). The waste water mainly contains organic matter. The quality is measured in Biological oxygen demand (BOD) i.e. the quantity of oxygen required to break down the organic matter.

- Volatile compounds: emissions of volatile compounds is mainly from the use of fossil energy, further from the singeing of pig skins for hair removal, and for the further processing of meat (smoking).
(2) Environmental effects of the tanneries.

For the tanning of 1 ton of raw hides around 300 kg of salts and minerals are required. Chromium is the main tanning agent and at the same time a major polluting factor as it is highly toxic. Emissions are in the form of:
- Solid waste: in the form of scrapings of the raw hide (meat offal etc.), and chromium containing scrapings and cuttings of semi- or fully tanned hides. Discarded leather products also contain 3 % chromium.

- Waste water: from cleaning, soaking etc contains organic material, salts and chromium. - Volatile compounds: emitted to the air mainly from the use of fossil energy and the use of dyes for finishing leather products.
(3) Environmental effects from the dairy plants.

Emissions are in the form of:

- Waste water: containing residues of milk and milk products; whey from cheese production is a major water pollutant in some cases.

- Volatile compounds: emitted to the air mainly the result of use of fossil energy, and limited dust emissions in milk powder manufacturing. - Whey and other dairy by-products: which can be, and are increasingly, used for feeding calves and pigs.
Following processing, emissions to the air also occurs when energy is used for transport to the retailer and consumer as well as during storage (

India: Increasing demand challenges the dairy sector

Meeta Punjabi Dairy consultant New Delhi Over the span of three decades, India has transformed from a country of acute milk shortage to the worlds leading milk producer, with production exceeding 100 million tonnes in 2006. This phenomenal success is attributed to a Government initiative known as Operation Flood (1970 1996) and its intense focus on dairy development activities. In that initiative, rural milk shed areas were linked to urban markets through the development of a network of village cooperatives for procuring and marketing milk. And milk production and productivity were enhanced by ensuring the availability of veterinary services, artificial insemination (AI), feed and farmer education. The investment paid off, promoting production gains of 45 percent per annum. However, that growth has slumped to less than 3 percent in recent years, raising cause for concern. The slowdown is attributed to the decline in investment in the dairy sector since the end of the Operation Flood initiative. Central and state government allocation for dairy development has diminished in the past two five-year plans.

Emerging situation
Dairy is currently the top-ranking commodity in India, with the value of output in 2004 at 1.179 billion rupees (US$39 million), which is almost equal to the combined output value of rice and wheat. Despite the importance of the dairy sector in overall GDP, it receives less government budgeting than the agriculture sector. Further, there has been no concentrated investment in the development of value-added or innovative products, nor any serious effort to support and modernize the informal sector. In light of the increasing demand driven by the growing population, higher incomes and more health consciousness, the slowdown in dairy industry growth is severely worrisome. Based on estimates by the National Dairy Development Board (NDDB), the demand for milk is likely to reach 180 million tonnes by 2022. To supply the market, an average incremental increase of 5 million tonnes per annum over the next 15 years is required a doubling of the average incremental rate achieved over the past 15 years. In the absence of sufficient increased production, India will need to rely on the world market for imports. And because of the huge volume required, it will affect global milk prices. Thus, focusing on areas for local dairy development is critical. Traditionally, the policy environment has favoured the expansion of cooperatives, which ultimately crowded out the private sector. However, liberalization of the sector in recent years has encouraged private investment in dairying. In 2002, the Milk and Milk Products Order (MMPO) ushered in major policy changes friendly to the private sector and a momentum of

activity that is likely to increase dramatically in the coming years. Large Indian and multinational corporations, such as Reliance, Pepsi and Coca-Cola, are planning significant investments. Nowadays, both the private sector and the cooperatives drive the value chains. Because of the many unsuccessful cooperatives in the country, other models of dairy farmer organizations are being explored, such as mutually aided cooperative societies (MACS) and producer companies. Millions of small and marginal farmers in dairying who own two to three animals and produce an average of 5 litres comprise a critical portion of Indias dairy industry. Livestock development in general and dairy development activities in particular are key components of pro-poor development strategies because livestock distribution is much more equitable than land distribution. Thus, changes in the dairying environment have important implications for the smallholder farmers and for poverty reduction. The following characterizes Indias dairy farming and its relevance to inclusive growth:

Small and marginal farmers own 33 percent of land and about 60 percent of female cattle and buffaloes. Some 75 percent of rural households own, on average, two to four animals. Dairying is a part of the farming system, not a separate enterprise. Feed is mostly residual from crops, whereas cow dung is important for manure. Dairying provides a source of regular income, whereas income from agriculture is seasonal. This regular source of income has a huge impact on minimizing risks to income. There is some indication that areas where dairy is well developed have less incidence of farmer suicide. About a third of rural incomes are dependent upon dairying. Livestock is a security asset to be sold in times of crisis.

Factors affecting the competitiveness of the dairy sector

To assess the dairy sectors competiveness, a performance analysis looked at five factors: demand conditions, market structure, factor conditions, related supporting industries, and government and the enabling environment.21 Demand conditions Demand for dairy products in India is likely to grow significantly in the coming years, driven by more consumers, higher incomes and greater interest in nutrition. Consumption of processed and packaged dairy products is increasing in urban areas. Because of the increasing competition from the private sector, several national and international brands have entered the market and expanded consumers expectation of quality although only among a small proportion of the population. In many parts of the country, people still prefer unpacked and unprocessed milk delivered by a local milkman because of its taste and the perception of freshness. The price elasticity for milk is high, thus demand for milk is very sensitive to price changes. Table 1: Demand conditions

Market size and growth

Market growth is due to high per capita consumption, increasing population and health consciousness Consumption patterns Consumption of processed and packaged dairy products is increasing in urban areas Consumption patterns Unpackaged milk is still preferred because of taste and price Sophistication of consumers Consumer awareness on product quality is increasing but in a very small portion of the population Receptivity to new products Mostly urban consumers have a very low but increasing interest in new products Price elasticity Price elasticity is high Impact of market opening on demand Consumers now have a variety of quality products Market structure Until 2002, cooperatives traditionally were the dominant players in the formal sector. With liberalization of the dairy industry, private investment has increased quite significantly. However, the organized sectors share in milk procurement is very low because a large proportion of the milk and milk products are sold through the informal channel (Table 3). The informal demand absorbs approximately 41 percent of the milk and milk products produced in the country, accounting for about 75 percent of the marketable surplus of milk. The formal channel, with its packaged milk and dairy products, accounts for only about 25 percent of the marketable surplus, which is about 15 percent of production. Table 2: Market Structure Performance

Competitive structure

Governance (value chain type) Role of "lead" or organizing firms Farmer organization Marketing chain capacity and efficiency Distribution channels

Still large share of produce; 85% of marketable surplus goes through informal channel Quality of milk through informal channel is an issue and to some extent in formal channel as well Little competition to cooperatives because private sector was not allowed in the sector until recently Entry of supermarkets in retailing of milk is increasing the competitive structure Governance of cooperative structures is constaining efficiency and expansion Role of lead agency has been hampered by government interference in cooperatives Immense scope for improving management and governance through farmer organizations Scope for enhancing efficiency of distribution Cooperatives have a well-developed distribution channel

in urban areas How market signals are conveyed or Government and political interference in price setting, distorted limits prices being determined by market forces. The informal sector consists of the village milk vendors who procure loose milk from farmers and sell it in urban and peri-urban areas directly to consumers, small private processors or hotels. The milk vendors also may sell processed products, such as paneer or separated cream. The quality of the vendors milk and milk products is not guaranteed. Largely sold in loose form, it is often adulterated with several additives to control spoilage. Table 3: Flow of milk through different channels Share of Total production marketable % of production Use (million tonnes) surplus 100% 100 45% 45 Home consumption Marketable surplus sold in urban and 55% 55 rural markets (informal and formal) Sold in urban markets as loose 34.5% 19% 19 unpackaged milk Sold as processed products through 40% 22% 22 informal markets Sold as packaged milk through formal 14.5% 8% 8 markets Sold as packaged milk products through 12.7 % 7% 7 formal markets Cooperatives are the central players in the formal dairy sector. The cooperatives have a three-tier structure i) primary societies at the village level, ii) unions at the district level and iii) federations at the state level. Currently, there are 14 federations in India. The success of the Gujarat Cooperative Milk Marketing Federation (GCMMF), known for its Amul brand and its Amul model of cooperative, is acclaimed. However, there is a perception that cooperative organizations generally have failed in other parts of the country. A less recognized fact is that the cooperatives in other states are organized differently than the GCMMF cooperatives. The GCMMF cooperatives operate as a true representative of farmers and are run by professionally qualified managers. In most other states, the cooperatives are managed by civil servants, function more as government bodies and are weak representatives of farmers. Of the 14 major state cooperatives in the country, 10 have state government equity, of which 6 have government equity in excess of 51 percent. Twelve of the 14 cooperatives have government officers as managing directors who are appointed by the state government. It is not uncommon for these officials to change up to three times a year. Because of such governance, cooperatives are mere parastatals and do not work in the true spirit of cooperatives with elected farmer

representatives and professionals who run the organization. This governance structure influences the functioning of the entire chain, from the state federation to the village societies and thus significantly impacts farmers involvement in the chain. The primary differences between the GCMMF cooperatives and other state cooperatives are price and services. In Gujarat, the price paid to farmers is based on fat content; there is regular testing of milk each farmer supplies. In most of the other states, there is hardly any testing of milk. In other state cooperatives, the village society president wields a lot of power and typically decides the prices paid to farmers. Reportedly, farmers with some degree of influence receive higher prices while those without receive lower remuneration. Being the lead organizations, the cooperatives also set a benchmark for prices paid by other buyers, such as local vendors and private dairies, who tend to pay 50 paise or 1 rupee ($ .02) more than that paid by the cooperatives. Thus, if the farmgate price paid by the cooperative is low, other players also pay a low price. For most of the private dairies, agents procure the milk from farmers. Some private dairies have established village societies for milk collection that follow the cooperative model. However, this model requires much larger investment and is not economically feasible, considering that cooperatives receive considerable development support from the government (such as feed subsidies). It is not uncommon for private dairies to make loans to farmers, which is a key reason for the somewhat large share of milk directed to this channel. Factor conditions Factor conditions for dairying entail the quality of animals, human resources and technical skills, land availability, capital, credit, infrastructure and other inputs relevant to the value chain, as the following explains. The quality of animals is critical in determining its milk productivity and hence overall production. Currently, low productivity per animal hinders development of the dairy sector. Despite being the worlds largest milk producer, Indias productivity per animal is very low, at 987 kg per lactation, compared with the global average of 2 038 kg per lactation. The low productivity is a result of ineffective cattle and buffalo breeding programmes, limited extension and management on dairy enterprise development, traditional feeding practices that are not based on scientific feeding methods, and limited availability and affordability of quality feed and fodder. In addition, the limited supply of quality animals is exacerbated by policies limiting interstate movement of animals. Indigenous cattle and buffalo make up 45 percent of the countrys total milch population, in contrast to the cross-bred cows at 10 percent. Animal health and breeding services provision, veterinary infrastructure development and vaccinations are the responsibility of the state government. These services have traditionally been provided for free or at a very subsidized rate. In the past few years, there has been increasing awareness that the state pays heavily to offer these services, which are easily available to farmers (Ahuja et al.). Consequently, many states have instituted partial or full-cost recovery fees for providing the services.

Table 4: Factor conditions Herd

Herd inventory Breed

Feed

Veterinary medicine Veterinary medicine costs Human capacity Farmer technical capacity Knowledge and new techniques are not accessible Support services technical capacity Accessibility to good quality veterinary services is an issue in many parts of the country Organization and managerial Organizational and managerial capacity of farmer capacity cooperatives is very poor Entrepreneurial capacity Entrepreneurial capacity is hindered by a low capacity to take risks Credit or finance market Formal credit mechanisms Access to formal credit mechanisms is very poor Informal credit mechanisms Accessible but at very high interest External economies Transmission of learning Very poor extension support services, leading to very poor knowledge transfer Social capital and trust Strong social capital and trust in the villages, which can sustain dairy farmer organizations if properly managed In addition to the State Department of Animal Husbandry, Dairying and Fisheries, the milk cooperatives and NGOs (BAIF, JK Trust) provide services in many states. So do trained private sector AI technicians, although for a fee. As well, state livestock development agencies are being set up as autonomous bodies to offer services in animal breeding in the form of procurement, production and distribution of breeding inputs (such as semen and liquid nitrogen), training and promotional activities. Despite these initiatives, the availability of services remains limited. Currently, AI services cover only 15 percent of the breedable animals. Cattle and buffalo breeding programmes have been initiated but have not had the desired impact because of a lack of coordination between the different state departments. And extension activities in dairy management are woefully lacking. Farmers have not been able to take advantage of the potential of their animals because they lack information on feeding and management practices. Extension, especially for women involved in livestock rearing, would enhance dairy production considerably.

Very large number of indigenous animals with low productivity and a small portion of cross-breeds Lack of policy focus on strengthening indigenous breeds Very poor awareness of quality feed, which hinders productivity Farmers not interested in quality feed because of the low price of milk Increasing feed costs Availability is not an issue Duplicate or cheap medicines

Crop residues are the single largest bulk feed material available to farmers for feeding livestock, specifically ruminants. They include coarse straws, fine straws, leguminous straws, pulses straws and sugarcane tops. Fodder from common property resources is another major source of feed for animals. But lack of efficient management of common property resources is a major constraint in availability of these resources for fodder. The area under cultivated fodder production is limited only to 5 percent of the total cultivable land. In the states of Haryana, Punjab, Gujarat and some parts of Rajasthan, land use for green fodder production is estimated at 10 percent or more. There is a need for restructuring the land use strategy to elevate the overall proportion of cultivable lands for fodder production. Concentrates used for fodder include coarse grains, such as maize, sorghum, bajra and other millets, and other cereal by-products, such as rice bran/polish and various oil meals, including groundnut cake, mustard cake, coconut cake, soybean meal, cotton seed meal and sesame cake. The escalating price of feed ingredients is a major cause for concern. In many states, cooperatives are involved in producing feed concentrate and selling to farmers at subsidized rates. Scarcity of fodder resources is likely to be a major constraint in the development of the dairy sector unless adequate measures are undertaken to augment them. Another important issue regarding feed is the lack of regulations to ensure quality. In the absence of a coherent policy, all kinds of substandard feeds are available in the market. Formal/informal credit: Lack of access to credit to expand the herd is a critical problem for farmers. There is little access to formal credit through the cooperatives. Informal credit is available from private traders and agents of private companies, but the interest rate is very high. And these loans may or may not be linked to dairy activity. When taking a loan from a trader, the farmer is then tied to selling the milk to that trader, often at a low rate. The Working Group Report on Animal Husbandry emphasizes the low or non-availability of credit as a primary constraint in livestock sector activity, indicating that: Public sector lending is abysmally very low. The commercial banks are not favourably disposed to providing credit to livestock farmers and the cooperative credit system is very weak, resulting in excessive dependence of livestock farmers on informal sources [and] usually at exorbitant interest rates. Efforts should be put on correcting these distortions and ensure timely availability of inputs and services, including credit to livestock. Vaccines/medicines: The Government and the private sector are involved in producing medicines and vaccines. However, quality control is a critical issue. An important policy question is whether the government should be involved in the manufacturing and production of vaccines or should it instead take on a regulatory role to ensure quality and availability at a reasonable price. Related supporting industries Strong supporting industries are critical for the development of any industry. In the case of dairying, the National Dairy Research Institute pursues research and education in all aspects of dairying: microbiology, chemistry, technology, engineering, animal genetics and breeding,

livestock production and management, animal nutrition, animal physiology, dairy economics and dairy extension education. Table 5: Related and supporting industries Processing capacity Lack of processing capacity in the country, including primary processing by bulk chilling Processing capacity There are government subsidies on bulk chilling and processing infrastructure Transportation and distribution Because of low productivity, transportation costs for procurement are high Dairy farmer services Availability of health and breeding services could be enhanced; extension is almost non-existent Specialized finance and credit Exists on paper but is very difficult to access Relevant research capacity and use Good research capacity Processing capacity: At present, there are 678 registered dairy processing units processing 1215 percent, or 26.63 tonnes, of the milk produced in the country each year. Of the total units registered under the MMPO, 403 are private dairies processing around 11.83 tonnes per year, whereas 212 cooperative dairies process 10.36 tonnes per year. The remaining 63 government plants process 4.44 tonnes per year. These dairy plants are registered in the different states of India. There is immense scope to increase the processing capacity and direct a greater share of milk and milk products through the formal channel. Primary processing is another factor in need of critical attention to ensure the quality of milk through the supply chain. In addition to the Clean Milk Programme and other rural development schemes, the Government has provided subsidies for bulk chilling and processing infrastructure to support the dairy industry. But credit remains a problem; specialized credit exists on paper but is difficult to access for dairying. There is significant private sector investment in feed manufacturing and the manufacturing of medicines and vaccines. Government and the enabling environment The dairy sector in India has traditionally been highly regulated. The government projects and programmes in place for enhancing dairy development include subsidies for developing infrastructure for milk processing and testing. The Clean Milk Production Programme is a centrally sponsored scheme that is being implemented by the State Department of Animal Husbandry, Dairying and Fisheries with several objectives: i) the creation and strengthening of necessary infrastructure for the production of quality milk and milk products at the farm level up to the points of consumption; ii) improvement of milking techniques; and iii) training to enhance awareness on the importance of hygienic milk production. Several other rural development initiatives support dairying, such as through the District Rural Development Agency and womens self-help groups. An area of government support that has not been capitalized on so far is the investment in promoting the nutritional aspects of milk, particularly pasteurized milk versus loose milk.

Detailed information about policy regulations regarding the dairy sector in India is available online at www.indiandairy.com. The policy history Until 1991, the dairying sector was licensed under the Industries Development and Regulation Act (IRDA, 1951). This resulted in preferential treatment given to milk cooperatives that were outside the purview of the legislation. In 1991, the dairy sector was swept up in the move to liberalize the economy. Consequently, the IRDA was replaced by the Milk and Milk Product Order in 1992, which contained the following provisions:
1. The main objective of the MMPO is to maintain and increase the supply of liquid milk of desired quality in the interests of the general public and to regulate the production, processing and distribution of milk and milk products. 2. Any person or dairy plant handling more than 10 000 litres of milk per day or 500 tonnes of milk solid per annum needs to be registered, with the registering authority appointed by the central Government. 3. Every holder of a registration certificate can collect or procure milk only from the milk shed assigned under the registration certificate. The milk shed, is defined as "an area geographically demarcated by the registering authority for the collection of milk or milk product by the holder of a registration certificate''.

Amendments were made to MMPO in 2002 to further liberalize the sector and encourage dairy entrepreneurs from the private sector. The milk shed concept was abandoned, allowing for milk supplies to be procured from any area. Traditionally, the cooperatives have not had much competition from the private sector. In the liberalized environment characterized by open procurement of milk, there is incentive for private players to invest in the sector. Consequently, many agencies, organizations and agents have started buying milk. But a major difference is that they are not backward investing in dairy development activities through the offering of producer services. In the coming years, the lack of involvement in dairy development by the various players is likely to constrain further growth of the industry. In this environment, dairy farmer organizations and cooperatives will have a strong role to play in supporting dairy development activities. If they were to establish higher prices to farmers, for instance, the private sector and other players would be forced to pay at least that much as well. Policy and regulatory issues Agriculture is a state responsibility in India, and the State Department of Animal Husbandry, Dairying and Fisheries, within the Ministry of Agriculture, is responsible for the dairy activities. Consequently, the focus of the activities and budgetary allocation is biased towards agriculture rather than livestock. Table6: Enabling environment

National sector regulation Key regulatory actors (ministries)

Price regulation
Food safety

Department of Animal Husbandry is under the Ministry of Agriculture, hence focus on livestock is underemphasized, particularly in light of the high value of the sector. Rice setting by cooperatives Regulated through the Milk and Milk Products Order Very difficult to control quality in traditional channels Huge premium on fat content of milk compared with formal regulations; thus buffalo milk fetches much higher price Approaches being taken to modernize the sector Various subsidies available for milk processing and testing infrastructure Very little investment on the promotion of health or quality of milk

Informal regulations

Formal sector support Domestic sector (national) Subsidy support Inward investment promotion Provincial/local Key regulatory actors (ministries)

State Department of Animal Husbandry, Dairying and Fisheries is the implementing agency at the state level Informal regulation & transparency Lack of milk testing equipment and thus transparency, leading to low payments Formal sector support Availability of veterinary services; paravets are working with the Department of Animal Husbandry. Dairying and Fisheries Formal sector support Availability of services in remote areas through the government Donor agencies are very actively involved in livestock Donor/NGO roles sector development There are several issues related to milk pricing policies that require serious review and reconsideration. Because cooperatives are mostly managed by civil servants, there is some government influence in determining milk prices. But the state cooperatives are supposed to base the price paid to farmers on the fat and solid-not-fat (SNF) content of milk. In the case of the better-managed cooperatives in Gujuart, the system works that way.22 However, it is less the practice elsewhere. As noted previously, the village society president often wields a lot of power and determines the price randomly, without testing the fat or SNF content. Also as previously mentioned, the cooperative price becomes the benchmark price for other buyers (vendors and private dairy agents) and when it is low, so are the other prices paid. Thus there is no incentive for farmers to sell to the other buyers; only about 15 percent of the milk is sold this way for the marketing of packaged milk and milk products. Policy efforts should focus on enforcing testing as the basis for milk pricing. This can be achieved by ensuring availability of testing machines at all milk collection centres, educating farmers to sell milk only based on

testing and setting up policy norms for all players in the sector to collect milk only when it has been tested. Another important aspect of milk pricing is the huge premium on the fat content compared to the non-fat solid content. Thus buffalo milk fetches a much higher price than cow milk, which has lower fat content.

Industry SWOT analysis

Within the framework of the competitiveness drivers and issues, the smallholder dairy sectors strengths, weaknesses, opportunities and threats have been assessed. The strengths and weaknesses are factors that are directly controllable, while opportunities and threats derive from the external environment. As evident in Table 7, there are a large number of weaknesses in the sector, implying considerable scope for interventions. This SWOT analysis entailed matching each of these elements with an appropriate action. Table 7: SWOT analysis of performance drivers Strengths

How to build on them

Large number of small and marginal farmers involved in dairying An effective marketing channel helps to meet the demands of the urban consumer Very large number of animals and huge scope to enhance productivity Self-sufficiency in medicine production and do not have to rely on exports

Strengthen economic viability of dairy farms by interventions on the input side as well as ensuring more fair farmer prices Increase the link between rural production areas and urban markets Focus on strengthening the indigenous breed to help significantly enhance productivity Ensure availability of quality medicines by strengthening regulatory framework for quality

Weaknesses

How to correct them

Large share of milk (7085%) of marketable surplus goes through informal channel where quality is a big concern Sometimes quality is an issue in the formal channel as well Very little competition to cooperatives because private sector was not allowed to participate in until recently Farmers do not share in the benefits of high demand because of poor governance of cooperatives Milk production is scattered over a large number of farmers producing miniscule quantities

Focus on quality issues even in the informal channel by training traders and by enforcing food quality regulations Develop infrastructure and training for clean milk production Support a fair playing field for the private sector Bring about changes in cooperatives to make them true representatives of farmers instead of functioning as parastatals. Support to dairying as an enterprise to encourage commercial dairy farming and encourage production and productivity by extension and breed development

Milk distribution is limited to urban and peri-urban areas Low milk prices because of lower prices declared by cooperatives, which results in low prices of milk paid by all players Ad hoc export policies and a ban on exports Quality of milk and milk products are a barrier to entry to the export market, especially the EU and the USA Lack of policy focus on strengthening indigenous breeds Non-existent extension facilities Farmers prices are not based on fat measurement, which affects their profitability Because of low access to credit and risktaking ability, farmers cannot increase their herd size

Enhance packaged milk distribution in more areas Strengthen dairy farmer cooperatives to enable farmers to get a higher price for milk Create rational export policy to enable farmers to take advantage of higher prices Strictly implement quality regulations and improve infrastructure and training for quality Strengthen the breed development programmes Strengthen extension facilities Create policy regulations to make mandatory testing as a basis for setting milk price Increase access to credit through dairy farmer organizations and other agencies

Opportunities

How to pursue them

Increased farmer income by exploiting the high demand Increased consumer sophistication and awareness of quality reception of quality packaged products (though slowly) Entry of large corporations in retailing, which can lead to more investment Immense scope to enhance governance of dairy farmer organizations and thus enable dairy farmers to demand higher prices Potential for exports due to low cost of production Overall positive growth environment, which is triggering the Government to enhance infrastructure

Create policies and activities geared towards enhancing dairy farming activity by increasing, production, productivity and ensuring fair farmer price of milk Establish enabling policy environment to enhance investment Create policy support to enhance governance of producer companies Focus on quality issues that are a barrier to exports Encourage private sector to increase investment in dairying

Threats

How to avert them

Large portion of the population does not care about quality issues in milk Because of high price sensitivity for dairy products, people are not willing to pay for quality Significant increase in maize prices can increase feed prices Large informal markets that extend credit are constraining farmers

Initiate consumer education about the negative health impacts of unpackaged products Develop packaging in small quantities to meet the needs of the poor Increase milk prices in accordance with feed prices Support expansion of dairy farmer organizations

Low productivity and scattered production leading to high cost of transportation Emphasis on milk fat and not on SNF content maintaining relatively lower prices of milk

Enhance productivity by breed improvement and extension Enforce price setting of milk based on fat and SNF content to encourage production of cow milk

Four dairy enterprise models

The following section presents analysis and comparisons of four dairy enterprise models in India. Chosen for the analysis: i) a private dairy operating in Andhra Pradesh, ii) the Orissa State Cooperative as an example of a weak functioning cooperative, iii) the Gujarat Cooperative Milk Marketing Federation as an example of a strong functioning cooperative and iv) a mutually aided cooperative society as an alternative model. Models such as producer companies (emerging as a new generation cooperative) are still in a developing stage. Table 8: Model features Number of farmers involved Average litresof milk procured per day Litres of milk processed at dairy plant per day Number of primary cooperatives Private dairy 150 000 700 000 State cooperative 224 000 322 000 GCMMF 2 700 000 60 000 10 200 000 3 500 3 800 13 141 MACS

As previously noted, cooperatives have been successful only in some parts of the country. This is largely because the cooperative law falls under the state policy and is formulated differently in different states. In states such as Gujarat, where the model succeeds, the cooperative is headed by elected managers and managed by professionals. In many other states, civil servants manage the cooperative, which results in a lot of government interference in the day-to-day functioning and leads to a lack of democracy and hence no sense of ownership or responsibility at the village level. Three key differences distinguish the Gujarat (GCMMF) cooperatives from the other states: i) an oversight board elected by farmer members; ii) professionals employed by the cooperatives to manage the cooperatives and iii) the cooperatives have autonomy and freedom in their operating policies from interference by government and politicians (Tushar Shah et al.). To address the governance issues related to cooperative management, the MACS Act was passed in 1995. It de-linked the district level cooperative from the state level, giving autonomy to district and village mutually aided societies. However, only the state of Andhra Pradesh has implemented the legislation. Changing from the cooperative model to the society model has many associated bureaucratic problems. To overcome the hassles, the concept of producer companies was introduced as a way

of transforming cooperatives to work more efficiently as representatives of farmers. However, while promising, it is a relatively new idea that needs more time to develop. Meanwhile, with the liberalization of dairy sector, private sector dairies have emerged as prominent players in the dairy industry. i) A private dairy The private dairy selected for the comparative analysis is an ISO 9001-certified dairy headquartered in Andhra Pradesh. The company set up there in 1992 after the MMPO opened the door to private dairies, and it now trades on the Indian stock exchange. Milk collection is about 7 lakh litres per day from 150 000 households in 3 500 villages in 3 states, although the major operations are in Andhra Pradesh. The company serves three main metropolitan areas with fresh milk (Hyderabad, Chennai and Bangalore) and is about to enter Mumbai. It also markets a wide range of products, including milk, curd, butter milk, pedha and paneer as well as new items such as flavoured yoghurt and flavoured milk to cater to the changing tastes of the young generation. The company has several chilling and bulk cooling units across its collection region in Andhra Pradesh to ensure quality of milk through the chain. The company obtains its milk supply through village agents who have personal relationships with the farmers; it does not get directly involved with farmers. Depending on the social structure of the village, there may be more than one agent per village. The agents collect the milk and deliver to the company. The two parties have negotiated a price, but the company is not involved with what price the agent pays the farmers (although it is slightly above what the cooperatives pay in the state). Agents often provide loans to farmers to maintain their loyalty; typically, the agent competes with agents of other private companies for a farmers milk supply. Company employees are previous dairy cooperative employees who have enormous experience in this area. Collection areas depend on milk density and areas in which the district cooperative is less active and access to markets is efficient. ii) The Orissa State Cooperative The state cooperative is a dairy cooperative society registered under the Cooperative Society Act (1962). Currently, milk collected from 3 800 village societies and 224 000 farmers within 12 district unions totals about 322 000 litres per day. There has not been much competition with the private sector in this region because of low productivity and little dairy development, although private sector investment in the dairy sector is on the rise. iii) Gujarat Cooperative Milk Marketing Federation The Anand Milk Union Limited (Amul) cooperative formed in 1946; but it has become a brand name managed by the Gujarat Cooperative Milk Marketing Federation (GCMMF). The GCMMF consists of 13 district unions, involving 13 141 village dairy cooperative societies and nearly 2.7 million farmer members. With an aggregate milk processing capacity of 10.2 million litres per day, it is Asia s biggest dairy business venture. The marketing network encompasses 3 000 wholesale distributors and over 500 000 retail outlets, giving GCMMF a national reach that very few fast-moving consumer goods companies can boast. GCMMF has been exporting UHT -

processed milk, ghee, skimmed and whole milk powder, butter, cheese and indigenous milk products to the China , Hong Kong , Singapore and the USA , among others. Structure GCMMFs Amul model of dairy development is a three-tiered structure, with the dairy cooperative societies at the village level federated under a milk union at the district level and a federation of member unions at the state level. Farmer members milk their cows twice daily (morning and evening). GCMMF collects the milk twice a day, makes regular payments to the farmer members and provides them with cattle feed, fodder, animal breeding and veterinarian services. Anyone who owns a cow or a buffalo and makes a one time payment of 11 rupees (10 rupees for the share certificate and 1 rupee for registration) can become a member of the village cooperative society. The applicant must agree to provide a set minimum quantity of milk, generally between 600 and 700 litres, to the society each year. The farmer members elect a managing committee that then chooses a chairman. The managing committee appoints a secretary to discharge the societys administrative functions. At the second tier, there is a district level union that processes the milk procured from individual societies. Each of the 13 unions has a board of directors chosen by an electoral college drawn from the chairpersons of its affiliated societies. The union board in turn elects its chairman. The final tier is constituted by the GCMMF, which is responsible for marketing the milk procured and processed into various value-added products at the union dairies. All the products are sold under the Sagar or Amul umbrella brands. The federations board consists of the chairpersons of all 13 district unions. They elect the federation chairperson and appoint the managing director, who is accountable to the nearly 2.7 million strong Amul dairy society members. Elected representatives of the farmer members make policy decisions at all three levels, which are then implemented by professional managers and skilled personnel employed by the farmer members. This structure eliminates all middlemen. By placing the farmer members in command, in essence, of the dairy cooperative involves them in the development process. This cooperative structure is democratic, and the farmers are in control, from the milking of their animals to the final marketing by the federation. For every rupee that GCMMF earns, roughly 75 paise goes to the farmers. The mandate is clear production by the masses, for the masses, at its efficient best. The farmer members democratically govern the entire cooperative structure to ensure that the higher tier organizations are geared to serve the purpose of the lower levels and that the gains at all levels flow ultimately back to the farmers in a significant measure. The core feature of this structure is farmer involvement in decision-making at all three stages procurement, processing and marketing of milk and milk products. The value addition at procurement and processing

stages can be realized only with effective marketing of products, thus making it an essential feature for success. Services provided to farmer members The dairy unions affiliated to GCMMF provide various inputs that contribute to enhancing the productivity and quality standards, such as:

breed improvement and animal healthcare programmes; extension activities; supplies of balanced cattle feed on a no profitno loss basis; quality fodder seed distribution at subsidized cost; a network of artificial insemination centres aimed at genetic upgrading of the animals using frozen semen of pedigree bulls; these centres are managed by educated unemployed rural youth who provide breeding services to the farmers; frozen semen, liquid nitrogen and other consumables; 24-hour mobile veterinary services for emergencies.

It is this integrated approach to dairying and addressing farmers needs at all levels that gives the Amul model its uniqueness. And it is why every third litre of milk from a cow or buffalo in Gujarat is processed in a GCMMF union dairy. iv) MACS in Andhra Pradesh (AP) Dairy activities started at the district level in 1971. The originally chosen district union was registered under the Andhra Pradesh Cooperative Societies Act (1964). After the introduction of the MACS Act (1995), the district union opted for registration as a MACS to acquire better functional autonomy for servicing its farmer members. The union is currently collecting 60 000 litres of milk per day from 650 villages, though it likely to increase up to 100 000 litres in the next two to three years. The MACS have a two-tier operation: at the village and district levels. A village society with elected officers manages operations at the lower level; an elected board of directors managers the district society. The village and district societies each registered separately, and each has the freedom to use its own profits. The union provides its members with a range of services required for dairy development activity:

organizing thrift and credit cooperative society to facilitate the financial assistance for buying milch cattle; organizing AI services through an NGO; making cross-breed or graded animals for farmers to purchase; providing inputs such as concentrate feed, fodder seed, fodder slips and mineral mixtures at subsidized rates to members; supplying breeding bulls to societies; providing veterinary health facility, de-worming and vaccination to the animals of members; compensating members in the event of the death of an animal with either a grant or loan;

providing insurance coverage to members.

Comparative analysis of the four value chains

The following compares performance criteria for the four dairy value chains to determine how they are likely to endure against future competition. Demand conditions The GCMMF has a wide range of traditional products as well as several new products catering to the demands of the new generation, such as sugar-free ice cream. It is one of the largest selling brands of dairy products, with a presence in all parts of the country. The private dairy also has a range of modern products catering to the young generation, such as flavoured yoghurt. The Andhra Pradesh MACS largely sells traditional products, such as milk, to urban consumers as well as rural markets through village societies (small packets, 250 ml). The Orissa State Cooperative also largely sells milk and a few traditional products. Market structure and governance The competitive structure for the four models varies. Dairy is a regional industry with regional dairies serving the local market, especially in the case of packaged milk. There is more scope for inter-regional trade. The GCMMF competes with other multinational companies, such as Nestl and Britannia, with certain products but leads among dairy products in India. The private dairy is a leading brand in the city of Hyderabad. However, the state of Andhra Pradesh has a well-developed dairy industry with several private dairies present in the state and rigorous competition among them. The Andhra Pradesh MACS largely sells packaged milk to the nearby areas and thus encounters less competition in marketing its products. And as mentioned earlier, Orissa finds very little competition to its packaged dairy products because there are hardly any private players in the state. The supply chain is closely linked to the governance structure of the chain. For instance, the GCMMF network is very strong, with farmer involvement at all levels in the chain. Thus it is difficult for private players to procure milk directly from farmers. It is a similar situation within the Andhra Pradesh MACS. In Orissa, however, the cooperative network is not very strong and the president of the village society wields a lot of power; farmer involvement in decision-making at all levels is virtually non-existent. This has created keen competition from milk vendors in milk procurement in that area. The private dairy in Andhra Pradesh experiences intense competition from several private dairies in milk collection. But most of these companies do not deal directly with farmers. Milk is collected through village agents. There is no involvement of any company in any dairy development activity, and thus the companies compete with each other for milk collection. The GCMMF collects its milk through village societies, with the cooperative setting the price. But it pays one of the highest prices in the country; milk collection is done in a transparent

manner (based on testing fat and SNF content). The MACS society also has similar norms (for testing fat and SNF content) for milk collection. The MACS has the freedom to decide the price paid to farmers for their milk because they have autonomy in setting prices. Societies making profits through the sale of milk products can give higher returns to farmers because they do not have to follow the cooperative price. The prices paid that the Andhra Pradesh MACS declares at the district union are higher than the cooperative prices. The Orissa State Cooperative collects its milk supply through a village society run by the president who wields a lot of power; its farmers price is relatively low compared with the GCMMF. In most cases, there is no testing for fat and SNF content on which prices should be based. Average prices are fixed for cow and buffalo milk; however, influential people in community get better prices. In the case of the private dairy, milk purchases are done through the agent, with prices based on competition with agents of other companies and the declared cooperative price. A large number of societies have electronic milk testing machines and more are acquiring them. Factor conditions Livestock assets are likely to be better where organizations serving the area are involved in dairy development activities. The GCMMF has been providing good AI services, which has enhanced the quality of buffalo in the area. The Andhra Pradesh MACS have created a good network of services by involving the State Department of Animal Husbandry, Dairying and Fisheries and NGOs working in its area. With efficient services and involvement in breed development, the quality of herd is likely to improve in the near future. The GCMMF as well as the Andhra Pradesh MACS provide their farmers with feed, animal medicines and vaccines and breeding services. In the Orissa State Cooperative, feed is made available at a subsidized rate through the village society. The society is also involved in providing health and breeding services; however, the farmers still need to largely rely on the state government to provide health and breeding services, which are somewhat inadequate. There is no facility for loans; however, medicines are available at cost, although supply tends to be a problem. Because the private dairy collects milk through agents, it is not directly involved with the farmers for service provision. The agents sometimes extend loans to farmers, which ensures marketing commitment by producers. These are general loans not specifically used for dairy activities, and the interest rate typically is quite high. Milk productivity depends on the level of extension support provided to farmers. The GCMMF provides ongoing extension activities, including training sessions and exposure visits for women. The Andhra Pradesh MACS are also involved in extension to some extent. The Orissa State Cooperative offers hardly any extension activity; the private dairy does not involve itself in extension services at all. Related and supporting industries The GCMMF has created good processing and primary processing infrastructure. Its plants are ISO certified and meet all the quality requirements. The private dairy processing plant also is

ISO certified; however, the primary processing at the village level is not very strong. The Andhra Pradesh MACS have developed adequate processing facilities and plan to expand significantly in the coming years. Milk quality was an issue previously for the Orissa State Cooperative, but the situation has improved in recent years.

Prospects
The GCMMF is the most organized in meeting future growth because of its investing in dairy development activities, such as ensuring the availability of feed and fodder and veterinary services. It is in a position to increase its procurement in the coming years. Also, in terms of development, the GCMMF leads the country in modern products, such as sugar-free ice cream. The private dairy is not involved in dairy development activity and is only focusing on milk procurement. Faced with increasing competition, it will have to move to newer areas for expansion. Because of low involvement of farmers in the Orissa Cooperative, the private sector will find it easy to move into milk procurement in its area. The lack of variety and quality of its products will make it difficult for Orissa to compete with the private sector. If the MACS model becomes popular, procurement will be affected. MACS involvement in dairy development activity will help the model grow and expand the milk procurement. It is geared to face competition from the private sector because of close links with farmers at the village level.

Conclusions
Dairy has a lot of potential to improve rural incomes, nutrition and women empowerment, and hence is a very critical area for investment. A well-developed industry will enable millions of farmers to capitalize on the emerging opportunities and make a significant impact on rural incomes. On the flip side, weak efforts towards dairy development also can have a significant but negative impact on the dairy industry. The growth rate has been sluggish over the past few years. With an increase in demand on one hand and sluggish supply on the other, there is a likely shortfall in demand in the coming years. Major areas of intervention in the dairy sector have been highlighted in this review. Carrying out interventions requires resources and commitment from key actors government, NGOs, development agencies and the National Dairy Development Board to partner and work together. A comprehensive policy addressing the critical issues is required for the robust growth of the sector. The following highlights those issues:
1. The first issue is defining and implementing a policy for dairy development. Though a livestock policy has been established at the national level, its implementation is at the state level because agriculture is a state responsibility in India. But state policies addressing critical needs in dairy development have yet to be clearly defined across the country. Some progressive states have a well-defined policy, but it is lacking in most of the others. But even where a policy is clearly developed, oftentimes implementation is a problem.

2. Lack of clarity between the roles of the State Livestock Development Agency and the State Department of Animal Husbandry, Dairying and Fisheries is an issue for effective policy implementation. For example, the National Cattle and Buffalo Breeding programme has not been well implemented in several states. Further, availability of funds is a major issue in implementing livestock activities. The Livestock Department is within the Department of Agriculture and thus the resources are biased towards agriculture. There is need to emphasize the importance of dairying to smallholder incomes to direct more resources towards dairy development.

Two very significant factors for the growth of the dairy sector are dairy development activities and milk prices paid to farmers. In the liberated policy environment, any player can procure milk in any region. This is a very different situation from the earlier concept of milk sheds, which limited the agency or organization procuring milk to a particular area. Hence, earlier it made sense for agencies and organizations to invest in dairy development activities. But the freedom for procurement has thwarted the incentive for private companies to invest in dairy development activities. However, private sector investment in procurement is increasing. What is clear is that while the number of buyers is increasing, little is being done to develop the sector. In this situation, farmer-owned organizations (such as cooperatives, producer companies, common interest groups and womens self-help groups) have to be strengthened at the grassroots level and linked to service and input providers. Dairy farmer organizations can be used as a platform to address issues regarding availability of all inputs, including feed, fodder, breeding, veterinarian services, medicines, vaccines, credit and insurance. As is evident from the examples presented previously, the GCMMF has been the most successful in meeting the input requirements of farmers. However, this model has not been successful in other states because of issues with the basic organization of cooperatives. Dairy cooperatives in several states function as parastatals and lack the spirit of cooperative organization with farmer involvement in ownership and decision-making. Alternative models of dairy farmer organizations such as the MACS, producer companies, womens self-help groups also need to be explored. International agencies and donor groups need to be directed towards creating political will to strengthen dairy cooperatives and to set them up. A very important aspect of dairy development is the price paid to farmers. Currently in many states, the milk price is set by the cooperatives; this price is used by all other players to set their prices, typically by paying 50 paise or 1 rupee more than the cooperative price in that area. The farmers price for milk ranges from 9 to 11 rupees for cow milk and 13 to 14 rupees for buffalo milk (a key comparison is a litre of bottled water, which costs 1012 rupees then why are milk prices so low? The GCMMF pays the highest prices in the country. In the areas where the Andhra Pradesh MACS have set up, their prices are higher than the cooperative prices (MACS have the freedom to declare their own prices). It is evident that where dairy farmer organizations are strong, farmer prices are higher. Low productivity per animal is another factor hindering development of the dairy sector. Many issues related to low productivity have been discussed an inadequate cattle and buffalo breeding programme, extension and management on dairy enterprise and feeding practices, and

availability of quality feed and fodder. Another important aspect related to low productivity is the lack of quality animals for farmers to purchase. A major hindrance to the availability of quality animals in dairy developing areas is the policy regarding interstate movement of animals. Finally, it is important to discuss the hygienic issues. Milk quality concerns go beyond the farm level and require assurance of safe milk at all stages, including within the informal sector. Through the formal channel, cooperatives, private dairies or any other form of dairy farmer organization, quality can be addressed through training and education on clean milk practices, including the use of bulk coolers. It is also important to develop diagnostic facilities for milk testing, including infrastructure and human resources, that enable constant monitoring for quality. At the processing level, plant certification will help to enhance consumer confidence. Milk quality in the informal markets is an important issue. As noted, 7085 percent (based on different estimates) of milk is obtained and sold through the informal channel. In recent years, initiatives have focused on working with and providing training to traders. In Kenya, for instance, licensing has been used to formalize the traditional sector. In India as well, the Capitalisation of Livestock Programme Experiences programme, along with the International Livestock Research Institute, have undertaken some initiatives in this direction. In the current situation, traders collecting milk at the farm then deliver it and milk products to urban and peri-urban areas. Each trader buys only small amounts of milk. There is scope to organize the traders into groups and create joint facilities where they can test, process and store their milk supplies. These trader facilities could serve as wholesale or bulk suppliers for hotels, chaiwalas (tea sellers) and small sweetshops. These initiatives can help to address the quality issues in the informal sector and also create employment opportunities in the non-farm sector. An argument against working with traders is that formal sector involvement in dairying is increasing and eventually there will be no room for informal players. However, looking at the current reality, it will be several years before this materializes. In the meantime, the informal sector should not be ignored and organizing informal traders should be pursued. Annex I: Overview of dairy marketing channels in India

Annex II: Income from dairy enterprise Income from dairy enterprise per month (two-animal farm) Economic analysis (accounting for household labour and cost of green/dry fodder obtained for free from common resources or neighbour fields) 2 000 750 60 2 810 2 1603 360 -(650)550

Financial analysis (Does not account for household labour and free fodder) 1 400 60 1 460 2 1603 360 7001 900

Feed cost Labour cost Medicine cost Total cost Total revenue (4 litre/animal/day @ 9 rupees cow milk or 14 rupees buffalo milk) Net income Source: Punjabi

Annex III: Milk price chart GCMMF COW Buffalo Farmer price Orissa State Coop Cow Buffalo 99.5 MACS Cow Buffalo 260/kg fat Get salary 92105 + incentive Private dairy (heritage) Cow Buffalo 225+ some amount (cooperative pricing) 240+ incentive

Agent price Consumer price Source: Punjabi

10

Annex Table 1: Identifying critical issues in the dairy chain Stage Priority Developing livestock Policy environment policy Breed development Issues Lack of a coherent livestock development policy Ineffective implementation of policy and projects due to lack of clarity in roles of different agencies Lack of resources Lack of clarity between roles of different departments Lack of regulation for quality of feed and medicines Disease control/ Dept. of Inadequate coverage of veterinarian health/breeding/extension Animal and breeding services services Husbandry, Non-existent extension services Support to dairy farmer Dairying and Scope to enhance activities of NGOs in organizations/womens Fisheries these areas self-help groups Cooperatives Lack of private sector involvement in NGOs dairy development services and Private dairies activities Feed supply Cooperative Quality/cost of feed Fodder Feed Ineffective approach for management Medicines/vaccine supply companies of common property resources Medicine Quality of medicines companies Medicine store Formal credit for animal Banks/financial Very poor access to formal credit at purchase institution the farm level Agent Dept. of Animal Husbandry, Dairying and Fisheries

Services

Inputs

Cooperatives Self-help group Informal loans for animal Trader Very high rate of interest; farmer has purchase or other dairy Private to sell milk at low price to the trader if needs company agent he/she has borrowed money from the trader Farmer Poor management and feeding Production Dairy farming Selling milk practices because of lack of cooperatives/traders/private information in the absence of dairy agents extension activities. Low productivity because of poor genetic potential, poor feeding and management practices, poor access to health and breeding services, lack of good-quality animals Availability of milk per household very low Low profitability from dairy enterprise Cooperative Lack of coverage of villages Marketing/ Collection of milk from society Lack of transparency in milk testing processing farmers through village society, processing and and pricing marketing of milk in cities Lack of democracy in village societies and urban areas Marketing only in peri-urban/urban areas Maintaining quality of milk/infrastructure Milk prices declared by cooperatives kept low and used as a benchmark price by other players Purchase milk from Trader No transparency in milk pricing farmers and selling milk Adulteration and quality of milk and and processed products to milk products consumers Unhygienic conditions for milk processing Purchase of milk from Private dairy No transparency in pricing of milk farmers through village Quality of milk agents, processing and selling milk Selling of milk and milk Retailers Retailing products processed by cooperatives and private dairies

21

The first four factors were drawn from the diamond model; see Dr Michael E. Porter, 1985. Competitive advantage creating and sustaining superior performance. The fifth factor is from an adaptation of a model for agro industry value chains by Carlos Da Silva; see Carlos Da Silva and Hildo M. de Souza Filho. 2007. Guidelines for rapid appraisals of agrifood chain performance in developing countries. FAO publication. Rome. 22 Gujarat farmers receive the highest share of consumer prices compared to any other state in the country.

India: Increasing demand challenges the dairy sector

Meeta Punjabi Dairy consultant New Delhi Over the span of three decades, India has transformed from a country of acute milk shortage to the worlds leading milk producer, with production exceeding 100 million tonnes in 2006. This phenomenal success is attributed to a Government initiative known as Operation Flood (1970 1996) and its intense focus on dairy development activities. In that initiative, rural milk shed areas were linked to urban markets through the development of a network of village cooperatives for procuring and marketing milk. And milk production and productivity were enhanced by ensuring the availability of veterinary services, artificial insemination (AI), feed and farmer education. The investment paid off, promoting production gains of 45 percent per annum. However, that growth has slumped to less than 3 percent in recent years, raising cause for concern. The slowdown is attributed to the decline in investment in the dairy sector since the end of the Operation Flood initiative. Central and state government allocation for dairy development has diminished in the past two five-year plans.

Emerging situation
Dairy is currently the top-ranking commodity in India, with the value of output in 2004 at 1.179 billion rupees (US$39 million), which is almost equal to the combined output value of rice and wheat. Despite the importance of the dairy sector in overall GDP, it receives less government budgeting than the agriculture sector. Further, there has been no concentrated investment in the development of value-added or innovative products, nor any serious effort to support and modernize the informal sector.

In light of the increasing demand driven by the growing population, higher incomes and more health consciousness, the slowdown in dairy industry growth is severely worrisome. Based on estimates by the National Dairy Development Board (NDDB), the demand for milk is likely to reach 180 million tonnes by 2022. To supply the market, an average incremental increase of 5 million tonnes per annum over the next 15 years is required a doubling of the average incremental rate achieved over the past 15 years. In the absence of sufficient increased production, India will need to rely on the world market for imports. And because of the huge volume required, it will affect global milk prices. Thus, focusing on areas for local dairy development is critical. Traditionally, the policy environment has favoured the expansion of cooperatives, which ultimately crowded out the private sector. However, liberalization of the sector in recent years has encouraged private investment in dairying. In 2002, the Milk and Milk Products Order (MMPO) ushered in major policy changes friendly to the private sector and a momentum of activity that is likely to increase dramatically in the coming years. Large Indian and multinational corporations, such as Reliance, Pepsi and Coca-Cola, are planning significant investments. Nowadays, both the private sector and the cooperatives drive the value chains. Because of the many unsuccessful cooperatives in the country, other models of dairy farmer organizations are being explored, such as mutually aided cooperative societies (MACS) and producer companies. Millions of small and marginal farmers in dairying who own two to three animals and produce an average of 5 litres comprise a critical portion of Indias dairy industry. Livestock development in general and dairy development activities in particular are key components of pro-poor development strategies because livestock distribution is much more equitable than land distribution. Thus, changes in the dairying environment have important implications for the smallholder farmers and for poverty reduction. The following characterizes Indias dairy farming and its relevance to inclusive growth:

Small and marginal farmers own 33 percent of land and about 60 percent of female cattle and buffaloes. Some 75 percent of rural households own, on average, two to four animals. Dairying is a part of the farming system, not a separate enterprise. Feed is mostly residual from crops, whereas cow dung is important for manure. Dairying provides a source of regular income, whereas income from agriculture is seasonal. This regular source of income has a huge impact on minimizing risks to income. There is some indication that areas where dairy is well developed have less incidence of farmer suicide. About a third of rural incomes are dependent upon dairying. Livestock is a security asset to be sold in times of crisis.

Factors affecting the competitiveness of the dairy sector

To assess the dairy sectors competiveness, a performance analysis looked at five factors: demand conditions, market structure, factor conditions, related supporting industries, and government and the enabling environment.21 Demand conditions Demand for dairy products in India is likely to grow significantly in the coming years, driven by more consumers, higher incomes and greater interest in nutrition. Consumption of processed and packaged dairy products is increasing in urban areas. Because of the increasing competition from the private sector, several national and international brands have entered the market and expanded consumers expectation of quality although only among a small proportion of the population. In many parts of the country, people still prefer unpacked and unprocessed milk delivered by a local milkman because of its taste and the perception of freshness. The price elasticity for milk is high, thus demand for milk is very sensitive to price changes. Table 1: Demand conditions Market size and growth

Market growth is due to high per capita consumption, increasing population and health consciousness Consumption patterns Consumption of processed and packaged dairy products is increasing in urban areas Consumption patterns Unpackaged milk is still preferred because of taste and price Sophistication of consumers Consumer awareness on product quality is increasing but in a very small portion of the population Receptivity to new products Mostly urban consumers have a very low but increasing interest in new products Price elasticity Price elasticity is high Impact of market opening on demand Consumers now have a variety of quality products Market structure Until 2002, cooperatives traditionally were the dominant players in the formal sector. With liberalization of the dairy industry, private investment has increased quite significantly. However, the organized sectors share in milk procurement is very low because a large proportion of the milk and milk products are sold through the informal channel (Table 3). The informal demand absorbs approximately 41 percent of the milk and milk products produced in the country, accounting for about 75 percent of the marketable surplus of milk. The formal channel, with its packaged milk and dairy products, accounts for only about 25 percent of the marketable surplus, which is about 15 percent of production. Table 2: Market Structure

Performance

Competitive structure

Governance (value chain type) Role of "lead" or organizing firms Farmer organization Marketing chain capacity and efficiency Distribution channels

Still large share of produce; 85% of marketable surplus goes through informal channel Quality of milk through informal channel is an issue and to some extent in formal channel as well Little competition to cooperatives because private sector was not allowed in the sector until recently Entry of supermarkets in retailing of milk is increasing the competitive structure Governance of cooperative structures is constaining efficiency and expansion Role of lead agency has been hampered by government interference in cooperatives Immense scope for improving management and governance through farmer organizations Scope for enhancing efficiency of distribution

Cooperatives have a well-developed distribution channel in urban areas How market signals are conveyed or Government and political interference in price setting, distorted limits prices being determined by market forces. The informal sector consists of the village milk vendors who procure loose milk from farmers and sell it in urban and peri-urban areas directly to consumers, small private processors or hotels. The milk vendors also may sell processed products, such as paneer or separated cream. The quality of the vendors milk and milk products is not guaranteed. Largely sold in loose form, it is often adulterated with several additives to control spoilage. Table 3: Flow of milk through different channels Share of Total production marketable % of production Use (million tonnes) surplus 100% 100 45% 45 Home consumption Marketable surplus sold in urban and 55% 55 rural markets (informal and formal) Sold in urban markets as loose 34.5% 19% 19 unpackaged milk Sold as processed products through 40% 22% 22 informal markets Sold as packaged milk through formal 14.5% 8% 8 markets Sold as packaged milk products through 12.7 % 7% 7 formal markets

Cooperatives are the central players in the formal dairy sector. The cooperatives have a three-tier structure i) primary societies at the village level, ii) unions at the district level and iii) federations at the state level. Currently, there are 14 federations in India. The success of the Gujarat Cooperative Milk Marketing Federation (GCMMF), known for its Amul brand and its Amul model of cooperative, is acclaimed. However, there is a perception that cooperative organizations generally have failed in other parts of the country. A less recognized fact is that the cooperatives in other states are organized differently than the GCMMF cooperatives. The GCMMF cooperatives operate as a true representative of farmers and are run by professionally qualified managers. In most other states, the cooperatives are managed by civil servants, function more as government bodies and are weak representatives of farmers. Of the 14 major state cooperatives in the country, 10 have state government equity, of which 6 have government equity in excess of 51 percent. Twelve of the 14 cooperatives have government officers as managing directors who are appointed by the state government. It is not uncommon for these officials to change up to three times a year. Because of such governance, cooperatives are mere parastatals and do not work in the true spirit of cooperatives with elected farmer representatives and professionals who run the organization. This governance structure influences the functioning of the entire chain, from the state federation to the village societies and thus significantly impacts farmers involvement in the chain. The primary differences between the GCMMF cooperatives and other state cooperatives are price and services. In Gujarat, the price paid to farmers is based on fat content; there is regular testing of milk each farmer supplies. In most of the other states, there is hardly any testing of milk. In other state cooperatives, the village society president wields a lot of power and typically decides the prices paid to farmers. Reportedly, farmers with some degree of influence receive higher prices while those without receive lower remuneration. Being the lead organizations, the cooperatives also set a benchmark for prices paid by other buyers, such as local vendors and private dairies, who tend to pay 50 paise or 1 rupee ($ .02) more than that paid by the cooperatives. Thus, if the farmgate price paid by the cooperative is low, other players also pay a low price. For most of the private dairies, agents procure the milk from farmers. Some private dairies have established village societies for milk collection that follow the cooperative model. However, this model requires much larger investment and is not economically feasible, considering that cooperatives receive considerable development support from the government (such as feed subsidies). It is not uncommon for private dairies to make loans to farmers, which is a key reason for the somewhat large share of milk directed to this channel. Factor conditions Factor conditions for dairying entail the quality of animals, human resources and technical skills, land availability, capital, credit, infrastructure and other inputs relevant to the value chain, as the following explains.

The quality of animals is critical in determining its milk productivity and hence overall production. Currently, low productivity per animal hinders development of the dairy sector. Despite being the worlds largest milk producer, Indias productivity per animal is very low, at 987 kg per lactation, compared with the global average of 2 038 kg per lactation. The low productivity is a result of ineffective cattle and buffalo breeding programmes, limited extension and management on dairy enterprise development, traditional feeding practices that are not based on scientific feeding methods, and limited availability and affordability of quality feed and fodder. In addition, the limited supply of quality animals is exacerbated by policies limiting interstate movement of animals. Indigenous cattle and buffalo make up 45 percent of the countrys total milch population, in contrast to the cross-bred cows at 10 percent. Animal health and breeding services provision, veterinary infrastructure development and vaccinations are the responsibility of the state government. These services have traditionally been provided for free or at a very subsidized rate. In the past few years, there has been increasing awareness that the state pays heavily to offer these services, which are easily available to farmers (Ahuja et al.). Consequently, many states have instituted partial or full-cost recovery fees for providing the services. Table 4: Factor conditions Herd
Herd inventory Breed

Feed

Veterinary medicine Veterinary medicine costs Human capacity Farmer technical capacity Knowledge and new techniques are not accessible Support services technical capacity Accessibility to good quality veterinary services is an issue in many parts of the country Organization and managerial Organizational and managerial capacity of farmer capacity cooperatives is very poor Entrepreneurial capacity Entrepreneurial capacity is hindered by a low capacity to take risks Credit or finance market Formal credit mechanisms Access to formal credit mechanisms is very poor Informal credit mechanisms Accessible but at very high interest External economies

Very large number of indigenous animals with low productivity and a small portion of cross-breeds Lack of policy focus on strengthening indigenous breeds Very poor awareness of quality feed, which hinders productivity Farmers not interested in quality feed because of the low price of milk Increasing feed costs Availability is not an issue Duplicate or cheap medicines

Transmission of learning Social capital and trust

Very poor extension support services, leading to very poor knowledge transfer Strong social capital and trust in the villages, which can sustain dairy farmer organizations if properly managed

In addition to the State Department of Animal Husbandry, Dairying and Fisheries, the milk cooperatives and NGOs (BAIF, JK Trust) provide services in many states. So do trained private sector AI technicians, although for a fee. As well, state livestock development agencies are being set up as autonomous bodies to offer services in animal breeding in the form of procurement, production and distribution of breeding inputs (such as semen and liquid nitrogen), training and promotional activities. Despite these initiatives, the availability of services remains limited. Currently, AI services cover only 15 percent of the breedable animals. Cattle and buffalo breeding programmes have been initiated but have not had the desired impact because of a lack of coordination between the different state departments. And extension activities in dairy management are woefully lacking. Farmers have not been able to take advantage of the potential of their animals because they lack information on feeding and management practices. Extension, especially for women involved in livestock rearing, would enhance dairy production considerably. Crop residues are the single largest bulk feed material available to farmers for feeding livestock, specifically ruminants. They include coarse straws, fine straws, leguminous straws, pulses straws and sugarcane tops. Fodder from common property resources is another major source of feed for animals. But lack of efficient management of common property resources is a major constraint in availability of these resources for fodder. The area under cultivated fodder production is limited only to 5 percent of the total cultivable land. In the states of Haryana, Punjab, Gujarat and some parts of Rajasthan, land use for green fodder production is estimated at 10 percent or more. There is a need for restructuring the land use strategy to elevate the overall proportion of cultivable lands for fodder production. Concentrates used for fodder include coarse grains, such as maize, sorghum, bajra and other millets, and other cereal by-products, such as rice bran/polish and various oil meals, including groundnut cake, mustard cake, coconut cake, soybean meal, cotton seed meal and sesame cake. The escalating price of feed ingredients is a major cause for concern. In many states, cooperatives are involved in producing feed concentrate and selling to farmers at subsidized rates. Scarcity of fodder resources is likely to be a major constraint in the development of the dairy sector unless adequate measures are undertaken to augment them. Another important issue regarding feed is the lack of regulations to ensure quality. In the absence of a coherent policy, all kinds of substandard feeds are available in the market. Formal/informal credit: Lack of access to credit to expand the herd is a critical problem for farmers. There is little access to formal credit through the cooperatives. Informal credit is available from private traders and agents of private companies, but the interest rate is very high. And these loans may or may not be linked to dairy activity. When taking a loan from a trader, the

farmer is then tied to selling the milk to that trader, often at a low rate. The Working Group Report on Animal Husbandry emphasizes the low or non-availability of credit as a primary constraint in livestock sector activity, indicating that: Public sector lending is abysmally very low. The commercial banks are not favourably disposed to providing credit to livestock farmers and the cooperative credit system is very weak, resulting in excessive dependence of livestock farmers on informal sources [and] usually at exorbitant interest rates. Efforts should be put on correcting these distortions and ensure timely availability of inputs and services, including credit to livestock. Vaccines/medicines: The Government and the private sector are involved in producing medicines and vaccines. However, quality control is a critical issue. An important policy question is whether the government should be involved in the manufacturing and production of vaccines or should it instead take on a regulatory role to ensure quality and availability at a reasonable price. Related supporting industries Strong supporting industries are critical for the development of any industry. In the case of dairying, the National Dairy Research Institute pursues research and education in all aspects of dairying: microbiology, chemistry, technology, engineering, animal genetics and breeding, livestock production and management, animal nutrition, animal physiology, dairy economics and dairy extension education. Table 5: Related and supporting industries Processing capacity Lack of processing capacity in the country, including primary processing by bulk chilling Processing capacity There are government subsidies on bulk chilling and processing infrastructure Transportation and distribution Because of low productivity, transportation costs for procurement are high Dairy farmer services Availability of health and breeding services could be enhanced; extension is almost non-existent Specialized finance and credit Exists on paper but is very difficult to access Relevant research capacity and use Good research capacity Processing capacity: At present, there are 678 registered dairy processing units processing 1215 percent, or 26.63 tonnes, of the milk produced in the country each year. Of the total units registered under the MMPO, 403 are private dairies processing around 11.83 tonnes per year, whereas 212 cooperative dairies process 10.36 tonnes per year. The remaining 63 government plants process 4.44 tonnes per year. These dairy plants are registered in the different states of India. There is immense scope to increase the processing capacity and direct a greater share of milk and milk products through the formal channel. Primary processing is another factor in need of critical attention to ensure the quality of milk through the supply chain. In addition to the Clean Milk Programme and other rural development

schemes, the Government has provided subsidies for bulk chilling and processing infrastructure to support the dairy industry. But credit remains a problem; specialized credit exists on paper but is difficult to access for dairying. There is significant private sector investment in feed manufacturing and the manufacturing of medicines and vaccines. Government and the enabling environment The dairy sector in India has traditionally been highly regulated. The government projects and programmes in place for enhancing dairy development include subsidies for developing infrastructure for milk processing and testing. The Clean Milk Production Programme is a centrally sponsored scheme that is being implemented by the State Department of Animal Husbandry, Dairying and Fisheries with several objectives: i) the creation and strengthening of necessary infrastructure for the production of quality milk and milk products at the farm level up to the points of consumption; ii) improvement of milking techniques; and iii) training to enhance awareness on the importance of hygienic milk production. Several other rural development initiatives support dairying, such as through the District Rural Development Agency and womens self-help groups. An area of government support that has not been capitalized on so far is the investment in promoting the nutritional aspects of milk, particularly pasteurized milk versus loose milk. Detailed information about policy regulations regarding the dairy sector in India is available online at www.indiandairy.com. The policy history Until 1991, the dairying sector was licensed under the Industries Development and Regulation Act (IRDA, 1951). This resulted in preferential treatment given to milk cooperatives that were outside the purview of the legislation. In 1991, the dairy sector was swept up in the move to liberalize the economy. Consequently, the IRDA was replaced by the Milk and Milk Product Order in 1992, which contained the following provisions:
1. The main objective of the MMPO is to maintain and increase the supply of liquid milk of desired quality in the interests of the general public and to regulate the production, processing and distribution of milk and milk products. 2. Any person or dairy plant handling more than 10 000 litres of milk per day or 500 tonnes of milk solid per annum needs to be registered, with the registering authority appointed by the central Government. 3. Every holder of a registration certificate can collect or procure milk only from the milk shed assigned under the registration certificate. The milk shed, is defined as "an area geographically demarcated by the registering authority for the collection of milk or milk product by the holder of a registration certificate''.

Amendments were made to MMPO in 2002 to further liberalize the sector and encourage dairy entrepreneurs from the private sector. The milk shed concept was abandoned, allowing for milk supplies to be procured from any area.

Traditionally, the cooperatives have not had much competition from the private sector. In the liberalized environment characterized by open procurement of milk, there is incentive for private players to invest in the sector. Consequently, many agencies, organizations and agents have started buying milk. But a major difference is that they are not backward investing in dairy development activities through the offering of producer services. In the coming years, the lack of involvement in dairy development by the various players is likely to constrain further growth of the industry. In this environment, dairy farmer organizations and cooperatives will have a strong role to play in supporting dairy development activities. If they were to establish higher prices to farmers, for instance, the private sector and other players would be forced to pay at least that much as well. Policy and regulatory issues Agriculture is a state responsibility in India, and the State Department of Animal Husbandry, Dairying and Fisheries, within the Ministry of Agriculture, is responsible for the dairy activities. Consequently, the focus of the activities and budgetary allocation is biased towards agriculture rather than livestock. Table6: Enabling environment National sector regulation Key regulatory actors (ministries)

Price regulation
Food safety

Department of Animal Husbandry is under the Ministry of Agriculture, hence focus on livestock is underemphasized, particularly in light of the high value of the sector. Rice setting by cooperatives Regulated through the Milk and Milk Products Order Very difficult to control quality in traditional channels Huge premium on fat content of milk compared with formal regulations; thus buffalo milk fetches much higher price Approaches being taken to modernize the sector Various subsidies available for milk processing and testing infrastructure Very little investment on the promotion of health or quality of milk

Informal regulations

Formal sector support Domestic sector (national) Subsidy support Inward investment promotion Provincial/local Key regulatory actors (ministries)

State Department of Animal Husbandry, Dairying and Fisheries is the implementing agency at the state level Informal regulation & transparency Lack of milk testing equipment and thus transparency, leading to low payments Formal sector support Availability of veterinary services; paravets are working with the Department of Animal Husbandry. Dairying and Fisheries

Formal sector support Donor/NGO roles

Availability of services in remote areas through the government Donor agencies are very actively involved in livestock sector development

There are several issues related to milk pricing policies that require serious review and reconsideration. Because cooperatives are mostly managed by civil servants, there is some government influence in determining milk prices. But the state cooperatives are supposed to base the price paid to farmers on the fat and solid-not-fat (SNF) content of milk. In the case of the better-managed cooperatives in Gujuart, the system works that way.22 However, it is less the practice elsewhere. As noted previously, the village society president often wields a lot of power and determines the price randomly, without testing the fat or SNF content. Also as previously mentioned, the cooperative price becomes the benchmark price for other buyers (vendors and private dairy agents) and when it is low, so are the other prices paid. Thus there is no incentive for farmers to sell to the other buyers; only about 15 percent of the milk is sold this way for the marketing of packaged milk and milk products. Policy efforts should focus on enforcing testing as the basis for milk pricing. This can be achieved by ensuring availability of testing machines at all milk collection centres, educating farmers to sell milk only based on testing and setting up policy norms for all players in the sector to collect milk only when it has been tested. Another important aspect of milk pricing is the huge premium on the fat content compared to the non-fat solid content. Thus buffalo milk fetches a much higher price than cow milk, which has lower fat content.

Industry SWOT analysis

Within the framework of the competitiveness drivers and issues, the smallholder dairy sectors strengths, weaknesses, opportunities and threats have been assessed. The strengths and weaknesses are factors that are directly controllable, while opportunities and threats derive from the external environment. As evident in Table 7, there are a large number of weaknesses in the sector, implying considerable scope for interventions. This SWOT analysis entailed matching each of these elements with an appropriate action. Table 7: SWOT analysis of performance drivers Strengths

How to build on them

Large number of small and marginal farmers involved in dairying An effective marketing channel helps to meet the demands of the urban consumer Very large number of animals and huge scope to enhance productivity Self-sufficiency in medicine production and

Strengthen economic viability of dairy farms by interventions on the input side as well as ensuring more fair farmer prices Increase the link between rural production areas and urban markets Focus on strengthening the indigenous breed to help significantly enhance

do not have to rely on exports

productivity Ensure availability of quality medicines by strengthening regulatory framework for quality

Weaknesses

How to correct them

Large share of milk (7085%) of marketable surplus goes through informal channel where quality is a big concern Sometimes quality is an issue in the formal channel as well Very little competition to cooperatives because private sector was not allowed to participate in until recently Farmers do not share in the benefits of high demand because of poor governance of cooperatives Milk production is scattered over a large number of farmers producing miniscule quantities Milk distribution is limited to urban and peri-urban areas Low milk prices because of lower prices declared by cooperatives, which results in low prices of milk paid by all players Ad hoc export policies and a ban on exports Quality of milk and milk products are a barrier to entry to the export market, especially the EU and the USA Lack of policy focus on strengthening indigenous breeds Non-existent extension facilities Farmers prices are not based on fat measurement, which affects their profitability Because of low access to credit and risktaking ability, farmers cannot increase their herd size

Focus on quality issues even in the informal channel by training traders and by enforcing food quality regulations Develop infrastructure and training for clean milk production Support a fair playing field for the private sector Bring about changes in cooperatives to make them true representatives of farmers instead of functioning as parastatals. Support to dairying as an enterprise to encourage commercial dairy farming and encourage production and productivity by extension and breed development Enhance packaged milk distribution in more areas Strengthen dairy farmer cooperatives to enable farmers to get a higher price for milk Create rational export policy to enable farmers to take advantage of higher prices Strictly implement quality regulations and improve infrastructure and training for quality Strengthen the breed development programmes Strengthen extension facilities Create policy regulations to make mandatory testing as a basis for setting milk price Increase access to credit through dairy farmer organizations and other agencies

Opportunities

How to pursue them

Increased farmer income by exploiting the high demand Increased consumer sophistication and awareness of quality reception of quality packaged products (though slowly) Entry of large corporations in retailing,

Create policies and activities geared towards enhancing dairy farming activity by increasing, production, productivity and ensuring fair farmer price of milk Establish enabling policy environment to enhance investment

which can lead to more investment Immense scope to enhance governance of dairy farmer organizations and thus enable dairy farmers to demand higher prices Potential for exports due to low cost of production Overall positive growth environment, which is triggering the Government to enhance infrastructure

Create policy support to enhance governance of producer companies Focus on quality issues that are a barrier to exports Encourage private sector to increase investment in dairying

Threats

How to avert them

Large portion of the population does not care about quality issues in milk Because of high price sensitivity for dairy products, people are not willing to pay for quality Significant increase in maize prices can increase feed prices Large informal markets that extend credit are constraining farmers Low productivity and scattered production leading to high cost of transportation Emphasis on milk fat and not on SNF content maintaining relatively lower prices of milk

Initiate consumer education about the negative health impacts of unpackaged products Develop packaging in small quantities to meet the needs of the poor Increase milk prices in accordance with feed prices Support expansion of dairy farmer organizations Enhance productivity by breed improvement and extension Enforce price setting of milk based on fat and SNF content to encourage production of cow milk

Four dairy enterprise models

The following section presents analysis and comparisons of four dairy enterprise models in India. Chosen for the analysis: i) a private dairy operating in Andhra Pradesh, ii) the Orissa State Cooperative as an example of a weak functioning cooperative, iii) the Gujarat Cooperative Milk Marketing Federation as an example of a strong functioning cooperative and iv) a mutually aided cooperative society as an alternative model. Models such as producer companies (emerging as a new generation cooperative) are still in a developing stage. Table 8: Model features Number of farmers involved Average litresof milk procured per day Litres of milk processed at dairy plant per day Number of primary cooperatives Private dairy 150 000 700 000 State cooperative 224 000 322 000 GCMMF 2 700 000 60 000 10 200 000 3 500 3 800 13 141 MACS

As previously noted, cooperatives have been successful only in some parts of the country. This is largely because the cooperative law falls under the state policy and is formulated differently in different states. In states such as Gujarat, where the model succeeds, the cooperative is headed by elected managers and managed by professionals. In many other states, civil servants manage the cooperative, which results in a lot of government interference in the day-to-day functioning and leads to a lack of democracy and hence no sense of ownership or responsibility at the village level. Three key differences distinguish the Gujarat (GCMMF) cooperatives from the other states: i) an oversight board elected by farmer members; ii) professionals employed by the cooperatives to manage the cooperatives and iii) the cooperatives have autonomy and freedom in their operating policies from interference by government and politicians (Tushar Shah et al.). To address the governance issues related to cooperative management, the MACS Act was passed in 1995. It de-linked the district level cooperative from the state level, giving autonomy to district and village mutually aided societies. However, only the state of Andhra Pradesh has implemented the legislation. Changing from the cooperative model to the society model has many associated bureaucratic problems. To overcome the hassles, the concept of producer companies was introduced as a way of transforming cooperatives to work more efficiently as representatives of farmers. However, while promising, it is a relatively new idea that needs more time to develop. Meanwhile, with the liberalization of dairy sector, private sector dairies have emerged as prominent players in the dairy industry. i) A private dairy The private dairy selected for the comparative analysis is an ISO 9001-certified dairy headquartered in Andhra Pradesh. The company set up there in 1992 after the MMPO opened the door to private dairies, and it now trades on the Indian stock exchange. Milk collection is about 7 lakh litres per day from 150 000 households in 3 500 villages in 3 states, although the major operations are in Andhra Pradesh. The company serves three main metropolitan areas with fresh milk (Hyderabad, Chennai and Bangalore) and is about to enter Mumbai. It also markets a wide range of products, including milk, curd, butter milk, pedha and paneer as well as new items such as flavoured yoghurt and flavoured milk to cater to the changing tastes of the young generation. The company has several chilling and bulk cooling units across its collection region in Andhra Pradesh to ensure quality of milk through the chain. The company obtains its milk supply through village agents who have personal relationships with the farmers; it does not get directly involved with farmers. Depending on the social structure of the village, there may be more than one agent per village. The agents collect the milk and deliver to the company. The two parties have negotiated a price, but the company is not involved with what price the agent pays the farmers (although it is slightly above what the cooperatives pay in the state). Agents often provide loans to farmers to maintain their loyalty; typically, the agent competes with agents of other private companies for a farmers milk supply. Company employees are previous dairy cooperative employees who have enormous experience

in this area. Collection areas depend on milk density and areas in which the district cooperative is less active and access to markets is efficient. ii) The Orissa State Cooperative The state cooperative is a dairy cooperative society registered under the Cooperative Society Act (1962). Currently, milk collected from 3 800 village societies and 224 000 farmers within 12 district unions totals about 322 000 litres per day. There has not been much competition with the private sector in this region because of low productivity and little dairy development, although private sector investment in the dairy sector is on the rise. iii) Gujarat Cooperative Milk Marketing Federation The Anand Milk Union Limited (Amul) cooperative formed in 1946; but it has become a brand name managed by the Gujarat Cooperative Milk Marketing Federation (GCMMF). The GCMMF consists of 13 district unions, involving 13 141 village dairy cooperative societies and nearly 2.7 million farmer members. With an aggregate milk processing capacity of 10.2 million litres per day, it is Asia s biggest dairy business venture. The marketing network encompasses 3 000 wholesale distributors and over 500 000 retail outlets, giving GCMMF a national reach that very few fast-moving consumer goods companies can boast. GCMMF has been exporting UHT processed milk, ghee, skimmed and whole milk powder, butter, cheese and indigenous milk products to the China , Hong Kong , Singapore and the USA , among others. Structure GCMMFs Amul model of dairy development is a three-tiered structure, with the dairy cooperative societies at the village level federated under a milk union at the district level and a federation of member unions at the state level. Farmer members milk their cows twice daily (morning and evening). GCMMF collects the milk twice a day, makes regular payments to the farmer members and provides them with cattle feed, fodder, animal breeding and veterinarian services. Anyone who owns a cow or a buffalo and makes a one time payment of 11 rupees (10 rupees for the share certificate and 1 rupee for registration) can become a member of the village cooperative society. The applicant must agree to provide a set minimum quantity of milk, generally between 600 and 700 litres, to the society each year. The farmer members elect a managing committee that then chooses a chairman. The managing committee appoints a secretary to discharge the societys administrative functions. At the second tier, there is a district level union that processes the milk procured from individual societies. Each of the 13 unions has a board of directors chosen by an electoral college drawn from the chairpersons of its affiliated societies. The union board in turn elects its chairman. The final tier is constituted by the GCMMF, which is responsible for marketing the milk procured and processed into various value-added products at the union dairies. All the products are sold under the Sagar or Amul umbrella brands. The federations board consists of the

chairpersons of all 13 district unions. They elect the federation chairperson and appoint the managing director, who is accountable to the nearly 2.7 million strong Amul dairy society members. Elected representatives of the farmer members make policy decisions at all three levels, which are then implemented by professional managers and skilled personnel employed by the farmer members. This structure eliminates all middlemen. By placing the farmer members in command, in essence, of the dairy cooperative involves them in the development process. This cooperative structure is democratic, and the farmers are in control, from the milking of their animals to the final marketing by the federation. For every rupee that GCMMF earns, roughly 75 paise goes to the farmers. The mandate is clear production by the masses, for the masses, at its efficient best. The farmer members democratically govern the entire cooperative structure to ensure that the higher tier organizations are geared to serve the purpose of the lower levels and that the gains at all levels flow ultimately back to the farmers in a significant measure. The core feature of this structure is farmer involvement in decision-making at all three stages procurement, processing and marketing of milk and milk products. The value addition at procurement and processing stages can be realized only with effective marketing of products, thus making it an essential feature for success. Services provided to farmer members The dairy unions affiliated to GCMMF provide various inputs that contribute to enhancing the productivity and quality standards, such as:

breed improvement and animal healthcare programmes; extension activities; supplies of balanced cattle feed on a no profitno loss basis; quality fodder seed distribution at subsidized cost; a network of artificial insemination centres aimed at genetic upgrading of the animals using frozen semen of pedigree bulls; these centres are managed by educated unemployed rural youth who provide breeding services to the farmers; frozen semen, liquid nitrogen and other consumables; 24-hour mobile veterinary services for emergencies.

It is this integrated approach to dairying and addressing farmers needs at all levels that gives the Amul model its uniqueness. And it is why every third litre of milk from a cow or buffalo in Gujarat is processed in a GCMMF union dairy. iv) MACS in Andhra Pradesh (AP) Dairy activities started at the district level in 1971. The originally chosen district union was registered under the Andhra Pradesh Cooperative Societies Act (1964). After the introduction of the MACS Act (1995), the district union opted for registration as a MACS to acquire better functional autonomy for servicing its farmer members. The union is currently collecting 60 000

litres of milk per day from 650 villages, though it likely to increase up to 100 000 litres in the next two to three years. The MACS have a two-tier operation: at the village and district levels. A village society with elected officers manages operations at the lower level; an elected board of directors managers the district society. The village and district societies each registered separately, and each has the freedom to use its own profits. The union provides its members with a range of services required for dairy development activity:

organizing thrift and credit cooperative society to facilitate the financial assistance for buying milch cattle; organizing AI services through an NGO; making cross-breed or graded animals for farmers to purchase; providing inputs such as concentrate feed, fodder seed, fodder slips and mineral mixtures at subsidized rates to members; supplying breeding bulls to societies; providing veterinary health facility, de-worming and vaccination to the animals of members; compensating members in the event of the death of an animal with either a grant or loan; providing insurance coverage to members.

Comparative analysis of the four value chains

The following compares performance criteria for the four dairy value chains to determine how they are likely to endure against future competition. Demand conditions The GCMMF has a wide range of traditional products as well as several new products catering to the demands of the new generation, such as sugar-free ice cream. It is one of the largest selling brands of dairy products, with a presence in all parts of the country. The private dairy also has a range of modern products catering to the young generation, such as flavoured yoghurt. The Andhra Pradesh MACS largely sells traditional products, such as milk, to urban consumers as well as rural markets through village societies (small packets, 250 ml). The Orissa State Cooperative also largely sells milk and a few traditional products. Market structure and governance The competitive structure for the four models varies. Dairy is a regional industry with regional dairies serving the local market, especially in the case of packaged milk. There is more scope for inter-regional trade. The GCMMF competes with other multinational companies, such as Nestl and Britannia, with certain products but leads among dairy products in India. The private dairy is a leading brand in the city of Hyderabad. However, the state of Andhra Pradesh has a well-developed dairy industry with several private dairies present in the state and rigorous competition among them. The

Andhra Pradesh MACS largely sells packaged milk to the nearby areas and thus encounters less competition in marketing its products. And as mentioned earlier, Orissa finds very little competition to its packaged dairy products because there are hardly any private players in the state. The supply chain is closely linked to the governance structure of the chain. For instance, the GCMMF network is very strong, with farmer involvement at all levels in the chain. Thus it is difficult for private players to procure milk directly from farmers. It is a similar situation within the Andhra Pradesh MACS. In Orissa, however, the cooperative network is not very strong and the president of the village society wields a lot of power; farmer involvement in decision-making at all levels is virtually non-existent. This has created keen competition from milk vendors in milk procurement in that area. The private dairy in Andhra Pradesh experiences intense competition from several private dairies in milk collection. But most of these companies do not deal directly with farmers. Milk is collected through village agents. There is no involvement of any company in any dairy development activity, and thus the companies compete with each other for milk collection. The GCMMF collects its milk through village societies, with the cooperative setting the price. But it pays one of the highest prices in the country; milk collection is done in a transparent manner (based on testing fat and SNF content). The MACS society also has similar norms (for testing fat and SNF content) for milk collection. The MACS has the freedom to decide the price paid to farmers for their milk because they have autonomy in setting prices. Societies making profits through the sale of milk products can give higher returns to farmers because they do not have to follow the cooperative price. The prices paid that the Andhra Pradesh MACS declares at the district union are higher than the cooperative prices. The Orissa State Cooperative collects its milk supply through a village society run by the president who wields a lot of power; its farmers price is relatively low compared with the GCMMF. In most cases, there is no testing for fat and SNF content on which prices should be based. Average prices are fixed for cow and buffalo milk; however, influential people in community get better prices. In the case of the private dairy, milk purchases are done through the agent, with prices based on competition with agents of other companies and the declared cooperative price. A large number of societies have electronic milk testing machines and more are acquiring them. Factor conditions Livestock assets are likely to be better where organizations serving the area are involved in dairy development activities. The GCMMF has been providing good AI services, which has enhanced the quality of buffalo in the area. The Andhra Pradesh MACS have created a good network of services by involving the State Department of Animal Husbandry, Dairying and Fisheries and NGOs working in its area. With efficient services and involvement in breed development, the quality of herd is likely to improve in the near future. The GCMMF as well as the Andhra Pradesh MACS provide their farmers with feed, animal medicines and vaccines and breeding services. In the Orissa State Cooperative, feed is made

available at a subsidized rate through the village society. The society is also involved in providing health and breeding services; however, the farmers still need to largely rely on the state government to provide health and breeding services, which are somewhat inadequate. There is no facility for loans; however, medicines are available at cost, although supply tends to be a problem. Because the private dairy collects milk through agents, it is not directly involved with the farmers for service provision. The agents sometimes extend loans to farmers, which ensures marketing commitment by producers. These are general loans not specifically used for dairy activities, and the interest rate typically is quite high. Milk productivity depends on the level of extension support provided to farmers. The GCMMF provides ongoing extension activities, including training sessions and exposure visits for women. The Andhra Pradesh MACS are also involved in extension to some extent. The Orissa State Cooperative offers hardly any extension activity; the private dairy does not involve itself in extension services at all. Related and supporting industries The GCMMF has created good processing and primary processing infrastructure. Its plants are ISO certified and meet all the quality requirements. The private dairy processing plant also is ISO certified; however, the primary processing at the village level is not very strong. The Andhra Pradesh MACS have developed adequate processing facilities and plan to expand significantly in the coming years. Milk quality was an issue previously for the Orissa State Cooperative, but the situation has improved in recent years.

Prospects
The GCMMF is the most organized in meeting future growth because of its investing in dairy development activities, such as ensuring the availability of feed and fodder and veterinary services. It is in a position to increase its procurement in the coming years. Also, in terms of development, the GCMMF leads the country in modern products, such as sugar-free ice cream. The private dairy is not involved in dairy development activity and is only focusing on milk procurement. Faced with increasing competition, it will have to move to newer areas for expansion. Because of low involvement of farmers in the Orissa Cooperative, the private sector will find it easy to move into milk procurement in its area. The lack of variety and quality of its products will make it difficult for Orissa to compete with the private sector. If the MACS model becomes popular, procurement will be affected. MACS involvement in dairy development activity will help the model grow and expand the milk procurement. It is geared to face competition from the private sector because of close links with farmers at the village level.

Conclusions
Dairy has a lot of potential to improve rural incomes, nutrition and women empowerment, and hence is a very critical area for investment. A well-developed industry will enable millions of farmers to capitalize on the emerging opportunities and make a significant impact on rural

incomes. On the flip side, weak efforts towards dairy development also can have a significant but negative impact on the dairy industry. The growth rate has been sluggish over the past few years. With an increase in demand on one hand and sluggish supply on the other, there is a likely shortfall in demand in the coming years. Major areas of intervention in the dairy sector have been highlighted in this review. Carrying out interventions requires resources and commitment from key actors government, NGOs, development agencies and the National Dairy Development Board to partner and work together. A comprehensive policy addressing the critical issues is required for the robust growth of the sector. The following highlights those issues:
1. The first issue is defining and implementing a policy for dairy development. Though a livestock policy has been established at the national level, its implementation is at the state level because agriculture is a state responsibility in India. But state policies addressing critical needs in dairy development have yet to be clearly defined across the country. Some progressive states have a well-defined policy, but it is lacking in most of the others. But even where a policy is clearly developed, oftentimes implementation is a problem. 2. Lack of clarity between the roles of the State Livestock Development Agency and the State Department of Animal Husbandry, Dairying and Fisheries is an issue for effective policy implementation. For example, the National Cattle and Buffalo Breeding programme has not been well implemented in several states. Further, availability of funds is a major issue in implementing livestock activities. The Livestock Department is within the Department of Agriculture and thus the resources are biased towards agriculture. There is need to emphasize the importance of dairying to smallholder incomes to direct more resources towards dairy development.

Two very significant factors for the growth of the dairy sector are dairy development activities and milk prices paid to farmers. In the liberated policy environment, any player can procure milk in any region. This is a very different situation from the earlier concept of milk sheds, which limited the agency or organization procuring milk to a particular area. Hence, earlier it made sense for agencies and organizations to invest in dairy development activities. But the freedom for procurement has thwarted the incentive for private companies to invest in dairy development activities. However, private sector investment in procurement is increasing. What is clear is that while the number of buyers is increasing, little is being done to develop the sector. In this situation, farmer-owned organizations (such as cooperatives, producer companies, common interest groups and womens self-help groups) have to be strengthened at the grassroots level and linked to service and input providers. Dairy farmer organizations can be used as a platform to address issues regarding availability of all inputs, including feed, fodder, breeding, veterinarian services, medicines, vaccines, credit and insurance. As is evident from the examples presented previously, the GCMMF has been the most successful in meeting the input requirements of farmers. However, this model has not been successful in other states because of issues with the basic organization of cooperatives.

Dairy cooperatives in several states function as parastatals and lack the spirit of cooperative organization with farmer involvement in ownership and decision-making. Alternative models of dairy farmer organizations such as the MACS, producer companies, womens self-help groups also need to be explored. International agencies and donor groups need to be directed towards creating political will to strengthen dairy cooperatives and to set them up. A very important aspect of dairy development is the price paid to farmers. Currently in many states, the milk price is set by the cooperatives; this price is used by all other players to set their prices, typically by paying 50 paise or 1 rupee more than the cooperative price in that area. The farmers price for milk ranges from 9 to 11 rupees for cow milk and 13 to 14 rupees for buffalo milk (a key comparison is a litre of bottled water, which costs 1012 rupees then why are milk prices so low? The GCMMF pays the highest prices in the country. In the areas where the Andhra Pradesh MACS have set up, their prices are higher than the cooperative prices (MACS have the freedom to declare their own prices). It is evident that where dairy farmer organizations are strong, farmer prices are higher. Low productivity per animal is another factor hindering development of the dairy sector. Many issues related to low productivity have been discussed an inadequate cattle and buffalo breeding programme, extension and management on dairy enterprise and feeding practices, and availability of quality feed and fodder. Another important aspect related to low productivity is the lack of quality animals for farmers to purchase. A major hindrance to the availability of quality animals in dairy developing areas is the policy regarding interstate movement of animals. Finally, it is important to discuss the hygienic issues. Milk quality concerns go beyond the farm level and require assurance of safe milk at all stages, including within the informal sector. Through the formal channel, cooperatives, private dairies or any other form of dairy farmer organization, quality can be addressed through training and education on clean milk practices, including the use of bulk coolers. It is also important to develop diagnostic facilities for milk testing, including infrastructure and human resources, that enable constant monitoring for quality. At the processing level, plant certification will help to enhance consumer confidence. Milk quality in the informal markets is an important issue. As noted, 7085 percent (based on different estimates) of milk is obtained and sold through the informal channel. In recent years, initiatives have focused on working with and providing training to traders. In Kenya, for instance, licensing has been used to formalize the traditional sector. In India as well, the Capitalisation of Livestock Programme Experiences programme, along with the International Livestock Research Institute, have undertaken some initiatives in this direction. In the current situation, traders collecting milk at the farm then deliver it and milk products to urban and peri-urban areas. Each trader buys only small amounts of milk. There is scope to organize the traders into groups and create joint facilities where they can test, process and store their milk supplies. These trader facilities could serve as wholesale or bulk suppliers for hotels, chaiwalas (tea sellers) and small sweetshops. These initiatives can help to address the quality issues in the informal sector and also create employment opportunities in the non-farm sector.

An argument against working with traders is that formal sector involvement in dairying is increasing and eventually there will be no room for informal players. However, looking at the current reality, it will be several years before this materializes. In the meantime, the informal sector should not be ignored and organizing informal traders should be pursued. Annex I: Overview of dairy marketing channels in India

Annex II: Income from dairy enterprise Income from dairy enterprise per month (two-animal farm) Economic analysis (accounting for household labour and cost of green/dry fodder obtained for free from common resources or neighbour fields) 2 000 750 60 2 810

Financial analysis (Does not account for household labour and free fodder) 1 400 60 1 460

Feed cost Labour cost Medicine cost Total cost

Total revenue (4 litre/animal/day @ 9 rupees cow milk or 14 rupees buffalo milk) Net income Source: Punjabi Annex III: Milk price chart GCMMF COW Buffalo Farmer price

2 1603 360 -(650)550

2 1603 360 7001 900

Orissa State Coop Cow Buffalo 99.5

MACS Cow Buffalo 260/kg fat Get salary

Private dairy (heritage) Cow Buffalo 225+ some amount (cooperative pricing) 240+ incentive

Agent price Consumer price Source: Punjabi

10

92105 + incentive

Annex Table 1: Identifying critical issues in the dairy chain Stage Priority Developing livestock Policy environment policy Breed development Issues Lack of a coherent livestock development policy Ineffective implementation of policy and projects due to lack of clarity in roles of different agencies Lack of resources Lack of clarity between roles of different departments Lack of regulation for quality of feed and medicines Disease control/ Dept. of Inadequate coverage of veterinarian health/breeding/extension Animal and breeding services services Husbandry, Non-existent extension services Support to dairy farmer Dairying and Scope to enhance activities of NGOs in organizations/womens Fisheries these areas self-help groups Cooperatives Lack of private sector involvement in NGOs dairy development services and Private dairies activities Feed supply Cooperative Quality/cost of feed Agent Dept. of Animal Husbandry, Dairying and Fisheries

Services

Inputs

Fodder Feed Ineffective approach for management Medicines/vaccine supply companies of common property resources Medicine Quality of medicines companies Medicine store Formal credit for animal Banks/financial Very poor access to formal credit at purchase institution the farm level Cooperatives Self-help group Informal loans for animal Trader Very high rate of interest; farmer has purchase or other dairy Private to sell milk at low price to the trader if needs company agent he/she has borrowed money from the trader Farmer Poor management and feeding Production Dairy farming Selling milk practices because of lack of cooperatives/traders/private information in the absence of dairy agents extension activities. Low productivity because of poor genetic potential, poor feeding and management practices, poor access to health and breeding services, lack of good-quality animals Availability of milk per household very low Low profitability from dairy enterprise Cooperative Lack of coverage of villages Marketing/ Collection of milk from society Lack of transparency in milk testing processing farmers through village society, processing and and pricing marketing of milk in cities Lack of democracy in village societies and urban areas Marketing only in peri-urban/urban areas Maintaining quality of milk/infrastructure Milk prices declared by cooperatives kept low and used as a benchmark price by other players Purchase milk from Trader No transparency in milk pricing farmers and selling milk Adulteration and quality of milk and and processed products to milk products consumers Unhygienic conditions for milk processing Purchase of milk from Private dairy No transparency in pricing of milk farmers through village Quality of milk agents, processing and selling milk

Retailing

Selling of milk and milk products processed by cooperatives and private dairies

Retailers

21

The first four factors were drawn from the diamond model; see Dr Michael E. Porter, 1985. Competitive advantage creating and sustaining superior performance. The fifth factor is from an adaptation of a model for agro industry value chains by Carlos Da Silva; see Carlos Da Silva and Hildo M. de Souza Filho. 2007. Guidelines for rapid appraisals of agrifood chain performance in developing countries. FAO publication. Rome. 22 Gujarat farmers receive the highest share of consumer prices compared to any other state in the country.

TABLE OF CONTENTS
ABBREVIATIONS 6 GLOSSARY 8 Types of AEFI 7 Cluster of AEFI 10 Reporting and Investigation of AEFI 11 State Expert Committee on AEFI 13 Monitoring and feedback 15 APPENDIX 1 EVENTS TO BE REPORTED IMMEDIATELY 19 APPENDIX 2 FIRST INFORMATION REPORT FORM 20 APPENDIX 3 PRELIMINARY INVESTIGATION REPORT FORM 21 APPENDIX 4 DETAILED INVESTIGATION REPORT FORM 22 APPENDIX 5 CASE DEFINITIONS AND TREATMENTS FOR AEFI 31 APPENDIX 6 DISTRICT REPORTING FORMAT FOR AEFI 35 APPENDIX 7 LINELISTING FORMAT FOR AEFI TO BE USED AT STATE LEVEL 37 APPENDIX 8 AEFI LABORATORY REQUEST FORM 38 Table 1: Classification of Adverse Events Following Immunization 7 Table 2: Frequency of common minor vaccine reactions 8 Table 3: Summary of Rare Serious AE, onset interval and rate 9
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blank AC (UIP) Assistant Commissioner Universal Immunization Programme AEFI Adverse Event Following Immunization AE Adverse Event AFP Acute Flaccid Paralysis ANM Auxiliary Nurse Midwife BCG Bacillus Calmette-Guerin - vaccine for tuberculosis (TB) CHC Community Health Center Commissioner FW Commissioner Family Welfare CMO/ CS Chief Medical Officer/ Civil Surgeon DCG (I) Drug Controller General of India

DF Deep freezer DIO District Immunization Officer DIR Detailed investigation report DM&HO District Medical and Health Officer DPT Diphtheria -Pertussis (whole-cell) -Tetanus vaccine DT Diphtheria-Tetanus vaccine EPI Expanded Programme on Immunization FDA Food & Drugs Administration FIR First information report GoI Government of India HA Health Assistant Hep B Hepatitis B Hep C Hepatitis C HIV Human Immunodeficiency Virus

ABBREVIATIONS
6

ICD 10 International classification of diseases 10th edition ILR Ice lined refrigerator MO Medical officer MO (PHC) Medical Officer Primary Health Center MoHFW Ministry of Health & Family Welfare NCL National Control laboratory NRA National Regulatory Authority OPV Oral Polio Vaccine PHC Primary health center PIR Preliminary investigation report RIT Regional Investigation Team SC Sub center SEPIO State EPI Officer SRA State Regulatory Authority SOPs Standard operating procedures TT Tetanus Toxoid Vaccine VAPP Vaccine-Associated Paralytic Poliomyelitis VPD Vaccine Preventable Disease WHO World Health Organization UHC Urban Health Center UIP Universal Immunization Programme UNICEF United Nations children.s fund UT Union territory
7

GLOSSARY
Adverse event following immunization (AEFI): A medical incident that takes place after an immunization, causes concern and is believed to be caused by the immunization. Serious AEFIs are defined as those that are life threatening and those that result in hospitalization (or prolonged hospitalization), disability (or have the potential to result in disability) or death. Minor AEFI: A reaction that is not .serious.. Trigger event: A medical incident that stimulates a response, usually a case investigation. Causal association/link: An AEFI which is caused by administration of a particular vaccine. Causally associated events

are also temporally associated (i.e. they occur within a limited time after vaccine administration), but events which are temporally associated may not necessariy be causally associated. Causality is usually based on: l Laboratory findings (e.g. isolation of vaccine virus strain), and/or l Unique clinical syndrome (e.g. anaphylaxis), and/or l Epidemiological studies showing an increased incidence in vaccinated groups as compared with unvaccinated groups. Coincidental adverse event: A medical event that would have occurred whether or not the individual had received an immunization prior to the event. Cluster: Two or more cases of the same adverse event related in time, the time interval since vaccination, geography or vaccine administered. Injection safety: The public health practices and policies dealing with various aspects of the correct administration of injections (including waste disposal) aimed at minimizing the risk of transmission of blood-borne pathogens. All injections, irrespective of their purpose, are covered by this term (see definition of safe injection practices). Immunization safety: The public health practices and policies dealing with the various aspects of the correct administration of vaccines. They focus on minimizing the risk of transmission of disease with the injection and on maximizing the effectiveness of the vaccine. The term encompasses the spectrum of events from proper manufacture to correct administration. The term usually includes both injection safety (programmatic errors compromising injection safety) and vaccine safety (faults in the vaccine itself compromising vaccine safety). Programme-related AEFI or programme error: A medical incident that was caused by some error in the transportation, storage, handling, or administration of vaccine. Safe injection practice: Those public health practices and policies which ensure that the process of injection carries the minimum of risk, regardless of the reason for the injection or the product injected. This is the preferred generic term for this subject.
8

Surveillance: The continuing, systematic collection of health data that is analyzed and disseminated to enable public health decision-making and action to protect the health of populations Temporal association/link: An event which occurs close in time to vaccine administration. Temporal association is independent of causal association, and an event which is temporally associated with vaccine administration may or may not be shown to be caused by the vaccine. Vaccine: Biological substance that is administered to individuals to elicit immunity (protection) against a specific disease. Combination vaccines (e.g. DPT) protect against more than one disease. Live viral vaccines (e.g. poliomyelitis, measles) contain attenuated (weakened) version of the disease-causing virus. The

vaccine virus causes a mild infection, usually with no or minimal symptoms, that creates immunity against that virus. Vaccine reaction: A side-effect (usually mild) such as soreness at the site of injection following administration of a vaccine. It is usually of short duration (two or three days) with no long-term consequence. It may require mild medication such as paracetamol for a short while to alleviate the symptoms.
69

STANDARD OPERATING PROCEDURE (SOP) FOR INVESTIGATION OF ADVERSE EVENTS FOLLOWING IMMUNIZATION (AEFI)

An adverse event following immunization (AEFI) is defined as a medical incident that takes place after an immunization, causes concern, and is believed to be caused by immunization.
Types of AEFI
AEFIs can be classified into 5 types. These are described and defined in Table 1.

Table 1: Classification of Adverse Events Following Immunization

Type of AEFI 1. Vaccine reaction 2. Programme Error 3. Coincidental 4. Injection Reaction 5. Unknown Definition An event caused or precipitated by the active component or one of the other components of the vaccine. This is due to the inherent properties of the vaccine. An event caused by an error in vaccine preparation, handling or administration. An event that occurs after immunization but is not caused by the vaccine. This is due to a chance association Event from anxiety about, or pain from the injection itself rather than the vaccine Event.s cause cannot be determined Example Anaphylaxis due to measles vaccine Bacterial Abscess due to unsterile injection Pneumonia 4 days after oral polio vaccine administration Fainting spell in a teenager after

immunization
10

Table 2: Frequency of common minor vaccine reactions

Vaccine BCG1 Hepatitis B Measles OPV Tetanus DPT2 Treatment Local reaction (pain, swelling, redness) Common Adults up to 30% Children up to 5% Up to 10% None Up to 10%3 Up to 50% Cold cloth at injection site Paracetamol5 Fever 1-6% Up to 5% Less than 1% Up to 10% Up to 50% Give extra oral fluids Put on cool clothing Tepid sponge or bath Paracetamol5 Irritability, malaise and non-specific symptoms Up to 5% Less than 1%4 Up to 25% Up to 60%
Local reactogenicity varies from one vaccine product to another, depending on the strain and the number of viable bacilli. With whole cell pertussis vaccine. Acellular pertussis vaccine rates are lower. Rate of local reactions likely to increase with booster doses, up to 50 to 85% 4Diarrhoea, Headache, and/or muscle pains 5Paracetamol dose: up to 15 mg/kg every 4 hours, maximum of 4 doses in 24 hours

11

Table 3: Summary of Rare Serious AE, onset interval and rate

Vaccine BCG Hepatitis B Measlesa

OPV Tetanus DPT

a Approximately

90% of those receiving a second dose are already immune. Reactions do not occur if the child/woman is already immune. This is not the case for anaphylaxis, where this type of reaction is more likely on the second or subsequent doses. b The risk of Vaccine-associated Paralytic Poliomyelitis (VAPP) is higher after the first dose (1.4 - 3.4 per million doses) compared with the second and third doses (0.17 per million doses). c Seizures are most likely febrile in origin, and rate depends on past history, family history and age, with much lower risk in children under the age of 4 months.

Reaction Suppurative lymphadenitis BCG Osteitis Disseminated BCG infection Anaphylaxis Guillain-Barre Syndrome (plasma derived) Febrile seizures Thrombocytopenia (low platelets) Anaphylaxis Vaccine-associated paralytic polio Brachial neuritis Anaphylaxis Persistent (>3hours) inconsolable screaming Seizures Hypotonic hypo responsive episode (HHE) Anaphylaxis/shock Encephalopathy Interval between vaccination and onset 2-6 months 1-12 months 1-12 months 0-1 hour 1-6 weeks 5-12 days 15-35 days 0-1 hour 4-30 days 2-28 days 0-1 hour 0-24 hours 0-3 days 0-24 hours 0-1 hour 0-3 days Number of events per million doses 100-1000 1-700 2 1-2 5

333 33 1-50 1.4-3.4 b 5-10 1-6 1,000-60,000 570c 570 20 0-1

12

Programme Errors Non-sterile injection: l Improperly sterilizing syringe & needle l Contaminated vaccine or diluent l Reuse or reconstituted vaccine at subsequent sessions l wiping the needle with a swab, administering injection over clothes Reuse of disposable syringe & needle Reconstitution Error/ Wrong vaccine preparation l Reconstitution with incorrect diluent l Drug substituted for vaccine diluent l Inadequate shaking for T series vaccine Injection at incorrect site l BCG given subcutaneously l DPT/DT/TT given superficially l Injection into buttocks Vaccine transportation/storage incorrect Contraindications ignored Possible Adverse event that may occur Infection such as local abscess at site of injection, sepsis, toxic shock syndrome, or death. Transmission of blood-borne infections such as Hep B, HIV, Hep C Vaccine ineffective Negative effect of drug, e.g. insulin Death Local abscess Local reaction or abscess Local reaction or abscess Sciatic nerve damage Local reaction from frozen vaccine Vaccine ineffective Avoidable serious reaction

CLUSTER OF AEFI
Working definition for adverse event cluster A cluster of AEFIs is defined as two or more cases of the same adverse event related in time, place or vaccine administered. The exact nature of the relationship between the adverse events (e.g., duration of .time., proximity of .place.)

will differ by the nature of the events and the circumstances within which they occur.
13

Different types of AEFI clusters are illustrated by the following examples: l Two (or more) cases of abscesses following vaccinations administered in a single immunization session, whether fixed or outreach. (Duration of time in hours.) l Two or more cases of deaths following measles vaccination during a mass immunization campaign over several days. l Two (or more) cases of disseminated BCG infection in a district or province in a month. (Duration of time may be in months and will depend on background rate of risk factors for disseminated BCG infection such as severe immune deficiency states. Similarly the definition of the relationship in place may extend beyond a single health unit or district, depending on population size and the background rate of risk factors.)

Reporting and Investigation of AEFI At Field Level

l ANMs,

HAs and other field level health workers and Medical Officers of Primary Health Centers MO(PHC) should follow-up all children and mothers they vaccinated during the next vaccination session or follow-up field/ home visits (or post and ante-natal visits), to monitor the occurrence of any AEFI. l During the vaccination session, vaccinators should inform all parents and guardians about the risk of mild AEFIs that could occur and encourage them to report the AEFIs described or any illness that causes concern after the immunization to the respective ANM/ HAs or to the MO (PHC). Parents and guardians should be given instructions to manage fever with sponge baths, paracetamol and extra oral fluids. In cases of fever that remains intractable (with or without a febrile seizure) and for other severe illness, the child should be taken to a treatment facility for urgent treatment. l In case of a serious AEFI or other AEFI which warrants investigation (see AEFIs to be reported & investigated in the Annex 1), the MO (PHC) should be informed by telephone immediately. l On receipt of information about any other AEFI, the ANM/HA should report the same in the monthly reporting form as per the existing timeline for monthly reports. At PHC level l Once information regarding an AEFI, including any concerns reported by the parents, is received by the MO (PHC), he/she should personally initiate an investigation to verify the facts, for any serious event he will fill the First Information Report (FIR) (Annex 2). l If the event is a reportable AEFI (see annex 1), FIR should be filled in duplicate and a copy should be sent to the DIO as soon as possible. For serious events (see annex 1) the completed form should be sent within 24 hours of the report. For all other events the report should be sent monthly.

114
l If

the reported AEFI is an event that needs investigation (see annex 1), the MO/PHC should inform the DIO of the case(s) by telephone or fax immediately. The MO (PHC) will keep copy of FIR at PHC level. l In the event of death following AEFI, the incriminated vial of vaccine and syringe used to administer the vaccine should be collected and sent under cold chain requirement to DIO. If required, a post-mortem investigation should be conducted to assist with the investigation. l If the event is due to a programmatic error, actions should be taken to correct wrong practices. l In situations where no reports of AEFIs are received during the month, a .Nil. report should be prepared by writing word ..NIL. across the monthly reporting form and sent to the DIO and the copy kept in a separate file at the PHC. At Medical Institution Level l All medical officers treating patients with conditions, as given in the list of reportable AEFIs, (especially among the children admitted to pediatric units and children with injection site abscess to the surgical units) should ascertain their immunization history. If the event is in the list of events to be reported immediately then FIR should be filled in duplicate and sent to the DIO within 24 hours. Rest of the events should be reported in the monthly reporting form. l If the AEFI is an event that needs investigation (see annex 1), it should be informed to the DIO by telephone or fax immediately and followed up by FIR within 24 hours. l In the event of death following AEFI, the incriminated vial of vaccine and syringe used to administer the vaccine should be collected and sent under cold chain requirement to DIO. If required, a postmortem investigation should be conducted to assist with the investigation. l Medical officers should give their fullest cooperation to DIOs and RITs to investigate AEFI by providing clinical information and by carrying out the appropriate laboratory investigation, and facilitating postmortem investigation where needed. At District (DIO) Level l On receipt of FIR from hospitals and MO (PHC), for cases that warrant investigation, the DIO should initiate an investigation by filling up PIR and Detailed investigation form (DIR). Remaining reports in the monthly reporting forms will be compiled for future reference and further analysis using the form in Annex 6. The FIR should be sent to AC (UIP) within 24 hrs, the PIR within 7 days and the DIR within 90 days. Original copies of FIR/PIR and DIR should be maintained in a separate file at district level. l Events that need to be investigated by RIT (see annex) should be intimated to the coordinator of the respective

RIT through the SEPIO by telephone or fax. The DIO should assist the RIT to carry out the investigation.
15

When applicable the AC (UIP) should always be informed of the investigation to take place; he/she will assist in the investigation whenever possible. l In the event of death following AEFI, the incriminated vial of vaccine and syringe used to administer the vaccine should be collected and sent under cold chain requirement to CRI Kasauli for laboratory investigation. l On completion of the investigation, the DIO should provide feedback on the outcome of the investigation to the MO (PHC) and HA with appropriate corrective measures. l DIO should maintain a line listing of all cases of AEFI reported to him/her through FIR/PIR/monthly reports. This line listing according to blocks should be maintained on a monthly basis and a copy should be forwarded to the SEPIO before 20th of following month. Form similar to appendix 7 may be used for this. Regional Investigation Team (RIT) l The epidemiologist in each RIT should act as the coordinator and focal point for that team. l All deaths incriminated to AEFI, AEFIs causing public concern, serious events not specified in the reporting form but warrant detailed investigation, AEFI clusters, where cause is not clear and any other situations when requested by SEPIO should be investigated and a report made available. l The coordinator of the RIT will receive requests for investigations from SEPIO l Since RIT members are located in the main referral hospitals in the regions, medical officers and nodal persons who are in charge of AEFI reporting also can in parallel inform RIT through the SEPIO to initiate an early investigation. l In the event of a death, the RIT should after an onsite investigation make a preliminary report available to the SEPIO within 72 hours. The final report should be ready within a reasonable time (3 months) period after completing necessary tests and detailed investigations. Report should be prepared according to the DIR and any additional details deem necessary can be forward with it.

State Expert Committee on AEFI

Note: These generic terms of reference have been drafted as a single TOR to cover (a) case investigation and implementation issues and (b) expert review or causality assessment of cases. Options for establishment of separate committees for the respective areas of responsibility, a single committee (with or without subgroups for the respective areas) or alternative structure may be decided by States. I. Terms of reference for Case Investigation and other Implementation issues Provide technical advice on the implementation of the AEFI system (including training activities, development of training materials in local language if required)
16

l Review

aggregate reports and advise on analysis and reporting of AEFI data advising on development & maintenance of a state database l Recommend cases for expert review and causality assessment, oversee regular l Evaluations of the surveillance system and recommendations for further strengthening. l Investigate serious and unusual AEFI (investigation will be initiated within 24 hours of being reported to the team). Composition: It is recommended that the committee/team with overall responsibility as described above should comprise as a minimum, the SEPIO, an epidemiologist, a paediatrician/clinician. Additional membership (or participation on an ad hoc basis) of a microbiologist, and 1 or more DIOs should be considered. II. Terms of reference for Expert Review and Causality Assessment An expert advisory committee/panel will be established to: l Review individual serious and unusual AEFIs and other AEFIs referred to it by the .Case Investigation and Implementation group. in order to assess a potential causal link between the event and the vaccine. This review will be most effective if done in a comprehensive and standard manner consistent with the international criteria for causality assessment listed below. l Monitor reported AEFI data for potential signals of previously unrecognized vaccine-related adverse events and make recommendations for further investigation. WHO criteria for assessment and classification of the likelihood of a causal association between a vaccine (or drug) and an adverse event: l Very likely/Certain: Clinical event occurring in a plausible time relationship to vaccine administration, and which cannot be explained by concurrent disease or other drugs or chemicals. l Probable: Clinical event with a reasonable time relationship to vaccine administration, and which is unlikely to be attributed to concurrent disease or other drugs or chemicals. l Possible: Clinical event with a reasonable time relationship to vaccine administration, but which could also be explained by concurrent disease or other factors. l Unlikely: Clinical event whose temporal relationship with vaccine administration makes a causal relationship improbable, and in which other factors or underlying disease provide a plausible explanation. l Unrelated: Clinical event with a temporal relationship which is not compatible with vaccine administration, and which could be explained by underlying disease or other factors. l Unclassifiable: Clinical event with insufficient information provided to allow for an assessment of the cause.
17

Criteria (Evidence) for Establishing Causality: l Biologic plausibility (coherence with existing information) l Strength of the association l Consistency of the association l Specificity of the association

l Temporal

sequence Composition: It is recommended that the committee/panel with above responsibility should have broad expertise, including a paediatrician/neurologist, physician, microbiologist, epidemiologist, the SEPIO, a representative of the State Drug Control Authority. In addition, the DIO and/or other designated officers from concerned districts should be invited to participate in meetings of the committee to review AEFI cases. The committee will meet at least twice a year to review the serious and unusual AEFI.

Monitoring and feedback

At Community Level l When ever a parent, public or any other interested group brought any AEFI to the notice of any member of the health team, they should be assured that after an investigation they will be informed about the true facts of the situation. l In situations were cause of an AEFI is obvious, after in consultation with the MO (PHC), parent/public should be informed the reason for the AEFI and if it is due to a programme error, it blame should be admitted and public should be assured that all possible corrective measures has been taken to prevent an occurrence of such event in the future. At PHC Level l At every monthly meetings, MO (PHC) should discussed the types of AEFI reported, results of investigations, action taken and corrective measures adopted with ANM/ HAs and other field health staff. l Contents of the Quarterly and annual feed back reports received from district and state level should also be a part of feedback to field health staff during these meetings when they core received. At District (DIO) Level l DIO should maintain a log to monitor the completeness and timeliness of FIR/PIR/DIR/ Monthly report received from MO (PHC), RIT and from the reporting hospitals come under his/her purview. l When Monthly report or the FIR/PIR is not received from a particular hospital or from a PHC before the dead
158

line, reminder should be sent and DIO should make sure that he/her received all reporting forms in reasonable time. l At the end of every quarter and annum DIO should analyze the data available in FIR/PIR/DIR/ Monthly reports by filling the form in annex 6, a summary report of this should be sent to the MO (PHC)s and to the SEPIO. At State Level l SEPIO should maintain a log to monitor the completeness and timeliness of all reporting forms received from DIO. l When the reports are not received from a particular DIO before the dead line, reminder should be sent and SEPIO should make sure that he/her received all AEFI forms in reasonable time.

l At

the end of every quarter and annum SEPIO should analyze the data available in annex 6 & 7 and compile a report, and feed back it to the DIOs, Reporting Hospitals, RIT, Expert committee, to the national level and to the all interested officials and institutions. It.s contains should be discussed at least Quarterly at the DIOs meeting. General Instruction for report writing l The basic principles of field investigations of infectious diseases should be adopted for the investigation of AEFI, especially if there is clustering of cases. Preliminary diagnosis from first reports must be clinically examined. It is important that non-immunized children . of the same age group in the locality are also investigated and examined to include temporal relationship. l Particularly if the type of AEFI is unexpected and not easily explainable, views other experts must carefully record all signs and symptoms and timing of these for review. l A detailed write-up is necessary as the reports are likely to be reviewed by both at the State and National level. Uniformity in the format of the reports facilitates review. The report should start with general information regarding the place where the events occurred. The name of the state, district and PHC / ward should be stated. The following points should be covered in the report: a. General information and details of investigation: - When the first symptoms were observed, what they were and who reported the event; - Who conducted the investigations and how long after the first symptoms were these started: - How was the investigations conducted (was active search included, were relevant records checked and whether parents of children and other representatives of the community contacted?) - No. of children immunized and the type of reaction observed. The line lists and summary tables should be attached; - If any unimmunized children in the area had similar symptoms.
19

b. Clinical aspects for affected child: - Site of injection of each vaccine and time given; - Detailed clinical picture; - History of previous doses; - Treatment given; - Outcome of illness; - Diagnosis by treating physician and any relevant observation; c. Operational aspects: - Batch no. of involved vaccines; - How are immunization sessions generally provided in the area? Procedure followed on the day of the event (whether the session was on the scheduled day); - When and from where the vaccines were received. How were the vaccines stored and transported. Batch no. of the vaccines;

- How many syringes and needles were available and procedure followed for the sterilization of equipment; - Who administered the vaccines and the training they had received; - Have similar reactions been observed in the past and were not reported; d. Laboratory investigation: - The samples will be sent to CDL, Kasauli for testing. (The test reports are not expected to be available at the time of writing the report); - The samples should be sent under proper cold chain condition. The forwarding letter should explain the circumstances under which the samples were sent. The used vial with the remaining vaccine as well as unused vials of the same batch from the same storage point should be sent. - Any other samples sent for testing; name of the laboratory; e. Autopsy; - If a post-mortem was conducted relevant findings may be included. Since the purpose of investigations is to identify the underlying cause of AEFI and suggest corrective measures, operational aspects of the program must be carefully reviewed and noted in the written report. Also please mention following at the end of the report.
20

f. Follow . up: - State briefly follow . up measures taken; g. Suggestions and recommendations: - What was the likely cause of the adverse event; - Further steps would you recommend to minimize the risks in the future:
21

Events to be reported and investigated immediately

l Any

death, hospitalization, disability or other serious and unusual events that are thought by health workers or the public to be related to immunization l Anaphylaxis l Toxic shock syndrome (TSS) l Anaphylactoid reaction (acute hypersensitivity reaction) l Acute flaccid paralysis* l Encephalopathy l Sepsis l Any event where vaccine quality is suspected l Any cluster of events *Any case of AFP will be reported through the current system for AFP surveillance and reporting Events, which are to be reported in the monthly reporting forms. l Persistent (more than 3 hours) inconsolable screaming, l Hypotonic hypo-responsive episode (HHE), l Severe local reaction, l Injection site abscess (bacterial), l Seizures including febrile seizures, l Brachial neuritis, l Thrombocytopenia, l Lymphadenitis, l Disseminated BCG infection,

l Osteitis

/ Osteomyelitis. Common minor reactions usually resolve without any serious consequences. However, if there is a change in the nature, severity or the frequency with which these reactions occur, health staff should report this to their supervisor. Also, if any of these events occur in cluster or cause a major public concern then they should be reported and investigated immediately following the same guidelines as for the serious AEFIs.

APPENDIX 1
22

FIRST INFORMATION REPORT FORM

First Information Report Adverse Events Following Immunization

(To be reported within 48 hrs to the GoI)

State District Block Date of report Name Age (DOB) Sex: Male/ Female Mother.s / Father.s Name Complete Address of the case Date & time of vaccination Date & time of onset of symptoms Complete address of place of vaccination Vaccines given Batch Number & Expiry date of each vaccine Type of reaction Date of Death Any other comment1 Name of person filling the report Signature and Designation
1 Preliminary report will follow in a week and detailed investigation report will be submitted in three months.

On completion the form should be sent along with the monthly surveillance report of AEFI to Assistant Commissioner (UIP), CH division of Govt. of India (Fax No. 011-23062728 or email: aefi@rediffmail.com

APPENDIX 2
23

PRELIMINARY INVESTIGATION REPORT FORM

PRELIMINARY INVESTIGATION REPORT Adverse Events Following Immunization

(To be reported within 7 DAYS to the GoI)

State District Block Date of report Name: Age (DOB): Sex: Male/ Female Mother.s / Father.s Name Complete Address of the case Date & time of vaccination Date & time of onset of symptoms Vaccines given Complete address of place of vaccination Batch Number & Expiry date of each vaccine

Type of reaction Date of Death Probable cause of death: Probable cause of the AE: Programme error/ Vaccine reaction/ Coincidental/ Unknown Further action planned: Yes/ No (if Yes Details) Any other comment Name of person filling the report Signature and Designation On completion the form should be sent along with the monthly surveillance report of AEFI to Assistant Commissioner (UIP), CH division of Govt. of India (Fax No. 011-23062728 or email: aefi@rediffmail.com

APPENDIX 3
24

DETAILED INVESTIGATION REPORT FORM

DETAILED INVESTIGATION REPORT Adverse Events Following Immunization (AEFI)

(To be reported within three months)

Adverse event following Immunization or Death after Immunization Date of Investigation: Case ID No.: IND (AEFI)/_ _ /_ _ _ /_ _ / _ _ _ Use same coding as done for AFP cases 1. Name of child affected (In Block Letters) 2 Name of Parents Father.s name Mother.s name 3 Age and Sex . ./. ./ . . Date of Birth Male/ Female yrs mo days ( if know) 4 Full detailed address 5 Place of immunization Health facility/ Out reach session site/Field camp/ Hospital/ Maternity home/ Private clinic/ any other place 6 a. Date and time of immunization b. Location of immunization session (Full address) 7 No. of children immunized at the session 8 Date and time of onset of AEFI Date of Initial report

APPENDIX 4
BCG___ DPT1___ DPT2___ DPT3___ DPT B___ OPV1___ OPV2___ OPV3___ OPV B___ HEPB 1___ HEPB 2___ HEPB 3___ MEASLES___ DT___ TT1___ TT2___ TT B___ VIT A___ OTHERS___
25

9 Type of AEFI 10 Was the patient admitted to hospital Yes/ No/ Unknown 11 If Yes, date & Time of admission Name of Hospital Ward no Centralized admission number Outcome Recovered/ still in hospital/ death/ unknown/ Residual problem 12 SYMPTOMS AND SIGNS a. Time of onset

b. Sign of shock present/absent c. Temperature d. Pulse e. Respiration f. Convulsion g. Vomiting h. Diarrhoea i. Altered sensorium j. Rash k. Any other symptoms & sign (pl specify) l. Progress of symptoms and signs with brief history & chain of events (Please attach additional sheet if required or patient records if available)
26

m. Mention whether above sign and symptoms are seen by investigating officer or whether above sign and symptoms are noted from hospital record 13 Treatment given (attach copy of case sheet, if available) 14 GROWTH & DEVELOPMENT/PAST/ FAMILY HISTORY (please fill as relevant to case) a. Type of Delivery Normal delivery/ LSCS/ Assisted birth b. Gestation Full term/Premature/Post dated c. Complications during birth d. Birth weight (if possible) e. Present Weight (if possible) f. Present length/ height (if possible) g. Present head circumference (if possible) h. Developmental milestones Gross motor Fine Motor Language Adaptive & Social i. Past illness like allergy, asthma, convulsion etc j. Any previous history of similar event Yes/ No/ Unknown after immunization k. Family history - history of epilepsy, allergy, asthma etc in the family
27

l. Any history of similar event in siblings Yes/ No/ Unknown m. Was the child on any concurrent Yes/ No/ Unknown medication for any illness If yes: Indication & Dosage 15 INFORMATION ON IMMUNIZATION (IN CASE PROGRAMME ERROR SUSPECTED) a. Name of worker who administered vaccine b. Designation c. Length of service d. Experience e. When did worker receive the last training in immunization

f. Name of Health Assistant (Supervisor) g. Designation h. Length of service i. Experience j. When did Health Assistant (Supervisor) receive the last training in immunization 16 k. Total number of mother and children immunized. Attached detailed list giving name/age/sex/vaccines given l. Any history of similar event reported a. At same clinic: Yes/ No/ Unknown ( among those vaccinated) b. Using same vaccine type at previous clinic sessions: Yes/ No/ Unknown If Yes Specify event Number Place
28

m. Any history of similar event reported a. At same clinic session: Yes/ No/ Unknown (among unimmunized) b. In the field: Yes/ No/ Unknown If Yes Specify event Number Place n. At what stage was the index child a. Within the first few doses of the vial immunized b. Within the last few doses of the vial c. Within the first vaccinations of the clinic session d. Within the last vaccinations of the clinic session e. Unknown o. Vaccination technique (observe the Reconstitution: Satisfactory/ Unsatisfactory/ Not observed relevant vaccinator) Drawing of vaccine: Satisfactory/ Unsatisfactory/ Not observed Injection technique: Satisfactory/ Unsatisfactory/ Not observed 17 DETAILS OF VACCINE GIVEN PRIOR TO AEFI a. Date of receipt of vaccine of implicated MoH/ State batch by Regional Store District PHC/CHC/ Urban Health Center Sub center/ Out reach session site b. Status of maintenance of cold chain at State Regional store District Head Quarter PHC/ Urban health post Subcenter Session Site c. Is there a suspicion of breach of cold chain as per records? (If so, when & where?)
29

d. Is there a suspicion of freezing of .T. series vaccines? (If so, when & where?) e. Where are the vaccines and In the PHC/CHC: diluents stored In the Subcenter:

In the Clinic: Others (specify) f. How are the vaccines transported In a vaccine flask or vaccine carrier/ In a cold box/ Others (specify) g. Is the packing of vaccine Satisfactory/ Unsatisfactory/ Not observed h. Maintenance of cold chain for unopened/ Satisfactory/ Unsatisfactory/ Not observed opened vials during immunization session i. Status of the vaccine storage in the Deep freezer: Satisfactory/ Unsatisfactory/ Not observed refrigerator/s Status of the VVM: Satisfactory/ Unsatisfactory/ Not observed Main compartment of refrigerator: Satisfactory/ Unsatisfactory/ Not observed j. Are any other drugs or food stored in Yes/ No/ Unknown the refrigerator/s If yes, specify k. If vaccine given by private practitioner, Source of vaccine: Govt supply/ procured from manufac then turer/ pharmacy Status of cold chain at clinic: Satisfactory/ Unsatisfactory/ Not observed Status of cold chain at procurement site: Satisfactory/ Unsatisfactory/ Not observed IF VACCINE GIVEN DURING FIELD CAMP/ OUTREACH SESSION l. Time of collection of vaccine from Health Post/ PHC for field camp immunization
30

m. Time of receipt of vaccine at field camp site (immunization session site) n. Maintenance of cold chain during transit from Health Post/ PHC to field camp site o. Name of person collecting vaccine from fixed centre to field camp site p. Vaccines used BCG/ DPT/ OPV/ Measles/ Hepatitis/ Vit A/ others (specify) q. If reconstituted, what diluent was used r. Which type of syringe was used for Reusable/ Disposable/ AD reconstitution? s. Practice of reconstitution Same syringe used for multiple vials of same vaccine/ Same syringe used for reconstituting different vaccines/ Separate syringe for each vial/ Separate syringe for each vaccine t. Is the needle left in reconstituted Yes/ No/ Not observed vaccine vial u. Whether label of vial intact i) Batch No ii) Expiry date iii) Manufactured by v. Date and time when vial opened w. Date of vaccine sent for testing x. Result of sample of vaccine sent for testing

y. Is the vaccine collected by FDA or SRA i) Name of the officer ii) Date when vaccine sent for testing
31

iii) Place where vaccine sent for testing iv) Result of vaccine sent for testing 18 STERLISATION OF SYRINGE AND NEEDLE a. Types of syringes used to vaccinate Reusable/ Disposable/ AD the child. b. Method of sterilization if reusable syringes used c. Name and Designation of person who was responsible for autoclaving/ boiling for 20 minutes d. Date and time of autoclaving/ boiling started e. Date and time of autoclaving/ boiling completed f. Sterilization satisfaction as per records of Signolac strip register g. No of syringes & needles autoclaved h. No of syringes & needles used for the session. 19 INVESTIGATIONS DONE a. Whether any blood tests were done b. If yes, results of blood tests c. Whether CSF was examined d. If yes, result of CSF tests
32

e. Any other investigation done f. Results of other investigations 20 IN CASE OF DEATH a. Any post mortem done b. If yes, were was it done c. Post mortem findings in brief (Please attach the post mortem report) 21 Probable cause of death/ Residual problem 22 Probable cause of AE Programme error: Injection Sterility/ Vaccine reconstitution/ Administration technique/ Vaccine storage/ Vaccine transportation/ Unknown/ Others (specify)____________ Vaccine reaction: Vaccine lot problem/ Known vaccine reaction at expected rate/ others Coincidental: Similar events in unimmunized/ others Unknown 23 Remarks including recommendation (or any addition information / action taken or to be taken) Name/s of the person doing investigation Signature and Designation

Please attach photocopies of relevant documents such as case records, inpatient records, lab reports etc If certain information is not available at the time of filling report to don.t delay in sending the report, please send the form within 90 days. You can forward additional information whenever it becomes available On completion the form should be sent along with the monthly surveillance report of AEFI to Assistant Commissioner (UIP), CH division of Govt. of India (Fax No. 011-23062728 or email: aefi@rediffmail.com
33

CASE DEFINITIONS AND TREATMENTS FOR AEFI

Adverse event Acute flaccid paralysis (Vaccine associated paralytic poliomyelitis) Anaphylactoid reaction (acute hypersensitivity reaction) Anaphylaxis Disseminated BCG infections Encephalopathy Case definition Acute onset of flaccid paralysis within 4 to 30 days of receipt of oral poliovirus vaccine (OPV), or within 4 to 75 days after contact with a vaccine recipient and neurological deficits remaining 60 days after onset, or death. Exaggerated acute allergic reaction, occurring within 2 hours after immunization, characterized by one or more of the following: l wheezing and shortness of breath due to bronchospasm l laryngospasm/laryngeal oedema l One or more skin manifestations, e.g. hives, facial oedema, or generalized oedema. Less severe allergic reactions do not need to be reported. Severe immediate (within 1 hour) allergic reaction leading to circulatory failure with or without bronchospasm and/or laryngospasm/ laryngeal oedema. Widespread infection occurring within 1 to 12 months after BCG vaccination and confirmed by isolation of Mycobacterium bovis BCG strain. Usually in immuno-compromised individuals. Acute onset of major illness characterized by any two of the following three conditions: l seizures

l severe

alteration in level of consciousness lasting for one day or more Treatment No specific treatment available; supportive care. Self-limiting Anti-histamines may be Useful Adrenaline injection (See Appendix 5) Should be treated with anti-tuberculous regimens including isoniazid and rifampicin. No specific treatment available; supportive care. Vaccines OPV All All BCG Measles, Pertussis

APPENDIX 5
34

Fever Hypotonic, hypo responsive episode (HHE or shockcollapse) Injection site abscess l Distinct change in behaviour lasting one day or more. Needs to occur within 48 hours of DPT vaccine or from 7 to 12 days after measles vaccine, to be related to immunization. The fever can be classified (based on rectal temperature) as Mild fever: 100.4 OF to 102 OF (38 to 38.9oC), High fever: 102 OF to 104.7 OF (39 to 40.4oC) and Extreme fever: 104.7 OF or higher (>40.5oC). Event of sudden onset occurring within 48 [usually less than 12] hours of vaccination and lasting from one minute to several hours, in children younger than 10 years of age. All of the following must be present: limpness (hypotonic) reduced responsiveness (hypo responsive) pallor or cyanosis . or failure to observe/ recall

Fluctuant or draining fluid-filled lesion at the site of injection. Bacterial if evidence of infection (e.g. purulent, inflammatory signs, fever, culture), Sterile abscess if no evidence of bacterial Infection on culture. Sterile abscesses are usually due to the inherent properties of the vaccine. Symptomatic; paracetamol. Give extra oral fluids. Tepid sponge or bath. In cases of high and extreme fever, other signs and symptoms should be sought and reported/ managed as appropriate. The episode is transient and self-limiting, and does not require specific treatment. It is not a contraindication to further doses of the vaccine. Incise and drain; Antibiotics if bacterial. All Mainly DPT, rarely others All injectable vaccines
35

Heals spontaneously (over months) and best not to treat unless lesion is sticking to skin. If so, or already draining, surgical drainage and local instillation of anti-tuberculous drug. Systemic treatment with anti-tuberculous drugs is ineffective Should be treated with anti-tuberculous regimens including isoniazid and rifampicin. Settles within a day or so; analgesics may help. Self-limiting; supportive care; paracetamol and cooling if febrile; rarely anticonvulsants. Critical to recognize and

treat early. Urgent transfer to hospital for intravenous antibiotics and fluids. Settles spontaneously within a few days to a week. Either at least one lymph nodes enlarged to >1.5 cm in size (one adult finger width) or a draining sinus over a lymph node. Almost exclusively caused by BCG and then occurring within 2 to 6 months after receipt of BCG vaccine, on the same side as inoculation (mostly axillary). Inflammation of the bone with isolation of Mycobacterium bovis BCG strain. Inconsolable continuous crying lasting 3 hours or longer accompanied by high-pitched screaming. Occurrence of generalized convulsions that are not accompanied by focal neurological signs or symptoms. Febrile seizures: if temperature elevated >100.4 OF or 38 OC (rectal) Afebrile seizures: if temperature is normal Acute onset of severe generalized illness due to bacterial infection and confirmed (if possible) by positive blood culture. Needs to be reported as possible indicator of programme error. Redness and/or swelling centred at the site of injection and one or more of the following: l swelling beyond the nearest joint Lymphadenitis (includes suppurative lymphadenitis) Osteitis/ Osteomyelitis Persistent inconsolable screaming Seizures Sepsis Severe local reaction BCG BCG DPT, Pertussis All, especially Pertussis, Measles All injectable vaccines All injectable vaccines
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Toxic shock

syndrome (TSS) l pain, redness, and swelling of more than 3 days duration l Requires hospitalization. Local reactions of lesser intensity occur commonly and are trivial and do not need to be reported. Abrupt onset of fever, vomiting and watery diarrhoea within a few hours of immunization. Often leading to death within 24 to 48 hours. Needs to be reported as possible indicator of programme error. Symptomatic treatment with analgesics. Antibiotics are inappropriate. Critical to recognize and treat early. Urgent transfer to hospital for intravenous antibiotics and fluids. All injectable vaccines
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APPENDIX 6 DISTRICT REPORTING FORMAT FOR AEFI

State __________________ District_____________Month_________________ Year___________ Please indicate the no. of events in the relevant cage Adverse events 1. Local adverse events Injection site abscess BCG lymphadenitis Severe local reactions 2. Central Nervous System adverse events Vaccine associated paralytic poliomyelitis (within 4-30 days after immunization) Guillain-Barre syndrome (within 30 days after immunization) Encephalopathy (within 72 hours after immunization) Encephalitis (within 1-4 weeks after immunization) Meningitis (within 1-4 weeks after immunization) Seizures (febrile/afebrile) 3. Others Allergic reaction Anaphylactic shock Arthralgia High fever (>39 deg. C) Persistent screaming Osteitis/ Osteomyelitis (within 8-16 months after immunization) Toxic shock syndrome (within few hours after immunization) Others (please specify) B C G

O P V D P T D T M ea sl es T T J E M R He pa tite B ot h er s
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What are the possible explanations for the above-mentioned AEFI? Actions taken Were there any hospitalisations or deaths among the reported AEFI? Please explain Did any cluster of events come to your notice during the month If Yes, Please provide details Name ______________________ Designation __________________Date ___________ Signature__________________
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LINELISTING FORMAT FOR AEFI TO BE USED AT STATE LEVEL

This is to be used to identify trends and clusters of AEFI State_______________________ Year_____________ * 1 = injection site abscess; 2 = BCG lymphadenopathy; 3 = severe local reaction; 4 = acute flaccid paralysis; 5= encephalopathy/encephalitis/meningitis; 6 =seizure; 7=acute anaphylaxis; 8 = fever; 9 = toxic shock; 10 = other (enter as many as required) Note : Similar form according to blocks should be used by DIO to maintain line listing of AEFI cases at District level. Name/ID District Date of Birth (dd/mm/yyyy) Date of immunization (dd/mm/yyyy)

Outcome (Recovered/ Died) Suspect Vaccine (name & dose eg DPT-2) Batch number Onset time (hours,days, weeks) Date of report (dd/mm/yyyy) Investigated (if yes, date) Conclusion* Reaction type (code)

APPENDIX 7
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AEFI LABORATORY REQUEST FORM

This section should accompany specimens to the laboratory and be completed by the sender of the specimens State: IND (AEFI)/_ _ /_ _ _ /_ _ / _ _ _ Patient.s Full Name Age(DOB): Sex Male Female Complete Address of patient Date of onset of symptoms of AEFI Day Month Year Date of collection of specimen Day Month Year Date specimen sent Day Month Year Precise description of the samples (Batch no / Expiry date/ manufacturer/ Quantity sent) How were specimens shipped (e.g. with dry ice, ice-pack) Tests requested Preliminary clinical diagnosis (working hypotheses) Name & complete address of person to whom laboratory results should be sent Telephone number Fax number

APPENDIX 8
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This section should be completed by a virologist at the receiving laboratory and, when complete, sent to the EPI manager and the sender of the specimens. Date of receipt of specimen at laboratory Day Month Year Name of person receiving specimen(s) at laboratory Condition of specimen upon receipt at lab (circle response) good poor unknown Results: Comments by pathologist, virologist or bacteriologist: Date specimen results sent from this lab (if applicable) Day Month Year Name of laboratory professional Signature Telephone number Fax number

Vaccine samples should be sent for testing to the National control laboratory, Kasauli. The

samples have to be sent in cold chain (2-8 degree Celsius) and by fastest means (by courier or by messenger). The forwarding note should clearly state the circumstances under which the sample(s) is/are sent. It is important that the used vial with remaining vaccine and diluent (if applicable and available) is sent for testing along with unused vials of same batch. 50 ml of each vaccine has to be sent (e.g. 25 vials for vaccine coming in 2ml vials and 10 for those coming in 5 ml vials) It should be ensured that the label of the vaccine is intact and the used vial is packed in polythene and kept upright in the vaccine carrier to avoid contamination and leakage
42Standard

Operating Procedures (SOPs) help maximum safety and operational efficiency for these kind of organisations: - Pharmaceutical organizations - Government organizations - Emergency response operations - Clinical research organizations - Power producing organizations SOPs are detailed written instructions to achieve uniformity of the performance of a specific function. A well-written SOP can be used to satisfy compliance requirements. SOPs are recommended for all procedures that pose a potential risk to the health and safety of personnel. Standard Operating Procedures (SOPs) lets you operationalize documents such as plans, regulation, compliance, and policies. SOPs distil requirements contained in these documents into a format that can be used by staff members in their work environment. Standard Operating Procedures (SOPs) should be tranfered without every modification to insure the expected results. Every modification or divergence of a given standard, the Procedure should being served, while an investigation and results of the investigation documented according to the internal divergence procedure. All high-class processes and procedures should be put on in a Standard Operating Procedure. This Standard Operating Procedure should be the base for the everyday training programme of every employee. The Standard Operating Procedure should be often updated to insure of obedience to the realisation conditions and the working practise.

A minimum review list of 3 years is recommended. Changes of the Standard Operating Procedure are activated generally by the process or the procedure changes or the adaptations. These changes should be led by the internal site controlling procedure. A part of the activity list of such changes should be to update the coherent standard operating procedure. Standard operating procedure should be in the place for all high-class systems plus the specific operational activities on the side. The structure of a the Procedure System and the sum of all SOPs should be considered carefully. Too many standard operating procedure could lead to a breakdown of the SOP Sstem.