Description
dairy
PROJECT REPORT ON
“Entrepreneurship in Dairy product”
In Partial fulfillment of the requirements For the degree of
BACHELOR OF BUSINESS ADMINISTRATION
Submitted to: Submitted by: Mr. Parvinder Singh Amit Pandey (94552451243 ) Rajneesh swami (9455245130
1)
GUJRANWALA GURU NANAK INSTITUTE OF MANAGEMENT & TECHNOLOGY CIVIL LINES LUDHIANA
PREFACE An individual can not do project on this scale. I take this opportunity to express my acknowledgement and deep sense of gratitude to individuals for rendering valuable assistance and assistance and gratitude to me .There inputs have played a vital role in success of this project &formal piece of acknowledgement may not be sufficient to express the felling of gratitude towards people who have helped me in successfully completing my project. I highly thankful to Mr. Parvinder Singh for guidance. I firmly belived that there is always a scope of improvement. I welcome any suggestion for further enriching the quality of this report.
Amit Kumar Pandey
DECLARATION I hereby declare that the project on“Entrepreneurship in Dairy product”has been submitted by me for the partial fulfillment for the award of the degree of Bachelors of Business Administration. This report has been based on my study under the guidance of Mr. Parvinder Singh. I undertake responsibility for the contents of this report. - Amit KumarPandey
DAIRY FARMING
INTRODUCTION
India derives nearly 33% of the gross Domestic population from agriculture and has 66% of economically active population,engaged in agriculture. The share of livestock product is estimated at 21% of total agriculture sector. The fact that dairing could play a more constructive role in promoting rural welfare and reducing poverty is increasly being recognised . Milk production alone involves more than 70 million producers, each raising one or two cows/ buffaloes primarily for milk production . The domesticated water buffalo is one of the gentlest of all farm animals ,hence it can be breeded easily. The dairy sector offers a good opportunity to entrepreneurs in India. India is a land of opportunity for those who are looking for new and expanding markets.Growth propsects in the dairy sector are very bright.
MARKET Dairy development in India has been acknowledged the world over as one of modern India"s most sucessful development programme. India is the second largest milk producing country with anticipated production of about 78 million tons during 1999-2000. The production of milk products stoood at 3.07 lakh tonnes in 1999-2000. Production ofmilk powder including infant milk food has risen to 2.25 lakh tons in 1999-2000, whereas that of malted food is at 65000 tons. Off late market for milk products is showing a steady increase.
11 MANUFACTURING PROCESS Modern and well established scientific principles ,practices and skills should be used to
obtain maximum economic benefits from dairy farming. Some of the major norms and recomondationtions are: Care full selection of animals, feeding of animals,milking of animals
Why do Dairy Farming ? 1.1 Dairying is an important source of subsidiary income to small/marginal farmers and agricultural labourers. The manure from animals provides a good source of organic matter for improving soil fertility and crop yields. The gober gas from the dung is used as fuel for domestic purposes as also for running engines for drawing water from well. The surplus fodder and agricultural by-products are gainfully utilised for feeding the animals. Almost all draught power for farm operations and transportation is supplied by bullocks. Since agriculture is mostly seasonal, there is a possibility of finding employment throughout the year for many persons through dairy farming. Thus, dairy also provides employment throughout the year. The main beneficiaries of dairy programmes are small/marginal farmers and landless labourers. A farmer can earn a gross surplus of about Rs. 12,000 per year from a unit consisting of 2 milking buffaloes. The capital investment required for purchase of 2 buffaloes is Rs. 18,223/-. Even after paying a sum of Rs. 4294/- per annum towards repayment of the loan and interest the farmer can earn a net surplus of Rs. 6000 - 9000/- approximately per year. (For details see model scheme enclosed). Even more profits can be earned depending upon the breed of animal, managerial skills and marketing potential. 1.2 According to World Bank estimates about 75 per cent of India's 940 million people are in 5.87 million villages, cultivating over 145 million hectares of cropland. Average farm size is about 1.66 hectares. Among 70 million rural households, 42 per cent operate upto 2 hectares and 37 per cent are landless households. These landless and small farmers have in their possession 53 per cent of the animals and produce 51 per cent of the milk. Thus, small/marginal farmers and land less agricultural labourers play a very important role in milk production of the country. Dairy farming can also be taken up as a main occupation around big urban centres where the demand for milk is high. 2. Scope for Dairy Farming and its National Importance. 2.1 The total milk production in the country for the year 2001-02 was estimated at 84.6 million metric tonnes. At this production, the per capita availability was to be 226 grams per day against the minimum requirement of 250 grams per day as recommended by ICMR. Thus, there is a tremendous scope/potential for increasing the milk production. The population of breeding cows and buffaloes in milk over 3 years of age was 62.6 million and 42.4 million, respectively (1992 census) 2.2 Central and State Governments are giving considerable financial assistance for creating infrastructure facilities for milk production. The nineth plan outlay on Animal Husbandry and Dairying was Rs. 2345 crores.
3. Financial Assistance Available from Banks/NABARD for Dairy Farming. 3.1 NABARD is an apex institution for all matters relating to policy, planning and operation in the field of agricultural credit. It serves as an apex refinancing agency for the institutions providing investment and production credit. It promotes development through formulation and appraisal of projects through a well organised Technical Services Department at the Head Office and Technical Cells at each of the Regional Offices. 3.2 Loan from banks with refinance facility from NABARD is available for starting dairy farming. For obtaining bank loan, the farmers should apply to the nearest branch of a commercial or co-operative Bank in their area in the prescribed application form which is available in the branches of financing banks. The Technical Officer attached to or the Manager of the bank can help/give guidance to the farmers in preparing the project report to obtain bank loan. 3.3 For dairy schemes with very large outlays, detailed reports will have to be prepared. The items of finance would include capital asset items such as purchase of milch animals, construction of sheds, purchase of equipments etc. The feeding cost during the initial period of one/two months is capitalised and given as term loan. Facilities such as cost of land development, fencing, digging of well, commissioning of diesel engine/pumpset, electricity connections, essential servants' quarters, godown, transport vehicle, milk processing facilities etc. can be considered for loan. Cost of land is not considered for loan. However, if land is purchased for setting up a dairy farm, its cost can be treated as party's margin upto 10% of the total cost of project. 4. Scheme Formulation for bank loan. 4.1 A Scheme can be prepared by a beneficiary after consulting local technical persons of State animal husbandry department, DRDA, SLPP etc., dairy co-operative society/union/federation/commercial dairy farmers. If possible, the beneficiaries should also visit progressive dairy farmers and government/military/agricultural university dairy farm in the vicinity and discuss the profitability of dairy farming. A good practical training and experience in dairy farming will be highly desirable. The dairy co-operative societies established in the villages as a result of efforts by the Dairy Development Department of State Government and National Dairy Development Board would provide all supporting facilities particularly marketing of fluid milk. Nearness of dairy farm to such a society, veterinary aid centre, artificial insemination centre should be ensured. There is a good demand for milk, if the dairy farm is located near urban centre. 4.2 The scheme should include information on land, livestock markets, availability of water, feeds, fodders, veterinary aid, breeding facilities, marketing aspects, training facilities, experience of the farmer and the type of assistance available from State
Government, dairy society/union/federation. 4.3 The scheme should also include information on the number of and types of animals to be purchased, their breeds, production performance, cost and other relevant input and output costs with their description. Based on this, the total cost of the project, margin money to be provided by the beneficiary, requirement of bank loan, estimated annual expenditure, income, profit and loss statement, repayment period, etc. can be worked out and shown in the Project report. A format developed for formulation of dairy development schemes is given as Annexure I. 5. Scrutiny of Schemes by banks. The scheme so formulated should be submitted to the nearest branch of bank. The bank's officers can assist in preparation of the scheme for filling in the prescribed application form. The bank will then examine the scheme for its technical feasibility and economic viability. (A) Technical Feasibility - this would briefly include 1. 2. Nearness of the selected area to veterinary, breeding and milk collection centre and the financing bank's branch. Availability of good quality animals in nearby livestock market. The distribution of important breeds of cattle and buffaloes are given in Annexure II. The reproductive and productive performance of cattle and buffalo breeds is given in AnnexureIII. Availability of training facilities. Availability of good grazing ground/lands. Green/dry fodder, concentrate feed, medicines etc.
3. 4. 5.
6. Availability of veterinary aid/breeding centres and milk marketing facilities near the scheme area.
(B) Economic Viability - this would briefly include 1. 2. 3. 4. 5. 6. Unit Cost - The average unit cost of dairy animals for some of the States is given in Annexure IV. Input cost for feeds and fodders, veterinary aid, breeding of animals, insurance, labour and other overheads. Output costs i.e. sale price of milk, manure, gunny bags, male/female calves, other miscellaneous items etc. Income-expenditure statement and annual gross surplus. Cash flow analysis. Repayment schedule (i.e. repayment of principal loan amount and interest).
Other documents such as loan application forms, security aspects, margin money
requirements etc. are also examined. A field visit to the scheme area is undertaken for conducting a techno-economic feasibility study for appraisal of the scheme. Model economics for a two animal unit and mini dairy unit with ten buffaloes are given in Annexure V and VI. 6. Sanction of Bank Loan and its Disbursement. After ensuring technical feasibility and economic viability, the scheme is sanctioned by the bank. The loan is disbursed in kind in 2 to 3 stages against creation of specific assets such as construction of sheds, purchase of equipments and machinery, purchase of animals and recurring cost on purchase of feeds/fodders for the initial period of one/two months. The end use of the fund is verified and constant follow-up is done by the bank. 7. Lending terms - General 7.1 Unit Cost Each Regional Office (RO) of NABARD has constituted a State Level Unit Cost Committee under the Chairmanship of RO-in-charges and with the members from developmental agencies, commercial banks and cooperative banks to review the unit cost of various investments once in six months. The same is circulated among the banks for their guidance. These costs are only indicative in nature and banks are free to finance any amount depending upon the availability of assets.
Pandey milk Plant
PRODUCTION CAPACITY PER ANNUM Capacity Selling Price PROJECT COST/CAPITAL INVESTMENT
S.No Description Amount Rs.
24000 Ltrs Month Rs. 32Per ltr
Pe r
2
Fixed Capital
1260000
3
Working Capital for Total Project Cost
2
Month
639000 1899000
FINANCIAL ASPECTS A. FIXED CAPITAL i. Land and Buildings ii. Machinery and Equipment
S.No Description Qty. Rate Amount Rs.
Rented
40000 per month
1 2
Buffellows Shed
Nos
30 1
20000 200000
600000 200000
3
4 5
Msslenious exp.(wire ,other)
Lum
1
2
50000 20 0000
10000
50000 400000 10000 1260000
Four wheeler Electric wiring Total
B. WORKING CAPITAL i. Salaries & Wages (per month)
S.No Description Nos. Sal/mon. Amount Rs.
1 2 3
Supervisor/Entrepreneur Driver Labour Total
1 2
10000 10000
5000 10000
10000 60000 80000
06
ii. Raw Material (per month)
S.No Description Unit Qty. Rate Amount Rs.
1
Feed Total
Kgs
20kg*30* 7Rs*
30days
126000
126000Rs.
iii. Utilities (per month)
S.No Description Unit Amount Rs.
1 2
Power Water Total
35000 2500 37500
iv. Other Expenses (per month)
S.No Description Amount Rs.
1 2
Driver expense Transportation Expenses
4000
30000 2000
36000
Other expense (moter reparing etc)
Total
Total Working Capital (per month)
S.No Description Amount Rs.
1 2 3
Rent Salaries and Wages Raw Material
40000 80000 126000
4 5
Utilities Other Expenses
37500 36000
Total
319500
PROFIT AND LOSS ACCOUNT Expense Rent Raw material Utilities Other expense Total profit Rs. 40000 80000 126000 313500 3834000(for1y r) 756000 3726000 Income Selling cost Rs. 7560000
1- DAIRY ECONOMICS 12 SCOPE AND IMPORTANCE OF PRINCIPLES OF ECONOMICS IN DAIRYING Farm production economics is concerned with the choice of production pattern and resource uses in order to maximize the objective function of the farm operator, their families, the society or the nation, within a frame work of limited resources. The laws of production economics explain the conditions under which the quantities can be maximized
(profit, output, national income) or minimized (cost, use of physical input). The main objectives of production economics are. 1. To determine and define the conditions, which provide for optimum use of resources. 2. To determine the extent to which the existing use of resources deviates from the optimum use. 3. To analyze the factors or forces which are responsible for the existing production patterns and resources use. 4. To delineate means and methods for changing the existing use of resources to the optimum level. In India the dairy farming is still existing as a subsidiary to the agriculture, which gives additional income to agricultural labours, small and middle farmers. In India growing atleast one or two dairy animals by farmers have many advantages of economic importanc 1. Dairy animals fits well in any diversified farming programmes i.e. it can be clubbed with agriculture, fisheries, horticulture, etc., which helps to give additional source of income.
In agriculture different types of roughages as paddy straw, Jawar straw, Wheat straw etc., are bulky fetching less amount and also not possible convertors of roughage to produce milk. 3. The prices of most of the agricultural produce show great fluctuation where as milk will not have such fluctuations in price. 4. The income from agriculture is seasonal and the farmer receives income on harvesting crop only) where as dairy anirrials gives money daily and it is distributed throughout the year. The economics can be calculated daily also. 5. Normally farmers will not take milk by spending money. But the family members will consume certain amount of milk invariably, which improves the family diet in terms of nutrition. 6. Legumes and grasses are grown on farm providing fodder to the animals. These crops are soil conserving and soil building crops. The manure produced will be utilized as natural fertilizers for growing,agricultural crops economically. DAIRY ECONOMICS, EXTENSION AND ENTREPRENEURSHIP 7. The male animals are utilized for draft purpose: In India still most . of the agricultural operations are carried by use of bullocks power: In India the size of the land holdings are small and it is becoming still smaller portions by divisions and they cannot afford for mechanical farm operations. 8. Even after death, the carcasses are utilized for meat meal production, bone meal production, blood meal
production etc., skin is used as hides. In dairy farming the cost feed accounts for roughly 6065% of the cost and so the economic milk production mainly depends upon the economic feed formulations. There are other factors also which contribute to the economics of dairy farming. The economic factors in a successful dairying one. 1. The effective breeding policy: Selection of high yielding animals for dairy farming. For breeding high record site or good sites semen for. All should be
utilized. Unless the animal have high productive nature, even heavy feeding of balanced nutrition cannot improve the milk production much. 2. Economic feeding practices are important which can alone decrease the cost of production milk appreciably. Feeding of adlibitum of green forages will decrease the feed cost and ultimate less cost of milk production. Feeding of certain amount of leguminous fodders still improve the milk production. Feeding of certain ‘amount of dry roughages will improve the butter fat content, which again adds to the high payment for the milk. Among the concentrate feed ingredients, most of the traditional ingredients are competed by human beings, so the cost is increasing resulting high feed cost making dairy farming uneconomical. Use.of unconventional feeds which are available at throw away price or less price will decrease the feed cost resulting low cost of milk production. 3. The managemental conditions are cardinal in maintaining the optimum level of production and also to keep up the animal health. III health reduces the milk production drastically and, it take more time to reach original production. 4. The optimum use of land, manure resources to produce fodder with less investment, which ultimately affects the economic milk production. 5. The ability to direct and make use of labour efficiently after the economics of milk production. 6. Efficient disposal of milk plays half of the economic role in dairying. Even a small price increase in the sale price of milk, will have much impact on the economics of dairy farmings. 7. Sound business practices appropriate to dairy farming is important at all levels. Le. purchases of inputs, and also disposal of products and by products.
The main theme of dairy economics rests on maximum reduction in feed cost producing high level of milk production economically and proper disposable of milk.
4-Postproduction of milk, milk processing and preparation of milk products also comes under dairying. A medium or big size dairy farm simultaneously they can have either processing of milk 1 production of many dairy production. Some times more profit can be obtained in the sale of processed milk / dairy products. Simultaneous establishment of processing plant will increase the income of dairying 30-40% and establishment of products factory will increase the profit by 40-50 % over dairy farming. If these processing or products factories are established within farm premises it reduces the cost of raw material i.e. milk collection and transportation costs. Further the quality of milk produced in own dairy farm will be superior as it is processed immediately without lapse of time, limiting less processing problems, uniform quality of milk is. obtained which troubles less in products preparations compared to wide variation is collected milk from various sources. 12 ECONOMIC VIABILITY FOR DIFFERENT SIZE OF DAIRY AND ENTERPRISE. 1. Economic planning : The. following factors requires considerable attention when one decides to go for milk production on a farm. Suitability of the farm Suitability of farm, buildings and other fixed equipments. Supply of right type of labour. Availability of capital Capability of the farmer. Physical condition of the soil. Climate Water supply
The basis of economic planning of dairy farm depends upon the following factors.
a) b) c) d)
Size of the herd Level of milk yield Feeding policy and stock density Farm area devoted to dairy farm and stocking density
f) g) h) i) j}
Seasonal production policy Raising replacement stock. Watching milk yield Check on food quantity and quality Labour utilization.
a) Size of the herd : The result of National investigation of milk i shows that upto the a certain point, herd size has an important infiu on the profitability of milk production. No appreciable improveme profitability was noted with a level of cows above 40. Infact a distinc in profits seemed to result above that level. The greater part of variati profits was found to be due to reduction in costs of labour percent increase in herd size. The size of herd depends upon the folic factors. Method of milking Milking of shed facility Milk yield Cow shed layout Labour efficiency Area under forage
Most of the farmers appear to find that herds of 30 cows with a cowshed layout and 40 with parlour system can be handled conveniently and efficient ly. It is assumed that a producer in his interest maintain normally a herd of 130 animals consisting of 40 milking animals, 40 dry animals and 2 bulls and rest comprising followers. The number of cows to be handled efficiently and conveniently is dictated by the acreage of farm and cow shed accommodation. Every farmer should ascertain periodically whether his herd size could be increased, at the same time, carry out culling process with discretion. b) Level of milk yield : Statistical evidence appear to favours high yielding herd. The upward tendency in profit with the increasing in milk yield is what one should expect but upto certain limit only, because the food cost per cow- also increases due to extra concentrate with the
increase in milk yield
c) Feeding policy and stock density : It is observed that feed accounts for 61% in cost structure of milk production in buffaloes, therefore attempts to lower the feed cost will reduce the cost of milk production, which can be achieved by use of less of concentrates and use of more green fodder. d) Density of stocking and farm area devoted to dairy farm : Dairy unit of 3 cows and followers can be maintained on one acre fertile and fully irrigated land. e) Housing facilities : The yard and parlour system requires less capital investment per cow and less labour /cow compared to conventional cow shed. f) Seasonality in milk production : Milk plants offer incentive in the form of or by way of higher price for milk during lean period of summer months so that the farmer may obtain more milk in those months of higher prices. g) Raising replacement stock : Most dairy farmers prefer rearing most of their heifers on their farm to maintain required number because to avoid risk of buying poor quality stock and also it is proved that use of by products and unconventional feed stuff heifer can be raised cheaply. h) Watching milk yield : The dairy milk yield record of an individual cow can be used as a guide for rationing, an indication of status of health on faulty feeding and as a basis culling. i) Check on Feed Quantity & Quality : Depending upon the milk yield and requirements of an animals, farmers must work out the ration for each cow and write it on the chart against the animal. It helps to ensure the supply of right quantities of concentrates, from time to time depending upon the quality and quantity of roughage. j) Labour Utilization : Cost of labour is second to cost of feed in the annual cost of keeping of a cow. Loose housing system saves
labour because cows come to milking parlour instead of man going to cow. Manure loader can be used in the loafing area. It is also suggested that labour requirement by following yard and parlour system is less comr•- -ed to cow shed system
Viability for small size farms : For a family(2) members having 2-5 acres of land for crop production the economically size of dairy farm is 25 animals, depending upon their interest, capability, availability of fodder and marketing facilities. These two family members can work for 2-5 animals without engaging any extra labour and also without affecting the routine farm operations. The dairy farming will act as side employment to the main agriculture work. These small farms will be more economical than larger farms due to : a) No dependence on external labour to work. b) Agricultural by products I wastes can be utilized to produce more profitable milk item. c) It helps to increase the fertility of agricultural lands in the way of manure. d) It gives more income which is daily cash crop to the farmer without waiting for a season to get money. e) More supervision on the individual animals as animals are less and also the owner will have more enthusiasm and love with animals. f) No problem with marketing of milk, as the quantity.is not bulk. Viability for large farms : The farms having more than 25 animals comes under large/commercial farms and 5-25 animals will come under medium farms. The economic viability of large farms depends on . a) Effective Management/ supervision on materials and animals. b) Individual animal feed requirements calculation and feeding. c) Effective labour use and management. d) Production of green fodder required. e) Preparation of nutritive concentrate mixture.
f) Effective breeding management. g) Effective health control measures. h) Effective marketing of milk and milk products. I) Culling and replacement of animals in the farm.
When comparative to small farms, survivability of large farms will be difficult as over head charges will be more in all aspects, in addition to lack of individual responsibility and care on the animals. 13 ECONOMIC PRINCIPLES INVOLVED TO ENHANCE BENEFITS IN DAIRYING: The various factors that can influence the dairy farms profitability can be enlisted and linked as given below. Gross profitability / acre. Gross profitability / cow Milk produced / cow Milk price Lactation Quantity of yield breed milk -Quantity Of Feeding produce Advertise Management ment Govt. Calving index policies Decrease incidence Replacement cost Variable cost -Replace cow castLabour Other - cost c of cost ost new Feed cost cow -cost Fodder of concentrate Calve s House Purchases
By detailed study of the above factors that influence profitability of a dai farm, the following principles can be drawn to maximize profits.
1. Selection of good animals : A good lactating breed and also good animal is that breed will yield more milk production. 2. Balanced feeding : Feeding of animals with standard DCP al TDN content of required quantity will increase / maintain the m production.
3. Green fodder feeding : Feeding of adlibitum green fodder v decrease the use of concentrates which ultimately decrease the cost production of milk. 4. Conservation of greens : The green fodder will be excess duriv flush season. It should be converted into silage / hay which preserve tl nutritive value of green fodder and it can be used during summer in plai of green fodder which will reduce the cost of milk production. 5. Formulation of concentrates with unconventional inqredients: Certain unconventional feed ingredients are not used for any purpose which can be conveniently used in concentrates formulation to decrea the cost of concentrate, as the cost of concentrates place an import2 role in the cost of milk production. 6. Uses of agricultural by products : The use of agricultural t products like straws etc will decrease the cost of milk production. 7. Effective utilization of labour : The cost of labour ranks second after feed cost in dairy farming. The effective use of labour depends on - Proper planning of cattle housing unit - Loose housing system saves labour and energy - Proper grouping of buildings. in layout for saving time of labour. - System of tieing is conventional housing system Tail to tail tieing will decrease the labour requirement as ‘it is man time is spend in back of the animal for cleaning, which space in tail to tail’system.
8. Replacement of the herd : After few lactation’s, the animals are culled to remove uneconomical animals, which should be replaced by growing own calves or by purchase. It is scientifically proved that replacement of dairy stock by growing their own calves is more economical and also have the information about the animal. 9. Milk price : The profitability of dairy farming mainly depends upon the sale price of milk. Even a marginal extra price per litre of milk will have higher profitability per year.
10.Advertisement : Advertisement about the quality and benefits of the milk will give more demand and price ever, after deducting the advertisement costs. 11.Conservation in to milk products : During flush season more milk will be produced and also the factories will pay less price. To get maximum profits some milk can be converted into products like cream, ghee, butter, paneer etc., which will also solve the problems of marketing of milk and also gives 30-50% extra profits over the cost of milk. 1 Good -management : Clean environment will 2 practices produce more milk, when compared to uncleanliness in the” sheds. Proper protection of animals against environmental conditions like heat and cold will helps to maintain the production, other wise drastic fall in production is not protected. Maintenance of proper timings of feeding and milking will help in maintaining the optimum production. Maintenance of cattle health by proper vaccination and treatment will definitely helps in production of more milk. 1 ECONOMIC INSTITUTIONS SUPPORTING .4 DAIRY DEVELOPMENT PROGRAMMES. PROGRAMMES. For starting any business, the foremost important resource one should give prime importance is finance. One cannot start any business / industry on their own money. The rural people are poor or middle income people and so they cannot afford to invest large amounts for establishment of any
size of dairy farms. Several institutions are concerned either directly or indirectly in the activities or providing finance to establish dairy farm, milk collection centres, dairy plants etc. They are 1. Indian Dairy Corporation : Earlier it is the financing agency for all the dairy developmental activities i.e. establishing dairy plants, chilling centre, progeny testing farms, formation of dairy cooperatives under Anand pattern. Now there is no- Indian dairy corporation and it is merged with NDDB.
2. National Dairy Development board : Earlier it is only implerfientation agency implementing all the dairy developmental programmes throughout the country. After merging of Indian dairy corporation,’nowit is acting as financial as well as implementation of dairy developmental activities in the country. It provides finance to all the state owned milk cooperative federations, for the establishing and or increasing the capacity of milk processing f dairy products factories; chilling centers, feed factories, establishing progeny testing farms, improving Artificial insemination centers. The NDDB also acts as agent for international business / loan for the development of dairy industry. NDDB will provide finance to the state federations Or cooperative society by taking guarantees from the respective state government. The finance will be different types i.e. with nominal interest, no interest and repayment of one scheme to investment for other scheme. NDDB also involved in the research activities of dairy+ng. Eg : Embryo transfer Technology, cross breeding programme, indigenous dairy processing equipment development. 3. National bank for agriculture and Rural development (NABARD). This is the apex bank for refinancing for all types agricultural operations for the commercial banks. at less interest. Earlier this is a wing in reverse bank as agricultural refinance wing of reserve bank. NABARD will not directly finance to the dairy farms, -dairy factori4s or allied business, but only through commercial banks. For community / social schemes like water shed, small irrigation schemes, tanks rural roads etc., it will finance directly to the state government to provide basic amenities to agriculture and related fields. For community work the interest rate is very low. 4. Commercial Bank : In-our country there are 28 nationalized banks and many private banks who are financing for dairying. These banks will finance for small to large dairy farms, dairy factories, feed mixing plants other dairy based business. The amount of finance will vary from 75-85% of the cost of project depending upon scheme or non scheme projects. For dairy farms one should have their own land and no loan will be given for land. The interest rates charged will be 12-15.5% P.A.
depending upon the amount of loan. 5. Cooperative bank : In each state apex cooperative bank will be there, in each district cooperative bank which will have branches throughout the district in rural areas. Just like commercial banks, cooperative banks will give for all dairying projects for both short term and long term loans,the rules and regulations are almost commercial banks with little less interest rates. 6. Village cooperative societies-For a cluster of villages cooperative
societies will be there, which will give loans for small scale animal husbandry activities. The finance for these societies will be by cooperative banks. The interest rates will be less compared to commercial banks. 7. State Financial Corporation : Each state will have state financial corporation (SFC) which will also finance for dairy projects. The interest rates are almost equal to commercial bank: In our state Andhra h state financial corporation is located at Hyderabad and it is branches in all district head quarters. 8. Dairy Development Cooperative federation and district milk producers cooperative societies: The state dairy development cooperative federation will get some loans from NDDB and other agencies for development of dairying, which will be provided to district unions, who will inform will give loans to milk producers. 7h ey will not give loans directly to the beneficiaries, but they will procure good genetic high milk producing animals and distributed to the beneficiaries. Part of the amount will be subsidy and the rema.ining amount will be treated as loan with less interest rates. 9. District Rural Development agencies : In each districtoneDRDA will be there which will operate most of the centrally and state sponsored schemes.DRDA will assist programmes like a) Draught ‘prone area programmes (DPAP) b) Small farmers development agencies (SFDA) c) Marginal farmer and Agricultural labour development agency d) Integrated rural development programmes. The (IRDP) DRDA will sponsor the above schemes by sanctioning loans by commercial, banks and provide subsides from 25-50% depending upon the classes of people involved in the schemes. 10. B.C and SC corporation : SC and BC corporations will arrange loans for dairy programmes of respective class of people through milker commercial / cooperative banks and provide subsidy of 25-50% .
11. Tribal development: agencies : For the development of tribal areas, the government has established tribal development agencies which will give subsidies and arrange loans through financial institutions. SUMMARY Importance of economics in dairying was explained with , particular reference to rural areas. The economic viability for large and small size dairying units were discussed. Various important economic principles were given with a primary moto to maximize profit. The various financial institutions are listed. Project reports with their viability are given for 2,10,50 and 100 animal dairy farms and also milk processing centres handling 5000 litres, 50000 litres per day. The importance and implications of dairy animal insurance were discussed.
2 MILK PROCUREMENT Surverys for Milk potential area for Surplus (Milk shed area) To assess whether any project or industry would be available in a certain area, a survey of available resources in that particular area is carried out. 4lilk shed are generally denotes a district (or) from which area milk is procured~ and processed in the common plant located in the central part of that particular are The villages in the milk shed area should be prelimiary survey is conducted as different aspects of milk production as detailed given below 1. The existing cattle and buffalo population 2. The production and uti!ization / disposal pattern of milk and milk product. 3. Marketing channels for surplus milk.
4. Returns from the sale of milk realised by the farmers. 5. Agricultural facilities and production patterns. 6 .Basic amenities such as communications links, educational facilities. 6. Other sources of income. 7. Performance of cooperatives etc., other institutions including multipurpose
8. Different communities living in a village and their interrelationship. 9. Other relevant information if any. Once the milk potential areas are located detailed survey is conducted i.e. door to door survey about the milk production, surplus milk with the family, whether they are interested to sell the milk to the society or not, infrastructure needed for enhancement of milk production etc. After detailed survey possible milk roots are identified so as to cover all the milk potential areas. In selecting the roots the prime idea should be considered is that the vehicle from the starting point loading the milk from different collection centres, reaches milk chilling centers .
2.2 SYSTEMS OF MILK PROCUREMENT : The success of any dairy project depends on a well planned ani organised system of milk procurement. In the case where procureme system is not well established dairy plants remains under utilized on th other hand, if systems is well planned the following advantages can b obtained. - An assured market round the year to the milk producers. - Full capacity utilization of the dairy plant - Increase in the milk production through inputs at reasonable cost. - Planning and scheduling of milk procurement following two aspects. - Policy decisions at top management level - Scheduling the actions for smooth running 2.2.1 POLICY DECISIONS AT TOP MANAGEMENT LEVEL Before starting milk procurement the following decision should be taken. 1) Price to be paid for raw milk in different seasons 2) The system and frequency of payment for milk - Daily Weekly, fortnight or Monthly. 3) Reserve funds required to carry milk procurement to avo hard ships 4) Material, equipment, chemicals and stationary required f collection centres. 5) Transportation of milk - hiring of transporting vehicles better rather than owning the vehicle. 6) Technical inputs i.e. Veterinary aids, A.I, feeds and fodder to be given in advance to the producers to get the advantage of favour. Man power required and training engazed in milk porcurement. needed
to people
2.2.2
Scheduling the actions :
Once the above policy dessions are taken, the milk procurement activities are planned. After preliminary and detailed survey of villages, village society’s are started. Society staff is recruited and necessary training in the fields related to milk collection, testing, maintenance of records, bank transactions bye-laws etc is given. Transport time table for milk root is prepared and the all society’s are informed about the time of loading of milk cans and (or) unloading of empty cans. All the members of the society will be informed about the time of milk collection at the collection centers. Depending upon the quantity of milk collected indent for extra cans or information about the quantity of milk to be procured in future should be reported promptly to the concentrated authorities by the society organisers. 2.3 SYSMTES OF MILK PRICING : The pricing of any commodity is always based on its cost price and the price paid by the consumer. Working out the cost price of milk under field conditions is a complex subject any pricing system followed should be 1) Remunerative to the producers 2) Competitive to the local market prices. 3) Discourage adulteration and promote quality consciousness: 4) Based on milk constituents i.e. Fats & SNF 2.3.1 METHODS OF MILK PRICING: The old systems followed in India are volume basis and weight basis. The volume basis will encourage the adulteration of milk with water and also quantity of milk will be affected on, with formation of foam. The weight system will not be effected by foam but it also encourages adulteration of milk. The various other pricing systems are 1. Pricing on pro-rata fat bas
In this system the price of milk is fixed proportional to the fat content of milk. This system will assign practically zero value for S.N.F content.
The advantage of this method are easy to calculate the milk price easy to adopt as it required only fat estimation, farmer will easily under stand the system and it can be adopted to any type of milk. The disadvantages are : It encourages adultration of milk with water, as there is not check on S.N.F. This system will encourage buffalo milk and donot provide remunerative price for cow milk. PRICING ON TWO AXIS BASIS: This method is used in pricing cow as well as buffalo milk where both fat and SNF contents are taken into accounts. As the system is based on both fat and SNF, it is called as “Two access pricing”. The prices of fat and SNF are fixed depending- upon the market price of GHEE and skim milk powder. Normally the price of fat will be declared by the union for different seasons and the price of SNF will be 2/3 price of the fat. The price is calculated using the following formulae. Ex : Price of 100 kgs milk = Kg fat rate x Fat percentage + kg SNF rate x SNF % Ex : If the price of kg Fat is 100 then the price of 9% SNF be 100 x 2/3 = Rs. 66.60 Then the cost of 100 kg of milk testing 6% fat an 9% SNF = (100 x 6) + (66.6 x 9) =600+599 = 1199 i.e Rs. 11.99 per kg. The advantages are
No discrimination against cow or buffalo milk as cow milk is reasonably priced due to consideration of SNF contents which is well comparable to that of buffalo milk.l PRICING ON EQUIVALENT FAT UNIT BASIS In this method the SNF unites are converted into equivalent fat units inproportion to the relative market prices of fat and SNF. The SNF is value at 2/3 units of fat. For example : The buffalo milk testing 6% fat and 9 % SNF The total number of Fat units = 6 + 9 x 2 / 3. =6+6= 12 If the fat price is Rs. 100/- than the cost of 100 1 kg of milk = 00 x 12 = 1200 Or Rs. 12 per kg of milk. This method will leave the same advantage of two access pricing system. 2.4 PRINCIPLES INVOLVED IN PRICING OF MILK PRODUCTS While finalizing the price for milk products there are six steps to be followed. 1. Selecting the pricing objectives : Whether the pricing objectives should be or profit oriented service oriented. Normally government agencies, voluntary organizations or cooperative bodies objective will be service oriented with minimum profit, where as private people will aim on maximum profit. For any producer aiming at reasonable profit will have many advantages to have in market for longer period with maximum percentage of market share.
2. Determining the demand : By making market surveys the demand for individual product can be assessed. The heavy demand product should be prepared. The price of heavy demand product will be high. 3. Estimating the cost : The cost of the product at which it can be marketted can be calculated as follows a) Cost of raw materials used for the preparation of the product i.e. milk, sugar, spicies, salt etc., b) Cost of processing the product: Normally in dairy industry the c) Processing costs will be around 20% of cost of raw Packing cost : d) Depreciation on the cost of raw material. e) Distribution cost (i.e. transportation) f) Distribution margin (whole salers margin) g) Retailers margin. The total of the above gives actual price for the product. For that add profit margin which may be 10-15% depending upon the demand. 4.. Analysis of competitors price and offer : The price of product should be competiative and attractive compared to competitors product. Some times extra quantity of product is offered with the same prices (Add 100 gms with 500 gms of product) by competitors. That shoulJ also be taken into account. 5. i.e. Selecting a price method Market +
Market - price methods. Market 0
6. Selecting the final price : After deciding the above factors the final price of the products may be arrived.
For any product price fixation.other factors will also influence like. 1) Season : During summer, demand for flavoured milk, butter milk, Ice cream, kulfi will be enoromosly increased. So the price of fast moving products in summer can be increased. 2) Area of marketing : If the income of people is high, their purchase will be more. 25 PLANNING FOR MILK COLLECTION AND TRANSPORTATION ROUTES: For efficient collection of milk, certain problems arising at the collection centre should be solved. The various problems faced at the collection centres are 1. Producers having vested interest - some persons will try to influence the staff and get undesirable things done to save their personal interest. This should not occur. 2. Some persons will supply adulterated or substandard milk. This should be discouraged. 3. Strict timings for milk procurement - Some producers will supply the milk very late, the society will not receive it resulting a direct conflict between the producers and staff. This can be sorted by explaining the farmers about the difficulties. 4. Some producers will think that sample of milk drawn is an extra quantity of milk which is not paid for. This can be explained to the farmer that all the samples are polled and sold which is distributed to all members as bonus. 5. Some farmers due to many reasons will supply evening milk in the next morning and morning milk in the evening which causes
curdling of milk and loss to the society. Such producers should be carefully checked and explain about the quality of milk causing problems in processing of milk. 6. Some staff members will not following the timings for milk collection, so
that the procedures will have to wait for hours together and loose their interest on society. Maintenance of the time by the staff is essential for improving the milk procurement. Transportation of milk to the processing centre or chilling centre will be undertaken by the union. Some societies will not have proper roots, it’s the responsible of the society to transport the milk from the collection centre to the near by truck pick-up point. In some societies there will be transportation root through that village, but the collection centre will be interior, in such case also it is the responsibility of the society. At union level different roots are planned to get the milk from different places to the processing plant. Each root will be planned in such a manner that it will go through all the society villages or atleast nearer to the societies. The roots are so planned that if any damage to the road or traffic an alternative road is available to the processing centre.(The’, root map should be supplied in advance to all the societies so that they can plan for amnicable pick-up points. The length of the road should be such that from the ~starting point of the milk collection, it reaches the processing or chilling centre within reasonable time so that the milk may not get spoiled and fit for processing) The transport vehicles will deliver the empty cans for next collection and lift the can with milk. In case of any break to the transporting vehicles an alternative vehicle or atleast the other route vehicle may be diverted. 26 MEASURES TO ENHANCE DURING LEAN SEASON. MILK COLLECTION
During rainy and winter season, there will be, lot of green, roughages which will help in enormous milk production, where ,3s in summer the’ most of the, fields’including grazing lands become drylnagreen fodder will be available adversely affecting the milk production. Moreover no farmer will plan to calve the animals just before or during, summer, which will adversely affect the lactation yield. Most of the cows will be in dry or late *lactation or late lactation with pregnancy. Recent studies indioate that the milk production during summer season will be decreased, b4A% of the milk production during rainy and winter seasons. The summer
season in in which low production of milk is called lean season and flush season when
high milk production exists. As the output of milk production is decreased, the demand will be as such for the milk, there will be lot of competion for the collection of milk. The competitors of milk processors will start their own strategies to get maximum share of milk collection by any dairy in lean season. The following are the some of such steps. 1. The milk production during flush season will be surplus, the collection centres are unable to collect full quantity due to varied reason. The procesers should regularly collect full quantities of milk from those producers who will be faithful and supply full. quantity of milk to him during lean season. The producers are also remember the collection centers, who has helped them during flush season. Some processors even declare milk holidays once in a week, or so during flush season, which will cause economical loss to the producers. If farmers are tackled well during flush season, they will inturn help by giving whole quantity of milk during lean season. 2. Fixing of high price or giving bonus or extra payments for the milk supplied during lean season will also improve the milk collection. As the level of production drops during summer and also most of the dairy animals in dry / pregnant conditions, the cost of the milk production will generally high during summer season. To compensate this high cost of milk production, the processers should enhance the purchase price of milk. 3. Advance payment / prompt and regular payments for the purchased milk by the collection centers will definitely improve the milk collection during summer. 4. Supply of inputs like concentrate feeds, fodder seeds, fertilizers A.I facilities to the producers in advance and adjusting the cost for the price of milk collected. 5. Satisfying the producers by explaining about the cunning nature of competitors who will give high price of milk during lean
season. The collection center people should explain to the producers, that the competitors would not collect the milk during flush season. 6. Especially during festival occasion, children school reopening, marriages time farmer need of money and they may come for
center people, by supplying milk-during lean season, if they give any finance to them. Any processors should make advance payments during the above occasions to attract the producers. 7. Training programmes should be conducted on management of animals during summer season without affecting the milk production. 8. The collection centre persons should respect customs, of the local people and they should participate in a various social and cultural activities of the village so that the farmers think that these are one among them and definitely they sell milk to them only. 9. Out of their profits, the processors / milk collection centre persons should spent certain portion for social activities in the village, i.e. laying or repairing of roads, construction of school buildings. Maintenance of parks, donations to temples, or donation to any religious / other functions will have effect on milk collection. 10.Milk competitions, bull competitions, calves and other groups of animal competition regularly is the village will also increase the faith in the villagers. In addition to the above encouragement points, the processors / collection centre people should not do the following things. a) cheating the producers by taking extra quantity by manipulating the weights and measures. b) Showing less readings of fat and SNF levels in the milk. c) Wrong calculation in the price fixation of milk. d) Utilization of money for personal use and delaying the payments to the producers. e) Not paying the bonus after the year. f) Not bothering about the collection of milk during flush season. g) Not attending to the problems of animals.
SUMMARY Surveys for milk production potential areas for surplus milk in a particular milk shed area was discussed in detail to enhance milk collection. Different milk procurement systems with advantages and disadvantages were covered. Pricing policy for milk and milk products were explained so that it is useful to select effective pricing policy under different conditions. Planning for milk. collection and transportation routes was covered extensively. Collection of milk during lean season is very difficult, so planning for milk collection during lean season was highly projected. DAIRY ECONOMICS, EXTENSION AND ENTREPRENEURSHIP 3 DAIRY DEVELOPMENT PROGRAMMES 31 VARIOIUS DAIRY DEVELOPMENT PROGRAMMES AVAILABLE Milk has emerged as the second largest agricultural commodity next to rice production (1988-89). India ranks world first in milk production in 1996. India’s milk production is 70 million tones. Cross breeding of indigenous cows with exotic bulls/semen has encouraged for augmenting milk production. Government Project/programme. 1. 2. 3. 4. 5. 6. 7. All India key Village Scheme - 1951 I ntensive Cattle Development Projects (ICDPs) - 1964 - 65. Operation Flood phase I - 1970. IDA Assisted Dairy projects. Operation Flood Phase II - 1979 Operation Flood Phase III - 1985. Dairy Technology Mission - 1987.
1. -Key Village Scheme (KVS)
It was taken up in August, 1952. Under the scheme a “key village block” consists of one AI centre along with four key village units attached to it.Each key village unit is a compact area_ of contiguous village having a population of about 500 cows and / or she buffaloes fit for breeding and milk supply. Selection of pedigree bulls, proper administration and technical organisation consisting of one VAS, one milk recorder and three stockmen had been provided for every centre.) During the third five year plan the KVS was considered to be the main programme for IDCP. The main activities are : 1. To intensify the construction programme in the key village area
Extending the PTS to the Ongole breed in Pradesh 2. Andhra and Kankrej breed in Gujarath. (PTS - Primary Testing Scheme) 3. Establishing bull-rearing farms 4. Development of grazing areas by setting up two fodder banks and also a grass land and Research Institute. Intensive Cattle Development Projects (ICDP’s) During the third and fourth five year plan it gained its significance by its activities such as i) Formation of NDDB ii) Establishing progeny testing farms -IV plan iii) Establishing frozen semen stations - VI plan iv) Institute for Buffalo Research - VI plan v) Embryo transfer technology-. VII plan. Progress Review By the end of 1965, there was an awareness about the success and failures of the Government’s own programme. The review of above revealed the following. Progress Made Under 5 - Year plans. - Dairying acquired national-level recognition. - Concept of planned approach was introduced at all the levels. - Organized marketing was adopted by private, public and cooperative sectors. - The multi-national introduced new milk products. - To overcome the economic barriers, toned milk, with less fat and at comparatively cheaper price, was formulated. - India started developing its own cadre of trained technical personnel:
- The concept of intensive cattle development was introduced. Unfortunate Trends Besides above contributions, some negative effects were also observed as listed below. - modernization and planning of dairy industry was consumer oriented. - the package of inputs required for enhancing milk production was , left in the hands of State Animal Husbandry Department without Lilly correlation with milk industry. Those inputs hardly reached the producer. This made dairy fanning an unattractive preposition for rural milk ; producers as they were to bear entire burden of maintaining the milch animal. - the private city dwellers/duhias exploited the consumer due to increased demand as a result of industrial development. - Cattle colonies, housing large number of good cattle and buffaloes ‘ brought from the home tracts got established to meet cities demands. ‘ Maintenance of these animals in big cities was a problem, especially in dry periods. The best animals thus started finding way to slaughter ‘ houses, once these were found uneconomical. Old stocks were replaced : by the new ones from villages. This anti-dairy cycle perpetuated. 3. Operation Flood Operation flood - the Indian white revolution was launched to over come ! the above mentioned unhealthy trends. It is designed to raise milk ~ producer’s income by organizing them into cooperatives and eliminating f middlemen; to increase milk production in rural areas creating a flood of milk to meet demand on a regular year-round basis; and to create a. self-sufficient dairy industry in India. Operation Flood I was launched in 1970, following an agreement with the United Nations World Food programme. The European Economic ~ Community was also closely associated with Operation Flood I provided much of the food aid to the World Food Programme.
To launch Operation Flood I and finance projects undertaken within its
frarnework, the Delhi Government set up the Indian Dairy Corporation ! (IDC) in 1970. The actual implementation of the various projects is left to . the village cooperative societies and milk unions which own dairies at , district level. Objectives of Operation Flood I a. To increase the capacity of milk processing facilities. b. To change urban markets from traditional milk supplies to modern dairy milk supplies. c. To make provision for the resettlement of city based cattle in rural areas. . d. To develop long distance milk transport and storage facilities. e. To develop Anand pattern of milk procurement system. f To improve dairy farming standards. Operation Flood II Operation flood II was started in April 1981 and ended in March 1985 with the expressed intention of creating a viable dairy industry to meet India’s needs in milk and milk products. India’s White Revolution has not only received support from the European Community and the World bank, but also from a number of Western Governments, the United Nations food and Agriculture Organisation (F.A.O), the United Nations Children’s Fund (UNICEF) and European NGOs such as the British Relief Agency OXFAM. It has also been regularly evaluated over the years. 4. IDA Assisted Dairy Projects The world bank’s assistance to dairy development started with the coverage of Karnataka, Madhya pradesh and Rajasthan. The project comprises of: i. establishment of about 7200 DCS and 12 milk producer’s unions.
ii. Important and multiplication of pure bred exotic breeding stock and an associated A.I. programme of crossbreeding native cattle with high producing exotic breeds. Provisions of extension programme to encourage production of fodder, mixed farming and improved animal husbandry practice. iii. Construction of 12 dairy plants and cattle feed mills. iv. Establishment of one regional diagnostic laboratory and a plant for production of biological veterinary vaccines. v. Provisions of a training centre for each union. Objectives of Operation Flood II a) To cover 10 million milk producer families in rural areas. b) To create National Milk Herd of 14 million cross-bred graded buffaloes_ c) To strengthen national Milk and by linking milk supply and demand centres. cows and d) To construct a base structure for National Dairy Industry. e) To increase percapita consumption of milk products at 144 gms / day Operation Flood III Operation Flood III was launched in April 1985 to run until March 1990. The results achieved in Operation Flood 11 justified the confidence faced by the Government in farmer’s own organisations as instruments of dairy development and led to the initiation of Operation Flood III which was implemented, covering most of the Anand pattern milk sheds of the country. Objectives of Operation Flood III a) To increase the coverage of milk producers.
b) To establish an additional 15,500 village Milk co-operative societies in 173 Anand pattern milk sheds as constituents of the
c) To increase milch animals in co-operative ambit. d) To strengthen National milk Grid. e) To better utilization of technical inputs in cooperation with state governments. f) To develop dairy co-operatives own system of improving health, environmental sanitation, nutrition etc., National Dairy Development Board (NDDB) To replicate the Anand pattern throughout the country National Dairy Development Board (NDDB) was established in 1965. The dairy development programmes are being implemented through a network of milk co-operatives organised on the model existing in Gujrat state namely ANAND pattern dairy cooperatives. The three tier structure of the dairy development programme are: 1. Village level primary milk co-operative producers societies. 2. District level milk producers co-operative society unions. 3. rtate level federation of district co-operative milk producers unions.’ Objectives The main objectives are to assure remunerative price for the milk produced by the milk producers through a stable, steady and well organised market support, and distribution of milk and milk products at reasonable prices to consumers.
6. Milk and Milk Products Order (MMPO) This programme has been issued. by the Government of India during 1992 under the liberalization polic~i6s. It empowers that those dairy plan exceeding its utilization of 10,000 liters per day must register with Government for its modernization, product manufacturing and to collect milk in specified area.
32.WHITE REVOLUTION - AIMS - IMPACT ON ECONOMY OF RURAL PEOPLE Just like ‘green revolution’ which is intended over all increase in agricultural produce., white revolution in the increase of milk production tremendously so that sufficient quantity of milk is available for all a1 affordable price. To tune up the milk production the infra structure required are 1. High yielding genetic potential dairy animalse in India most of the dairy cattle are native breeds, in which majority are poor yielders of milk. It is not economical to raise the animals with 1-2 litres of milk production The milk potential of animals can be improved by a) Introduction of Exotic cattle : Exotic breeds like Jersey, HolsteinFriesian, Browpswiss etc., are excellent milk producers. These breeds can be introduced to some extent through out the country to increase the milk production. b) Cross breeding programme : Purchase of exotic breeds are costly and mass introduction is not possible. The semen of exotic breeds can be utilized on native breeds to produce superior breeds which can be utilized on native breeds to produce superior offsprings. With little investment the future herd will be cross breds having good m ilk production capactiy. Massive cross breeding programme should be undertaken. c) Selective rearing of native breeds : Under native breeds there are some breeds which are yielding optimum milk production. These breeds can be maintained by maintaining pure breeding, programme. d) Upgrading native buffaloes : Murrah buffalo breed is the good breed under buffalo which can be utilized for upgrading native buffaloes. Slowly the future stock will become graded murrah buffaloes.
2 Animal Husbandry activities : Veterinary doctor should be there in or around- at least within a reasonable distance who will take care of the animals in the following activities.
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doc_714611475.rtf
dairy
PROJECT REPORT ON
“Entrepreneurship in Dairy product”
In Partial fulfillment of the requirements For the degree of
BACHELOR OF BUSINESS ADMINISTRATION
Submitted to: Submitted by: Mr. Parvinder Singh Amit Pandey (94552451243 ) Rajneesh swami (9455245130
1)
GUJRANWALA GURU NANAK INSTITUTE OF MANAGEMENT & TECHNOLOGY CIVIL LINES LUDHIANA
PREFACE An individual can not do project on this scale. I take this opportunity to express my acknowledgement and deep sense of gratitude to individuals for rendering valuable assistance and assistance and gratitude to me .There inputs have played a vital role in success of this project &formal piece of acknowledgement may not be sufficient to express the felling of gratitude towards people who have helped me in successfully completing my project. I highly thankful to Mr. Parvinder Singh for guidance. I firmly belived that there is always a scope of improvement. I welcome any suggestion for further enriching the quality of this report.
Amit Kumar Pandey
DECLARATION I hereby declare that the project on“Entrepreneurship in Dairy product”has been submitted by me for the partial fulfillment for the award of the degree of Bachelors of Business Administration. This report has been based on my study under the guidance of Mr. Parvinder Singh. I undertake responsibility for the contents of this report. - Amit KumarPandey
DAIRY FARMING
INTRODUCTION
India derives nearly 33% of the gross Domestic population from agriculture and has 66% of economically active population,engaged in agriculture. The share of livestock product is estimated at 21% of total agriculture sector. The fact that dairing could play a more constructive role in promoting rural welfare and reducing poverty is increasly being recognised . Milk production alone involves more than 70 million producers, each raising one or two cows/ buffaloes primarily for milk production . The domesticated water buffalo is one of the gentlest of all farm animals ,hence it can be breeded easily. The dairy sector offers a good opportunity to entrepreneurs in India. India is a land of opportunity for those who are looking for new and expanding markets.Growth propsects in the dairy sector are very bright.
MARKET Dairy development in India has been acknowledged the world over as one of modern India"s most sucessful development programme. India is the second largest milk producing country with anticipated production of about 78 million tons during 1999-2000. The production of milk products stoood at 3.07 lakh tonnes in 1999-2000. Production ofmilk powder including infant milk food has risen to 2.25 lakh tons in 1999-2000, whereas that of malted food is at 65000 tons. Off late market for milk products is showing a steady increase.
11 MANUFACTURING PROCESS Modern and well established scientific principles ,practices and skills should be used to
obtain maximum economic benefits from dairy farming. Some of the major norms and recomondationtions are: Care full selection of animals, feeding of animals,milking of animals
Why do Dairy Farming ? 1.1 Dairying is an important source of subsidiary income to small/marginal farmers and agricultural labourers. The manure from animals provides a good source of organic matter for improving soil fertility and crop yields. The gober gas from the dung is used as fuel for domestic purposes as also for running engines for drawing water from well. The surplus fodder and agricultural by-products are gainfully utilised for feeding the animals. Almost all draught power for farm operations and transportation is supplied by bullocks. Since agriculture is mostly seasonal, there is a possibility of finding employment throughout the year for many persons through dairy farming. Thus, dairy also provides employment throughout the year. The main beneficiaries of dairy programmes are small/marginal farmers and landless labourers. A farmer can earn a gross surplus of about Rs. 12,000 per year from a unit consisting of 2 milking buffaloes. The capital investment required for purchase of 2 buffaloes is Rs. 18,223/-. Even after paying a sum of Rs. 4294/- per annum towards repayment of the loan and interest the farmer can earn a net surplus of Rs. 6000 - 9000/- approximately per year. (For details see model scheme enclosed). Even more profits can be earned depending upon the breed of animal, managerial skills and marketing potential. 1.2 According to World Bank estimates about 75 per cent of India's 940 million people are in 5.87 million villages, cultivating over 145 million hectares of cropland. Average farm size is about 1.66 hectares. Among 70 million rural households, 42 per cent operate upto 2 hectares and 37 per cent are landless households. These landless and small farmers have in their possession 53 per cent of the animals and produce 51 per cent of the milk. Thus, small/marginal farmers and land less agricultural labourers play a very important role in milk production of the country. Dairy farming can also be taken up as a main occupation around big urban centres where the demand for milk is high. 2. Scope for Dairy Farming and its National Importance. 2.1 The total milk production in the country for the year 2001-02 was estimated at 84.6 million metric tonnes. At this production, the per capita availability was to be 226 grams per day against the minimum requirement of 250 grams per day as recommended by ICMR. Thus, there is a tremendous scope/potential for increasing the milk production. The population of breeding cows and buffaloes in milk over 3 years of age was 62.6 million and 42.4 million, respectively (1992 census) 2.2 Central and State Governments are giving considerable financial assistance for creating infrastructure facilities for milk production. The nineth plan outlay on Animal Husbandry and Dairying was Rs. 2345 crores.
3. Financial Assistance Available from Banks/NABARD for Dairy Farming. 3.1 NABARD is an apex institution for all matters relating to policy, planning and operation in the field of agricultural credit. It serves as an apex refinancing agency for the institutions providing investment and production credit. It promotes development through formulation and appraisal of projects through a well organised Technical Services Department at the Head Office and Technical Cells at each of the Regional Offices. 3.2 Loan from banks with refinance facility from NABARD is available for starting dairy farming. For obtaining bank loan, the farmers should apply to the nearest branch of a commercial or co-operative Bank in their area in the prescribed application form which is available in the branches of financing banks. The Technical Officer attached to or the Manager of the bank can help/give guidance to the farmers in preparing the project report to obtain bank loan. 3.3 For dairy schemes with very large outlays, detailed reports will have to be prepared. The items of finance would include capital asset items such as purchase of milch animals, construction of sheds, purchase of equipments etc. The feeding cost during the initial period of one/two months is capitalised and given as term loan. Facilities such as cost of land development, fencing, digging of well, commissioning of diesel engine/pumpset, electricity connections, essential servants' quarters, godown, transport vehicle, milk processing facilities etc. can be considered for loan. Cost of land is not considered for loan. However, if land is purchased for setting up a dairy farm, its cost can be treated as party's margin upto 10% of the total cost of project. 4. Scheme Formulation for bank loan. 4.1 A Scheme can be prepared by a beneficiary after consulting local technical persons of State animal husbandry department, DRDA, SLPP etc., dairy co-operative society/union/federation/commercial dairy farmers. If possible, the beneficiaries should also visit progressive dairy farmers and government/military/agricultural university dairy farm in the vicinity and discuss the profitability of dairy farming. A good practical training and experience in dairy farming will be highly desirable. The dairy co-operative societies established in the villages as a result of efforts by the Dairy Development Department of State Government and National Dairy Development Board would provide all supporting facilities particularly marketing of fluid milk. Nearness of dairy farm to such a society, veterinary aid centre, artificial insemination centre should be ensured. There is a good demand for milk, if the dairy farm is located near urban centre. 4.2 The scheme should include information on land, livestock markets, availability of water, feeds, fodders, veterinary aid, breeding facilities, marketing aspects, training facilities, experience of the farmer and the type of assistance available from State
Government, dairy society/union/federation. 4.3 The scheme should also include information on the number of and types of animals to be purchased, their breeds, production performance, cost and other relevant input and output costs with their description. Based on this, the total cost of the project, margin money to be provided by the beneficiary, requirement of bank loan, estimated annual expenditure, income, profit and loss statement, repayment period, etc. can be worked out and shown in the Project report. A format developed for formulation of dairy development schemes is given as Annexure I. 5. Scrutiny of Schemes by banks. The scheme so formulated should be submitted to the nearest branch of bank. The bank's officers can assist in preparation of the scheme for filling in the prescribed application form. The bank will then examine the scheme for its technical feasibility and economic viability. (A) Technical Feasibility - this would briefly include 1. 2. Nearness of the selected area to veterinary, breeding and milk collection centre and the financing bank's branch. Availability of good quality animals in nearby livestock market. The distribution of important breeds of cattle and buffaloes are given in Annexure II. The reproductive and productive performance of cattle and buffalo breeds is given in AnnexureIII. Availability of training facilities. Availability of good grazing ground/lands. Green/dry fodder, concentrate feed, medicines etc.
3. 4. 5.
6. Availability of veterinary aid/breeding centres and milk marketing facilities near the scheme area.
(B) Economic Viability - this would briefly include 1. 2. 3. 4. 5. 6. Unit Cost - The average unit cost of dairy animals for some of the States is given in Annexure IV. Input cost for feeds and fodders, veterinary aid, breeding of animals, insurance, labour and other overheads. Output costs i.e. sale price of milk, manure, gunny bags, male/female calves, other miscellaneous items etc. Income-expenditure statement and annual gross surplus. Cash flow analysis. Repayment schedule (i.e. repayment of principal loan amount and interest).
Other documents such as loan application forms, security aspects, margin money
requirements etc. are also examined. A field visit to the scheme area is undertaken for conducting a techno-economic feasibility study for appraisal of the scheme. Model economics for a two animal unit and mini dairy unit with ten buffaloes are given in Annexure V and VI. 6. Sanction of Bank Loan and its Disbursement. After ensuring technical feasibility and economic viability, the scheme is sanctioned by the bank. The loan is disbursed in kind in 2 to 3 stages against creation of specific assets such as construction of sheds, purchase of equipments and machinery, purchase of animals and recurring cost on purchase of feeds/fodders for the initial period of one/two months. The end use of the fund is verified and constant follow-up is done by the bank. 7. Lending terms - General 7.1 Unit Cost Each Regional Office (RO) of NABARD has constituted a State Level Unit Cost Committee under the Chairmanship of RO-in-charges and with the members from developmental agencies, commercial banks and cooperative banks to review the unit cost of various investments once in six months. The same is circulated among the banks for their guidance. These costs are only indicative in nature and banks are free to finance any amount depending upon the availability of assets.
Pandey milk Plant
PRODUCTION CAPACITY PER ANNUM Capacity Selling Price PROJECT COST/CAPITAL INVESTMENT
S.No Description Amount Rs.
24000 Ltrs Month Rs. 32Per ltr
Pe r
2
Fixed Capital
1260000
3
Working Capital for Total Project Cost
2
Month
639000 1899000
FINANCIAL ASPECTS A. FIXED CAPITAL i. Land and Buildings ii. Machinery and Equipment
S.No Description Qty. Rate Amount Rs.
Rented
40000 per month
1 2
Buffellows Shed
Nos
30 1
20000 200000
600000 200000
3
4 5
Msslenious exp.(wire ,other)
Lum
1
2
50000 20 0000
10000
50000 400000 10000 1260000
Four wheeler Electric wiring Total
B. WORKING CAPITAL i. Salaries & Wages (per month)
S.No Description Nos. Sal/mon. Amount Rs.
1 2 3
Supervisor/Entrepreneur Driver Labour Total
1 2
10000 10000
5000 10000
10000 60000 80000
06
ii. Raw Material (per month)
S.No Description Unit Qty. Rate Amount Rs.
1
Feed Total
Kgs
20kg*30* 7Rs*
30days
126000
126000Rs.
iii. Utilities (per month)
S.No Description Unit Amount Rs.
1 2
Power Water Total
35000 2500 37500
iv. Other Expenses (per month)
S.No Description Amount Rs.
1 2
Driver expense Transportation Expenses
4000
30000 2000
36000
Other expense (moter reparing etc)
Total
Total Working Capital (per month)
S.No Description Amount Rs.
1 2 3
Rent Salaries and Wages Raw Material
40000 80000 126000
4 5
Utilities Other Expenses
37500 36000
Total
319500
PROFIT AND LOSS ACCOUNT Expense Rent Raw material Utilities Other expense Total profit Rs. 40000 80000 126000 313500 3834000(for1y r) 756000 3726000 Income Selling cost Rs. 7560000
1- DAIRY ECONOMICS 12 SCOPE AND IMPORTANCE OF PRINCIPLES OF ECONOMICS IN DAIRYING Farm production economics is concerned with the choice of production pattern and resource uses in order to maximize the objective function of the farm operator, their families, the society or the nation, within a frame work of limited resources. The laws of production economics explain the conditions under which the quantities can be maximized
(profit, output, national income) or minimized (cost, use of physical input). The main objectives of production economics are. 1. To determine and define the conditions, which provide for optimum use of resources. 2. To determine the extent to which the existing use of resources deviates from the optimum use. 3. To analyze the factors or forces which are responsible for the existing production patterns and resources use. 4. To delineate means and methods for changing the existing use of resources to the optimum level. In India the dairy farming is still existing as a subsidiary to the agriculture, which gives additional income to agricultural labours, small and middle farmers. In India growing atleast one or two dairy animals by farmers have many advantages of economic importanc 1. Dairy animals fits well in any diversified farming programmes i.e. it can be clubbed with agriculture, fisheries, horticulture, etc., which helps to give additional source of income.
In agriculture different types of roughages as paddy straw, Jawar straw, Wheat straw etc., are bulky fetching less amount and also not possible convertors of roughage to produce milk. 3. The prices of most of the agricultural produce show great fluctuation where as milk will not have such fluctuations in price. 4. The income from agriculture is seasonal and the farmer receives income on harvesting crop only) where as dairy anirrials gives money daily and it is distributed throughout the year. The economics can be calculated daily also. 5. Normally farmers will not take milk by spending money. But the family members will consume certain amount of milk invariably, which improves the family diet in terms of nutrition. 6. Legumes and grasses are grown on farm providing fodder to the animals. These crops are soil conserving and soil building crops. The manure produced will be utilized as natural fertilizers for growing,agricultural crops economically. DAIRY ECONOMICS, EXTENSION AND ENTREPRENEURSHIP 7. The male animals are utilized for draft purpose: In India still most . of the agricultural operations are carried by use of bullocks power: In India the size of the land holdings are small and it is becoming still smaller portions by divisions and they cannot afford for mechanical farm operations. 8. Even after death, the carcasses are utilized for meat meal production, bone meal production, blood meal
production etc., skin is used as hides. In dairy farming the cost feed accounts for roughly 6065% of the cost and so the economic milk production mainly depends upon the economic feed formulations. There are other factors also which contribute to the economics of dairy farming. The economic factors in a successful dairying one. 1. The effective breeding policy: Selection of high yielding animals for dairy farming. For breeding high record site or good sites semen for. All should be
utilized. Unless the animal have high productive nature, even heavy feeding of balanced nutrition cannot improve the milk production much. 2. Economic feeding practices are important which can alone decrease the cost of production milk appreciably. Feeding of adlibitum of green forages will decrease the feed cost and ultimate less cost of milk production. Feeding of certain amount of leguminous fodders still improve the milk production. Feeding of certain ‘amount of dry roughages will improve the butter fat content, which again adds to the high payment for the milk. Among the concentrate feed ingredients, most of the traditional ingredients are competed by human beings, so the cost is increasing resulting high feed cost making dairy farming uneconomical. Use.of unconventional feeds which are available at throw away price or less price will decrease the feed cost resulting low cost of milk production. 3. The managemental conditions are cardinal in maintaining the optimum level of production and also to keep up the animal health. III health reduces the milk production drastically and, it take more time to reach original production. 4. The optimum use of land, manure resources to produce fodder with less investment, which ultimately affects the economic milk production. 5. The ability to direct and make use of labour efficiently after the economics of milk production. 6. Efficient disposal of milk plays half of the economic role in dairying. Even a small price increase in the sale price of milk, will have much impact on the economics of dairy farmings. 7. Sound business practices appropriate to dairy farming is important at all levels. Le. purchases of inputs, and also disposal of products and by products.
The main theme of dairy economics rests on maximum reduction in feed cost producing high level of milk production economically and proper disposable of milk.
4-Postproduction of milk, milk processing and preparation of milk products also comes under dairying. A medium or big size dairy farm simultaneously they can have either processing of milk 1 production of many dairy production. Some times more profit can be obtained in the sale of processed milk / dairy products. Simultaneous establishment of processing plant will increase the income of dairying 30-40% and establishment of products factory will increase the profit by 40-50 % over dairy farming. If these processing or products factories are established within farm premises it reduces the cost of raw material i.e. milk collection and transportation costs. Further the quality of milk produced in own dairy farm will be superior as it is processed immediately without lapse of time, limiting less processing problems, uniform quality of milk is. obtained which troubles less in products preparations compared to wide variation is collected milk from various sources. 12 ECONOMIC VIABILITY FOR DIFFERENT SIZE OF DAIRY AND ENTERPRISE. 1. Economic planning : The. following factors requires considerable attention when one decides to go for milk production on a farm. Suitability of the farm Suitability of farm, buildings and other fixed equipments. Supply of right type of labour. Availability of capital Capability of the farmer. Physical condition of the soil. Climate Water supply
The basis of economic planning of dairy farm depends upon the following factors.
a) b) c) d)
Size of the herd Level of milk yield Feeding policy and stock density Farm area devoted to dairy farm and stocking density
f) g) h) i) j}
Seasonal production policy Raising replacement stock. Watching milk yield Check on food quantity and quality Labour utilization.
a) Size of the herd : The result of National investigation of milk i shows that upto the a certain point, herd size has an important infiu on the profitability of milk production. No appreciable improveme profitability was noted with a level of cows above 40. Infact a distinc in profits seemed to result above that level. The greater part of variati profits was found to be due to reduction in costs of labour percent increase in herd size. The size of herd depends upon the folic factors. Method of milking Milking of shed facility Milk yield Cow shed layout Labour efficiency Area under forage
Most of the farmers appear to find that herds of 30 cows with a cowshed layout and 40 with parlour system can be handled conveniently and efficient ly. It is assumed that a producer in his interest maintain normally a herd of 130 animals consisting of 40 milking animals, 40 dry animals and 2 bulls and rest comprising followers. The number of cows to be handled efficiently and conveniently is dictated by the acreage of farm and cow shed accommodation. Every farmer should ascertain periodically whether his herd size could be increased, at the same time, carry out culling process with discretion. b) Level of milk yield : Statistical evidence appear to favours high yielding herd. The upward tendency in profit with the increasing in milk yield is what one should expect but upto certain limit only, because the food cost per cow- also increases due to extra concentrate with the
increase in milk yield
c) Feeding policy and stock density : It is observed that feed accounts for 61% in cost structure of milk production in buffaloes, therefore attempts to lower the feed cost will reduce the cost of milk production, which can be achieved by use of less of concentrates and use of more green fodder. d) Density of stocking and farm area devoted to dairy farm : Dairy unit of 3 cows and followers can be maintained on one acre fertile and fully irrigated land. e) Housing facilities : The yard and parlour system requires less capital investment per cow and less labour /cow compared to conventional cow shed. f) Seasonality in milk production : Milk plants offer incentive in the form of or by way of higher price for milk during lean period of summer months so that the farmer may obtain more milk in those months of higher prices. g) Raising replacement stock : Most dairy farmers prefer rearing most of their heifers on their farm to maintain required number because to avoid risk of buying poor quality stock and also it is proved that use of by products and unconventional feed stuff heifer can be raised cheaply. h) Watching milk yield : The dairy milk yield record of an individual cow can be used as a guide for rationing, an indication of status of health on faulty feeding and as a basis culling. i) Check on Feed Quantity & Quality : Depending upon the milk yield and requirements of an animals, farmers must work out the ration for each cow and write it on the chart against the animal. It helps to ensure the supply of right quantities of concentrates, from time to time depending upon the quality and quantity of roughage. j) Labour Utilization : Cost of labour is second to cost of feed in the annual cost of keeping of a cow. Loose housing system saves
labour because cows come to milking parlour instead of man going to cow. Manure loader can be used in the loafing area. It is also suggested that labour requirement by following yard and parlour system is less comr•- -ed to cow shed system
Viability for small size farms : For a family(2) members having 2-5 acres of land for crop production the economically size of dairy farm is 25 animals, depending upon their interest, capability, availability of fodder and marketing facilities. These two family members can work for 2-5 animals without engaging any extra labour and also without affecting the routine farm operations. The dairy farming will act as side employment to the main agriculture work. These small farms will be more economical than larger farms due to : a) No dependence on external labour to work. b) Agricultural by products I wastes can be utilized to produce more profitable milk item. c) It helps to increase the fertility of agricultural lands in the way of manure. d) It gives more income which is daily cash crop to the farmer without waiting for a season to get money. e) More supervision on the individual animals as animals are less and also the owner will have more enthusiasm and love with animals. f) No problem with marketing of milk, as the quantity.is not bulk. Viability for large farms : The farms having more than 25 animals comes under large/commercial farms and 5-25 animals will come under medium farms. The economic viability of large farms depends on . a) Effective Management/ supervision on materials and animals. b) Individual animal feed requirements calculation and feeding. c) Effective labour use and management. d) Production of green fodder required. e) Preparation of nutritive concentrate mixture.
f) Effective breeding management. g) Effective health control measures. h) Effective marketing of milk and milk products. I) Culling and replacement of animals in the farm.
When comparative to small farms, survivability of large farms will be difficult as over head charges will be more in all aspects, in addition to lack of individual responsibility and care on the animals. 13 ECONOMIC PRINCIPLES INVOLVED TO ENHANCE BENEFITS IN DAIRYING: The various factors that can influence the dairy farms profitability can be enlisted and linked as given below. Gross profitability / acre. Gross profitability / cow Milk produced / cow Milk price Lactation Quantity of yield breed milk -Quantity Of Feeding produce Advertise Management ment Govt. Calving index policies Decrease incidence Replacement cost Variable cost -Replace cow castLabour Other - cost c of cost ost new Feed cost cow -cost Fodder of concentrate Calve s House Purchases
By detailed study of the above factors that influence profitability of a dai farm, the following principles can be drawn to maximize profits.
1. Selection of good animals : A good lactating breed and also good animal is that breed will yield more milk production. 2. Balanced feeding : Feeding of animals with standard DCP al TDN content of required quantity will increase / maintain the m production.
3. Green fodder feeding : Feeding of adlibitum green fodder v decrease the use of concentrates which ultimately decrease the cost production of milk. 4. Conservation of greens : The green fodder will be excess duriv flush season. It should be converted into silage / hay which preserve tl nutritive value of green fodder and it can be used during summer in plai of green fodder which will reduce the cost of milk production. 5. Formulation of concentrates with unconventional inqredients: Certain unconventional feed ingredients are not used for any purpose which can be conveniently used in concentrates formulation to decrea the cost of concentrate, as the cost of concentrates place an import2 role in the cost of milk production. 6. Uses of agricultural by products : The use of agricultural t products like straws etc will decrease the cost of milk production. 7. Effective utilization of labour : The cost of labour ranks second after feed cost in dairy farming. The effective use of labour depends on - Proper planning of cattle housing unit - Loose housing system saves labour and energy - Proper grouping of buildings. in layout for saving time of labour. - System of tieing is conventional housing system Tail to tail tieing will decrease the labour requirement as ‘it is man time is spend in back of the animal for cleaning, which space in tail to tail’system.
8. Replacement of the herd : After few lactation’s, the animals are culled to remove uneconomical animals, which should be replaced by growing own calves or by purchase. It is scientifically proved that replacement of dairy stock by growing their own calves is more economical and also have the information about the animal. 9. Milk price : The profitability of dairy farming mainly depends upon the sale price of milk. Even a marginal extra price per litre of milk will have higher profitability per year.
10.Advertisement : Advertisement about the quality and benefits of the milk will give more demand and price ever, after deducting the advertisement costs. 11.Conservation in to milk products : During flush season more milk will be produced and also the factories will pay less price. To get maximum profits some milk can be converted into products like cream, ghee, butter, paneer etc., which will also solve the problems of marketing of milk and also gives 30-50% extra profits over the cost of milk. 1 Good -management : Clean environment will 2 practices produce more milk, when compared to uncleanliness in the” sheds. Proper protection of animals against environmental conditions like heat and cold will helps to maintain the production, other wise drastic fall in production is not protected. Maintenance of proper timings of feeding and milking will help in maintaining the optimum production. Maintenance of cattle health by proper vaccination and treatment will definitely helps in production of more milk. 1 ECONOMIC INSTITUTIONS SUPPORTING .4 DAIRY DEVELOPMENT PROGRAMMES. PROGRAMMES. For starting any business, the foremost important resource one should give prime importance is finance. One cannot start any business / industry on their own money. The rural people are poor or middle income people and so they cannot afford to invest large amounts for establishment of any
size of dairy farms. Several institutions are concerned either directly or indirectly in the activities or providing finance to establish dairy farm, milk collection centres, dairy plants etc. They are 1. Indian Dairy Corporation : Earlier it is the financing agency for all the dairy developmental activities i.e. establishing dairy plants, chilling centre, progeny testing farms, formation of dairy cooperatives under Anand pattern. Now there is no- Indian dairy corporation and it is merged with NDDB.
2. National Dairy Development board : Earlier it is only implerfientation agency implementing all the dairy developmental programmes throughout the country. After merging of Indian dairy corporation,’nowit is acting as financial as well as implementation of dairy developmental activities in the country. It provides finance to all the state owned milk cooperative federations, for the establishing and or increasing the capacity of milk processing f dairy products factories; chilling centers, feed factories, establishing progeny testing farms, improving Artificial insemination centers. The NDDB also acts as agent for international business / loan for the development of dairy industry. NDDB will provide finance to the state federations Or cooperative society by taking guarantees from the respective state government. The finance will be different types i.e. with nominal interest, no interest and repayment of one scheme to investment for other scheme. NDDB also involved in the research activities of dairy+ng. Eg : Embryo transfer Technology, cross breeding programme, indigenous dairy processing equipment development. 3. National bank for agriculture and Rural development (NABARD). This is the apex bank for refinancing for all types agricultural operations for the commercial banks. at less interest. Earlier this is a wing in reverse bank as agricultural refinance wing of reserve bank. NABARD will not directly finance to the dairy farms, -dairy factori4s or allied business, but only through commercial banks. For community / social schemes like water shed, small irrigation schemes, tanks rural roads etc., it will finance directly to the state government to provide basic amenities to agriculture and related fields. For community work the interest rate is very low. 4. Commercial Bank : In-our country there are 28 nationalized banks and many private banks who are financing for dairying. These banks will finance for small to large dairy farms, dairy factories, feed mixing plants other dairy based business. The amount of finance will vary from 75-85% of the cost of project depending upon scheme or non scheme projects. For dairy farms one should have their own land and no loan will be given for land. The interest rates charged will be 12-15.5% P.A.
depending upon the amount of loan. 5. Cooperative bank : In each state apex cooperative bank will be there, in each district cooperative bank which will have branches throughout the district in rural areas. Just like commercial banks, cooperative banks will give for all dairying projects for both short term and long term loans,the rules and regulations are almost commercial banks with little less interest rates. 6. Village cooperative societies-For a cluster of villages cooperative
societies will be there, which will give loans for small scale animal husbandry activities. The finance for these societies will be by cooperative banks. The interest rates will be less compared to commercial banks. 7. State Financial Corporation : Each state will have state financial corporation (SFC) which will also finance for dairy projects. The interest rates are almost equal to commercial bank: In our state Andhra h state financial corporation is located at Hyderabad and it is branches in all district head quarters. 8. Dairy Development Cooperative federation and district milk producers cooperative societies: The state dairy development cooperative federation will get some loans from NDDB and other agencies for development of dairying, which will be provided to district unions, who will inform will give loans to milk producers. 7h ey will not give loans directly to the beneficiaries, but they will procure good genetic high milk producing animals and distributed to the beneficiaries. Part of the amount will be subsidy and the rema.ining amount will be treated as loan with less interest rates. 9. District Rural Development agencies : In each districtoneDRDA will be there which will operate most of the centrally and state sponsored schemes.DRDA will assist programmes like a) Draught ‘prone area programmes (DPAP) b) Small farmers development agencies (SFDA) c) Marginal farmer and Agricultural labour development agency d) Integrated rural development programmes. The (IRDP) DRDA will sponsor the above schemes by sanctioning loans by commercial, banks and provide subsides from 25-50% depending upon the classes of people involved in the schemes. 10. B.C and SC corporation : SC and BC corporations will arrange loans for dairy programmes of respective class of people through milker commercial / cooperative banks and provide subsidy of 25-50% .
11. Tribal development: agencies : For the development of tribal areas, the government has established tribal development agencies which will give subsidies and arrange loans through financial institutions. SUMMARY Importance of economics in dairying was explained with , particular reference to rural areas. The economic viability for large and small size dairying units were discussed. Various important economic principles were given with a primary moto to maximize profit. The various financial institutions are listed. Project reports with their viability are given for 2,10,50 and 100 animal dairy farms and also milk processing centres handling 5000 litres, 50000 litres per day. The importance and implications of dairy animal insurance were discussed.
2 MILK PROCUREMENT Surverys for Milk potential area for Surplus (Milk shed area) To assess whether any project or industry would be available in a certain area, a survey of available resources in that particular area is carried out. 4lilk shed are generally denotes a district (or) from which area milk is procured~ and processed in the common plant located in the central part of that particular are The villages in the milk shed area should be prelimiary survey is conducted as different aspects of milk production as detailed given below 1. The existing cattle and buffalo population 2. The production and uti!ization / disposal pattern of milk and milk product. 3. Marketing channels for surplus milk.
4. Returns from the sale of milk realised by the farmers. 5. Agricultural facilities and production patterns. 6 .Basic amenities such as communications links, educational facilities. 6. Other sources of income. 7. Performance of cooperatives etc., other institutions including multipurpose
8. Different communities living in a village and their interrelationship. 9. Other relevant information if any. Once the milk potential areas are located detailed survey is conducted i.e. door to door survey about the milk production, surplus milk with the family, whether they are interested to sell the milk to the society or not, infrastructure needed for enhancement of milk production etc. After detailed survey possible milk roots are identified so as to cover all the milk potential areas. In selecting the roots the prime idea should be considered is that the vehicle from the starting point loading the milk from different collection centres, reaches milk chilling centers .
2.2 SYSTEMS OF MILK PROCUREMENT : The success of any dairy project depends on a well planned ani organised system of milk procurement. In the case where procureme system is not well established dairy plants remains under utilized on th other hand, if systems is well planned the following advantages can b obtained. - An assured market round the year to the milk producers. - Full capacity utilization of the dairy plant - Increase in the milk production through inputs at reasonable cost. - Planning and scheduling of milk procurement following two aspects. - Policy decisions at top management level - Scheduling the actions for smooth running 2.2.1 POLICY DECISIONS AT TOP MANAGEMENT LEVEL Before starting milk procurement the following decision should be taken. 1) Price to be paid for raw milk in different seasons 2) The system and frequency of payment for milk - Daily Weekly, fortnight or Monthly. 3) Reserve funds required to carry milk procurement to avo hard ships 4) Material, equipment, chemicals and stationary required f collection centres. 5) Transportation of milk - hiring of transporting vehicles better rather than owning the vehicle. 6) Technical inputs i.e. Veterinary aids, A.I, feeds and fodder to be given in advance to the producers to get the advantage of favour. Man power required and training engazed in milk porcurement. needed
to people
2.2.2
Scheduling the actions :
Once the above policy dessions are taken, the milk procurement activities are planned. After preliminary and detailed survey of villages, village society’s are started. Society staff is recruited and necessary training in the fields related to milk collection, testing, maintenance of records, bank transactions bye-laws etc is given. Transport time table for milk root is prepared and the all society’s are informed about the time of loading of milk cans and (or) unloading of empty cans. All the members of the society will be informed about the time of milk collection at the collection centers. Depending upon the quantity of milk collected indent for extra cans or information about the quantity of milk to be procured in future should be reported promptly to the concentrated authorities by the society organisers. 2.3 SYSMTES OF MILK PRICING : The pricing of any commodity is always based on its cost price and the price paid by the consumer. Working out the cost price of milk under field conditions is a complex subject any pricing system followed should be 1) Remunerative to the producers 2) Competitive to the local market prices. 3) Discourage adulteration and promote quality consciousness: 4) Based on milk constituents i.e. Fats & SNF 2.3.1 METHODS OF MILK PRICING: The old systems followed in India are volume basis and weight basis. The volume basis will encourage the adulteration of milk with water and also quantity of milk will be affected on, with formation of foam. The weight system will not be effected by foam but it also encourages adulteration of milk. The various other pricing systems are 1. Pricing on pro-rata fat bas
In this system the price of milk is fixed proportional to the fat content of milk. This system will assign practically zero value for S.N.F content.
The advantage of this method are easy to calculate the milk price easy to adopt as it required only fat estimation, farmer will easily under stand the system and it can be adopted to any type of milk. The disadvantages are : It encourages adultration of milk with water, as there is not check on S.N.F. This system will encourage buffalo milk and donot provide remunerative price for cow milk. PRICING ON TWO AXIS BASIS: This method is used in pricing cow as well as buffalo milk where both fat and SNF contents are taken into accounts. As the system is based on both fat and SNF, it is called as “Two access pricing”. The prices of fat and SNF are fixed depending- upon the market price of GHEE and skim milk powder. Normally the price of fat will be declared by the union for different seasons and the price of SNF will be 2/3 price of the fat. The price is calculated using the following formulae. Ex : Price of 100 kgs milk = Kg fat rate x Fat percentage + kg SNF rate x SNF % Ex : If the price of kg Fat is 100 then the price of 9% SNF be 100 x 2/3 = Rs. 66.60 Then the cost of 100 kg of milk testing 6% fat an 9% SNF = (100 x 6) + (66.6 x 9) =600+599 = 1199 i.e Rs. 11.99 per kg. The advantages are
No discrimination against cow or buffalo milk as cow milk is reasonably priced due to consideration of SNF contents which is well comparable to that of buffalo milk.l PRICING ON EQUIVALENT FAT UNIT BASIS In this method the SNF unites are converted into equivalent fat units inproportion to the relative market prices of fat and SNF. The SNF is value at 2/3 units of fat. For example : The buffalo milk testing 6% fat and 9 % SNF The total number of Fat units = 6 + 9 x 2 / 3. =6+6= 12 If the fat price is Rs. 100/- than the cost of 100 1 kg of milk = 00 x 12 = 1200 Or Rs. 12 per kg of milk. This method will leave the same advantage of two access pricing system. 2.4 PRINCIPLES INVOLVED IN PRICING OF MILK PRODUCTS While finalizing the price for milk products there are six steps to be followed. 1. Selecting the pricing objectives : Whether the pricing objectives should be or profit oriented service oriented. Normally government agencies, voluntary organizations or cooperative bodies objective will be service oriented with minimum profit, where as private people will aim on maximum profit. For any producer aiming at reasonable profit will have many advantages to have in market for longer period with maximum percentage of market share.
2. Determining the demand : By making market surveys the demand for individual product can be assessed. The heavy demand product should be prepared. The price of heavy demand product will be high. 3. Estimating the cost : The cost of the product at which it can be marketted can be calculated as follows a) Cost of raw materials used for the preparation of the product i.e. milk, sugar, spicies, salt etc., b) Cost of processing the product: Normally in dairy industry the c) Processing costs will be around 20% of cost of raw Packing cost : d) Depreciation on the cost of raw material. e) Distribution cost (i.e. transportation) f) Distribution margin (whole salers margin) g) Retailers margin. The total of the above gives actual price for the product. For that add profit margin which may be 10-15% depending upon the demand. 4.. Analysis of competitors price and offer : The price of product should be competiative and attractive compared to competitors product. Some times extra quantity of product is offered with the same prices (Add 100 gms with 500 gms of product) by competitors. That shoulJ also be taken into account. 5. i.e. Selecting a price method Market +
Market - price methods. Market 0
6. Selecting the final price : After deciding the above factors the final price of the products may be arrived.
For any product price fixation.other factors will also influence like. 1) Season : During summer, demand for flavoured milk, butter milk, Ice cream, kulfi will be enoromosly increased. So the price of fast moving products in summer can be increased. 2) Area of marketing : If the income of people is high, their purchase will be more. 25 PLANNING FOR MILK COLLECTION AND TRANSPORTATION ROUTES: For efficient collection of milk, certain problems arising at the collection centre should be solved. The various problems faced at the collection centres are 1. Producers having vested interest - some persons will try to influence the staff and get undesirable things done to save their personal interest. This should not occur. 2. Some persons will supply adulterated or substandard milk. This should be discouraged. 3. Strict timings for milk procurement - Some producers will supply the milk very late, the society will not receive it resulting a direct conflict between the producers and staff. This can be sorted by explaining the farmers about the difficulties. 4. Some producers will think that sample of milk drawn is an extra quantity of milk which is not paid for. This can be explained to the farmer that all the samples are polled and sold which is distributed to all members as bonus. 5. Some farmers due to many reasons will supply evening milk in the next morning and morning milk in the evening which causes
curdling of milk and loss to the society. Such producers should be carefully checked and explain about the quality of milk causing problems in processing of milk. 6. Some staff members will not following the timings for milk collection, so
that the procedures will have to wait for hours together and loose their interest on society. Maintenance of the time by the staff is essential for improving the milk procurement. Transportation of milk to the processing centre or chilling centre will be undertaken by the union. Some societies will not have proper roots, it’s the responsible of the society to transport the milk from the collection centre to the near by truck pick-up point. In some societies there will be transportation root through that village, but the collection centre will be interior, in such case also it is the responsibility of the society. At union level different roots are planned to get the milk from different places to the processing plant. Each root will be planned in such a manner that it will go through all the society villages or atleast nearer to the societies. The roots are so planned that if any damage to the road or traffic an alternative road is available to the processing centre.(The’, root map should be supplied in advance to all the societies so that they can plan for amnicable pick-up points. The length of the road should be such that from the ~starting point of the milk collection, it reaches the processing or chilling centre within reasonable time so that the milk may not get spoiled and fit for processing) The transport vehicles will deliver the empty cans for next collection and lift the can with milk. In case of any break to the transporting vehicles an alternative vehicle or atleast the other route vehicle may be diverted. 26 MEASURES TO ENHANCE DURING LEAN SEASON. MILK COLLECTION
During rainy and winter season, there will be, lot of green, roughages which will help in enormous milk production, where ,3s in summer the’ most of the, fields’including grazing lands become drylnagreen fodder will be available adversely affecting the milk production. Moreover no farmer will plan to calve the animals just before or during, summer, which will adversely affect the lactation yield. Most of the cows will be in dry or late *lactation or late lactation with pregnancy. Recent studies indioate that the milk production during summer season will be decreased, b4A% of the milk production during rainy and winter seasons. The summer
season in in which low production of milk is called lean season and flush season when
high milk production exists. As the output of milk production is decreased, the demand will be as such for the milk, there will be lot of competion for the collection of milk. The competitors of milk processors will start their own strategies to get maximum share of milk collection by any dairy in lean season. The following are the some of such steps. 1. The milk production during flush season will be surplus, the collection centres are unable to collect full quantity due to varied reason. The procesers should regularly collect full quantities of milk from those producers who will be faithful and supply full. quantity of milk to him during lean season. The producers are also remember the collection centers, who has helped them during flush season. Some processors even declare milk holidays once in a week, or so during flush season, which will cause economical loss to the producers. If farmers are tackled well during flush season, they will inturn help by giving whole quantity of milk during lean season. 2. Fixing of high price or giving bonus or extra payments for the milk supplied during lean season will also improve the milk collection. As the level of production drops during summer and also most of the dairy animals in dry / pregnant conditions, the cost of the milk production will generally high during summer season. To compensate this high cost of milk production, the processers should enhance the purchase price of milk. 3. Advance payment / prompt and regular payments for the purchased milk by the collection centers will definitely improve the milk collection during summer. 4. Supply of inputs like concentrate feeds, fodder seeds, fertilizers A.I facilities to the producers in advance and adjusting the cost for the price of milk collected. 5. Satisfying the producers by explaining about the cunning nature of competitors who will give high price of milk during lean
season. The collection center people should explain to the producers, that the competitors would not collect the milk during flush season. 6. Especially during festival occasion, children school reopening, marriages time farmer need of money and they may come for
center people, by supplying milk-during lean season, if they give any finance to them. Any processors should make advance payments during the above occasions to attract the producers. 7. Training programmes should be conducted on management of animals during summer season without affecting the milk production. 8. The collection centre persons should respect customs, of the local people and they should participate in a various social and cultural activities of the village so that the farmers think that these are one among them and definitely they sell milk to them only. 9. Out of their profits, the processors / milk collection centre persons should spent certain portion for social activities in the village, i.e. laying or repairing of roads, construction of school buildings. Maintenance of parks, donations to temples, or donation to any religious / other functions will have effect on milk collection. 10.Milk competitions, bull competitions, calves and other groups of animal competition regularly is the village will also increase the faith in the villagers. In addition to the above encouragement points, the processors / collection centre people should not do the following things. a) cheating the producers by taking extra quantity by manipulating the weights and measures. b) Showing less readings of fat and SNF levels in the milk. c) Wrong calculation in the price fixation of milk. d) Utilization of money for personal use and delaying the payments to the producers. e) Not paying the bonus after the year. f) Not bothering about the collection of milk during flush season. g) Not attending to the problems of animals.
SUMMARY Surveys for milk production potential areas for surplus milk in a particular milk shed area was discussed in detail to enhance milk collection. Different milk procurement systems with advantages and disadvantages were covered. Pricing policy for milk and milk products were explained so that it is useful to select effective pricing policy under different conditions. Planning for milk. collection and transportation routes was covered extensively. Collection of milk during lean season is very difficult, so planning for milk collection during lean season was highly projected. DAIRY ECONOMICS, EXTENSION AND ENTREPRENEURSHIP 3 DAIRY DEVELOPMENT PROGRAMMES 31 VARIOIUS DAIRY DEVELOPMENT PROGRAMMES AVAILABLE Milk has emerged as the second largest agricultural commodity next to rice production (1988-89). India ranks world first in milk production in 1996. India’s milk production is 70 million tones. Cross breeding of indigenous cows with exotic bulls/semen has encouraged for augmenting milk production. Government Project/programme. 1. 2. 3. 4. 5. 6. 7. All India key Village Scheme - 1951 I ntensive Cattle Development Projects (ICDPs) - 1964 - 65. Operation Flood phase I - 1970. IDA Assisted Dairy projects. Operation Flood Phase II - 1979 Operation Flood Phase III - 1985. Dairy Technology Mission - 1987.
1. -Key Village Scheme (KVS)
It was taken up in August, 1952. Under the scheme a “key village block” consists of one AI centre along with four key village units attached to it.Each key village unit is a compact area_ of contiguous village having a population of about 500 cows and / or she buffaloes fit for breeding and milk supply. Selection of pedigree bulls, proper administration and technical organisation consisting of one VAS, one milk recorder and three stockmen had been provided for every centre.) During the third five year plan the KVS was considered to be the main programme for IDCP. The main activities are : 1. To intensify the construction programme in the key village area
Extending the PTS to the Ongole breed in Pradesh 2. Andhra and Kankrej breed in Gujarath. (PTS - Primary Testing Scheme) 3. Establishing bull-rearing farms 4. Development of grazing areas by setting up two fodder banks and also a grass land and Research Institute. Intensive Cattle Development Projects (ICDP’s) During the third and fourth five year plan it gained its significance by its activities such as i) Formation of NDDB ii) Establishing progeny testing farms -IV plan iii) Establishing frozen semen stations - VI plan iv) Institute for Buffalo Research - VI plan v) Embryo transfer technology-. VII plan. Progress Review By the end of 1965, there was an awareness about the success and failures of the Government’s own programme. The review of above revealed the following. Progress Made Under 5 - Year plans. - Dairying acquired national-level recognition. - Concept of planned approach was introduced at all the levels. - Organized marketing was adopted by private, public and cooperative sectors. - The multi-national introduced new milk products. - To overcome the economic barriers, toned milk, with less fat and at comparatively cheaper price, was formulated. - India started developing its own cadre of trained technical personnel:
- The concept of intensive cattle development was introduced. Unfortunate Trends Besides above contributions, some negative effects were also observed as listed below. - modernization and planning of dairy industry was consumer oriented. - the package of inputs required for enhancing milk production was , left in the hands of State Animal Husbandry Department without Lilly correlation with milk industry. Those inputs hardly reached the producer. This made dairy fanning an unattractive preposition for rural milk ; producers as they were to bear entire burden of maintaining the milch animal. - the private city dwellers/duhias exploited the consumer due to increased demand as a result of industrial development. - Cattle colonies, housing large number of good cattle and buffaloes ‘ brought from the home tracts got established to meet cities demands. ‘ Maintenance of these animals in big cities was a problem, especially in dry periods. The best animals thus started finding way to slaughter ‘ houses, once these were found uneconomical. Old stocks were replaced : by the new ones from villages. This anti-dairy cycle perpetuated. 3. Operation Flood Operation flood - the Indian white revolution was launched to over come ! the above mentioned unhealthy trends. It is designed to raise milk ~ producer’s income by organizing them into cooperatives and eliminating f middlemen; to increase milk production in rural areas creating a flood of milk to meet demand on a regular year-round basis; and to create a. self-sufficient dairy industry in India. Operation Flood I was launched in 1970, following an agreement with the United Nations World Food programme. The European Economic ~ Community was also closely associated with Operation Flood I provided much of the food aid to the World Food Programme.
To launch Operation Flood I and finance projects undertaken within its
frarnework, the Delhi Government set up the Indian Dairy Corporation ! (IDC) in 1970. The actual implementation of the various projects is left to . the village cooperative societies and milk unions which own dairies at , district level. Objectives of Operation Flood I a. To increase the capacity of milk processing facilities. b. To change urban markets from traditional milk supplies to modern dairy milk supplies. c. To make provision for the resettlement of city based cattle in rural areas. . d. To develop long distance milk transport and storage facilities. e. To develop Anand pattern of milk procurement system. f To improve dairy farming standards. Operation Flood II Operation flood II was started in April 1981 and ended in March 1985 with the expressed intention of creating a viable dairy industry to meet India’s needs in milk and milk products. India’s White Revolution has not only received support from the European Community and the World bank, but also from a number of Western Governments, the United Nations food and Agriculture Organisation (F.A.O), the United Nations Children’s Fund (UNICEF) and European NGOs such as the British Relief Agency OXFAM. It has also been regularly evaluated over the years. 4. IDA Assisted Dairy Projects The world bank’s assistance to dairy development started with the coverage of Karnataka, Madhya pradesh and Rajasthan. The project comprises of: i. establishment of about 7200 DCS and 12 milk producer’s unions.
ii. Important and multiplication of pure bred exotic breeding stock and an associated A.I. programme of crossbreeding native cattle with high producing exotic breeds. Provisions of extension programme to encourage production of fodder, mixed farming and improved animal husbandry practice. iii. Construction of 12 dairy plants and cattle feed mills. iv. Establishment of one regional diagnostic laboratory and a plant for production of biological veterinary vaccines. v. Provisions of a training centre for each union. Objectives of Operation Flood II a) To cover 10 million milk producer families in rural areas. b) To create National Milk Herd of 14 million cross-bred graded buffaloes_ c) To strengthen national Milk and by linking milk supply and demand centres. cows and d) To construct a base structure for National Dairy Industry. e) To increase percapita consumption of milk products at 144 gms / day Operation Flood III Operation Flood III was launched in April 1985 to run until March 1990. The results achieved in Operation Flood 11 justified the confidence faced by the Government in farmer’s own organisations as instruments of dairy development and led to the initiation of Operation Flood III which was implemented, covering most of the Anand pattern milk sheds of the country. Objectives of Operation Flood III a) To increase the coverage of milk producers.
b) To establish an additional 15,500 village Milk co-operative societies in 173 Anand pattern milk sheds as constituents of the
c) To increase milch animals in co-operative ambit. d) To strengthen National milk Grid. e) To better utilization of technical inputs in cooperation with state governments. f) To develop dairy co-operatives own system of improving health, environmental sanitation, nutrition etc., National Dairy Development Board (NDDB) To replicate the Anand pattern throughout the country National Dairy Development Board (NDDB) was established in 1965. The dairy development programmes are being implemented through a network of milk co-operatives organised on the model existing in Gujrat state namely ANAND pattern dairy cooperatives. The three tier structure of the dairy development programme are: 1. Village level primary milk co-operative producers societies. 2. District level milk producers co-operative society unions. 3. rtate level federation of district co-operative milk producers unions.’ Objectives The main objectives are to assure remunerative price for the milk produced by the milk producers through a stable, steady and well organised market support, and distribution of milk and milk products at reasonable prices to consumers.
6. Milk and Milk Products Order (MMPO) This programme has been issued. by the Government of India during 1992 under the liberalization polic~i6s. It empowers that those dairy plan exceeding its utilization of 10,000 liters per day must register with Government for its modernization, product manufacturing and to collect milk in specified area.
32.WHITE REVOLUTION - AIMS - IMPACT ON ECONOMY OF RURAL PEOPLE Just like ‘green revolution’ which is intended over all increase in agricultural produce., white revolution in the increase of milk production tremendously so that sufficient quantity of milk is available for all a1 affordable price. To tune up the milk production the infra structure required are 1. High yielding genetic potential dairy animalse in India most of the dairy cattle are native breeds, in which majority are poor yielders of milk. It is not economical to raise the animals with 1-2 litres of milk production The milk potential of animals can be improved by a) Introduction of Exotic cattle : Exotic breeds like Jersey, HolsteinFriesian, Browpswiss etc., are excellent milk producers. These breeds can be introduced to some extent through out the country to increase the milk production. b) Cross breeding programme : Purchase of exotic breeds are costly and mass introduction is not possible. The semen of exotic breeds can be utilized on native breeds to produce superior breeds which can be utilized on native breeds to produce superior offsprings. With little investment the future herd will be cross breds having good m ilk production capactiy. Massive cross breeding programme should be undertaken. c) Selective rearing of native breeds : Under native breeds there are some breeds which are yielding optimum milk production. These breeds can be maintained by maintaining pure breeding, programme. d) Upgrading native buffaloes : Murrah buffalo breed is the good breed under buffalo which can be utilized for upgrading native buffaloes. Slowly the future stock will become graded murrah buffaloes.
2 Animal Husbandry activities : Veterinary doctor should be there in or around- at least within a reasonable distance who will take care of the animals in the following activities.
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