Dairy-based Livelihoods
69
dairies have established village societies for
milk collection that follow the cooperative
model. It is common for private dairies espe-
cially the agents to make loans to farmers,
which is a key reason for the large share of
milk directed to this channel.
24
Private sec-
tor, large multinational companies (MNCs)
and retail chains are rapidly expanding their
dairy operations and in the last 15 years,
have created capacities equal to the ones
set up by cooperatives in more than 30
years. While the private sector grows, it is
in the interests of livelihoods and inclusive-
ness that cooperatives and dairy-producer
companies retain their existing share of
milk handled by organised sectors so that
competition-based set of checks and bal-
ances prevail in the market.
Of late, adulteration of milk has been
highlighted as an issue in several states.
Milk being made up of 87 per cent water is
prone to adulteration. Moreover, its high
nutritive value makes it an ideal medium
for rapid multiplication of bacteria, par-
ticularly under unhygienic production and
storage conditions. Milk’s quality concerns
go beyond the farm level and require assur-
ance of safe milk at all stages. Cooperatives,
private dairies or any other form of dairy
farmers’organisations have to engage in
assuring the quality through education,
training and practice of clean milk produc-
tion. It is also important to develop diag-
nostic facilities for milk testing including
infrastructure and human resources that
enable continuous monitoring for quality.
8. Price paid to dairy farmers
Milk procurement price is either on fat
basis or on fat-and-SNF (solids-not-fat)
basis. A dudhia traditionally measures the
fat content by dipping his fingers into the
milk and sets a price based on his percep-
tion of the customer. Many collection
centres use basic centrifugal machines for
fat measurement which do not generate any
individual data or receipt for the farmer.
The farmers are paid not on the basis of
an individual’s record but on the basis
of the average of fat and SNF. The data
is calculated at the central level and not
at the collection centre. These collection
centres do not promote transparency and
farmers supplying good quality milk are
also penalised due to others’ bad practices.
The digital testing machines capable of
generating individual data are expensive
but are meant for measuring cow’s milk.
Since buffalo’s milk has high fat content,
the machine has to be often recalibrated
with centrifugal machines which adds to
the workload of centre operators. Testing
of milk for safety and quality parameters
at the collection centres is almost non-
existent. Quality of milk procured is an
important element in the supply chain
and calls for quality testing at the local
level itself. Quality control is possible only
through well-equipped laboratories and
trained technical manpower. Some of the
companies interested in clean milk produc-
tion are investing in adequate milk testing
that also tracks milk of individual pourer
so that the whole collection centre is not
penalised due to a few individuals (see case
study 4.2 on Sahayog clean milk at the end
of the chapter).
Milk’s price is set by the cooperatives in
many states. This price is used by all other
players to set their prices. In the organised
sector, the Gujarat Co-operative Milk
Marketing Federation (GCMMF) reportedly
pays the highest prices in the country. It is
evident that where dairy farmers’ organisa-
tions are strong, the prices that the farmers
get are higher. Successful milk coopera-
tives have shown that through a process of
efficient procurement, transparent pricing,
product development andmarketing, at least
75 per cent to 80 per cent of the consumers’
rupee can be transferred to the farmers.
During the year, prices fell in states
like Karnataka where milk unions cut the
procurement prices due to excess milk
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Round Table on Smallholder Dairy Convened by
BAIF and Access Development Services for This Report
on 17 August 2015 at Pune.
