Milk Collection Made Easy through Milk Producer’s Group

Introduction

India is the largest milk producer’s country in the world.  India produces 209.96 MT of Milk in 2020-21 and contributes about 21% of global milk production. Milk production in India has grown at a Compound Annual Growth Rate (CAGR) of 7.93% from 2014-15 to 2020-21. Dairy is the single largest agriculture commodity contributing about 5.2% of the national economy generating employment for 8 crore farmers.

Although India is the largest milk producer in the world, but dairy farming is much complicated here. The data shows average farm size is two cattle per farm. The average crossbreed cow milk yield is about 7-8 Kg per day and for indigenous cows yields 2.4-3 Kg per day.

This implies Milk is produced daily in small amounts by many producers. The average yield of milk per animal by species across India in the financial year 2021 is given below for ready reference.

Further the markets for milk & milk products are the urban area, which is at a reasonable distance from the village. This makes it difficult for producers to connect the consumers. Similarly, this makes Milk Collection complicated for Dairies as they need to approach numbers of farmers to get the required quantity of milk.

The best way to overcome this issue is to club milk producers in a group by forming a Milk Producer’s Group. Aggregate milk in a collection center. Bring this milk to a processing plant for further processing and distribution to the consumers. This benefits to the milk producers to increase their household income by finding a market for their produces.

Understanding this now let us discuss some more details on the following,

The advantages of Milk Producer’s Group

How to form a Group

Limitations of a Group

Why to Form Milk Producer’s Group?

To understand why to form milk producer’s group it is essential to understand the prevailing milk supply chain in Indian Dairy Industries. Dairy Cow milked twice a day. The raw milk has a self-life up to 04 hours. So, the milk must be brought to a place and sale to customer at the earliest. But this is practically not possible for each farmer to find a customer for him.

The best solution to this is to collect all the milk in a village at one place and then it can be distributed to a group of customers. There will be still issue of time & life of milk as customer for milk is at urban area far from the village where the milk is produced.

Here comes the Dairy, who collects the milk from individual farmer and distributed to customers after doing further processing to extend the life of milk. Below is the Milk supply chain flow diagram to understand the actual practice in place now.

We understand milk producers group is the key in dairy industries, now let us  list down few benefits of forming a milk producers’ group.

1. No need to find customer for selling milk.
2. Generates more income through direct market access.
3. No hurry to reach at customer place to deliver the milk.
4. Makes easy for Dairy to lift the milk from one place.
5. Since a good amount of milk available at one place it makes dairy viable to develop necessary infrastructure for Milk Testing & Cooling.
6. Farmers need no to travel to nearby city thus utilize their time for other activities.
7. Availability of testing facilities enable farmer to get better price based on the quality of milk he/she produced.
8. Availability of cooling facilities ensures no spoilage of milk.
9. Better access to outside support services, groups can be easy contact points for other organizations providing support services.
10. All these results in increase income of the farmer.

Combining forces in a group to reach the market provides a direct and clear benefits to the group. In addition to this a milk producer’s group can carry out a range of activities as

• Enables to pool resources to carry out activities such as Organizing the supply of inputs like animal feed and fodder which otherwise not possible for an individual farmer.
• Better access to outside support services such as animal health care, breeding, AI etc.
• Groups become an easy contact point for other organizations providing support services such as savings & credit, information & advisory services, training etc.
• The group develops more power and status hence it provides social as well as financial supports to its member in the time of crisis.
• The group becomes a platform to learn from each other and exchange useful information.

These additional activities undertake by milk producers themselves not only saves time but also helps in rise in their income directly or indirectly. Also carrying activities in group minimizes the risk in relation to investment and credits.

How to form a Group

After understanding the advantages of a Milk Producer’s Group now let us briefly discuss the process followed to form a group.

Group formation is encouraged when

• Prospective or budding farmer members are willing to join a group.
• The farmer members are living in a close by area preferably in the same or adjacent village.
• There must be belief and confidence among the farmer members.
• Most of the farmer members have identical social and economic background.
• Male & Female farmer members have indistinguishable rights.
• Farmer members wiling to accept the responsibilities.
• Farmer members are not driven by a particular cast or community ideology.

Given below the steps that guides in forming a group.

Step 1 : Initial Meeting

The initial meeting among a small group of 5-10 members is the starting point of forming a group. The members who want to increase their income from milk meets for a formal discussion. All members are free to express their ideas, views, and opinions about the group. These members once discussed the ideas and convinced among themselves form the core group.

This core group then starts contacting other milk producers on individual level and invite them for a meeting. They organize a general meeting to discuss on the vision of the group which formally discussed among the core group members earlier.

The major points shared in this meeting are,

Why to form a Group – the benefits of faorming a mik producer’s group

Who can be a member of the Group – basic criteria

What are the Activities of the Group – major activities to start with and add more for benefits of the members

What are the plan to set up the Group – types of organization, resources and facilities required and how to get it.

When to set up the Group – The timeline or the first-hand schedule

It is always a good idea to have an outside facilitator to guide the meeting to enable free participation by others and eliminates the feeling of domination by the core group.

Step 2 : Detail Proposal

Depending on the output & feedback from the initial meeting and response from other farmer a detail proposal is prepared. A sub-group is formed to prepare the proposal. In case of requirement an outside resource is employed to write down the detailed proposal.

The detailed proposal describes the purpose of the group, name for the group, finalize the actual or physical operational area, detailed criteria to become a member of the group, source of funds, activities to be carried out and other resources required.

At the same time another sub-group carry out an extensive survey to find out milk production, dairy animal presence in the physical area of operation. This group also explores the market for selling milk, veterinary services, feed supplier, micro financer etc.

Once the detail proposal is made then it is reviewed by the core group and with due discussion bring it to a final shape.

Step 3 : Public Meeting

A public meeting is arranged by the core group. Necessary steps are taken to encourage more and more farmers to attend meeting. The main objective of this meeting is to make sure that everyone understands the purposes and advantages of formation of the group. How appropriate is this group to increase their income and other benefits as a milk producer.

One of the core group member acts as the chairperson and presents the proposal, guides the meeting with a thorough discussion. He must take all questions raised by the farmers present to clarify their doubts or concerns.

The chairperson is now call for a vote to find out how many farmers are willing to join the group and accepts role and responsibilities of the membership. When the farmers present in the meeting unanimously decided to set up the group then a provisional management committee is formed to take this forward. It is important to ensure that the provisional management committee is elected democratically.

After the provisional management committee is formed the earlier formed core group is dissolved as they have completed their job.

Step 4 : Shaping Management Committee

The number of members for managing committee is finalized based on number of farmer members and local government policy. The committee may or may not include members of advisory sub-group. The primary duty of the management committee is to set up the group and make it a legitimate organization. The committee also review the whole proposal and finalize the objective, policies, finance and all other essential required for smooth running of the Milk Producers Group.

The provisional management committee is responsible to take appropriate permission or certificates as necessary to run a group as stipulated in the Government Act or Policies before starting any activities.

Step 5 : Developing a constitution or By-laws

This is most difficult and time-consuming activity in forming a group. The constitution or by-law of the Milk Producers Group form the most important document to control the actions of its members. This always referred as a set of written rules in case of any disputes and activities undertaken by the group. Though there is always a provision to amend the by-law, but it involves the activities such as consent of all members and informing to the concern local Government bodies.

The by-law or constitution always intend for the benefits and use of the members. This also become a legal document to regulate the group’s activities and keep away from misunderstanding arises among the members. The constitution clearly states on:

• Name, Objective and Activities of the Group.
• Describe the Membership Criteria, Role & responsibilities
• Election Procedure for the Management Committee & other office bearer
• Contribution by the Members in terms of Money and Physical Time
• Disciplinary Action in the case of misconduct or rule violation
• Meetings Schedule, Notification for meeting and MoM.
• Record Keeping procedure and person responsible for same.
• Bank Account for all financial activities, Savings and Loan
• Use of Profit, Sharing basis and criteria.

Step 6 : Registration of Members & the Group

Once the by-law has been finalized and drafted properly, the registration process for members into the group and registration of the Milk Producers Group with local as well as national authority is done. Obtaining registration certificate and other certificates are to be competed. May be on some occasion fees are to be deposited for applying clearance and registration. The expenses are recorded and updated in the books of account on regular basis.

Step 7 : Inaugural Meeting

After the Group registration and member registration completed an inaugural meeting is called for all the members. The provisional management committee elaborates on the job carried out by them and all the members of provisional committee resigns from the committee. A new permanent Management Committee is then formed to look after the activities decided by the group strictly in accordance with the constitution or by-law of the group.

The other activities taken in this meeting are,

1. Appointment of President, Secretary, Treasurer, and all other official bearer.
2. Detail discussion on report on task done by provisional management committee
3. Approval of application for membership and shareholding
4. Approval of draft constitution of the group
5. Appointment of external auditor.
6. Authorized Signatory & Nominee for Bank account

Step 8 : Plan Activities

After the inaugural meeting is done, now it is the prime responsibilities of the management committee to plan for all activities in line with the group constitution. The priority must be given on the following to start with the group activities and others to follow gradually.

• Finalizing the milk pricing and setting up of the payment procedures
• Groundwork and planning an optimized milk collection route.
• Designing and establishment of possible cooling infrastructure.
• Negotiating and signing agreement for milk distribution and marketing
• Arranging for other services to be provided to members
• Discussion with Government authorities, local Dairy, bank for arranging financial support and subsidies for capital requirement.

Limitations of a Group

All good side has a bad side too. The group has a ton of benefits to its members. But sometime the group will possibly dominate by only a few members results in no unanimous decision making.

It becomes much important to prevent such situation. Group members has to focus particularly political and cultural conflicts, religious group, cast, socio-economic difference, gender etc.

Establishing and maintaining a group need patience, leadership quality, knowledge & wisdom more over the ability to work with human being. of the members.

Conclusion

Young poet Mattie Stepanek once said, “Unity is Strength”. When there is teamwork and collaboration, wonderful things can be achieved.

The biggest and live example of the power of Milk Producers Farmer Group is AMUL. The co-operative movement initiated by Dr. Varghese Kurien is the biggest success and now adopted across all states of India.

It is the result of the initiative taken under “Operation Flood”, which made dairy farming India’s largest self-sustaining industry. This also enables rural employment providing a third of all rural income