MANAGEMENT ISSUES AND PROSPECTS OF DAIRY INDUSTRY IN VARANASI DISTRICT OF UTTAR PRADESH, INDIA

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1 Asian J. Dairy & Food Res., 33 (3) : , 2014 doi: / AGRICULTURAL RESEARCH COMMUNICATION CENTRE MANAGEMENT ISSUES AND PROSPECTS OF DAIRY INDUSTRY IN VARANASI DISTRICT OF UTTAR PRADESH, INDIA Amrita Poonia*, Abhilash Payasi and Dharmendra Kumar Centre of Food Science and Technology Banaras Hindu University, Varanasi , India Received: Accepted: ABSTRACT The investigation was conducted to review the situation of dairying in Varanasi with the objectives to comprehend the nature and status of Dairy Industry of Eastern Varanasi and to study the issues pertaining to the dairy industry of Varanasi. The survey work was carried out for the milk pocket areas of eight blocks of Varanasi region. Total 110 respondents indicated 19 different issues and these issues were considered as study variables. With the help of statistical analysis these issues were merged into five major dimensions or major issues affecting the growth of dairy sector in the area under study. These issues came out to be as production issues of the dairy sector, education and information issues, infrastructural issues, investment and compensation and inadequate government policies and social awareness. The total mean for these issues were 5.23, 5.38, 5.13, 5.13 and 5.03, respectively. Key words: Dairy industry, Management issues, Milch animal, Unorganized sector, Varanasi. INTRODUCTION India, the largest producer of milk in the world, is set to produce over 133 million tonne milk during Several measures have been initiated by the Government to increase the productivity of milch animals, which has resulted in increasing the milk production significantly from the level of million tonnes at the end of the Tenth Plan ( ) to million tonnes at the end of the Eleventh Plan ( ). The annual growth rate for production of milk is about 5% in compared to Dairy sector has assumed great significance in rural, urban and semi-urban population in the state. A milk co-operative society in a village in Allahabad district set up in 1918 marked the beginning of milk cooperatives in Uttar Pradesh. Successful efforts gave way to formation of Lucknow Milk Union in This is the only Milk Union in the country, giving Uttar Pradesh the credit of being a pioneer state in the country in this segment. Pradeshik Cooperative Dairy Federation (PCDF) was the chosen agency to implement the World Banks presti gious Operation Flood programme in the state. At present PCDF lends its support and services to 6,00,000 rural milk producers through 59 District Milk Unions and about 13,500 village Dairy Cooperatives in the State. Over the years PCDF has expanded, diversified, channelized into new areas, over new dimensions, onto new challenges. Today it features prominently in the National Milk Grid, supplying milk to Mother Dairy for sale in Delhi. Parag is the brand name for a range of milk and milk products. Uttar Pradesh is the largest milk producing state of India contributing 18 % of the total milk production of country. In the year , the total milk production in the state was 22,556 thousand tonnes (NDDB, 2012). Rajasthan and Andhra Pradesh are 2 nd and 3 rd milk producing states in India. Large proportion of breedable buffaloes in Uttar Pradesh compared to the country as whole, suggested that buffaloes were the major milch animals in the state. The milk yield per cow was 1.83 litres and that of buffalo 3.15 litres per day was also more than the national average for the country as a whole. The per capita availability of milk in the * Corresponding author s dramritapoonia@gmail.com

2 160 ASIAN JOURNAL OF DAIRY & FOOD RESEARCH state was 310 gm per day in , as against 290 gm for the country (NDDB, 2012). The present position for milk availability in the state is 192 gm per head per day against 202 gm for the country (Sharma and Singh, 1996). In Uttar Pradesh, majority of milk producers are dependent on the milk vendors/ shops for marketing of milk, who exploit them by not paying remunerative prices, thereby leaving the milk producers with no incentive to increase their production. A good marketing system, thus, is essential to stimulate milk production and growth of dairy in the state Despite a higher growth rate, the per capita availability of milk in India is 252 grams per day, is lower than the world average 265 grams per day. Indian dairy sector contributes the larger share in agricultural gross domestic products. Presently there are around 70,000 village dairy cooperative across the country. The co-operative societies are federated into 170 district milk producers unions, which have 22 state cooperative dairy federations (Ashraf et al. 2011). But in India milk yield per animal are very low. The main reasons for the low yield are: lack of use of scientific practices in mugged, inadequate availability of fodder in all seasons, unavailability of veterinary health services etc. MATERIALS AND METHODS Sampling: Scope of the study was confined to the eight blocks of Varanasi region. Keeping this in view respondent were identified from each blocks representing different sectors namely milk-producers, veterinary doctors, sweets makers/chhana makers/ dahi or curd makers/paneer makers, inter-mediator (middleman), cream makers, small dairy farm employees, academicians researchers, small milk collection centre employees, milk officers and agricultural officers. On the basis of convenience and accessibility, respondents selected for the study included 28 milk-producers, 14 veterinary doctors, 10 sweets makers/ chhana makers/ dahi or curd makers, 6 inter mediators (middleman), 2 respondent from cream maker, 10 small dairy farm employees, 14 academician or researchers, 16 employees of village level milk collection centres state government, 6 officers of dairy department, 4 state government agricultural officers looking after agriculture department in the district thus, total 110 respondents were selected through convenience sampling. Data was collected through a close ended structured questionnaire by judgmental and conveni ence sampli ng. Questi onnaire was structured on the basis of important issues related to dairy industry reported in literature or narrated by experts of the region during personal interaction. Rating scale (hedonic scale) 1 to 7 was used for taking the opinion of respondents. Based on these questionnai res issues were compi led. The respondents were interviewed for the initial feedback on understated points: Status of Indian dairy industry/overview of Indian dairy industry, Issues of milk and milk processing business of India, Milk and milk processing business in comparison to western counterpart, Issues of milk and milk processing business of Varanasi district. The Questionnaire was also tested for its reliability on the basis of Cronbach Alpha Value which was found to be This value was found above the assumed value 0.6 thus reli abi lity of the Questionnaire was used. Research design: The research design used in the study was exploratory till the identification of issues and perspective of the industry. Later it became descriptive when it comes to evaluate the major issues/problems affecting the growth of dairy sector in Varanasi. The nineteen variables were reduced to six principal components or dimensions through varimax rotation. Statistical Package for Social Science (SPSS) software version 16.0 was used for data analyses to summarize the nineteen variables into smaller sets that preserved most of the information in the original data set. The data was subjected to principal component analysis. The nineteen variables were reduced to six principal components or dimensions through varimax rotation. Regarding the pre analysis testing of the entire sample for factor analysis, the Kaiser Meyer Olkin measure of sampling adequacy was and the Bartlett s test of sphercity was significant at p< 0.001, thus indicating that the sample was suitable for factor analytic procedures. According to analysis, six factors with Eigen values greater than 1.0 were obtained.

3 RESULTS AND DISCUSSION The respondents indicated 19 different issues pertaining to state of affair of dairy industry in Varanasi district. These 19 issues were considered as study variables and were merged into five major dimensions. Details of variables, dimensions and their mean are shown in (Table 1). Details of individual dimension and weightage are discussed separately as under: I. Dimension: Production issues of the dairy sector: Mean response for the dimension entitled Production issues of the dairy sector was found to be On seven points ranking level of agreement for this mean score can be ranked above average. Per cent weightage of the issue for effecting the growth 74.80%. Individual effect of components under dimension I can be seen in (Fig. 1). There were four components closely associated with dimension I. Mean response of these components varied between 5.58 and Variable entitled unorganized dairy sector in Varanasi district was valued with highest mean score (5.58) by the respondents. Within the issue this component can be designated as the main variable. Score for this variable was above the slightly agree level on rank scale of agreement. Mean value of rest three variables being above four indicated that the variable is reaching fairly slightly agreement zone. Most of milk in India is produced in villages or at rural sites but it is scattered (unorganized). Existing government policy support is not adequate thus it is to be strengthened further. Direct linkage between milk farmers and consumer can also help in the growth of dairy industry in the study area. Ray (2000) studied different issues and key points related to dairy industry in three villages in the Jaipur district. FIG 1: Individual effect of components on production issues of the dairy sector Vol. 33, No. 3, His key observations were the role of middlemen, lack of awareness of consumers and the lack of regulation allows middlemen (and sweet shop owners) to make substantial gains absence/low presence of facilities like credit, procurement, services in formal sector creates a situation where it pushes/compels the small farmer into arrangements with middlemen that are not necessarily beneficial. Kalsi (1992) found that the unorganized sector usually scored over the organized sector on account of the consumers confidence, the richness of milk as indicated by Malai on milk, the freshness of their products, their ability to give credit and the low overheads. Shah et al. (1990) conducted a study on the marketing of milk in organised and unorganized sectors of Bulandshahar district of Uttar Pradesh and indicated that middlemen offer lowest price. The predominance of middlemen in this area was mainly due to the non-exi stence of co-operati ve infrastructure. Generally, the middlemen advanced money to needy milk producers and procured milk at a low price round the year. It was reported that 75% of marketed surplus of small producer s production was cornered by them. II. Dimension: Education and information issues: Mean response of the dimension entitled Education and information issues was found to Thus on seven point ranking levels of agreement for this dimension can be said above slightly agree. Per cent weightage of the issue for effecting the growth 76.88%. Individual effect of components under of the dimension can be seen in (Fig. 2). There were four components closely associated with II dimension. Mean response of these components varied between 5.16 and Variable entitled No link between farmer and consumer was valued with highest mean (5.62) by the respondents, among the components. Within the issue this component can be designated as main variable and was above slightly agree on rank scale of agreement. Mean value of rest three variables was found between 4 and 5 on the seven point rank scale. The farmers in the region are mostly illiterate and they are unconscious and unaware about processing, value addition of milk and milk products and current trends in dairy industry. So they do not get proper profit from their milk production. This

4 162 ASIAN JOURNAL OF DAIRY & FOOD RESEARCH FIG 2: Individual effect of components on the issue of lack of education and information. Dimensions (Factors) I. Production issues of the dairy sector II. Education and information issues III. Infrastructural issues IV. Investment and compensation issues V. Inadequate government policies and social awareness issues TABLE 1: Major dimensions and their mean values state discourages them to have a big leap in dairy sector. The variables indicated under dimension II were found affecting the growth in dairy business in Varanasi more than the other listed in (Table 1). III. Dimension: Infrastructural issues: Mean response of for the dimension entitled Infrastructural issues was found to Thus on seven point ranking level of agreement for this dimension can be said above average. Per cent weightage of the issue for effecting the growth of dairy industry in Varanasi was calculated as 73.40%. Individual effect of components under dimension one can be seen in (Fig. 3). There were three components closely Variables Mean Total mean Gravity of the issues (%) Unorganised dairy sector in Varanasi district Very less and scattered milk production in remote areas/village No facilities for collection of milk at village level Lack of education in Eastern Varanasi region No link between farmer and consumer 5.61 Per animal milk production is very less 5.16 and long dry period No information provided about the 5.23 profit of dairy industry during education No availability of good fodder and cattle yard for animals Lack of veterinary facilities for cattle s 5.40 Lack of good road between village and 4.52 city Lack of transportation for taking milk 4.98 out from village Lack of chilling facilities at village level 5.27 Producers are not getting good rate for milk according to their hard work Lack of investment for larger scale milk 5.34 production Lack of high milk producing cattle 5.12 breeds Lack of proper storing facilities of milk 5.10 at village level Poor quality of milk in 4.34 Varanasi(Eastern) Region Inadequate of government policies for dairy industry There is no information about 4.73 conversion of milk to Indigenous milk product

5 associated with III dimension. Mean response of these components varied between 4.53 and Variable entitled No availability of good fodder and cattle yard for animals was valued with highest mean (5.51) by the respondents, among the components. Within the issue this component can be designated as main variable, score being above the slightly agree level on rank scale of agreement. Mean value of rest four variables being above 4 indicated that the variable is reaching in fair slightly agreement. Though there exist dairy cooperative network in the region but it does not seem to have good impact to improve the milk collection practices. As the farmer is still not finding a quick collection and payment of its product. Tripathi (2008) reported that key challenges for dairy industry hygiene/ inadequacies of sourcing/ collection, hygiene/ i nadequacies duri ng transportation, limited cold chain infrastructure during transportation affected self life, limited cold chain infrastructure during distribution affected self life, synthetic/adulterated milk by unscrupulous middlemen/dudhwalas and poor level of processing. IV. Dimension: Investment and compensation issues: Mean response of for the dimension entitled Investment and compensation issues was found to Thus on seven point ranking level of agreement for this dimension can be said above average. Per cent weightage of the issue for effecting the growth 73.35%. Individual effect of components under dimension one can be seen in (Fig. 4). There were two components closely associated with IV dimension. Mean response of these components varied between 5.11 and Variable entitled Producers not getting good rate for milk according to their hard work was valued with highest mean Vol. 33, No. 3, (5.75) by the respondents, than the other components. Within the issue this component can be designated as main variable. Singh et al. (2009) reported marketing manners of milk producing units in Purvanchal region of Uttar Pradesh. It was reported that there are miles to go in the direction of marketing. People are generally not aware of the fact that marketing can add to the performance. They have no marketing strategies. Marketing variables are playing negative role in determination of value of output. The significant variable that emerges in such determination is the quantity of output. V. Dimension: Inadequate government policies and social awareness issues: Mean response of for the dimension entitled Inadequate government policies and social awareness issues was found to Thus on seven point ranking level of agreement for this dimension can be said above average. Per cent weightage of the issue for effecting the growth 71.94%. Individual effect of components under dimension one can be seen in (Fig. 5). There were two components closely associated with 5 th dimension. Mean response of these components varied between 5.35 and Within the issue this component can be designated as main variable. All the variables under the dimension, being between 4 and 5, were above average on rank scale of agreement. The milk producer in the region are not getting actual price matching to hard work in comparison to market value due to unscrupulous middlemen/dudhwalas. These factors can be addressed by establishing organized dairy sector in Varanasi. Chauhan and sharma (2005) revealed in their study on the system of domestic milk marketing in India and the export potential of Indian milk and FIG 3: Individual effect of components on the issue of infrastructural issues. FIG 4: Individual effect of components for the investment and compensation issues

6 164 ASIAN JOURNAL OF DAIRY & FOOD RESEARCH FIG 5: Individual effect of components on the issue of inadequate government policies and social awareness milk product stated that data on milk production, marketed surplus and disposal pattern of milk were collected from milk producer i n rural Haryana (primary data), statistical data collected by Indian agencies during 1998 (secondary data), as well internet si tes, were also used. The contribution of large farmers was maximum, at 49.83%. The disposal of milk was highest in milk vendors (48%), followed by consumers (19%) and shop keepers (14%), milk procurement by organized and unorganized sectors was 15 and 85%, respectively. Inference: Varanasi does not produce high quantity of milk matching to its potential. Lack of high milk yielding cattle breeds, good veterinary facilities and nutritious feed are some reasons for this. Thus variables under this dimension are important for the growth of dairy industry in Varanasi. I mp l ication s: T h e go v er nment sh o u l d generate various schemes and policy for milk producers/farmers which have poor economic condi ti on. Almost 80% of mi lk flows i nto unorgani zed secto r, whi ch needs t o be pr oper ly channeli zed. Thus t o t ackl e thi s problems technically skilled human resource is required or in other words it can be said that human resource available in rural areas be trained for skill up gradation. The milk producer should be di rectly connected with the di stri ct dai ry coo perati ve sectors l i ke Gujarat dairy cooperative (Amul) so that they can o m i t m i d d l e m an /d u d h w al a s and increase their profit share. There is also a need to educate farmers regarding processing and value addition of milk and production of various milk products which could increase thei r profitability and rai se their standard of livi ng. Milk is a highly perishable commodity thus there is a high call for centralized milk collection, storage and chilling centre. Good transportation facilities are required to ensure better utilization of the produce. H igh milk yielding breeds of cattle should be introduced among farmers, as well as, cattle/ani mals should be provided with good quality fodder and good veterinary care. Provided the above we will be able to increase good quality milk production in the area. CONCLUSION To increase the competitiveness of Indian dairy industry, efforts should be made to reduce cost of producti on, increasing productivity of animals, better health care, breeding facilities and management of dairy animals can reduce the cost of milk production. The government and dairy industry can play a vital role in this direction. If India has to emerge as an exporting country, it is imperative that we sho ul d dev el op pro per pro duct i o n, processing and marketing infrastructure, which is capable of meeting internati onal quali ty requirements. A comprehensive strategy for producing quali ty and safe, dairy products should be formulated wi th sui table legal backup. Several areas in the dairy industry could be strengthened by induction of state-ofthe-art technologies, transferred from other dai ry maj o rs of t he w orld. Operati onal efficiencies are required, not only to improve yi el ds but also to reduce w aste and minimization of losses in fat, protein during milk processing. REFERENCES Ashraf, I.; Zadeh, M. N and Dubey, L. R. (2011). Dairy marketing strategies in the context of globalization: Issues and Challenges. International Journal of Trade, Economics and Finance. 4: Chauhan, A. K. and Sharma, S. P. (2005). A pattern of domestic milk marketing and export potential of milk and milk product in India. Agricultural Marketing. 48:

7 Vol. 33, No. 3, 2014 Kalsi, B.S. (1992). Let s all do it- market more milk. Indian Dairyman. 44: National Dairy Development Board (2010). National Statistics. Retrieved 16 Jun 2011, from statistics.html. Ray, S. (2000). Dairy industry in Rajasthan: Problems and prospects. Institute of Development Studies, Rajasthan. Shah, D. and Jain, D.K. (2000). Impact of Dairy co-operative on marketing pattern of milk in Bulandshahr district. Indian Dairyman Sharma, V.P and Singh, R. V. (1996). Trends in Livestock Population and milk production in India: Study of Spatial and Temporal variation. Indian dairyman. 4: Singh, B.V.; Singh, G.P. and Chaturvedi, B.K. (2009). Marketing Manners of Milk Producing Units-A Case Study of the Purvanchal Region of Uttar Pradesh, India. Pakistan Journal of Nutrition. 8: