CHAPTER IV DAIRY DEVELOPMENT UNDER OPERATION FLOOD IN HARYANA 6

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1 CHAPTER IV DAIRY DEVELOPMENT UNDER OPERATION FLOOD IN HARYANA 6 4. Background (i) For centuries, dairying in India meant keeping a head or two of milch cattle by a householder. Indian livestock farming for centuries was caught in the vicious loop of large numbers, shortage of nutritious feed and fodder, low production, and recurring epidemics. Obviously, the position of dairying in Haryana was just the same before the modern era of dairy development began; there was no proper system at the village level for handling winter surpluses, nor was there a suitable mechanism for collection, transportation, processing and distribution of milk. Surpluses could only be converted to ghee or milk based sweets. Dairying in the pre-modern era was constrained by inadequate marketing channels and by the absence of modern inputs such as balanced cattle feed, artificial insemination and scientific animal husbandry practices. A large proportion of the dairy animals in a particular area consisted of buffaloes as buffalo milk fetched a better price than cow milk because of the practice of determining the price of milk on the basis of its fat content which gave buffalo milk an edge over cow milk due to its higher fat content. The rural milk economy was gravely disadvantaged because of dairy farmers inability to profitably exploit the seasonal planks in the production of milk. The flush season for milk is the winter months, but the absence of adequate facilities for conversion of surplus milk to milk powder or other products prevented the flow of handsome returns to the dairy farmers who had no option but to convert 6 The title of this chapter as given in the Synopsis has been changed to the present one in order to make it more explicit. The chapter discusses dairy development ubder Operation Flood in India with special reference to Haryana. Page 177

2 surplus milk into ghee (clarified butter), the sale of which brought them woefully low returns. During the early fifties, dairies in India were located in urban areas, and were owned by the government. There was an absence of any efficient procurement system, and many potential rural milk sheds remained untapped. Since the city dairies were unable to obtain sufficient milk through middlemen, milk powder was imported for reconstitution for lack of its production locally. Private milk supplies were erratic, usually adulterated and over-priced. In most villages, one middleman had the procurement monopoly and producers were forced to sell their milk at prices fixed by him. Seasonal fluctuations in production often had the producer at a double disadvantage low prices in winter due to flush production and no stocks in summer due to sustained demand. The low prices paid by middlemen to milk producers ensured that they did not invest in the expansion of their production, which thus stagnated. (ii) Modern dairy system connotes some degree of organization and use of new (western type) technology in all the three sub-systems of the industry i.e. production, processing and marketing. The form of organization could be public corporate, cooperative or proprietorship. In India, a variety of marketing channels now exist in the dairy sector. These include modern/organized (cooperatives and private dairy plants) as well as the traditional/unorganized channel engaged in marketing of liquid milk and traditional products such as locally manufactured ghee, paneer (cottage cheese), and milk-based sweets. Although the organized sector, which produces western type of dairy products has shown fast growth in the last three decades, it still accounts for only 15 per cent of the total milk produced in the country and a far larger proportion of milk continues to be marketed by the unorganized sector - comprising innumerable vendors, small Page 178

3 processors, merchants, manufacturers and retailers of indigenous milk products like khoa, paneer, dahi and milk based sweets, etc. But the main problem in the unorganized sector is quality, which creates a serious threat to the health of consumers. Unsanitary local conditions, unhygienic containers, substandard processing equipment, poor handling methods, breaks in the cold chain etc contribute to poor quality and at times unsafe milk in the unorganized sector. The organized sector serves as an exemplar for structural changes in the unorganized sector by use of the measures like processing at village level, process and market pasteurized milk in a cost effective manner, quality up gradation and up gradation of traditional technology to handle commercial scale using modern equipment and management skills Dairy Development under Operation Flood (OF) Phase I, II, and III The process of modernization of India s dairy industry, particularly processing and marketing sub-systems started in the 1970s with the launching of phase I of Operation Flood (OF) in 10 selected milk sheds in 10 states of the Indian Union 7. Operation Flood sought to replicate the Anand Pattern Dairy Co-operative in selected milksheds in India and thereby to modernize and develop the country s dairy industry Technological innovations The dairy sector was characterized by an inadequate infrastructure for procurement, transportation, processing and marketing of milk. In many ways, technological advance is the sine-qua-non of development. Appropriate technology is necessary to obtain greater output from a given quantity of resources. This statement 7 In Haryana, Operation Flood was inducted in an evalution of dairy development under Operation Flood in Haryana follows in Section 4. Page 179

4 applies to production, procurement, processing and marketing sub-systems of the dairy industry. Transition of traditional to modern dairy industry requires appropriate technology like Indian dairy products technology, packaging technology, transportation, cold chain and low temperature technologies, probiotic and nutraceutical product technology and information communication technologies. In the short run, a country can import new technology, and adopt/ adapt it to suit the local conditions. But in the long run, a country should have its own research base built-up to generate a continuous flow of new technology, a dynamic dairy cooperative organization adopting and adapting modern technology for production processing and marketing of milk and milk products. Dairy development owes much to the efforts of the education, research, extension and related development agencies in the public, co-operative and private sectors. Its base stems from the network of 28 agricultural universities, 36 veterinary colleges, 10 dairy science colleges and over 80 agricultural colleges and institutes of the country. The contribution of the Bhartiya Agro Industries Foundation (BAIF), Training in Frozen Semen Technology at the Central Frozen Semen Production and Training Institute (GOI) at Hesearghatta near Bangalore, Indian Council of Agricultural Research, New Delhi, National Dairy Research Institute, Karnal, and National Dairy Development Board Anand has been widely recognized in propagating scientific dairying (Singh Katar, 1987) Anand Pattern Milk Co-operative Structure As mentioned in the previous chapter, the Anand Pattern of Milk Cooperatives is a vertically integrated cooperative structure involving farmers in managing its affairs. With its concept since developed in a western Indian city of Gujarat State Page 180

5 called Anand and with its success, the system became popularly known as the Anand Pattern of cooperative dairy development. With its continued popularity and replication initially at the state level, followed by at the national level, it became globally known as Anand Model of cooperative dairy development. The Anand Pattern Dairy Cooperatives of a state formulate and implement their own policies and programmes for dairy development in their area and hire professional managers and technicians for these purposes. The role of the State Government is limited to assist the cooperatives financially in implementing their own programmes. The State Government funds for dairy development are placed at the disposal of the cooperatives.(nddb, 1987) features: The structure of Anand Pattern of Milk Cooperatives has the following salient (1). Three Tier Organisatinal Structure A three-tier structure comprises of milk producers societies at the village level, milk producers co-operative union at the district level and the state milk federation as an apex body at the state level. This structure permits the horizontal and vertical integration of all dairy development activities in a state and makes it possible to realize the economies of scale in procurement, processing and marketing of milk through the use of modern technology, as depicted in Fig.20. Page 181

6 Milk Producer Balanced Feed Veterinary First Aid Box A.I Services Primary Milk Producers Extension Services Balanced Cattle Feed Balanced Cattlefeed plant Animal Health Cover A.I Services Sperm Station Payment twice a day Weighing, Grading and Collection Transportation District Co-operative Milk Producers Payment every ten days Dairy Plant Milk Producers Source: National Dairy Development.Board Anand, Gujarat, India Processing, Packaging and Transportation Marketing and Distribution Consumer Payment Figure 20: showing the Co-operative Milk Producer s Organisation on Anand Pattern Page 182

7 (a) State level Co-operatives The State Dairy Federation is a federated body of all Milk Unions in the state and owns the milk plants for the efficient co-ordination and smooth working of all its units and various milk unions. It is the apex body at the state level. (b) District Co-operatives Milk Union The district level co-operatives was also called Milk Unions at the district level. The Milk Cooperative Societies of one or more districts come together to form Milk Unions. Milk unions are federated to the Apex Body at the state level. (c) Primary Milk Co-operatives The primary milk co-operatives also called Societies function at the village level. Milk producers in a village join to form Village Dairy Cooperatives Societies. The primary society is managed by the producers themselves. (2). Producer elected leadership and decentralized decision making Milk producers, who are members and enjoy good standing in these village cooperatives, constitute a pool from which policy makers are elected. Management Committees at the society level and Board of Directors at the Union and the Federation levels have both powers and responsibilities for formulating and executing their respective policies and appointing their chief executives who are responsible for implementing the polices. The democratic and decentralized policy making structure may well be called an organizational reform which has evolved over some sixty years since 1946 when the first co-operative was founded at Anand. Page 183

8 (3). A Cadre of Professionally Competent Managers and Technicians Management is one of the crucial determinants of the success of a development programme. In the Anand Pattern Co-operative structure, special emphasis is given on finding/attracting and retaining professionally competent and dedicated managers, technicians and other supporting staff to ensure the most efficient functioning of the system. The motivated and committed staff extends technical guidance to the unions in all spheres of personnel, technical, marketing, and financial management as well as to make them quality conscious, through use of modern methods of laboratory testing of various products. (4). Provision of all necessary production inputs and services The Anand Pattern co-operatives provide their members with all necessary inputs and services for increasing milk production. Their spirited cooperation provides benefits to the farmers such as a artificial insemination to upgrade the local stock of milch animals, nutritious and well balanced cattle feed round the year at prices lower than market prices and in adequate quantities; necessary animal health care and improved quality fodder seeds are also provided by the unions to the members at a nominal cost. (5). Integration of Production, Processing and Marketing The activities for promoting production, procurement and processing of milk and marketing of milk products for economic development of the milk producers are fully integrated to derive full benefits from the backward and forward linkages between them, and to eliminate the exploitation of producers and consumers by intermediaries. The year round assured market at remunerative prices for producers of milk provides them necessary incentive to increase their milk production. Page 184

9 (6). Continuous and Concurrent audit The Anand Pattern Co-operatives are subject to continuous and concurrent audit in order to ensure clean business and minimal chance of corruption. (7). Cash payment for milk daily/weekly/fortnightly on basis of fat content basis This has helped in meeting the day to day cash requirement of the members as also in maintaining their faith and trust in the system. (8). Contribution to Village Amenities The Anand Pattern village co-operatives set aside a considerable portion of their annual net profits to provide basic amenities and facilities in the village such as schools, health centres, libraries, Panchayat Ghars, roads, and drinking water. These welfare activities serve to attract the loyalty and support of the members as well as other villagers who are not member of the co-operatives. (9). What has made the Anand model a success? Each tier of the Anand organizational structure performs a unique function: procurement and services by the village cooperative; processing by the district union; marketing by the state federation and advancing the interests of the cooperative dairy industry by the National federation. Thus, Anand Model has evolved into an integrated approach to systematic dairy development. Essentially to the idea of producer control underlying the Anand Pattern ensures the system of producer representation. While in practice there are important deviations, ideally the structure of democratic representation functions follows. The general meeting of village producer members elects the managing committee, which in turn elects its chairman. The general meeting of the district union comprises one representative from each of Page 185

10 the affiliated village societies. These milk unions are managed by the representatives of milk producers elected from amongst the chairmen of co-operatives societies. The affairs of the milk unions are managed by the Board of Directors which is elected from the milk societies affiliated to the respective milk unions. The federation s board also includes non voting members like the managing director and nominees of the district registrar, the co-operative bank, the NDDB/IDC and a technical expert. The Anand Model succeeded largely because it involves people in their own development and because their interests are safe in their own hands. Under Operation Flood the entire institutional infrastructure set up at the village level, the district level and the state level is owned and operated by the farmers themselves. The Anand Model cooperatives have progressively eliminated middlemen, bringing the producers in direct contact with consumers Operation Flood: A Brief Overview Goal of Operation Flood Operation Flood (OF) was launched in 1970 to restructure the markets in India and to make the market a fast engine for milk production. The overall goal of Operation Flood was to lay the foundation of a modern dairy industry in India which would adequately meet the country s need for milk and milk products, and which would be capable of viable, self sustaining growth. This was sought to be done through the establishment of producer controlled dairy cooperatives in the major milksheds, modeled on Amul, which would evolve into viable business enterprises. In effect, Operation Flood was planned to enable millions of small producers of milk to market their surplus production, through their cooperatives, and gain direct access to far-flung urban demand centres, eliminating all middlemen. Page 186

11 4.3.2 Three Phases of Operation Flood The programme was implemented in three phases. OF-I ( ), OF-II ( ) and ( ). Phase I of the project was agreed upon between the Government of India and the World Food Programme(WFP) in March Operation Flood involved an imaginative but pragmatic use of funds generated by monetizing the WFP gifts of milk powder (126 thousand tonnes) and butter oil (42 thousand tonnes). The commodities were sold to the metropolitan dairies at market prices, to help them to capture a commanding share of the city s milk market. Operation Flood-I covered eighteen rural districts and was later extended to twentyseven districts and involved the participation of 1.4 million rural families. The second phase of Operation Flood, launched in 1981, aimed at bringing much wider areas of India within its range. The milksheds increased from 18 to 136 and 290 urban markets expanded the outlets for milk. By the end of 1985, a self-sustaining system of 43,000 village cooperatives covering 4.25 million milk producers had become a reality. About US$150 million was provided by the World Bank, with the balance of project financing obtained in the form of commodity assistance from the EEC. In 1986, Operation Flood III was proposed by Indian Government to the EEC and the World Bank to further extend and consolidate the infrastructure for milk procurement, processing and marketing established under OF-I and OF-II. Operation Flood s Phase III consolidated India s dairy cooperative movement, adding new dairy cooperatives to existing societies organized during phase III. Milksheds peaked to 173 in Impact of Operation Flood An indicator of the successful impact of Operation Flood is the amount of milk procured and supplied to consumers. Average Milk procurement increased from 2.56 million kg per day during Phase I to 11 million kg per day during Phase III. Page 187

12 However, there are variations in the proportion of milk procured to total milk production across states. The striking pattern that emerges is the predominance of cooperatives in Gujarat and Maharashtra. Between Phase I and III, average liquid milk marketing increased from 27.8 lakh litres per day to about 100 lakh litres per day. Major national level institutions involved in the implementation of the successive phases of this programme have been the National Dairy Development (NDDB) and the Indian Dairy Corporation (IDC). Before the third phase of Operation Flood was launched, NDDB itself underwent structural changes as a result of the LK Jha committee recommendations. The dairy board (a society), and the Indian Dairy Corporation (a company), were merged by an Act of Parliament in The new statutory corporate body retained the old name National Dairy Development Board (NDDB) and almost all of the autonomy that the Board has enjoyed all along. The NDDB Act 1987 declared the board an institution of national importance a tribute to its outstanding stature and achievements over the decades Objectives of OF-I The objectives for launching the initial phase (Phase I) of operation flood may be enumerated as under. (1) To enable each city s liquid-milk scheme to restructure and capture a commanding share of its market and to make available wholesome milk at stable and reasonable prices to the bulk of city milk consumers, including vulnerable groups, namely, pre-school children, and nursing and expectant mothers, with major effects on protein intake. (2) To enable the dairy organizations involved in the project to identify and satisfy the needs of milk consumers and producers, so that consumers preferences can be fulfilled economically and producers can directly obtain a Page 188

13 larger share of the price paid by consumers for their milk without any fleecing by middlemen. (3) To improve productivity of dairy farming in the rural areas with the long term objective of achieving self-sufficiency in milk, thereby bringing major increases in agricultural output and incomes with special emphasis on improvement of the income of small farmers and landless people. (4) To facilitate long term productive investment in dairy and cattle development. (5) To remove dairy cattle from the cities where they represent a growing problem of genetic waste, social cost and public health. (6) To ensure a sufficient supply of personnel to handle each facet of the project. (7) To establish a broad basis for accelerated development of the national dairy industry in the project period as well as the post project period Objectives of OF-II Whereas OF-I was confined to the rural hinterland milksheds of the four metrocities, namely, Delhi, Calcutta, Bombay and Madras, OF-II assumed a national scale by enlarging its sweep aiming to cover all major milksheds of India. The Objectives of OF-II were set out to accomplish the following major tasks. (1) To erect a National Milk Grid that will link the rural milksheds to the major demand centres with urban populations totalling 150 million. (2) To enable ten million rural milk producers families to build a viable, selfsustaining, dairy industry by mid (3) To enable the milk producers to rear a National Milch Herd of some 14 million cross-bred cows and up-graded buffaloes during 1980s. Page 189

14 (4) To usher in modernization and expansion of the dairy industry and its infrastructure for activating the milk grid and to erect the infrastructure required to support a viable national dairy industry, including a national frozen semen system, vaccine production and delivery systems, indigenous development of dairy processing and conservation methods (for traditional and modern dairy products) with enlarged facilities for indigenous design and manufacture of dairy equipment, provision of man-power development programmes with special emphasis on professional, managerial, and technical cadres for rural industries, such as dairying, and interim programmes to supply butteroil as a medium-priced cooking medium; to supply extracted foods as the basis for infant supplementary feeding programmes, especially in integrated rural development programmes based on the Anand Pattern, and erection of Management Information System, to provide timely information to local decision-makers responsible for development of the constituent parts of the National Milk Grid. (5) By means of the improvements thus achieved in milk production and marketing, to enable milk and milk products to form an appropriate part of a stable, nutritionally adequate diet (currently estimated at an average per capita availability of 180 grams of milk daily) which was to be achieved for a population of 750 million during the 1980s OF-II s edge over OF-I The OF-II plans revealed a number of noteworthy shifts in comparison with the first phase of Operation Flood. In the first place, the stated objectives of OF- II no longer explicitly mentioned the vulnerable groups in the cities and the small farmers and landless people in the rural areas as specific target groups of the Page 190

15 programme. On the other hand, the OF-II objectives envisaged supplementary infant feeding programmes in rural areas. Secondly, the removal of dairy cattle from the cities, once an important objective of OF-I, did not figure in OF-II plan of action. Thirdly and perhaps most importantly, the OF-II programme involved a shift from a two-tier structure of co-operative organization to a three-tier structure. The three-tier structure consisted of (a) village milk producers cooperatives, each of which were members of (b) a district co-operative milk producers union and finally (c) a cluster federation, being the federation of these unions in a cluster of five or six contiguous districts. These federation were designed as the main state level implementing agencies under OF-II, and replaced the earlier established state dairy development corporative Objective of OF-III The objective of Operation Flood-III focused on consolidating the milk procurement, processing and marketing infrastructure created under OF-I & OF- II so as to achieve a strong and self-sustainable co-operative dairy sector. The Operation Flood-III proposal document of the NDDB puts special emphasis on this consolidation effort by indicating a number of key tasks Operation Flood ends The year saw the termination of Operation Flood III. As stated earlier, OF was funded by a World Bank loan/credit of US$365 million, supplemented by EEC food aid, and mobilization of internal resources of NDDB. The salient features of Operation Flood in its three phases are tabulated hereunder (Table 4.1). Page 191

16 Features OF-I OF-II OF-III Period July 1, 1970 to March 31, 1981 October 2, 1979 to March 31, 1985 April 1, 1985 to April 30, 1996 Number of Milksheds covered Number of Anand Pattern DCSs set up ( 000) Number of Members (in million) Average Milk Procurement (Million Ltrs Per Day) Processing Capacity in Rural Dairies (Million Ltrs Per Day) Drying Capacity (Metric Tons Per Day) Liquid Milk Marketing (Million Ltrs Per Day) Table 4.1 showing Salient Features of Operation Flood Source: NDDB At the conclusions of Operation Flood III, 72,744 DCSs in 170 milksheds of the country, having a total membership of million had been organized. The targets set had either been effectively achieved or exceeded. However, procurement targets could not be fully realized, as private agencies started procuring milk from the cooperative villages, following the introduction of the new delicensing policy under the Government s programme of economic liberalization. Page 192

17 4.3.8 Achievement of Operation Flood Under Operation Flood, conditions for long-term growth in procurement of milk have been created. An assured market and remunerative produce prices for raw milk, technical input services including balanced cattle feed, and emergency veterinary health services, have all contributed to sustained increases in milk production. Three state-of-the-art dairies designed to produce quality products for both the domestic and export markets were nearing completion, when Operation Flood ended. Besides creating urban employment in dairy plants, marketing, transport, and distribution, Operation Flood III has emerged as India s largest sustainable rural employment programme. About 75 percent of dairy co-operative members who are landless or marginal and small farmers bring in more than 60 percent of the milk procured by the co-operatives. About Rs million is paid annually to milk producers by their village societies. For landless labourers, marginal and small farmers, this income at times is their only regular cash flow, transforming dairying into a core economic activity. In the concluding year of Operation Flood milk cooperatives paid about 18 percent higher prices to their members for milk in comparison to market rates. The market for the milk products remained buoyant during the year. The co-operatives procured 6.4 percent more milk on an average compared to the previous year, achieving a peak procurement of MLPD during flush season. A record marketing of liquid milk by co-operatives shot up to the level of 9.9 MLPD during the year. Rural milk processing capacity of 18.1 MLPD and drying capacity of 842 mtpd had been created till April 1996 to ensure that the farmer got a year-round remunerative market for his produce. To enable milk producers to raise their Page 193

18 productivity, nearly 626,000 tonnes of balanced cattle feed and 260,000 tonnes of pass protein feed were sold through some 34,000 DCSs during the year. In addition, 16,800 DCSs offered regular AI services till April The co-operatives succeeded in transferring 83 percent of the consumer s rupee to the producers during the year as against 81 percent in the previous year. Physical targets and achievements of OF-III are depicted in Table 4.2. It is rightly claimed that Operation Flood has been able to modernize the dairy sector to a level from where it can take off to meet not only the country s demand for milk and milk products in the next century but can also exploit global market opportunities, capitalizing on the inherent comparative production advantages available to India, provided right policy options are exercised by the Government to overcome some already visible signs of market disorders in the post liberalization period, as listed below. (i) Over capitalization in the private dairy sector. (ii) Ineffective enforcement of standards of processing, hygiene and quality, and (iii) A near absence of an effective monitoring mechanism to enforce market discipline. These major threats need to be countered to protect the long-term interests of milk producers, their organizations, as well as of consumers. A number of field studies conducted by independent researchers confirm emphatically the role played by milk co-operatives in adding strength to the efforts of India s millions of small, fragmented and isolated milk producers, to sustain their livelihood, to provide gainful employment and to bring them close to the market. Page 194

19 Items Target Ach. Target Ach. Anand Pattern DCS(000) Organized Functional DCS membership (lakh) Milk Procurement(kgpd) -- Average Build up of dairy processing capacity (llpd) Urban milk marketing (llpd) Table 4.2 Showing Operation Flood III Physical Targets and Achievements Source: NDDB 4.4. Dairy Development in Haryana Prior to Operation Flood As Haryana has a strong agricultural base, the by-products of agriculture in the form of crop residues are available in abundance to support dairy farming, which is spread all over the state. During 1960s, the state government tried out different strategies to develop dairying, including establishing dairies run by Government departments, setting up cattle colonies in urban areas, and organizing various milk production schemes. Almost invariably, dairy processing plants were built in cities Page 195

20 rather than in the milk sheds where milk was produced. These government projects encountered very many difficulties in organizing rural milk procurement and running milk processing schemes economically. None of them exclusively concentrated on creating a well-oiled system for procurement of milk, which was left to contractors and middlemen. Ruled by greed, the private milk contractors also took away the best milch buffaloes and cows from the villages and established milch animal herds in the cities, thereby not only fouling the environment by polluting land, air and water resources but also inhumanly starving the calves to death and selling the animals to butchers when the cows and buffaloes became dry. The unscrupulous contractors by their vicious practices caused an immense loss of good genetic stock. To improve the prevailing state of affairs in the dairy sector, the State Government entrusted the dairy development programme to an autonomous body namely, Haryana Dairy Development Corporation which started functioning in the State from the year Its tenure lasted for seven year. The functions of this corporation were thereafter taken over by Haryana Dairy Development Cooperative Federation w.e.f. 1 st April, With the decision of the State Government to bring the entire organized dairy industry in the cooperative sector the entire business and all assets of the corporation were handed over to the federation on lease basis w.e.f The milk co-operatives in the state are inter-linked in a three-tier structure. This cooperative federation was made responsible for implementing the Operation Flood programmes by the State Government Dairy Development under Operation Flood OF-I The Dairy Development Programme under Operation Flood-I was implemented in Rohtak and Gurgaon Milkshed areas w.e.f. 1 st July 1977 with financial assistance from the erstwhile Indian Dairy Corporation. The total financial outlay of the programme was Rs lacs. A rural cooperative infrastructure was Page 196

21 built in the villages where milk producers had joined hands to form Primary milk societies. Total milk production in the State rose consistently risen under OF-I as is evident from the data given in Table 4.3 below. Year 000MT Table 4.3 Showing Milk Production under Operation Flood-I Source: NDDB OF-II (a) Operation Flood-II Programme was as a sequel to Operation Flood-I. The OF-II programme was launched in the entire State w.e.f Before its implementation, the procurement and inputs (P and I) activities were being undertaken by the Haryana Dairy Development Cooperatives Federation directly. The Technical Inputs Programme (T.I.P) activities were, however, being provided only in few districts covered under Operation Flood-I and the Desert Development Programme (DDP). The District Milk Unions (DMUs) though existing, but all of them were almost lying dormant. With a view to adopt the three-tier structure of the cooperatives as envisaged in Operation Flood-II, the Federation decided to transfer the P and I activities to the Milk Unions in a phased manner w.e.f Initially, Page 197

22 only three unions were entrusted to undertake these activities, but subsequently this responsibility was also transferred to the remaining milk unions. Presently the P and I activities except the centralized technical inputs activities were being undertaken by the District Milk Unions. (b) The total outlay of the OF-II project was Rs crores against which an amount of Rs. 9 crores was invested in Haryana until March (c) With a view to revitalize the dairy development in the State on Anand Pattern under Operation Flood-III, a state plan was prepared and sent to NDDB. The total outlay as envisaged in the plan was to the tune of Rs. 30 crores. The investment under Action Item No.I (Processing and Chilling Facilities), Action Item No.II (Technical Inputs Programme), Action Item No.III (Marketing) was financed as 70% loan and 30% grant which worked out to Rs crores loan and 8.5 crores grant. Under Action Item No.IV (Support to Primary Milk Societies) the outlay was 2.19 crores which was 100% grant from National Dairy Development Board. 5% of Action Item I and IV were likewise provided to be as 100% grant as direct expenditure of NDDB. The rate of interest applicable for loan component was 10% per annum. (d) A review of the overall progress made under Operation Flood-II is presented hereunder. (i) In essence, the objective of Operation Flood-II was to replicate the Anand Pattern in Haryana. Considerable success was achieved in this regard. (ii) Replicating the Anand Pattern involves establishment of a three tier cooperative structure, owned and controlled by the farmers through their elected representatives to ensure that the member receive the maximum possible share of the consumers rupee. Many of the basic concepts of the Anand Model were successfully implemented in Haryana. Page 198

23 (iii) The overall achievement of milk procurement was about 61% of Operation Flood target by the year There was, however, shortfall in the organization of DCS as compared to the target, though the milkshed of Sirsa had fully achieved the target set for the year During this period the Federation expanded its product market. (iv) A large number of the conventional dairy societies which were lying defunct for many years were converted to Anand Pattern societies. New as well as converted societies began working on Anand Pattern and adopted Anand Pattern model byelaws, and introduced essential practices such as regular testing of milk for fat content, and regular payment of milk price to the milk producers. However, two axis method of pricing was yet to be adopted for buffalo milk. (v) During the year , there were 1658 functional societies in the State as against 970 in The most encouraging aspect during the past two years had been that most of them (1518 out of 1658 during ) were able to earn net profits, thereby ensuring their financial viability. (vi) All district-based Milk Unions except that of district Ambala elected their Board of Directors to manage the affairs of the unions independently, under the general guidelines issued by the Federation. The Milk Unions in the State not only undertook such activities as provision of technical input services which included animal health cover, artificial insemination, supply of cattle feed and fodder seeds. Besides that, they were entrusted with the responsibility of pushing up the sale of milk within the state of Haryana to improve their own financial health and also to eliminate middlemen. (vii) The Federation at the state level punctually performed its statutory responsibility for the processing of milk, marketing of milk and milk products outside Haryana, and for providing technical expertise to the unions. Page 199

24 (viii) The majority of the staff in the Unions was permanently absorbed by them and was not on common cadre of the Haryana Dairy Development Cooperative Federation. The remaining staff which included senior functionaries of the unions would be absorbed in the Milk Union when the assets of the Milk Plants/chilling centre were transferred to the Unions. Procedures and rules for recruitment/ appointment of the Managing Director of the Unions and other senior staff were scheduled to be formalized as per the process set in motion. (ix) During Operation Flood-II, the implementation of Artificial Insemination progrsmme in some of the Milk Sheds, namely, Ambala, Karnal, Kurukshetra and Sirsa remained lower than envisaged, yet an overall count, the number of inseminations performed both on cows and buffaloes increased from 4779 during to 7014 during (x) During the year , about 1034 MT of ghee was manufactured against 670 MT during the year MT of Skimmed Milk Powder and 410 MT of whole milk powder was also manufactured during against 356 MT of SMP and 29 MT of WMP during MT of Table Butter was manufactured during against 92 MT during (xi) Sizeable quantities of liquid milk, table butter, whole milk powder, skimmed milk powder and sweetened condensed milk were regularly supplied to the Army while SMP was supplied to the Indian Dairy Corporation during the entire period of OF-II. (xii) To match an impressive procurement turnover, the total sales turnover of the Federation also increased from Rs lacs during to Rs lacs during Page 200

25 (xiii) In view of the increasing milk procurement, the handling capacity of milk plants at Ambala and Jind were expanded from 20,000 LPD and 50,000 LPD to 75,000 LPD and 1,00,000 LPD respectively. At the Jind milk plant, the powder manufacturing capacity shot up from 5 MT/day to 10 MT /day. The refrigeration and steam generation facilities were substantially expanded at the milk plants of Ambala and Jind. In addition to the existing bottling facilities, pouch filling machines were installed at the milk plant of Ambala. Milk chilling centre at Hisar was upgraded and expanded into a full-fledged milk plant with 30,000 LPD capacity to supply pasteurized milk in pouches. The milk plant at Rohtak was modified and renovated. Solar water heating systems were installed at the milk plant of Ballabgarh as part of its expansion from a capacity of 50,000 LPD to 1, 00,000 LPD. (xiv) Five new milk chilling centres were commissioned at Jagadhari, Kurukshetra, Kaithal, Karnal and Goriwala in hired ice factories temporarily till full fledged milk chilling centres were established. Operation Flood-II formally ended on OF-III Operation Flood-III programme was a continuation of OF-II. The Operation Flood-II programme dimensions as per the appraisal report and the achievement of the key activities as on March 1987 formed the basis for revised operation flood programme. Great progress was made on the dairy front in Haryana during the period from to Milk production rose from MT in to MT by the end of OF-III in and per capita consumption of milk rose to 611 grams in from 478 grams in Page 201

26 4.4.3 Dairy Development post Operation Flood Over to HDDCF After the end of OF-III, progress in the working of HDDCF continued at a steady pace. The number of functional societies which was 2607 in rose to 4728 in , as detailed in the previous chapter. Alongwith the addition of five milk plants, the number of chilling centres rose to 27 in The capacity utilization of milk plants which was % in rose to 190% in Milk plants in Haryana now have a handling capacity of 4.70 lacs litres per day. The per capita milk availability has also increased from 611 grams in to 679 grams in A number of programmes have been launched in the State by the HDDCF for breed improvement, health care, better management, fodder development and marketing of milk and milk products. Besides meeting local demand, exports of milk products are being made from Haryana to other countries resulting in foreign exchange earning for the State. The Haryana Government is taking keen interest in the activities of HDDCF and providing all help in developing the dairy industry in the State which has become a reliable source of generating employment in rural areas and increasing income of the poor, resulting in the rise in their standard of living Need for Operation Flood Phase-IV Increase in exportable surpluses of milk and milk products depend on increased production of milk in the country. the best option to fulfil this vital mission is to launch the fourth phase of Operation Flood. With the expertise gained from its three phases, Operation Flood is best qualified to undertake the task of increasing milk production to the farthest extent possible. Page 202

27 Dairy exporters in Haryana like their counterparts in the rest of the country are hoping and praying for the National Dairy Development taking an early decision for the revival of Operation Flood in the national interest of establishing India on a firm footing in the international dairy market. If that happens, it will surely usher in the Golden Age of dairy development in Haryana. Everyone in Haryana- the Government, the dairy industry, and the dairy farmers- are eagerly waiting for that happy development to materialize. Page 203