CHAPTER NO. IV COST STRUCTURE OF SELECTED MILK SCHEME

Transcription

1 CHAPTER NO. IV COST STRUCTURE OF SELECTED MILK SCHEME

2 Study ofpricing Policy of Milk CHAPTER 4 COST STRUCTURE OF SELECTED MILK SCHEME 4.1 INTRODUCTION: The Government of Maharashtra has adopted the three-tire system for development of dairy department. The establishment of Government dairies at the district level is based on three-tire system.: Such as the third tire is the infrastructure of the Government dairies at : district level with corelated milk chilling centers under these dailies. In Sangli district basically named as Krishna Valley Milk Project Miraj (Sangli) was establish on 25/03/1961, with a view of railway siding facilities at Miraj Railway Junction for transportation of milk and milk products to the cities like Pune and Mumbai. This chapter includes the Case Study of Government Milk Scheme Miraj, where in have included the cost structure is of the milk scheme. The study of cost factor based on fixed cost and variable cost. The factors of cost incurred, which are fixed in nature and variable in nature are given in following table no The comparative study of the five years, starting from year up to is done. Fortunately it is observed that, in the year the capacity of the milk scheme was 154

3 Study ofpricing Polity of Milk utilized to its utmost level (on an average 95%). While studying the cost structure the statistical date of procurement, processing, product manufacturing, distribution, have taken as a base of year And the comparison of next four years with year have done, relating to various costs and profit loss analysis with positive / negative effect of pricing policy. Table showing the various factor included under the head of Fixed Cost and Variable Cost - Table No. 4.1 Factors under the head of Fixed Cost Factors under the head of Variable Cost 1. Salary. 1. Printing Stationery. 2. Overtime Allowance 2. Octroi Charges. 3. Traveling Allowance 3. Water Charges. 4. Telephone. 4. Electricity Charged. 5. Fees 5. Spare Parts of Dairy Mach. 6. Uniform & Gum Boots. 6. Repairs of Dairy Mach. 7. Depreciation. 7. Dairy Consumables. 8. Pension Contribution. 8. Chemicals & Glass Articles. 9. Audit Fees. 9. Ammonia Gas. 10. Stipend. 10. Detergent Pest. 11. Water Polution Fees. 11. Oil & Lubricants. 12. Transformer Rent. 12. Furnace Oil / LSHS 13. Insurance on Vehicles. 13. Caustic Soda. 14. ISI Marking Fees. 14. Rennet Powder. 15. Insurance on Products. 15. Weighing Scale Charges. 16. Warehouse Rent. 16. Cheese Red Wax. 17. Petrol & Diesel. 18. Tyres, Tubs & Flaps. 19. Vehicle Spare Parts. 20. Vehicle Repairs. 21. S.S. Engine Oil / Grease. 22. Transport Consumables. 23. Tyre Remolding. 24. Motor Batteries. 25. Packing Material. 26. SMPHamali Charges. 27. Use of Van. 28. White Butter Storage. 155

4 Study of Pricing Policy of Milk 4.2. Cost Analysis of Government Milk Scheme, Miraj. While analyzing the cost accounts of Government Milk Scheme, Miraj the Trading Account, related with buffalo milk, cow milk and the milk products manufactured from the cow milk and buffalo milk or combination of their of. Which is done for study period, have shown in table in numerical forms and the graphs based on these tables. The interpretation of tables and graphs is given under respective tables and graphs. 1. Buffalo Milk (Cost Per Lit) Table No.: showing the cost analysis of buffalo milk for the study period. Particulars Buffallo Milk (Cost Rs. Per Lit.) I) Manufacturing Cost li) Distribution Exps ill) Cost Total IV) Avg. Sale Price V) Profit & Loss

5 Study of Pricing Policy of Milk GRAPH SHOWING BUFFALO MILK COST (P R 1C E ) AN AL Y S IS. O M anufacturing Cost B Distribution Exps. OCost Total Avg. Sale Price Profit & Loss Graph No.: Source: Proforma Account (Government Milk Scheme, Miraj) Manufacturing Cost factors includes the price paid to the Co - operatives milk unions / society + the commission charges paid to union / Co - operatives society + transportation charges + chilling charges + processing expenses. Thus all these factors together accounts to manufacturing cost of cow or buffalo milk. The distribution cost factors includes, the expenditure incurred on sale of milk in form of transportation charges, storage charges, sales commission etc. Manufacturing cost and distribution expenses together accounts total cost Which is shown in table From the table No it is observed that the buffalo milk was procured only in the year and having total cost Rs

6 Study of Pricing Policy of Milk and and sales price Rs and 9.4 with a loss of Rs and 0.72 per litre in the respective years. 2. Cow Milk (Cost Per Lit.) Table No.: Table showing cost analysis of cow milk Particulars Cow Milk (Cost Per Lit.) 1) Manufacturing Cost II) Distribution Exps Ill) Cost Total IV) Avg. Sale Price V) Profit & Loss Graph No.: Source: Proforma Account (Government Milk Scheme, Miraj GRAPH SHOWING COW MILK COST (PRICE) PER LITRE ANALYSIS. Rupees per Litre Manufacturing Cost D Distribution Exps. OCost Total QAvg. Sale Price Profit & Loss From the table No and Graph No it is observed that, the manufacturing price of cow milk which includes purchase price and procurement expenditure is more than sales price stipulated which has resulted in the loss through out the study period. 158

7 Study of Pricing Policy of Milk 3.25 kg SMP (Cost Per kg.) After studying the cost analysis of buffalo and cow milk the cost analysis of various milk products is done hereafter. In the cost analysis of milk products includes the analysis of manufacturing cost ami distribution cost and all together comes to total cost. The factors included in the manufacturing cost are - cost of raw material that for S.M.P. the raw material is skimmed milk, for white butter the raw material is cream, for ghee the raw material is either cream or butter and for cheese the raw material is milk. Plus processing expenses that is the processing of S.M.P. includes the cost of conversation of skimmed milk in to skimmed milk powder (S.M.P.), in case of butter the cost of conversation of cream in to butter, in case of ghee the cost of conversation of cream or butter in to ghee and in case of cheese cost of conversation of milk in to cheese. The distribution expenses related with milk products includes the cost of packaging, storage, transportation, sales commission. By taking in consideration all these factors explained in above paragraphs the analysis of cost of milk products is done hereafter. 159

8 Study of Pricing Policy ofmilk Table No.: showing cost analysis of S.M.P Particulars kg SMP (Cost Per kg.) I) Manufacturing Cost II) Distribution Exps. III) Cost Total IV) Avg. Sale Price V) Profit & Loss GRAPH SHOWING 25 kg SMP COST (PRICE) ANALYSIS Years Avg. Sale Price Profit & Loss Graph No.: Source: Proforma Account (Government Milk Scheme, Miraj) The table No and the Graph related shows that, the manufacturing cost which includes the cost of raw material i.e. skimmed milk and the variable and fixed costs plus the cost incurred on the distribution of S.M.P. is more than sales price which has resulted in the loss. Hereafter the break even calculations it will be seen that, how much more quantity of S.M.P. was expected to be manufactured with same variable cost for the sake of no loss no profit base. Or otherwise with the

9 Study of Pricing Policy ofmilk same production (Basic) cost to have no profit no loss what were the expected rates have shown after the break even calculations. 4. White Butter (Cost Per kg.) Table No.: Particulars White Butter (Cost Per kg.) 1) Manufacturing Cost II) Distribution Exps Ill) Cost Total IV) Avg. Sale Price V) Profit & Loss GRAPH SHOWING WHITE BUTTER COST (PRICE) ANALYSIS Y ears Rupes per kq Manufacturing Cost Distribution Exps. Cost Total OAvg, Sale Price Profit & Graph No.: Source: Proforma Account (Government Milk Scheme, Miraj) From the table no and related graph it is observed that, in case of white butter the loss is in the year and in the study period of to The specific reason behind this to be noted is that, in year and as compared to sales price the manufacturing cost and distribution expenses are more. Respectively the 161

10 Study of Pricing Policy of Milk manufacturing cost in the year was Rs but with uneven change it has raised to Rs in the year , in subsequent years up to no uneven increase is observed but in it is suddenly increased and reached to Rs. / kg. hi case of distribution expenses with the exception of are ranging from Rs. 2.5 to 3.0. From the study of sales price and profit and loss it is observed that, the sales price in the first year of study was so that, there is profit from sale of white butter. But in due to uneven increase in production cost there is a loss of Rs. (-) In the year and when the manufacturing cost was not increased there is a profit from the sale of white butter, hi year the loss is observed as a result of sudden increase in manufacturing cost. 5. Table Butter (Cost Per kg.) Table No.: Particulars Table Butter (Cost Per kg.) 1) Manufacturing Cost II) Distribution Exps HD Cost Total IV) Avg. Sale Price V) Profit & Loss Graph No.: Source: Proforma Account (Government Milk Scheme, Miraj) 162

11 Study of Pricing Polity of Milk GRAPH SHOWING TABLE BUTTER COST (PRICE) ANALYSIS. Rupees per kg Manufacturing Cost Distribution Exps. Cost Total D Avg. Sale Price Profit & Loss From the Table No and the Graph No it is observed that, in Case of Table Butter the manufacturing cost, and distribution expenses have been increased in every year but, no comparative increase is done in the sales price of table butter which has resulted in loss in every year of study period. The breakeven calculations hereafter shows that, how mush possible increment in production at same manufacturing cost or how mush possible increase in sale price at same manufacturing cost is expected to have for no profit no loss. 6. Ghee Table No.: Particulars Ghee 1) Manufacturing Cost II) Distribution Exps Ill) Cost Total IV) Avg. Sale Price V) Profit & Loss Graph No.: Source: Proforma Account (Government Milk Scheme, Miraj) 163

12 GRAPH SHOWING GHEE COST (PRICE) ANALYSIS Manufacturing Cost Distribution Exps. Cost Total Avg. Sale Price Profit & Loss From the table No and graph there on it is observed that, there is loss through out the study period in the manufacturing of the Ghee due to high manufacturing and distribution cost compared to sales price. In the year the total cost was (Manufacturing plus distribution) Rs and sales price was Rs per kg. Resulting to loss of Rs 2.77 per kg. In subsequent years the increase in total cost observed is tremendous but no selling price is increased in that proportion which has resulted in loss Rs. (-) 29.65, (-) 42.52, (-) and (-) respectively from to

13 Study of Pricing Policy of Milk 7. Cheese Table No.: Particulars Cheese 1) Manufacturing Cost II) Distribution Exps Ill) Cost Total IV) Avg. Sale Price V) Profit & Loss Graph No.: Source: Proforma Account (Government Milk Scheme, Miraj) GRAPH SHOWING CHEESE COST(PERICE) ANALYSIS Year Rupees per kg a Manufecturing Cost B Distribution Exps. D Cost Total Avg, Sate Price Prott & Loss 165

14 Study ofpricing Polity of Milk In case of cheese from the table no and graph based on it, there is profit in the first year of the study i.e. in due to low manufacturing and distribution cost compared to sales price. But in further years the simultaneous increase in the price of raw material particularly milk and other chemical ingredients, no increase in selling price observed which has resulted in loss per kg of cheese sold in the study period Handling Capacity: Table No.: 4.3 (Amt In Lacks.) PARTICULERS / YEARS % Capacity (1.90 Lakh Ltr. Per Day) Actual Used Capacity Percentage to Full Capacity Purchase of Milk (Lakh Litres) Source: Proforma Accounts Government Milk Scheme, Miraj 166

15 Study of Pricing Policy ofmilk Graph No. 4.3 GRAPH SHOWING HANDLING CAPACITY PERFORMANCE OF GMS, MRAJ ] I R4 0R *8 8?! l 391 OR i49-i: r I R I l i WHk Lakhs Litres Percentage to Full Capacity Actual Used Capacity (Litres / Day Handling) 100% Capacity (1.90 Lakh Ur.Per Day) From the table 4.3 related with the handling capacity utilization by Government of Maharashtra and the graph based on that table, it is observed that, during the study period ( to ). In the first year of study 95.75% capacity utilization is done but in subsequent years of study the capacity utilization is below 50%. 167

16 Study of Pricing Policy of Milk Purchase and Sale Price of Buffalo Milk Rupees per Litre. Table No.: PARTICULARS / YEARS Purchase Price Pasteurization Charges Handling Loss etc Actual Pur Price of Buff Milk Sales Price Received Source: Proforma Accounts Government Milk Scheme, Miraj Graph No GRAPH SHOWING PURCHASE AND SALES PRICE OF BUFFALO MILK Purchase Price Pasteurisation Charges Handling Loss etc. Actual Pur. Price of Buff. Milk Sales Price Received 168

17 Study ofpricing Policy of Milk Table No and graph No related with purchase and sale price of buffalo milk Rs. per litre it is seen that, the total purchase price that, includes pasteurization charges handling losses etc. is more than sales price through out the study period Purchase and Sales Price of Cow Milk Rupees per Litre: Table No.: PARTICULARS / YEARS Purchase Price Pasteurization Charges Handling Loss etc Actual Pur. Price of Cow Milk Sales Price Received Source: Proforma A ccounts Government Milk Scheme, Miraj 169

18 Study of Pricing Policy of Mi Ik Graph No GRAPH SHOWING PURCHASE AND SALES PRICE OF COW MILK O Purchase Price Handling Loss etc. Sales Price Received B Pasteurisation Charges o Actual Pur. Price of Cow Milk From the table No and the graph related with it, it is observed that, the actual purchase price of cow milk is more than sales piece received in the year But in subsequent years the sales price is more than purchase price up to year In year the purchase price is more than sales price. 170

19 Study of Pricing Policy of Milk Purchase of Milk and Milk Products (Rupees in Lakhs): Table No PARTICULARS / YEARS Mfg. Of Milk Products Overheads Interest of Government Cap. Other Exps Total Expenditure Source; Proforma Accounts Government Milk Scheme, Miraj Sale of Milk & Milk Products Rs. In Lakhs Table No PARTICULARS/YEARS Sales of Milk & Milk Prod Total Receipts , Source: Proforma Accounts Government Milk Scheme, Miraj 171

20 Study of Pricing Policy of Milk Pnoductwise Profit and Loss Table No PARTICULARS / YEARS Buffalo Milk Cow Milk Cream -0.1 High Fat Milk whiter butter Table Butter kg SMP kgsmp gm SMP gm Poly pack SMP gm SMP Swept SMP Loose Ghee gm Packed Ghee 025 Energee Milk Cheese Skim Milk Berry Regenerateion SMP Condensed Milk -72 CO CO CO 172

21 Study of Pricing Policy of Mi Ik _ GROSS PROFIT/LOSS OF MILK AND MILK PRODUCTS (TRADING) able No Gross Profit / Loss iraph No Graph Showing Mik and Mik Product s Gross Prom I Loss of GMS, Miraj Rupees in Lakhs Gross ft-oft / Loss 173

22 Study of Pricing Policy ofmilk NET PROFIT/LOSS OF MILK AND MILK PRODUCTS Table No Net Profit / Loss Graph No Graph Showing Net Profit / Loss of GMS, Miraj ! )97-6 1) Rupees in Lakhs I i S Years Net Prott / Loss From the table No , 4.3.4, it is seen that, in the study period to from the manufacture of product and their sale there is loss to Government Milk Scheme, Miraj viz. Rs. (-) in which is highest in the five years of the study Whereas in 174

23 Study of Pricing Policy of Milk subsequent years it was Rs. (-) , (-) , (-) and (-) Here in this case it is seen that, irrespective of increase in the percentage of handling capacity a loss is also increased. But from year to that is in the last four study years the utilization of handling capacity was near about 49 to 50%, when the loss is very low compared to Manufacturing Account: While studying the manufacturing of milk and milk products from the Table No to it is seen that, Table No.: (Amt In Rs.) PARTICULARS / YEARS A. Whole Milk 1) Basic Cost ) Production Cost ) Processing Cost Total i.e. Mfg. Cost Source: Proforma Account (Government Milk Scheme, Miraj) Table No.: 4.S.8.2 PARTICULERS / YEARS B.Cow Milk/Ltr. 1) Basic Cost ) Production Cost ) Processing Cost Total i.e. Mfg. Cost Source: Proforma Account (Government Milk Scheme, Miraj) 175

24 Study of Pricing Policy of Mi Ik 2 O 8.1 GRAPH SHOWING MFG. COST OF WHOLE MILK Years Rupees per Itr. CD Production Cost. OProcessing Cost. OTotal i.e. Mfg. Cost 176

25 Study of Pricing Policy of Mi Ik Graph No GRAPH SHOWING MFG. COST OF COW MILK \...l.i, S > UMii l i L_ IMS i av T r ft* ~ i i - r Rupees per Litre Basic Cost. Production Cost. Processing Cost. OTotal i.e. Mfg. Cost Table No.: (Am t. In Rs.) PARTICULERS / YEARS C. Cream / Kg. 1) Basic Cost Graph No.: Source: Proforma Account (Government Milk Scheme, Miraj) 177

26 Study of Pricing Policy of Mi Ik graph showing basic cost of cream per kg!! I I - I I r : J I... I I _ 5.26 Year* L l ! _ J _ l_ I I I Rupees per kg Basic Cost Table No.: PARTICULERS/YEARS D. Skimmed Milk / Ltr. 1) Basic Cost , ) Processing Cost Total i.e. Mfg. Cost Graph No.: Source: Proforma Account (Government Milk Scheme, Miraj)

27 Study of Pricing Policy ofmilk GRAPH SHOWING MFG. COST OF SKIMMED MILK PER LTR. Rupees per L* 01) Basic Cost O 2) Processing Cost Total i e. Mfg Cost Table No.: PARTICULARS / YEARS (Amt*lpRs> E. SMP / Kg. 1) Basic Cost ) Production Cost. Total i.e. Mfg , Cost Graph No.: Source: Proforma Account (Government Milk Scheme, Miraj) 179

28 Study of Pricing Policy of Milk GRAPH SHOWING MFG. COST OF SMP PER KG Year Rupees per kg O t) Basic Cost. 02) Production Cost. Q Total Te. Cost Table No.: PARTICULERS / YEARS (Amt. In Rs.) F Table Butter /Kg. 1) Basic Cost. 2) Processing Cost. Total i.e. Mfg Cost , Graph No.: Source: Proforma Account (Government Milk Scheme, Miraj)

29 Study of Pricing Policy of Mi Ik Table No.: (Amt-,n Rs> PARTICliLERS / YEARS G. White Butter/Kg. 1) Basic Cost ) Processing Cost Total i.e. Mfg. Cost Graph No.: Source: Proforma Account (Government Milk Scheme, Miraj) GRAPH SHOWING MFG COST OF WHITE BUTTER PER KG 181

30 Study of Pricing Policy of Milk Graph No GRAPH SHOWING MFG. COST OF TABLE BUTTER PER KG Years CD CD O) CD Rupees per kg 1) Basic Cost. *2) Processing Cost. O Total i.e. Mfg. Cost Table No.: (Amt- ln Rs-> PARTICULARS / YEARS H Ghee / Kg. 1) Basic Cost ) Processing Cost Total i.e. Mfg. Cost Graph No.: Source: Proforma Account (Government Milk Scheme. Miraj)

31 Study of Pricing Policy of Milk GRAPH SHOWING MFG COST OF GHEE PER KG Table No.: (Amt In Rs.) PARTICULARS / YEARS I. Cheese / Kg. 1) Basic Cost ) Processing Cost Total i.e. Mfg. Cost

32 Study of Pricing Policy of Milk Graph No.: Source: Proforma Account (Government Milk Scheme, Mi raj) GRAPH SHOWING MFG OF CHEESE PER KG Rupees per kg 1) Basic Cost. B2) Processing Cost. Total i.e Mfc. Cost I. Manufacturing Cost of whole milk: The table no and the graph no related it was Rs. 8.73, 9.19, 9.17, 9.35 and respectively from the year to

33 Study ofpricing Policy of Milk 2. The Manufacturing Cost of Cow Milk: The Table No and the Graph No related, it was Rs. 7.56, 7.83, 8.64, 8.79 and respectively from the year to The Manufacturing Cost of Cream: From the Table No and the Graph No related, it was Rs , 38.32, 41.07, & respectively from the year to The Manufacturing Cost of Skimmed Milk per Litre: From the Table No and Graph No related, it was Rs. 4.77, 4.07, 4.54, 4.53 and 4.13 respectively from the year to The Manufacturing Cost of Skimmed Milk Powder per kg: From the Table No and Graph No related, it was Rs , 57.21, 63.46, and respectively from the year to The Manufacturing Cost of Table Butter per kg,: From the Table No and Graph No related, it was Rs , 88.53, 98.23, and respectively from the year to The Manufacturing Cost of White Butter per kg.: From the Table No and Graph No relate, it was Rs , 92.75, , and respectively from the year to

34 Study of Pricing Policy of Milk 8. The Manufacturing Cost of Ghee per kg.: From the Table No and Graph No related, it was Rs ,124.12,134.25, and respectively from the year to The Manufacturing Cost of Cheese per kg.: From the Table No and Graph No related, it was Rs ,95.27, , and respectively from the year to Remark. This manufacturing cost includes Basic Cost + Processing Cost required for manufacturing of final product (Basic Cost is nothing but the cost of the raw material used for manufacture of final product. For example for manufacture of skimmed milk powder as a basic cost the cost of skimmed milk per litre is taken.) 186

35 Study ofpricing Polity of Milk 4.4. ANALYSIS OF BREAK EVEN POINT: In this chapter here before we have studied the cost of Government Milk Scheme which includes Manufacturing Account, Trading Account and it is notice that, under head of milk and milk product the milk scheme is in loss. So with the help of formula of Break Even, Point Analysis the comparative break even points of the milk and milk products from the year to have been calculated. Table No Items Sales B.E.P. Difference Sales B.E.P. Difference 1. Cow & Buffalo Milk ' White Butter Table Butter Cheese Ghee S.M.P Sales B.E.P. Difference Sales B.E.P. Difference Sales B.E.P. Difference Formula of Break Even Point [B.E.P.]: Fixed Cost B. E. P. = Sales Price - Variable Cost. 187

36 Study ofpricing Policy of Milk From the above Table No where in year wise quantities of milk and milk products sold as price per kg. or litres stipulated by Government of Maharashtra and break even quantity are given form year to of the study period. It is observed that, in case of cow milk in year instead of sale of milk litre as per break even point analysis if litres of milk would have been sold at same fixed cost then no loss in trading would have been occurred.. hi year tiie loss is occurred in case of ghee and SMP subsequently in case of ghee instead of kgs, kgs of ghee would have been sold no loss would have been occurred. In case of SMP the much more difference is observed, the actual sale was kgs if kgs of SMP would have been manufactured and sold no loss would have been occurred. Further in year from to it is observed that, with exception of white butter trading in the year to there is a loss under the head of trading of all other milk and milk products. Table No Comparative Sales prices decided for no loss no profit purpose with the use of same quantity of raw material without change in variable cost. 188

37 Study of Pricing Policy ofmuc Items Sales Proposed Difference Sales Proposed Difference 1. Cow & Buffalo Milk White Butter Table Butter Cheese Ghee S.M.P Sales Proposed Difference Sales Proposed Difference Sales Proposed Difference CS In Hie above table No the sale prices of the milk and milk products are given with the proposed sales prices. The proposed sales prices are those prices with the help of which if the Government would have been sold their milk and milk products, then it would not have suffered any loss or gain any profit. The actual figures shows that, in the year the difference in price of cow and buflalo milk price is Rs. (- ) 3.67, white butter Rs. 0.31, Cheese Rs , Ghee (-) 2.78 and SMP (-) per kg. Likewise the figures of the subsequent study years have been given. 4.5 CONCLUSIONS: Conclusions related with Manufacture of Milk Products: 189

38 Study of Pricing Policy of Milk 1. In the manufacture of milk ad milk products the component wise cost analysis should be done which includes the establishment cost, manufacturing cost, transportation cost etc. Hare in case of Government Milk Scheme, Miraj it is concluded that, these costs are more than requirement in proportion with the quantity of milk handled. S. S. Chahal et_al has concluded in their study of the economics of milk processing that, though the cost of processing increases with increasing procurement. The component wise cost analysis revels that high establishment cost compared to other cost items, this is due to more investment on infrastructure facilities and unnecessary personal employment. On the other hand, in private milk plants optimally utilizing their capacity and employing skilled and efficient labour force results low establishment cost per unit. 2. It is concluded that, the Government Milk Scheme Miraj many ways it is loss in manufacturing of milk products. In this case, A. K. Ray Choudhari 1993 in his study on producers and consumers pricing has concluded that, the overhead cost should be reduced in manufacturing of milk and milk products in following ways. (I) (ii) To adopt pre stratification method for Ghee manufacturing. To reduce fat and S.N.F. losses. (iii) To maintain the pasteurization temperature up to 74 C rather than 84 C for reducing coal consumption by the 190

39 Study of Pricing Policy of Milk boiler. (iv) To use trolleys for handing the plastic crates etc. 3. Regarding marketing of milk it is concluded that, the Government of Maharashtra is selling their milk and milk-products under the brand name Aarey but with changing marketing scenario no developed marketing policies are adopted. In this case V. Kurian 1994 in his article on features of dairy industry depends on new market have revealed that, though the magnitude of marketing cost, that has been worked out may not be same for all dairy plants in the country. But the impact of capacity utilization on processing and marketing cost could be observed and it has meaningful policy implication for the dairy industry considered at micro level. 4. Regarding quality testing of milk it is concluded that, Government of Maharashtra till recent two - three years was adopting old methods of testing the quality of milk that is fat testing by Gurbar method (This is a method in which while testing the fat the Gurbar Sulfuric Add is used). And for calculating the solid not fat the old method of lacto - meter reading is used (Lacto - meter reading shows the density of the milk) and with the help of formula the S.N.F. was calculated in the milk. But since last ten years a electronic instrument called as milco - tester is used to check the fat percentage in the milk and only from last two - three years a electronic instrument called as density meter for 191

40 Study of Pricing Policy ofmilk calculation ofs.n.f. (that is S.N.F. testing) is used. After year 2000 the officers of dairy development department of Government of Maharashtra try to introduce a new electronic instrument particularly to calculate the S.N.F. contents in the milk based on freezing point determination. But due to opposition from authorities of co - operative sector particularly local leaders Government took decision to stop its decision. Due to use of such electronic instruments it has become possible to accept the milk with original quality of milk without ary adulteration and ultimate manipulations in quality records. Because due to old methods many times the authorities of primary dairy co - operative societies, Taluka level co - operative Sangh were manipulating the quality records. In pricing the quality has vital importance because the prices are fixed on the basis of quality of milk. Due to manipulation in the real quality records no one was suffering other than farmer producers. So due to use of such electronic instruments it is beneficial for the farmers to get their money for the milk sold by them as per its quality standards. From all this literature it is concluded that, the co - operative organization engaged in dairy industry have oppose to change with changing technology because of their own benefits. In this case an article by S. N. Lute et_al 1997 related with online milk testing, revels that, the online testing helps for I) Accurate weighing of milk and Accurate sample analysis of milk, ii) It helps to 192

41 Study of Pricing Policy of Milk eliminate the human errors, iii) It provides no scope for manipulations and saving the staff requirements, iv) It provides the modem and professional approach, v) Helps to enhance the producers confidence about the quality production of milk and their monetary receipts. 5. From the study of cost and revenue analysis of Government Milk Scheme Miraj the following conclusions are drawn - 1) Regarding cow milk and buffalo milk the rates given by Government of Maharashtra that is purchase price and the sales price there is not much more difference which helps to avoid the losses to Government Milk Scheme it seen from the table no to ) Regarding milk products also in the time span of study period it is concluded that, the sales price of the milk products even not covering the manufacturing cost so the loss under the heads of trading accounts of the milk products is observed, which is seen from the table no to ) While studying the BEP given in table No many times it is concluded that, due to low demand for the products, under utilization of the capacity of the dairy has resulted in less production with the same fixed cost and variable cost, the manufacturing account and trading accounts shows the losses in the trading of milk products. 4) From the Table No due to low prices of the milk products not covering even manufacturing cost which includes overhead charges the loss is observed in trading account. So in this table the probable prices 193

42 Study of Pricing Policy ofmlk of the products have been calculated, with the help of which if the products would have been sold then the scheme should not have suffered any loss or any profit in their trading account. From all these it is concluded that, the Government of Maharashtra is not making proper arrangement for the marketing system for their milk and milk products, hi this case Shiba Chopra. (1996) in a speech on the advertising as a best factor of marketing in the modem society has said that, God made milk and mm created Brand" and has concluded that, the present is fundamentally different from die recent past. The computer, artificial intelligence and media scope has revolutionized the design of market The contemporary advertising has a (Upper impact on the aesthetic mind due to its combination of vibrancy and vitality based on both art ami science. It is also more personnel and playful, design ccm no longer be naive. The design professionals have begun to understand the demand incumbent to their profession. So here in case of Government of Maharashtra and specially. *-* 1 «- Government Milk Scheme Miraj it is necessary to follow the changing marketing policies, to run the business at least on no. profit no loss basis, which'will help to get the remunerative price to the producer and good quality milk and milk products at the reasonable prices to consumer. 194