CHAPTER - 2

REVIEW OF
LITERATURE
 35

CHAPTER – 2

REVIEW OF LITERATURE

In this chapter, an endeavour has been made to review the existing

literature on the subjects under study; and present an overview of various
aspects and issues of this research work. As this research work relates to
the study of dairy cooperatives, the selected studies pertaining to this sector
have been reviewed in detail. The performance indicators of dairy cooperative
federations in the states of Punjab and Haryana have been identified and
studied in view of the objectives of this research.
Performance indicators provide a measurement for assessing the
quantitative performance of a system. When the indicators show difference in
one direction, this means that the situation is better, whereas if the difference
is in the opposite direction then this means that the situation is less
favourable. Some of the relevant studies undertaken for review are discussed
as hereunder :

Kumar, et al. (1975) in their study on economic response to feed on

milk production for different types of feeds of dairy cows in Haryana, found
that feed was the most significant factor influencing milk yield. Feed cost
accounted for 60-70 per cent of the total cost of production.

Jain, et al. (1978) based their research study on growth indicators of

milk producers‘ cooperatives in Mehasana district of Gujarat. The sample
villages in the milk shed area were selected; and the indicators for the growth
of cooperative societies such as their membership, share capital, volume of
milk handled and price paid by different agencies were studied. The period
selected for the study was 1968-69 to 1973-74. The data was scored under
the benchmark and repeated surveys were carried out. The researchers
 36

concluded that village level milk producers‘ cooperatives increased from 230
to 380; and membership of these cooperatives also increased from an average
of 157 members per cooperative to 240 during the study period. Further, the
share capital of these cooperatives also increased from an average of Rs. 3448
per milk cooperative to Rs. 18842 during the period. The number of persons
employed by the milk cooperatives and the daily milk collection of milk
cooperatives also increased during the second period, i.e., 1973-74.

Kulkarni (1979) investigated the problems pertaining to milk collection

from the producers. Some of the main problems identified were malpractices
in weighment and quality testing, inadequate extension services, lack of
sufficient milk collection by cooperatives in the rural areas and spoilage
during the rains.

Rayuda (1985) used different financial ratios such as current ratio,

acid test ratio and debt-equity ratio to assess the performance of cooperative
spinning mills in Andhra Pradesh. The study brought out that ratio analysis
had a dominant role for the appraisal of performance of cooperatives and also
their ability to handle professional financial management.

Gangadhar and Reddy (1986) evaluated the financial performance of a

cooperative super bazaar in Warangal. The various ratios like current ratio,
debt-equity ratio, acid test ratio and inventory ratio were used to study its
financial performance.

Nikam (1986) assessed the financial health of four cooperative sugar

factories situated in Aurangabad district of state Maharashtra. The various
ratios like current ratio, acid test ratio, debt-equity ratio and net fixed assets
to net worth ratio were studied for assessing the financial strength of the
cooperative sugar factories.
 37

Murthy (1986) evaluated the performance of Karnataka State

Cooperative Marketing Federation Limited (KSCMF) through ratio analysis. He
measured the profitability, turnover , liquidity, efficiency and strength of the
federation. He reached at the conclusion that ratio analysis would provide a
better idea about the financial position of the federation.

The study carried out by Baviskar (1986) was based on data

collected during the field work in two villages of Surat district The study
attempted to find the impact of increasing number of cooperative milk
producer societies on dairy development in the tribal areas of Gujarat. It
focused upon milk cooperatives managed by Jesuit missionaries in the region
presenting a detailed description of their internal organization. The main
reason for the success of these cooperatives was found to be the loyalty of its
members and integrity of its leaders. The secretary of dairy cooperative was
found to be the key functionary in the success of the project.

Narayanaswami and Ramachandra (1987) assessed the profitability

performance of a district central cooperative bank. To evaluate the
profitability performance of various components, financial statements were
used with the common denominator.

Hirevenkangoudar et al. (1988) studied the impact of dairy

development on the weaker sections of Bangalore north and Doddaballapur
taluk of Karnataka. The small, marginal farmers and agricultural labourers
were selected from the villages. They were classified as Karnataka Dairy
Development Corporation (KDDC) farmers and non-KDDC farmers who were
not availing the facilities of cooperatives. They found that more than 56 per
cent KDDC farmers were getting only 25 per cent of family income from dairy
enterprises, more than 64 per cent of KDDC farmers had repaid 75 to 100 per
cent of dairy loan, whereas only 10 to 25 per cent of non-KDDC farmers had
repaid 75 to 100 per cent of dairy loan.
 38

Ram (1988) made an attempt to analyze the organization and working

of Jaipur District Milk Producers Cooperative Union Limited, Jaipur. The
study was conducted through personal interviews with the management and
other employees of the union. The organizational structure of this cooperative
union and the functions such as (i) milk collection, (ii) supply of technical
inputs, (iii) farmers induction programmes, and (iv) supervision performed by
it were analyzed.

Mattigatti (1990) studied the performance of milk producers

cooperative societies and their impact on dairy farming in Dharwad district of
Karnataka. The number of physical and financial indicators were selected to
evaluate the performance. The secondary data required for the study was
collected from various annual reports of milk producers‘ cooperative societies
for the period 1986-88. He found that both the physical and financial
indicators of the societies showed a significant growth in their values. The
above average societies have already progressed with higher values for the
indicators compared to below average societies. While below average societies
have shown a greater rate of growth. Hence, he concluded that over the period
of time all these societies would contribute significantly to the overall
development of the societies.

Kumar (1990) studied the performance of dairy cooperatives and their

impact on milk production, income and employment in Chitor district of
Andhra Pradesh. The study revealed that the societies which were above the
average level have shown better performance with an increase in
membership and milk procurement, and profits of societies showed an
increasing rate except the society-II.

Thakur (1996) studied the impact of dairy development through milk

cooperatives in Gujarat which covered four milk unions which were at the
different stages of development. Twenty-four village milk producers' societies
 39

were selected randomly in four districts and 400 respondents respectively.

The primary data was collected from the respondents, through the survey
method and secondary data from the sample milk unions and societies. The
progress was captured by tabular analysis. The farmers were categorized as
landless, small, medium, and large in order to examine the impact of milk
cooperatives on economic conditions of the weaker sections. It was observed
that the landless people earned as much as 65-70 per cent, and small farmers
earned more than 25-30 per cent of the total income from dairying. The cash
income obtained continuously from the sale of milk can be used for better
management of Milch animals and for the purchase of improved agricultural
inputs to some extent which help the farmers in increasing their total income.

Kurien (1997a) in his research article, evaluated the different

dimensions of dairy in India. The larger framework within which one must
view dairy development has three main components --- (1) Dairying is an
industry, but its development must allow to serve our rural and semi-rural
population; (2) planned or unplanned – public, private or cooperative – in its
development dairy must compete for investment funds; and (3) our dairy
must develop in such a way as to contribute to the solution of the problem of
rural poverty. The author has explained the five larger dimensions of dairy
development which are (i) the institutional dimensions, (ii) the techno-
economic dimensions, (iii) the industrial dimensions, (iv) the dimension of
technical modernization in rural areas, and (v) the social dimensions.

Kurien (1997b) evaluated dairying as an instrument of change. In

order to explore fully the potential of dairying as an instrument of change, it
is best to look first into practicalities of national dairy development
programme which is popularly known as Operation Flood. The author has
explained in detail the ‗Kaira Cooperative Movement‘, its organizational set-
up, procedure, structure, management, problems and their solutions. The
surplus people on the farms try to migrate to cities in search of work. The
 40

resources of our cities are already overburdened. Therefore, we can make

massive investments in animal husbandry because dairying is highly labour
intensive. Dairy can double the income of our farmers, our small farmers and
our farms. It can also help to arrest the drift of population from the rural
areas to the cities. The author also evaluated the dairy industry in four
cities, viz. Bombay, Calcutta, Delhi and Madras; and made a comparative
study with ‗Kaira Cooperative‘. The dairying is an instrument of change; an
instrument not only of technical change, but also of socio-economic change.

Sain and Sharma (2000) analyzed the pattern and magnitude of

income generated by dairying enterprises across regions/size categories of
farms in the Punjab state. The researchers divided the state into three
homogeneous zones on the basis of topography, rainfall, underground water
availability, etc. The whole period under study was divided into three parts,
i.e., 1987-88 — peak Green Revolution period, 1987-88 — decelerated growth
period, and 1997-98 — the stagnation period. As many as 144 holdings for
the period 1981-82, 200-225 holdings for the period 1987-88 and 1997-98
have been covered in the study. Tabular analysis and Regional analysis
have been used for the purpose of this study. It concluded that dairying
enterprises paved the way for higher employment particularly on the small
farms, and thus, compensated the decline in employment in crop farming.
The study suggests that dairy is a potential and compatible enterprise
which can provide higher income and employment to the human labour with
a little diversification in crop farming. Further, the vocational training in
dairying would prove a boon to the families of this enterprise in the farm
sector of the state.

Chidambaram (2000) identified different indicators to evaluate the

growth of Amaravati Sugar Mill. These indicators are: (1) area under sugar
cane production, (2) membership, (3) recovery, (4) equity capital, (5) debt
capital, (6) net working capital, (7) cane price, (8) cost of production of sugar,
 41

(9) machinery utilization, (10) sale price, (11) income, (12) expenditure and,
(13) profit. Compound growth rate was calculated in all the indicators.

Kale et al. (2000) studied the financial position working and

operational efficiency of 23 dairy cooperatives in Raigad district of
Maharashtra. They studied the economic efficiency through income-
expenditure ratio, expenditure- income ratio, rate of return on capital, and
rate of turnover. They concluded that (i) the societies had low owned capital
and were dependent on borrowings from financial institutions; (ii) even
though the working capital of the dairy cooperatives was low, their turnover
was high because dairy cooperative did not make payment to milk producers
from their own funds, therefore, dairy cooperatives were able to carry on their
business with limited capital; and (iii) majority of the societies were trading
profit.

Sriramalu et al. (2001) while assessing the performance of 58 Farmers‘

Service Cooperative Societies (F.S.C.S.) in Andhra Pradesh concluded that out
of the total volume of non-credit services, input supply constituted 91.36 per
cent, consumer goods accounted for 5.18 per cent and customer services 0.04
per cent. This indicated that the non-credit services were mainly confined to
supply of agricultural inputs; and the marketing of agriculture produce was
completely neglected by all the F.S.C.S.

Saubramanian et al. (2003) made a comparative analysis to assess the

performance of milk cooperatives in Haryana and Gujarat. The objectives of
the study were meant to develop an index for the performance of milk
cooperatives of Haryana and Gujarat; compare the variability in the socio-
personal, economic and psychological characteristics of society members;
study the effect of organizational and environmental factors on the success
and failure of milk cooperatives; and identify the constraints in the
functioning of milk cooperatives. To achieve the said objectives, 14 village
 42

milk producers‘ cooperative societies were selected from two states, viz.
Haryana and Gujarat. From the VMPCSs, data was collected between 1985
to 1988 and January 1993 to Dec. 1993, and was ranked on the basis of
performance index developed for the study. On the basis of performance
score, two groups were classified, one above the medium performance score
and other group below it. From each group, three VMPCSs were selected
randomly. A total of 12 VMPCS‘s were selected for the study. It was
concluded that performance of Gujarat VMPCSs is significantly better than
those of Haryana, member farmers‘ traits varying significantly between
Gujarat and Haryana.

Reddy et al. (2004) conducted a comparative study of economics of

milk production in three states, viz. Chitoor district in Andhra Pradesh, Erode
district in Tamil Nadu and Kolar district in Karnataka involving aspects
related to existing cost structure of milk production, profitability of crossbred
dairy cows in the three states under the changed socio-economic and political
scenario. The study suggested some methods to improve the viability and
profitability of these enterprises. The net profitability varied from 43 per cent
in Tamil Nadu, 70 per cent in Andhra Pradesh, and 83 per cent in Karnataka.
The study has further brought out the fact that higher fat content provides
higher prices as milk price is based on fat and solid-not-fat (SNF) contents by
dairies. Hence, proper scientific breeding procedure is to be followed to
improve fat content in the milk as well as milk production per animal.

Sidhu and Bullar (2004) studied the impact of dairy on income and
employment in Punjab. The study revealed that the livestock economy
especially dairy is considered to be an economically viable alternative for
increasing income and employment in the farm sector of Punjab. It is clear
that the contribution of livestock economy to the farm sector has increased
over time, whereas the contribution of crop sub-sector to the agricultural
growth has declined due to stagnation, fall in productivity of important crops,
 43

rise in fixed cost and degradation of soil and water resources. The importance
of dairy especially on small and marginal farms has increased; and the
proportion of dairy to the total farm business income on these farms has
increased. The economic sustenance of these farmers is primarily dependent
on dairy enterprise as it helps in utilizing their surplus family labour, requires
less land and water resources and provides cash income to meet their daily
consumption needs. The dairy sector has also helped in generating
employment on small, marginal and semi-medium farms despite fall in
employment in crop production.

Duhan et al. (2004) conducted a study with reference to 120

respondents scattered in six villages of two blocks in Rewari district of
Haryana to analyze the nature of markets and role of cooperatives in
marketing of milk. It was observed that on medium and large categories of
farms the milk sold through cooperative society was found to be higher than
the disposal through milk vendors and directly to the consumers mainly due
to more marketable surplus. While on small farms the disposal was found to
be almost equal, i.e., 35 per cent through milk vendors and directly to the
consumers, and the disposal of milk through cooperative society was less due
to lower marketable surplus owing to smaller heard size.

Sujatha et al. (2004) studied the market structure, price spread,

marketing costs and marketing efficiency for milk in the cooperative and
private sectors of Andhra Pradesh. It was found that price spread was less
in private sector, and hence, the consumer price was also less. The major
constraints identified in milk marketing were high feed cost, inadequate
price for milk, poor credit facilities, disease outbreak, etc. Because of delay
in the payment for the milk sold to the cooperative society, the farmers
approached the private firms. For enhancing the marketing efficiency of
milk, infrastructure facilities like chilling plant, pasteurization and dairy
products processing plants have to be developed.
 44

Tuteja and Singh (2004) conducted a study on employment and income

generation through livestock based milk processing units in rural Haryana.
The study revealed that the production of milk in Haryana grew at the rate of
4.07 per cent per annum during 1980-81 to 2000-01. Therefore, milk
processing on commercial scale has great potential in terms of enhancing the
income of the farmers by selling milk products in the expanding domestic and
international markets. The milk processing units on an average generated
employment of 8.40 persons in Gurgaon, and 5.86 persons in Jind district.
The factories generated the highest employment of about 14 persons in the
former and 11 persons in the latter district. The study highlighted that
marketing of local products faced severe competition from the multinationals.
Hence, promotional policies need to focus on the marketing bottlenecks and
devise efficient marketing channels through public and private partnership.
Special zones can be created in those areas where raw material/milk is easily
available. The alternative way could be formation of cooperatives like Amul.

Jha (2004) studied India‘s dairy sector in the emerging trade order.
He made disaggregated analysis of dairy development in all the states of the
country by calculating simple and compound growth rates with the linear
and exponential trend equations for the period 1977-78 to 1996-97. He also
calculated the coefficient of determination (adjusted R2) for both the
equations have some meaningful inferences that if the exponential equation
yields a higher value of R2 as compared to the linear equations, it could be
taken at evidence that the compound rate of growth over the period is not
constant but is increasing and vice-versa. The R2 also helps in
understanding the reasons for disparity in the simple and compound rate of
growth. He also studied the trends in Dairy Development indicators for the
period 1950-51 to 1999-2000. He opined that dairy development in the
country presents encouraging trends, in terms of milk production, per capita
availability of milk, sources of milk production as also accessibility of milk. A
disaggregate analysis of the dairy sector presents a wide disparity in the
 45

different indicators of dairy development; and the trend growth in most of the
states is encouraging.

Khanna (2005) assessed the dairy cooperatives in different countries of

Asia. In his research article, different types of primary and secondary data
were used to explain the type of organisation structure, system and
strengthening the dairy farming in different countries of Asia. The author‘s
main objective is to have a comparative study of dairy cooperatives in different
countries of Asia.

Rao (2005) made an attempt to evaluate the impact of women dairy

project in Orissa, phases I to IV on target women respondents and to draw
lessons for future policy exercises. As many as 636 women dairy cooperative
societies (WDCSs) were taken with membership of 49207. Based on
probability proportional to total number of WDCSs in each milk union, 64
WDCSs (10%) were selected. Agro-climatic regions, spread of WDCSs,
procurement, input supplies and member participation were considered,
while selecting the sample. Five women members from each WDCS were
drawn randomly representing different age groups, land-holdings, caste,
literacy, animal holding, income, milk supplied, awareness, participation in
activities of WDCSs etc. Primary data was collected based on pre-tested
questionnaire during December 2002 to July 2003. Secondary data was also
collected from Orissa states‘ Cooperative Milk Producers Federation Limited
and milk unions. The study concluded that Women Dairy Project (WDP) is
aimed at the overall development of women through capacity building. The
state holding like Government of India, federation unions and link agencies
have to cooperate for effective system. Women should actively participate in
the daily management activities of WDCSs. Policies should be kept outside of
premises of WDCSs. Women should become role models.
 46

Kango (2006) studied the milk consumption pattern by different types

of consumers. The main objective of the study was to know the type of milk
and milk products used by the consumers. To achieve this objective, a survey
was conducted on students, family members and employees of the
institutions. As many as 675 schedules were selected for consolidation. It
was concluded from the study that there was an urgent need to improve the
quality of milk and milk products. So, Indian dairy industry should make
every effort to improve the quality of milk and milk products.

Patel (2007) in his article, assessed the Information System

Requirements for implementation of Enterprise Resource Planning (ERP) for
dairy cooperatives. The author discussed the Information System
Requirements in different functional areas, i.e., milk procurement, milk
production, milk sales and distribution, purchased and stores, quality
control, personnel and administration, accounts and finance, plant
maintenance and quality assurance. The author has concluded that with
integration of the above functional areas, the dairy cooperatives will be a in
position to generate various reports required for day-to-day management and
to take timely decisions. In spite of above integration activities, it also needs
to provide add on support for other important activities like Interfacing of
EPBAX and Generation of various reports, Development of RMRD (Raw Milk
Reception Dock) and License to use at defined locations, Development of an
optimization model for deciding the composition for various types of cattle
feed, with an objective to minimize the total cost and generate optimum
composition of each cattle feed with the objective of minimizing the total cost.

Verma (2007) examined the cooperative weak celebrations at the

national, state and district levels in the month of November. The author also
reviewed the major pronouncements by various states on cooperative sector
and their impact. The author‘s main objective is to explore the major
 47

cooperative developments during the month of November which primarily

revolve around the celebrations all over the country.

Shankar (2007) examined India‘s cooperatives in a globalised world. In

his research article, the author has explored the SWOT analysis technique on
cooperatives in the context of economic reforms and also discussed the steps
to enable cooperatives to face the challenges of economic reforms. In this
context, dairy cooperatives are also discussed. The author‘s objective is to
disclose the most dramatic changes in political, legal and economic order of
the world in the Indian context and their effect on cooperative sector during
the last thirteen years.

Vyas (2007) in his research article, reviewed the Amul dairy in a

detailed manner and development of India‘s dairy cooperative movement. The
author has discussed the three-tier Amul model, impact of Amul model and
achievements of Amul movement. The study has brought out that the future
of dairy is bright, but effective infrastructure coupled with sophisticated
marketing would be necessary to tap and stimulate the demand for milk and
milk products.

Asthana (2008) studied the cooperative dairy sector of Gujarat. The

author discussed the origin of ‗AMUL‘, its organization and structure,
financial management system, business management of cooperative dairy in
Gujarat. The article also covers the branding aspect and number of welfare
measures taken for dairy cooperative members. The determinants for the
success of dairy sector have also been mentioned in this article. On the basis
of success determinates of dairy sector, sustainable model has also been
discussed for other sectoral cooperatives. In brief, we can say that this study
provides us the guidelines to make cooperative dairying successful on the
pattern of Gujarat Cooperative Dairy sector ‗AMUL‘, and explaining the
measures for their success.
 48

Patel et al. (2008) assessed the concept of Total Quality Management

(TQM) and by adopting such practices how cooperative dairies can excel in
the direction of growth on major issues. In his article, the author has not
only talked about the conceptual framework but also its implications.
Cooperative dairies have reduced their overall cost of operation after
adoption of TQM technique. The author discussed the potential benefits of
TQM in cooperative dairies in India. The article focuses on the points like the
nature and importance of TQM, implementing TQM programme – Human
Resource Development, Quality Assurance and Customer Satisfaction, the
implementation of principles of Total Quality Management in cooperative
dairies — involve all people within a system, improve the process within the
system, and integrate continuous improvement activities with business
strategy. The author also discussed the role of a Manager of Housekeeping
Audit and small group activity in TQM programme in cooperative dairies.

Singh (2008) studied the performance of Punjab Cooperative Sugar

Federation Ltd. (Sugarfed). He employed financial ratio analysis as an
indicator to evaluate financial performance of the federation. He studied
different ratios such as gross profit ratio, net profit ratio, inventory turnover
ratio, working capital ratio and interest coverage ratio of 15 cooperative sugar
mills under the federation in Punjab. The secondary data for the period
2001-02 to 2006-07 was collected from the cooperative sugar mills. The
tables, graphs and bar diagrams have also been used for the purpose of this
study. The study concluded that most of the sugar mills‘ ratios are negative.
Hence, the financial performance of these mills has not been good. Out of 15
mills, 7 mills are already closed and many others may be closed in future.

Rao (2008) reviewed the overall development of dairy cooperatives in

India. The author‘s objective is to evaluate the different aspects of dairy
cooperatives, i.e., role of dairy cooperatives in economic development of rural
areas, structure and functions of dairy cooperatives, different dairy
 49

development programmes, women‘s participation in dairy cooperatives,

processing and packaging of dairy products, marketing of dairy products,
problems of dairy cooperatives and also discussed the factors associated with
success of dairy cooperative societies. It is concluded that dairy cooperatives
have a great potential for changing the life style of rural families. In many
cases, the modernization of dairy activity has also led them to modernize their
farming and economic activities as well as buying of agricultural inputs like
fertilizers and better seeds. Such a silent revolution with the introduction of
modern techniques in rural areas is the prime need of the hour. If these
constraints in the growth of milk cooperatives are removed the growth of dairy
sector will be enormous.

Patil (2008) assessed the issues such as cooperative movement in

India, challenges of cooperative sector, role of cooperative sector and
governance of cooperative sector. Pandit Nehru said, ―My outlook is to
convulse India with the cooperative movement, …. to make it broadly
speaking the basic activity of India, in every village as elsewhere and finally,
indeed, to make the cooperative approach the common thinking of India‖. It is
concluded that constructive recommendations would help the cooperative
movement in improving its performance.

Ubendhiran and Murugesan (2008) in their study, have mentioned

that popular branded products of Indian dairy cooperatives are Amul, Vita,
Sudha, Him etc. ‗Amul‘ is the product of for Gujarat Cooperative Milk
Marketing Federation, ‗Vita‘ of Haryana Dairy Cooperative Federation, ‗Sudha‘
of Bihar State Cooperative Dairy Federation, and ‗Him‘ of Himachal Pradesh
Milk Cooperative Marketing Federation. The authors have used various
branding strategies to explain the branding concept in an Indian cooperatives.
The authors have concluded that by means of appropriate branding strategy,
the image of the product improves and the marketability is enhanced, and the
product features can be effectively conveyed to the public. It also helps to
 50

guarantee the quality standards and build brand loyalties among the public
towards a particular product.

Ghanekar (2008) emphasized on strengthening the dairy cooperatives

to tackle the agrarian crisis. The author has concluded that dairy in India is
an integral part of the total farming system. Symbiotic relationship exists
between agriculture and dairy farming. The agricultural by-products provide
feed and fodder for the cattle, whereas cattle provide necessary draught power
for various agricultural operations. Hence, promoting cooperative dairy sector
by providing policy support will definitely be a right strategy to tackle the
agrarian crisis. The objective of the study is to examine the right strategy to
tackle the agrarian crisis.

NIIR Board (2008) provides an overview of milk products made from

milk in dairy industry. As the keeping quality of milk is poor, the surplus milk
is converted into milk products which can be stored over longer periods and
transported to distinct places for sale at convenience. Much of the milk, i.e.,
60% produced in the country is converted into various milk products. The
products are ghee, dahi, cream, butter, ice cream, milk powder, cheese,
khoya, rabri, shrikhand etc. Ghee alone accounts for about two-thirds. The
chemical composition of milk products is also discussed in the article.

Barberini (2009) evaluated the role of cooperatives in the case of

economic recession. The study quoted the views of Nobel Prize winner for
Economics, Amarthya Sen maintaining that ―what we need today, is not the
invention of a ‗new capitalism‘, but the intelligent and humane use of the
notion of Cooperative‖. Sen added that a market economy is heavily
dependent on the psychological mechanism of reciprocal trust and cooperative
growth. Ivano Barberini concluded that affirming the social role played by the
cooperative enterprise, ensuring its growth and prosperity, and spreading its
culture are essential factors in being a co-operator. These tasks must be
 51

pursued with passion, intelligence, and determination, together with those

who wish to develop a responsible form of globalization, a free market based
on clear rules and a society based on solidarity.

Das (2009) examined the micro credit requirement to promote dairy

farming. It was stated that the credit requirement for dairy farming amongst
the Below Poverty Line (BPL) categories in this country turns out to be around
Rs. 60,000 crore. In spite of the vast institutional networks, the formal
financial institutions till date could not cover even more than twelve per cent
of the total credit demand in dairy sector. Therefore, the semi-formal Micro-
Financial Institutions (MFIs) need to be promoted in a big way to extend
micro-credit to the capital starved dairy farming sector in order to give a fillip
to the existing status of the rural economy.

Veerakumaran (2009) discussed the problems and prospects of the

cooperatives in Kerala. It was stated that almost all villages have been covered
with the cooperative milk production and marketing network in the state of
Kerala. But the problems like escalating cost of production, occupational
mobility, and structural and operational setbacks are faced. It also examined
the prospects of milk cooperatives, in spite of the problems raised in the
article. This sector is having high prospects due to transformation of
Homestead farming to Commercial farming.

Sundaram (2009) assessed the demand of packaged dairy products. It

was concluded that while established names such as Mother Dairy, Amul and
Nestle have made deep in-roads into the packaged milk and milk products
market, small companies can emulate the model in regional market. A few
such as Verka in Punjab and Parag in UP have already made the beginning.

Khanna (2009) explored the scope of dairy cooperatives with

cooperative development. The author is concludes that whenever there is a
 52

discussion on setting up milk procurement business, the ideal network that

comes to mind is the cooperative pattern. While the government sponsored
cooperatives have learnt to manage and foster dairy cooperatives, there is not
even a single good example of private entrepreneur entering the dairy
business through the cooperative route. It is not very difficult to find the
reason. The existing Cooperative Societies Act is neither farmer-friendly nor
business-friendly. The provisions of the Act and the regulations cause more
harassment than help to set up cooperative organizations that would favour
the farmers.

Das (2010) studied the impact of dairying on rural development. For the
purpose of drawing the samples, two coastal districts, i.e., Puri and Ganjam
in Orissa in view of the high potential in dairy sector, were selected. Different
selected indicators of dairy households were compared with the corresponding
values of non-dairy households with a view to arrive at the changes arising
due to dairying. The impact of dairying development on rural development
was found considering the primary data obtained from 200 households of 4
villages under 2 blocks in Ganjam district, and 180 households of 4 dairying
villages under two blocks in Puri district. Both primary and secondary data
were used. The period of study was from 1st March, 2003 to 31st April, 2004.
He used the techniques like time series analysis, mean analysis, percentage
deviation methods and ‗t‘ test. The study concluded that dairy households are
better than non-dairy households.

Narain (2010) reviewed the price of milk in India. It was examined that
there is a gap of demand and supply of milk. In the article, the author has
undertaken the cost-benefit analysis to find out the different factors for the
rising milk prices in India. Various tools have been used to explain the
concept. Both the primary and secondary data are used in the article. It is
concluded that rising cost of production is the main reason for rise in milk
prices.
 53

Sundaram (2010) explored that dairying deserves a better deal. It was

evaluated that the dairy sector is producing more milk than the requirement
and it has become difficult to market dairy production. While it commands
low prices in the international market, the domestic market is unable to
absorb excess supply.

Palaniappan and Sengottaiyan (2010) reviewed the increasing

demand that puts pressure on production of dairy industry. It was argued
that the milk and milk products‘ demand is expected to grow very rapidly with
population growth, urbanization, increase in income levels and changes in
food habits. This increase in demand for the daily products will put an
increasing pressure on daily production systems.

Negi (2010a) evaluated the opportunities and challenges in Indian

dairy sector. The author discussed the key areas of dairy industry such as
competitiveness, cost of production, productivity of animals, processing,
marketing infrastructure, focus on buffaloes milk based specialty, import of
value added products and export of lower value products and operation flood
era. The study concluded that untapped potential of the dairy sector is
immense and opportunity to set up a new dairy venture is great. There is
enough place for both private and cooperative sectors. It is cautioned that
entering dairy sector is not going to be a cake walk .

Negi (2010b) assessed the different aspects of Rajasthan Cooperative

Dairy Federation Ltd.(RCDF). It includes the partners‘ vital role towards dairy
success, building benefits, technical know-how, operational support, market
and financial linkages, capacity building and infrastructure development,
achievements, impact of intervention and household nutrition and food
security. He concluded in the study that dairying is a source of stable income
bringing in cash on a daily basis and providing livelihood‘s security. This gives
small farmers an important economical incentive to adopt dairying for their
 54

livelihoods. Dairy is recognized as a catalyst for social and economic

development.

Kaur (2011) made a comparative analysis of operational

performance in MILKFED and HDDCF. The author selected various physical
indicators like number of functional societies, number of unions, number of
members, plants, chilling centres, average daily milk procurement, and peak
procurement of milk. The secondary data used for the study pertained to the
period 2005-06 to 2009-10. The author calculated the annual growth rates
and the compound growth rates. The study found that MILKFED is
performing much better than HDDCF.

Mann (2011) mentioned in his study that with 100 per cent loan
facility and up to 50 per cent subsidy to set up dairy farms, the project is fast
catching fancy of farmers in Punjab. Besides semi-literate people from rural
background, many highly qualified urbans too are turning towards this
profession. The author also talked about the training given to the farmers by
Dairy Development Department, and facilities of loan and subsidies given by
Department under the Rashtriya Krishi Vikas Yojna (RKVY) and schemes of
National Bank for Agriculture and Rural Development (NABARD).

Singh (2011) reviewed the success of dairy farming in Punjab. In

Punjab, the main source of milk is buffaloes; and there are 62 lac buffaloes
and 28 lac cows in Punjab, 70 per cent of milk production comes from
buffalos and 30 per cent from cows. Total milk production in Punjab is 75
lac metric tonnes which is 10 per cent of total production in the country.
Dairy farming increases the income of farmers. The farmers need to be made
more aware about the care of mixed breeds of cows. Special training
programmes are required for the farmers to motivate them to keep cattles.
 55

Malhotra (2011) assessed the main areas of activities in dairy

industry. The author in his research article discussed the different activities
of dairy industry, i.e., production, processing, job profile, opportunities and
personality traits. India is the world‘s largest producer of milk livestock.
Dairy farming and processing are two of the fastest growing agricultural
sectors in the country. Milk is the single largest commodity contributing
toward India‘s GDP. The spectacular growth of the dairy sector which
includes the dairy processing industry and related fields, has churred up a
plethora of career opportunities. With nearly 600 big and small dairy plants
owned by private companies and dairy federations, there is a growing
requirement for qualified and well-trained professionals. The National Dairy
Development Board (NDDB), a multi-locational organization, involved in
planning, implementing, financing and supporting farmers owned
professional agri-businesses is the core PSU in this field, but almost every
state is cloning Amul‘s ‗cooperative‘ success. With the presence of
multinationals like Nestle, Cadbury‘s, Kelloggs, Unilever, Walls, Heinz and
Prefetti Van Melle in the Indian market, employment opportunities as well as
salaries have escalated. Both milk cooperatives and federations like Mother
Dairy, Amul, Prang, Vijaya, Milkfed (Verka), and private enterprises such as
Milkfood, Dalmia, Dabur, Britannia, Vadilal, are actively modernising and
diversifying their operations and exploring non-traditional channels to boost
demand.

Khanna (2011) pointed out in his article that high prices of milk is a
result of increase in the procurement rate of milk. The author has also
described that the dairy milk procurement by Milkfed in Punjab is around 11
lac litres per day. Of this, 8.5 lac litres is sold as milk, while the remaining is
processed into other milk products like butter, ghee, curd, lassi and kheer.

Chengappa (2012) reviewed the adulteration of milk in India. The

author has explained the revelation made by the National Survey of Milk
 56

Adulteration 2011 that 81 per cent of milk samples tested in Punjab recently
are found to be contaminated. It is really quite shocking. A survey had found
that 42 per cent of children in India suffer from malnutrition. Such a high
rate of adulteration of milk in Punjab is alarming. The use of hormone
enhancing chemical oxytocin for a higher yield of milk and its related
harmful effects are well-known. The report says that the adulteration comes
from water and diluted powder milk in the milk sold loosely.

Khanna (2012a) assessed the milk adulteration in Punjab. Most of the

adulteration was found in the milk which is sold loose by milkmen, while the
packaged milk samples were found to be intact. From adding water to
packaged milk before selling it as loose milk to adding glucose powder or
skimmed milk powder, milkmen are doing it all to make a quick buck. So,
the milk that we get each morning is certainly not as healthy as we would
want it to be. The average milk production in Punjab is 257 lakh litres per
day. Of this, 55 per cent of milk is retained by dairymen for personal use and
25 per cent is procured by organized dairy players for supplying it as
packaged milk and other milk products. The remaining 20 per cent is
procured by milkmen and sweet sellers and it is in this milk that maximum
adulteration has been found.

Sachdeva (2012) evaluated the role of cooperatives and private milk

agencies in dairy industry in Punjab. The agencies like Verka, Nestle and
others take milk from the farmers at less rate than market rate. This is the
main reason that the dairy industry is not profitable in Punjab. Due to this
reason, it could not fulfil dairy expenditure.

Kaur (2012) reviewed the dairy profession as a change of traditional

agriculture. The author, in his research article, made a comparison of
traditional agriculture and dairy profession. He mentioned that both
professions are inter-related. Even the dairy profession provides a
permanent source of income especially to the small farmers and landless
 57

farmers. Less capital investment is required in dairy profession as compared

to agriculture.

Singh (2012a) stressed on the Embryo Transfer Technique (ETT) to

fast track the quality of its Holstein Frisian (HT) herd. The ETT involves a
process of super evolution of eggs in premium HF cows, which are flushed out
and separated. The State Animal Husbandry Department has imported 118
embryos with the aim of producing freeze bulls on its own. The author has
explained in his article the Embryo Technology used in Punjab state in dairy
industry and its importance.

Singh (2012b) made a comparative analysis of dairying in the states of

Punjab and Haryana. The author revealed that Punjab state has not only
topped in the country in average milk production of buffaloes by beating
Haryana, but also topped in average milk production from Holstein Frisian
cows and non-descript (desi) animals. Punjab is having only 2 per cent of the
total cattle population of the country, but contributing 8 per cent to the total
milk production. The buffaloes in Punjab provide an average milk of 8.5
litres per day per animal, but Haryana has recorded an average production
of only 6.86 litres per day. Similarly, in the case of non-descript animals,
Punjab recorded an average per day production of 6.5 litres against 4.75 litres
in Haryana. The national survey for 2010-11 had revealed that Punjab had
the best animal health service network. It is the first in the country to provide
area specific mineral mixture to dairy farming at subsidized rates.

Khanna (2012b) assessed the main problems faced by the dairy

farmers. Due to the ban imposed on the export of Skimmed Milk Powder
(SMP), most of the private players in the industry are not ready to buy milk
from dairy farmers. This, in turn, has burdened Milkfed Punjab‘s Dairy
Cooperative, which cannot say no to milk procurements. Milkfed was
procuring 30 per cent more milk as compared to the same period last year.
 58

As against their daily packaged milk supply of 8.5 lakh litres, the cooperative
was now purchasing 13.5 lakh litres a day. So, Milkfed had excess milk for
all products (ghee, skimmed milk powder, butter and butter milk lassi).
Milkfed has converted a huge quantity of milk into SMP during this year.
SMP inventory is now 40 per cent more than what it was last year. The other
reason for the increased milk supply was that the private producers has
stopped buying milk because they had enough stock of SMP, so they are not
getting good price for milk. On the other hand, rates of fodder and cattle feed
are constantly rising. The demand has remained static, whereas milk
availability has increased. Hence, dairy farmers are getting less returns.

Dhaliwal (2012) studied the reasons leading to Punjab state‘s dairy

sector crisis. The main reasons include falling milk prices, a huge stock of
powdered milk and ghee, and milk being procured by private players from
neighbouring states like Rajasthan. As of now, Punjab produces one crore
litres of milk daily. Of the one crore litres of milk produced, about 11 lakh
litres is procured by milk plants operated by Milkfed. About 20 lakh litres of
milk is procured by private milk plants and the remaining is supplied to the
market through milk vendors. Milkfed is procuring milk at an average price
of Rs. 390-410 per kg fat; and private milk plants in Haryana were procuring
milk at Rs. 360 per kg fat. The state dairy farmers blame the Central
Government for the crisis. When it was time to export milk products such as
milk powder, the central government banned it. This resulted in a huge stock
of about 8300 tonnes of milk powder in the country which could not be
exhausted even during the lean summer months. The state had about 3000
tonnes of milk powder but the price of the product in the international
market had gone down. Milk powder has a limited shelf life. The other state
governments like Maharashtra and Karnataka extended a helping hand to
milk producers, giving them a subsidy of Rs. 2 per kg of milk.
 59

Pushpesh (2013) evaluated all the aspects of animal husbandry. The

main objective of the study was to know about cattle husbandry and buffalo
husbandry at the national and international level and their role in dairy
industry. The study included the aspects like population of cattle in India
and other countries, different types of buffaloes found in different countries,
milk composition analysis, etc.

Sedhuraman (2014) discussed the adulteration found in milk in

market. A survey was conducted by the Food Safety and Standard Authority
(FSSA) in 33 states and Union Territories by randomly collecting as many as
1791 samples. Only 565 samples or 31.5 per cent conformed to the FSSA
standards. Of the 1226 samples (68.5 per cent) found to be non-conforming,
381 (31 per cent) were from rural areas and 845 (69 per cent) from urban
areas. In both rural and urban areas, loose samples were mostly adulterated,
83.2 per cent and 66.6 per cent respectively. The study showed that addition
of water to milk was common adulterant. Several samples showed that milk
powder had been used to reconstitute milk. The study also indicated traces
of detergent in some cases.

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