SUDHA DAIRY A Ray of Hope in Bihar

SUDHA DAIRY A Ray of Hope in Bihar Shishir Ranjan

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BACKGROUND

The Bihar State Co-operative Milk Producers' Federation Ltd. (COMPFED} came into existence in 1983 as the implementing agency of Operation Flood (OF} programme of dairy development on Anand pattern in the State. All the operations of erstwhile Bihar State Dairy Cooperation were handed overto COMPFED.

Five-district level Milk Producers' Coop. Unions affiliated to the Milk Federation were covering eighteen districts until the end of programme in March 1997 (end of eighth Plan}. Number of districts being covered by unions at present has risen to twenty-four and in addition, five districts are being covered by the Federation. Further, work is being initiated in six more districts. Different milk unions, which are organizing the DCS (Dairy Cooperative Societies} network in these districts, are listed below:

Vaishali Patliputra Milk Union, Patna, Vaishali, Nalanda, Saran and Patna.- Siwan districts

Barauni Milk Union, Barauni - Begusarai, Khagaria, Lakhisarai, Sheikhpura, & Villages of Munger, and Saharsa Districts.

Tirhut Milk Union, Muzarrarpur - Muzaffarpur, Sitamarhi, Sheohar, E. Champaran and West Champaran Districts.

Mithila Milk Union, Samastipur- Samastipur, Darbhanga & Madhubani districts.

Shahabad Milk Union, Arrah - Bhojpur, Buxar, Kaimur and Rohtas districts.

The Milk Federation has already taken up organisation of DCS in the districts of Gaya, Jahanabad, Bhagalpur and Purnia. Department of Animal Husbandry and Dairy in the Ministry of Agriculture, GOI has approved a proposal for dairy development in Supaul, Madhepura and Saharsa districts.

The district of East and West Singhbhum, Ranchi, Bokaro and Dhanbad, now in Jharkhand, are being covered by the dairies directly under the control of Milk Federation for the supply of milk and milk products to the urban consumers in these cities. Procurement of milk has been taken up in Ranchi district only recently.

Rationale of the Intervention: Post Independence era saw an immense increase in the urban population due to migration from villages in search of livelihood opportunities. Simultaneous growth in the Urban Khatals (Colonies of milch man} was not able to cope up with the increasing demand of the cities. This led to the scarcity of milk an important ingredient in the human diet. It provides most of the essential nutrients- carbohydrates,

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fats, proteins, vitamins, minerals and water for human health. At the same time rural villagers engaged in different livelihood activities and rearing milch cattle, as one of the diversified portfolio, were facing problems of selling the surplus milk after meeting their domestic nutritional requirements. There were other problems associated with milk marketing like price uncertainty, demand uncertainty and irregular payments. The demand and price of milk depended on the festive or marriage season, which led to various arbitrary trade practices. Due to the highly perishable nature of the produce and poor infrastructure for storage transportation value addition etc, the farmers had no incentive for addition of milch cattle. It was not possible for all dairy farmers to vend their milk directly in the cities despite them being aware of the huge demand. To bridge this huge gap between the demands and supply an intervention in this regard was thought of. Further it was observed that the problem faced by the farmers of Anand was quite similar in nature to the farmers of Bihar. Hence it was believed that the success story of Amul can be easily replicated in Bihar. Also, increasing industrialization and adoption of use of tractors and other machinery for agriculture activities decreased the dependency on draft animals which left spare fodder and forage with the farmers for milch animals and scope of addition of cattle without much additional expenses.

Intervention Strategy Various studies suggested that marketing of milk produced by the milkmen would alone not solve the problem. It was learnt from the AMUL experience that to make the intervention successful various linkages both forward and backward in the dairy sub sector should be essential to look at the problem in a holistic way. It was learnt various programmes to increase the milk productivity and thereby improve dairy farmers' sustainability were important. Hence, they integrated following programmes as a strategy to make the intervention successful such as, Cattle Breed improvement programme through Artificial insemination, Awareness creation about Animal Health Maintenance, Prophylactic vaccinations to prevent occurrence of certain diseases, Feed and fodder, Training of manpower at various levels of the organisation. To facilitate milk collection and implement aforementioned programmes for the benefit of the dairy farmers' formation of village level dairy cooperative societies were proposed. This helped them in increasing the transparency of the programme to the dairy farmers. They were also involved in various decision making process like price fixation of milk etc.

It was also felt that milk alone may not be successfully marketed and hence surplus milk should be converted into various value added products like khoya, curd, /assi, ghee, butter, rasogul/a, milk cake, ka/akand, gu/abjamum etc. In due course of time when marketable milk still became surplus they also explored markets for milk and milk products in other states like West Bengal. This helped them in decreasing the number of Milk Holidays declared from time to time due to surplus unsold stocks of milk.

ROLE OF DIFFERENT STAKE HOLDERS

For the success of the programme it was important that every person involved in the programme is truthful to his or her rights and duties for the success of the programme. Eg, slight adulteration of milk with water at individual level will magnify to such as an extent that it has the potential to affect the performance of the whole organisation adversely.


Dairy Farmers (Individual Level)- It was expected from every individual members of the dairy cooperative society that pure and clean milk should be delivered regularly. Proper care and maintenance of the health of their cattle should be taken. They should participate actively in all programmes organized from time to time to help themselves benefit in the long run.

Dairy Cooperative Society (Village Level) -It was expected that transparency in dealing with the members should be maintained in recording the Fat and SNF levels of every members along with the quantity of milk delivered. Timely and regular payments to the members should be made. They should not get involved in cross purchasing or selling of milk. It was also expected that regular information should be disseminated to all members of the DCS regarding the activities.

Dairy Milk Unions (District Level) -They are expected to make timely and regular payments to the DCS. They have to maintain proper logistics of the milk procurement from the DCS, its processing, storage and transport as well as arrange for regular extension activities for improvement of animal husbandry, timely supply of promised inputs and visit ofVertinaranians to the individual members.

Dairy Federation (State Level)-They are expected to arrange for efficient marketing and inter-union co ordination, so as not to allow Milk holidays which is a big problem for the producer members.

The above decentralized structure is no doubt very helpful in collectively working towards the basic purpose of improving incomes of milk producers through enhancing milk production.

Consumers The ultimate consumers are no doubt one of the stake holders. However they do not have much role in the organisation.

IMPACT OF THE INTERVENTION

Initially the set back caused by the natural vagaries like flood, the progress was impeded. Regaining of confidence of the milk producers in the dairy cooperative system was shattered due to poor management by erstwhile Bihar State Dairy Corporation earlier was also of one of the major reasons for sluggish growth. Lack of functional infrastructure in the sphere of animal husbandry, especially in breed improvement, artificial insemination (AI} and animal health cover contributed to the torpid progress.

Policy decision taken six to seven years ago has changed the trend of growth in all quarters of cooperative dairying in Bihar. In the earlier years the emphasis was on the horizontal expansion of dairy cooperative network. Now the strengthening I consolidation of the dairy cooperatives is being done to make them viable and gradual expansion of area is also being done. Impact of the intervention under different activities is summarized in the following pages.

Formation of Dairy Co-operative Societies :The first step of this Intervention was the


formation of strong village level DCS. It was important to assure regular uninterrupted supply of milk to the milk unions. Massive campaigning was done in each catchment villages and the awareness was created about the scope of dairy farming in income generation. Like minded people in a village or a cluster of villages I or tolas are initially motivated to form a cohesive groups for milk production. Training on different aspects of dairy farming is imparted. Assistance are also provides to these groups in organizing themselves and managing the DCS. How to keep records, How to take samples of the milk brought by the members. Training is imparted for how to do the Fat and SNF analysis and TSS calculation so that there is transparency in the payment system to the DCS members. Once this society starts functioning smoothly and consistently for 3-4 months, this society is registered with the District Milk Union for availing the various linkages and services being offered by the union from time to time. For registering this society, governing members of the society, The president, the secretary and the treasurer are elected democratically every year. The secretary oversees the day to day activity of the DCS. He is responsible for milk collection from the members, Sample taking, Fat and SNF analysis of milk collected from the members milk sample. Delivery of the Milk collected from the members to the Distt milk Union. Payment collection from the DMU and timely payment of the same to the members. Sudha Dairy also gives performance incentive to DCS which is being passed on to the individual members after deducting the secretary's commission. For the various services rendered to the society the secretary earns a commission of 1% of the earning of the members from the milk sold to the DCS. To strengthen the DCS and minimize milk losses at the DCS, Sudha Dairy has recently launched a programme of distributing bulk coolers to all DCS collecting more than 500 liters milk per day.

Table in the annexure would reveal that the percentage of functional DCS is about 83.38% of the total organized DCS whereas the percentage of registered DCS in 35.85%. DCS are registered once they prove to be viable after functioning for 1 to 2 years as proposed (unregistered) societies.

Membership of these dairy cooperative societies was 1.841akh households in 2000-2001, which has gone up to 2.50 lakhs (250285) at the end of September, 2004. About 14.8% of the total members are woman and 56.8% are of SCIST (9.2%) and other backward classes (47.6%).

Milk Production

The daily average milk production during 1994-95 averaged 114.33 thousand kgs per day (TKPD) which had jumped more than three times around to 402.60 TKPD in the year 2003-04. During 2004-05 till September, 2004, it averaged 435.46 TKPD 9approximately 15% more than last year up to September, 2003 and almost four times of 1994-951evel).

During 2003-04, the daily average milk production had gone down, especially in the Northern and Western India but Bihar registered a growth of around 5% due to sustained efforts and timely actions. The milk procurement status of all the unions I units is tabulated in the Annexure.

During 2000-01, compfed procured 2% of total milk procured everyday in the country by


the cooperatives, sill it was amongst the top ten Federations/States after Kerala. It was far ahead of states like MP and Haryana. Even during 2002-03, as per a report of NDDB, Compfed was ranked tenth in milk procurement in the country.

As against a target of 115.5 kgs of milk per day per functional DCS, the achievement in 2003-04 was 104.04 kgs/day. Due to flood in some of the milk sheds, low production in the villages, achievement has been stunted. However in the current year average till Septermber, 2004 was 1 07.30 kgs/day.

• The actions taken during the past seven to eight years to change the trend of milk procurement are listed below:-

• Timely and regular payment to milk producers. Payment is now made on every tenth day.

• Attractive procurement price and payment of incentive price during the lean months. Procurement price being paid at par with Federations like Punjab, U.P.

• Induction of crossbred cows in the DCS under various development schemes the SC, Women and IRDP farmers and emphasis on cow milk procurement. Cow

milk procurement is around 80% of total procurement.

• Disciplining of DCS and secretaries who were diverting milk during lean season and accepting milk of middlemen in flush, which was widening the gap between lean and flush procurement.

• Supervision of DCS by the field staff and regular visit to DCS even by the Board members of the milk unions. Mass contact with in members in route meetings.

INCOME TO MILK PRODUCERS

Initially Income significantly went up both due to extra production and higher prices in almost every locale. The reasons are not difficult to understand. The programme did little to change production activity at the village level. Dairying remained essentially based on decentralized animal holdings and low input animal husbandry practices. COM FED never promoted large capital intensive dairy farms. Small holders and landless, encouraged by higher milk prices and the reliability of the co operative marketing structure, took to dairying. They used their slack family labour, locally available fodder, crop residues and grasses from commons to carry out milk production. While cattle feed plants were set up in several places, their capacity utilization is well below the level that would be indicated by the volume of milk production. What happened was that the animal herd composition was changed, agricultural slack was used up and unpaid family labour was deployed to generate secure, regular and extra incomes. The income effect is all the more strong because it has mainly benefited small, marginal and landless families, often in flood prone districts.

ALTERNATIVE EMPLOYMENT OPPORTUNITIES FOR RURAL YOUTHS

Attracted by small investment, assured market, regular and timely payments extension and other technical support from the federation more and more educated unemployed


youth are driven towards this enterprise. Village elders suggest that thus lot of youthful energy and manpower earlier being wasted in unproductive works are now being channelised in income generation of the household.

LINKAGES

Milk Production Enhancement Programme.

It is commonly known as Technical Inputs Programme (TIP). It is one of the crucial activities of the milk unons I Compfed and is the major strength responsible for the success of dairy cooperatives. The main technical inputs given to milk producers include breeding facility, animal health cover, feed & Fodder and extension/ training services. The inputs provided to the farmers are elaborated in the following paragraphs. No input is provided free of cost to the milk producers.

Artificial Insemination (AI) Programme

Artificial insemination with frozen semen using liquid nitrogen (LN) technology is done by static (single) and mobile (cluster) AL workers who are self-employed persons specially trained by compfed. The progress of establishment of AI centers is tabulated in the annexure.

Around 76% of the total functional DCS are being covered under the AI programme. The members have to pay Rs. 20.00 per AL whereas the non-members pay Rs. 40.00 to Rs. 50.00 per insemination. Frozen semen doses of exotic/indigenous cows and buffaloes, pure and crossbred are procured from NDDB managed Sabarmati Ashram Gaushala, Bidaj (near Ahmedabad) and Animal Breeding Centre, Salon (near Rae Bareilly).

As far as performance of AI centers in terms of Al's done per month per centre is concerned, it was 50 during 2004-05 till September 2004. Union and year-wise details are embodied in the table given in the annexure.

ANIMAL HEALTH PROGRAMME

Main activities under animal health (AH) Programme include prophylactic vaccination, deworming, mastitis control programme, organization of veterinary/ infertility camps and treatment of veterinary first aid cases. Resume of different components of AH programme is given hereunder:

Prophylactic Vaccinations

Around 1725 Veterinary First Aid (VFA) centers has been established, which do the vaccinations. Prophylactic inoculations are mainly done against Foot & Mouth Disease (FMD), Hemorrhage Septicemia (HS), Black Quarter (BQ) and Theileriosis diseases.


During 2001-02, after initial trial, mass vaccination with Tri-o-cac (combined FMD, HS and BQ vaccine) on the lines of Pulse Polio vaccinations in children was taken up. Against an annual target of 6.20 lakhs vaccinations for the year 2003-04, the VFA centers could give immunity to 5.16 lakhs animals against the disease stated above. During 2004-05 the achievement up to September, 2004 was 1.91 lakhs.

Mastitis Control Programme

This programme has been taken up with the technical assistance from NDDB. Under this prgoramme, screening of milch animals is done using 'Mastect'. The doubtful or subclinical cases are given treatment. Awareness amongst the milk producers is created for disingecting the udders and teasts after milking with a view to check the infection of animals. Milk unions provide necessary disinfectant and teat cups to the milk producers on cost basis.

Deworming

Worm infestation in the milch animals affects their productivity adversely. Hence, for improving the productivity and health of animals, deworming with broad spectrum anthelmintics is arranged regularly by the milk unions. During 2003-04, around 3.39 lakh animals were dewormed as against 2.90 lakh animals in the previous year. However achievement up to September, 2004 was 1.521akhs.

Veterinary Campus

The milk unions organize veterinary camps where the milk producers bring their animals for treatment.

In the year 2003-04, 1036 veterinary camps were organized and in these camps, 18,015 animals were treated besides providing first aid to 81,836 animals. Number of animals given first aid up to September, 2004 was 69,720.

Feed & Fodder

Since, seventy five to eighty percent cost of milk production depends on the feeding of milch animals, this is very important input affecting the economy of the dairying activity. Both green fodder and balanced cattle feed are required to be fed in appropriate quantities for optimizing the out-put, i.e. milk production. Under feeding in terms of quantity and quality affects the milk yield.

Cattle Feed

Adult Cattle Feed (ACF) and Bypass Protein Feed (BPF) is manufactured by our cattle feed plants (CFP) located at Patna and Ranchi. Both the plants are of 100 MTs per day capacity. Cattle feed is supplied on cost basis to farmers. Besides manufacturing ACF and BPF, CFP Ranchi also manufactures other livestock feeds to meet the requirement of Govt. farms in Bihar and Jharkhand. In 2003-04, total production of feed was 39.16


thousand MTs. Production of feeds up to second quarter during the current year was 14.94 thousand MTs.

One cattle feed plant belonging to BISCOMAUN was taken on long term lease by Tirhut Milk Union and after repair and renovation this plant has been operationalised very recently. With the starting of this plant, total production capacity has gone up to 260 MTs per day.

Against an annul target of selling 39.25 thousand MTs of feed to the cooperatives during the year 2003-04, the achievement was 31.32 thousand MTs, which indicates that for every kg of milk procured, the sale of cattle feed was 213 gms. It has been targeted to sell 52.60 thousand MTs feed in the current financial year and up to September 2004 was 14.19 thousand MTs.

Fodder Development Green fodder is equally important in animal nutrition. Besides providing important nutrients, it helps in reducing the intake of balanced cattle feed and in turn the cost of production. After prolonged extension work and persuasion, the farmers have started not only the cultivation of different fodders in their fields but have started the production of fodder seeds. Good quality fodder seeds and their timely availability were the main constraints in popularizing the cultivation of fodders.

This will be substantiated from the fact that the sale of fodder seeds is increasing gradually. It was merely 37.0 MTs in 1993-94, which has gone up to 304.0 MTs in 2003-04.

In 2003-04 about 91.00 MTs of fodder seeds were produced by the milk unions with a view to gradually become self-sufficient in seeds production. The short fall in seed production and requirement is procured from the dairy cooperatives under the National Seeds Grid. Due to flood this year the fodder crops in the field and further cultivation were affected. Sale of seeds up to September was merely 5.0 MTs.

Other important scheme under fodder development has been the treatment of straw with urea, which not only increases the palatability of dry fodder but increases its nutritional value also. Feeding of urea treated straw helps in reducing the cost of production of milk. Farmers have started adopting it on regular basis. During 2003-04, around 4445 MTs o straw/bhusa was treated with urea. In the current year, achievement in first two quarters was 2514 MTs of bhusa.

Training I Man-power Development Capacity building/skill up-gradation has been given maximum emphasis in implementing the dairy development programme. This has been chieved through regular training of milk producers, management committee members (MCM) of DCS, staff ofDCS/milk unions/Compfed. Training of milk producers, DCS staff and MCM has been mainly arranged at the Compfed training centre at Patna. Training programmes organized at Compfed training centre include programmes of Society Operation for Secretaries, Orientation of MCM, AI & VFA training, Dairy Animal Management, Legal Literacy &


Women Empowerment (only for women members), refresher courses and tailor made programmes as per the need of milk unions.

Link for other activities, funding by NDDB for training was stopped when the Operation Flood programme ended in March, 1996. The milk union/DCS are bearing the training costs. However for the skill up-gradation of women, the Ministry of Human resource Development has provided funds.

During current year till September, 2004 about 1399 milk producers, DCS staff and Management Committee Members were given training. So far, the services of this training centre have been utilized for training 32,879 persons out of which 9795 (29.79%) were women.

From 1999-2000, training in artificial insemination (AI) was started at our training centre. Before starting the programme, the trainees were sent to NDDB training centre at Siliguri and at training centers of Punjab and UP Federations. A new programme, viz. Inputs Promoter training was introduced during 1998-99.

Wherever new Board of Directors of milk unions is elected, their orientation for three days is done at the Compfed Training centre.

Clean Milk Production

Besides creating awareness amongst the milk producers about the importance of clean milk production (CMP) programme, efforts are made to install bulk coolers and link the DCS covered under CMP with these bulk coolers. It has been targeted to cover 2125 DCS in all the unions under this programme during current year. Following actions were also taken under this programme:-

(a) Preponing arrival time of milk vehicles at the chilling centers/ dairy docks.

(b) Use of SS-304 milk cans replacing the old aluminum cans, introduction of SS M T E s and distribution of SS vessels to milk producers in bonus was done.

(c) More vigilant cleaning and sanitisation of milk cans.

(d) Testing the presence of adulterants in milk more vigorously. The milk unions have procured adulterant kits.

(e) Covering the milk procurement vehicles with tarpaulin to protect the milk cans from exposure to direct sunlight to avoid increase in temperature of milk.

MARKETING

Liquid Milk Marketing

Liquid Milk marketing was one of the neglected areas till five to six years back. Progress was very slow. It moved up at snail's speed from 1 00.55 thousand litres per day in 1987-88 to 1 06.54 thousand litres per day (TLPD) in 1992-93. However, strategies adopted in 1993-94, changed the trend completely. Year 2003 was declared as "Market Mevelopment


Year''. The daily average marketing of liquid milk in 2003-2004 was 451.46 TLPD more than a four fold increase as compared to 1992-93 TKPD, which was approximately 8% higher than last year.

Marketing of milk and milk products is being done in about 84 towns/cities through 5640 (including 386 whole day booths/parlours) outlets in Bihar/Jharkhand/West Bengal. It is being marketed in areas as far as Guwahati and Calcutta besides in cities like Varanasi and Siliguri.

Progress is shown in the table in the annexure.

In order to boost the sale of liquid milk, the dairies adopted the following strategies:-

Continual improvement in the quality of milk. It was achieved as a result of taking up Dairy Plant Management (DPM) and Quality Assurance Programme (QAP) by all the dairies with the technical and financial assistance from NDDB/Compfed. Nine out of ten dairies of Compfed, namely, Patna, Muzaffarput, Ranchi, Bokaro, Gaya, Bhagalpur, Jamshedpur, Barauni and Samastipur dairy have already been Accredited with ISO : 9001 : 2000 and HACCP: IS-15000:1998, whereas Arrah dariy is in the process of getting the ISO and HACCP certification.

• Bihar is one of the few States in the country which has been permitted by the National Dairy Development Board to use the "Mnemonic" symbol on all the milk being marketed in pouches, Milk being marketed in Calcutta also has "Mnemonic" symbol on the pouches confirming the quality standards fixed by NDDB.

• Reaching close to the consumers by expanding the retail network and establishing new whole day milk booths. Strengthening of door-delivery system.

• Strengthening of marketing teams by inducting professionals and better supervision.

• Service to retailers and redressal of consumer complaints.

• Liberalising the terms for appointment of retailers viz. reduction in the security deposits, facility for cash collection, increased commission, etc.

• Creating consumer awareness and education programmes.

Milk Products Marketing

With a view to improve the financial viability of dairies, broaden the product mix to serve a larger section of the population and improve the disposal of milk procured by the DCS, the dairies have resorted to the production of long shelf-life, value added and fresh milk products (indigenous milk based products/sweets). The product mix comprises of Ghee, Table Butter, Ice Crem, Dahi (Mishti and Plain), Lassi, Flavoured milk, Peda, Kalakand, Gulabjamun, Rasogulla, Paneer (vacuum-packed), Milk cake and Khoa. Besides these products, surplus milk is conserved in the form of white butter, skim milk powder (SMP) and whole milk powder (WMP), which are mainly consumed by own dairies.

Processing Infrastructure

There are eleven dairy plants and six chilling centers besides five bulk coolers with a total


760 TLPD processing facility and 235 TLPD chilling facility. There chilling centerre and two bilk coolers are under erection. With the commissioning of these plants, total chilling capacity available will be 209.0 TLPD. Details are embodied in annexure 1. There are one of 60 MTs per day production capacity). For the marketing of liquid milk in Calcutta, one dairy plant has been taken on lease. Actions are being taken for the expansion of processing capacities of some of the dairy plants of 15.0 MTs per day capacity is targeted to be established at Patna and Hajipur soon.

Other Programmes being implemented byComfed

Bihar Women Dairy Project Bihar Women Dairy Project (BWDP),. Comfed is implementing a project of women empowerment through dairy development exclusively for the rural women with financial assistance from the Department of Women & Child Development in the Ministry of Human Resource Development GOI, New Delhi. The project was launched in 1987 and presently the fourth phase of the project is being implemented. During the first phase, the Ford Foundation also supported the project financially.

Women Self Help Groups Like minded women in a village or a cluster of villages I or tolas are initially motivated to form a cohesive groups. Assistance are provides to these groups in organizing themselves and awareness is created regarding the benefits of SHG's and dairy farming as a source of additional and regular income to their livelihood portfolio. Further training on different aspects of dairy farming is imparted. Small and regular savings are also encouraged to meet their credit requirement in the times of need. Individual SHG's are free to formulate policies to decide the credit amount to be given to the members, whom to give, for what purpose to give and how much, the mode and of repayment and interest on the loan, whether the members earns interest on their deposit etc. Sudha Dairy personnels also helps them to get a corpus of Rs. 1 0,000.00 from the block office meant for such purpose which otherwise could not have been available to such SHG's. Once these groups are convinced of the benefits dairy farming can bring in their lives they are encouraged to form a Women DCS.

The system of formation of women DCS is similar to that of other DCS. The difference lies in the objective that only women can be member of these DCS and all activities right from cattle rearing (animal husbandry), milking, vending milk to the DCS, record keeping of the DCS, sample collection from the women dairy farmers members milk supply, Fat and SNF measurement, payment to members are done by women members themselves. Women are also encouraged to learn artificial insemination and other technical inputs. Regular training is organized to train all women members on all spheres of Animal Husbandry.

The impact of such Women DCS running through SHG's are very significant in villages where most of the male population migrate to metropolitan cities in the off peak seasons of farming. Women DCS has been seen to bring a revolutionary change in the lifestyles of the women members. In the off peak seasons of farming when they do not get much farm labour they need not depend on the money orders from their husband staying in towns to meet their ends.


Till September 2004, there were 550 women dairy cooperative societies with a women membership of around twenty-five thousand nine hundreds. Skill/leadership development, awareness generation about women & child development, nutrition & hygiene, legal right of women through different training programmes are the major components of the project apart from other acctivites of dairy/ economic development. In 2001-02, the National Commission on Women honoured one of the women AI workers in Mithila Milk Union.

Scheme of Renewable Sources of Energy

Under this scheme, bio gas plants and smoke-less 'Chulla' are being established at the milk producers' level in dariy cooperatives. Bihar Renewable Energy Development Agency provides funds towards the subsidy component. Around 45 bio gas plants and 3221 chulas have been built. At almost all the dairy/ chilling plants solar heaters for hot water supply have been installed.

Distribution of Milch Animals to the Economically Weaker Members of Dairy Cooperatives

The State SC/ST/BC Finance & Development Corporations have sanctioned funds for the distribution of milch animals, especially the crossbred cows for distribution to the scheduled caste members and members from backward classes in the dairy cooperative societies.

Financial Performance

The profitability and financial position of all the milk unions and dairies has improved a lot by reducing various operational costs, improving efficiency of plants by reducing breakdowns, increased level of milk procurement and marketing, production and marketing of value added products and loss control management.

The turnover, which was Rs. 159.61 crores in 1996-97, had touched a level of Rs. 386.03 crores by the end of 2003-04. This year, it is expected to cross Rs. 400.00 Crores mark.

The 'Turn-around' plan prepared and implemented (ref. Annexure-2) has helped all the milk unions to start making operating profit from 1992-93 onwards. Since , 1996-97 all the milk unions and dairies are posting a net profit.

The status of profit before interest and depreciation of Compfed and different milk unions is given in table in the annexure.

Critical analysis of the intervention

During Interaction with the dairy farmers in the process of documenting this case study we met numerous farmers. Dairy farming has now transcended the traditional caste based community occupation, and is now an enterprise across all castes. Different farmers perceived the milk revolution in Bihar in a different way Their opinions and comments were


both positive and negative. As many as 70% were of the opinion that there is . no profit in the dairy business. The reasons were not difficult to understand. On detailed discussions it was evident that the basic tenets of the intervention was not adhered to. This intervention was originally aimed at decentralized animal holdings and low input animal husbandry practices. Largely aimed at farmers with 2-3 cattles at the most. This was never promoted as a large capital-intensive dairy farming. The idea was to use slack family labour, locally available fodder, crop residues and grasses from commons to carry out milk production as an additional source of income. However encouraged by higher milk prices and the reliability of the cooperative marketing structure many small farmers took to dairying as a commercial venture. Many farmers started having more and more animals. Dairy herd composition was changed. The average number of unproductive animals increased. This not only increased their investment but also their dependency on external sources for labour, fodder and feeds. Belying the original principals of self-sufficiency in dairy farming.

The credit component of the programme is not well designed. The loan for purchasing cattle is given through the DCS and the repayment installment is deducted from the DCS. The DCS is supposed to deduct this amount from the payments to be made to the member farmer from the payment for milk supply. A high incidence of default of the member from the DCS has been observed after receiving the loan due to which the remaining members of the DCS has to suffer. Further the loan amount is not sufficient for the purchase of high yielding crossbreds. Here it is encouraging to note that the some of the Women Dairy Farmers cooperative societies exclusively run by women have also formed SHG's. They donate monthly to the fund and use the capital thus generated to give loan to their members for productive purposes. This system was found very successful.

Farmers have been found to depend too much on various services promised by the Milk Union such as vaccination, artificial insemination, and supply of good quality seeds for fodder. However due to irregularity in the time of supply and inconsistency in the quality farmers have to suffer a lot which affects their milk production. Eg. Poor quality of semen for artificial insemination has accounted for cattles not reaching lactation early.

Many farmers complain that the milk measurement at the Milk union has become highly inefficient. The cost of raising cattles has increased twofold in the last 20 years. Even the selling price of various products of Sudha Dairy has increased as much as 70-90% in the last 20 years but the procurement price has hardly increased 25%. Farmers feel it is high time procurement price should be raised however during the time of writing this case the there was speculation of the price cut upto 50 paise per Its. This clearly shows that interests of the farmers do not matter any more for the federation. In fact many DCS pointed out that despite all measures the DCS run into losses however when the auditors comes from federation they force manipulation in the records to show profit.

In many exclusive women DCS it has been found that the DCS is run in proxy by the husband of the named secretary. The husband of women member also does delivery of milk to the DCS.

Lessons for livelihood promotions

The experience of the Sudha Dairy intervention and its various features bring out some


key learning's and directions.

1. The increase in family income is evident only when the basic tenets of the decentralized small animal holdings and low input animal husbandry are adhered to. The dairy farmers should use spare household labour for the dairy functions. He should be self sufficient in forage and fodder and should be able to collect green fodder from the commons himself.

2. Credit for productive purposes from the self help group capital works best. It is basically due to the more responsive and cohesive group of dairy farmers and this idea should be promoted rather than giving loan to the DCS as in case of default by a loaner members other members have to suffer.

Challenges In the contemporary competitive world Sudha Dairy is facing a lot of challenges. The first and foremost is the usurping up of private dairies. Ganga Dairy is one of the prominent ones which is directly targeting at DCS organized by COMPFED. They are purchasing the milk from DCS by some lucrative margins to the secretaries. The farmers get the same price so they do not complain. However since Sudha Dairy invest heavily on providing various services its long term commitment to the DCS decreases with the fall in collection from the DCS which becomes a cause of grudge among the farmers at a later date. In the flush season when Sudha is trying to sell its milk in other neighbouring states, it faces severe competition from the federation of other states like Amul, OM FED etc. in prices due to which they are bound to slash procurement prices. Efficient marketing networks for milk and milk products has to be worked out. Transparency in the operation of DCS in cross selling the collected milk at higher prices to local vendors and sweet shops etc during festive and marriage season is also a big challenge in front of Sudha Dairy and it requires hard work in raising the commitment level of these DCS. Strengthening I Consolidating the functional and revival of defunct DCS is equally important. Capacity utilization of Milk powder production plant to consume the excess milk collected during flush season use for reconstitution in lean season to meet up its demand is another challenge facing them. This will also prevent them from announcing Milk holidays and creating inconvenience to the dairy farmers. Proper follow up of various extension activities like TIP etc are very essential as these directly affect the quality and quantity of Milk production. The credit programme for purchase of new high yielding crossbred cattles has to be worked out. Timely supply of assured inputs to the dairy farmers along with alternative arrangements for fodder in perennially flood prone districts should also be taken care of.


Year Wise progress of organisation of DCS is depicted below :

Particulars 87-88 90-91 94-95 97-98 98-99 99-100 00-01 01-02 02-03 03-04 04-05

DCS Organised 1669 1967 2417 2884 3002 3371 3525 3792 4018 4737 5024

DCS Functional 1462 1642 1781 2306 2523 2868 2890 3088 3285 3950 4058

DCS Reaistered 627 1152 1364 1456 1413 1605 1659 1719 1647 1678 1665

MembershiP 1'0001 65.6 98.13 117.83 147.2 157.5 172.94 184.2 199.94 213.58 241.37 250.29

Milk Procurement by DCS

Achievement

Milk Union 87-88 90-91 94-95 97-98 98-99 99-100 00-01 01-02 02-03 03-04 04-05*

Patna 30.18 37.86 49.01 72.8 52.59 82.32 95.57 88.92 96.78 102.66 118.14

Barauni 20.57 33.58 37.56 65.9 57.19 71.37 85.21 106.64 134.36 135 144.79

Muzaffarpur 10.77 9.14 13.75 24.4 22.72 40.46 49.07 44.28 44.73 52.94 54.23

SamastiDur 7.44 10.45 10.4 32.0 30.35 42.56 54.06 56.3 62.98 69.78 75.8

Shahabad -· ·- ·-· 8.8 23.39 35.38 36.66 33.82 32.98 29.99 29.98

Gaya 0.68 0.3 0.23 0.15 0.08 0.24 0.96 1.71 1.68 2.9 3.72

Ranch I -· ·- ·-· 5.35 6.23 6.99 5.67 4.93 5.97 6.06 5.22

Bhaaalpur -· ·- ·-· 2.81 1.55 1.76 2.55 5.14 5.59 3.27 3.59

Siwan -· ·- ·-· ·-· ·-· -- ·-· - - -- --

Total 71.05 94.9 114.33 211.9 194.1 281.1 329.8 342.74 384.7 402.6 435.46


Milk Procurement Per Functional DCS

Milk Union Achievement

87-88 90-91 94-95 98-99 99-00 00-01 01-02 02-03 03-04 04-05*

Patna 45.00 54.00 64.00 63.67 93.55 110.85 101.16 96.11 84.56 17.32

Barauni 64.00 91.00 89.00 116.94 140.48 159.57 183.55 218.00 180.72 234.67

Muzaffarpur 76.00 49.00 49.00 59.93 74.11 105.75 92.64 91.47 84.17 110.30

Mamastipur 33.00 37.00 46.00 74.58 81.84 108.55 98.77 111.01 118.07 134.40

Shahadbad 0.00 0.00 0.00 69.20 86.94 86.06 77.57 76.34 52.52 69.40

Total 49.00 58.00 64.00 76.93 98.01 114.10 110.67 119.49 104.04 132.20

Establishment of AI Centres

Milk Union

Achievement

87-88 90-91 94-95 98-99 99-00 00-01 01-02 02-03 03-04 04-05*

Patna 120 135 128 (38) 167 (65) 175 (67) 177 968) 190 (73) 212 (96) 222 (96) 232 (110)

Barauni 57 88 80 (24) 123 (3*) 133 (43) 149 (45) 159 (55) 162 (53) 162 (53) 149 (50)

Muzaffarpur 20 44 30 (13) 67 (28) 69 (31) 81 ( 42) 105 (51) 112. (49) 129 (61) 131 (57)

Samastipur 29 52 55 ( 19) 138 (32) 158 (36) 161 (73) 177 (105) 175 (104) 185 (112) 183 (112)

Bhagalpur - .. .. 4 (·) 3 (·) 0 (·) 0 (00) 0 (00) 10 (00) 25 (00)

Ranchi .. 11 (02) 17 (04) 17 ( 02) 19 (03) 19 (3) 17 (3) 19 (05)

Shahabad .. 61 (18) 86 (22) 120 (30) 156 (44) 152 (47) 160 (47) 166 (51)

Gay a .. .. .. 160 (47) 18 (07)

Total 226 319 293 (94) 571 (183) 641 (203) 705 (260) 806 (322) 826 (343) 11 (6) 923 (392)


AIS Performed

Milk Union Achievement

95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03 03-04 04-05*

Patna 60890 77034 93306 106371 98807 116412 123264 128777 139657 71535

Barauni 72322 92539 95377 107470 117527 12626 130810 139709 131304 63289

Muzaffarpur 37584 56704 65432 84698 94527 96970 89862 107433 104949 53896

Samastipur 18940 22876 31066 29960 31978 44915 57774 68605 72762 36324

Bhagalpur 0 282 1175 3146 982 -- 0 0 1650 1065

Ranchi -- -- 53 753 1546 2099 2910 3387 3353 1205

Shahabad -- -- 8486 19261 33659 53460 72591 88761 92013 46531

Gaya -- -- 3282

Total 189736 249435 294895 351659 379026 439482 477211 536672 548334 277127

* Up to September 2004

Daily Average Milk Marketing

Dairies Achievement

95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03 03-04 04-05*

Patna 53.84 62.34 68.84 80.16 79.65 76.38 76.7 89.77 103.72 104.31

Jamshedpur 41.80 48.04 53.41 60.91 65.89 67.78 65.51 67.82 69.44 71.48

Ranchi 23.62 26.27 30.02 34.73 35.27 36.66 41.44 43.82 51.51 52.97

Bokaro 20.26 22.87 26.28 32.41 33.65 34.30 33.16 36.79 42.13 44.05

Muzaffarpur 15.66 21.92 27.49 39.25 38.38 40.21 41.28 49.58 51.87 57.15

Gaya 5.42 6.36 6.78 8.84 9.25 9.58 10.03 11.12 14.19 14.36

Bhagalpur 3.85 3.7 3.75 5.15 6.66 6.99 6.13 6.92 6.83 6.88

Barauni 4.55 3.56 6.85 8.81 7.58 8.62 12.18 17.27 41.33 52.57

Samastipur 9.95 15.27 21.55 31.37 37.00 41.92 21.45 42.99 54.43 51.00

Ara 0.04 2.34 3.64 3.66 3.82 12.57 16.02 15.48

Total 178.95 210.36 245.02 303.96 316.97 326.10 331.71 378.63 451.46 470.24


Marketing of Different Milk Products Millk Products

Unit 94-95 95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03 03-04*

Ghee MT's 444.10 505.9 650.3 641.9 484.4 642.9 682.7 998.0 1025.6 991.18

Table Butter MT's 32.80 55.1 67.2 108.9 92.4 82.3 72.7 67.3 81.9 44.79

Ice-Cream MT's - 243.0 305.3 224.4 573.2 468.7 204.2 182.1 255.3 257.53

Lassi MT's 79.60 237.4 384.9 333.2 1171.7 2223.6 1111.0 127.1 1070.9 1615.13

Misti Dahi MT's 30.79 81.5 166.6 157.6 337.9 401.7 439.6 387.2 492.6 538.69

Peda MT's 69.90 115.5 176.1 205.1 268.0 333.7 359.2 350.5 409.9 413.12

Panneer MT's - 57.4 104.4 137.4 176.7 272.9 351.2 454.6 570.5 679.79

Sudha Spl. MT's - 21.6 80.1 76.4 142.2 180.6 218.7 203.6 240.7 224.19

Plain Curd MT's - 18.3 31.5 60.2 166.6 160.7 206.1 226.0 647.8 790.61

Kalakand MT's - 5.7 9.7 18.1 62.3 95.8 123.3 90.5 81.7 66.99

Rasogula MT's - - - - 14.8 44.7 55.0 47.8 78.7 95.23

Gulabjamun MT's - - - - 11.9 45.7 51.2 60.4 75.6 98.51

Profit Before Interest and Depreciation

(Rs. In Lakhs) Feb/Union

Profit before Interest & Depreciation

94-95 95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03 03-04 04-05*

Compfed 262 160.59 355.2 483.3 700.47 736.91 681.14 575.59 566.54 604.19 520

Patna 98.88 173.22 177.5 145.9 169.87 176.6 165.06 84.68 222.61 142.83 219.87

Barauni 37.37 165.48 75.27 145.6 129.74 46.54 198.69 245.92 158.3 248.67 396.45

Muzaffarpur 76.86 128.16 104.5 124.6 160.79 234.02 157.28 149.33 157.5 182.59 211.54

Samastipur 2.41 28.46 39.48 35.83 59.05 69.4 153.23 135.81 119.38 165.27 128.29

Shabhabad - - - 12.05 24.15 83.86 -43.52 -3.14 32.8 6.02 8.54

Total 477.52 655.91 751.95 947.28 1244.07 1347.33 1311.88 1188.19 1257.13 1349.57 1484.69

* Projected for 2004-05


MILKING PROFITS FROM DAIRY FARMING -a Success story

Neelam Devi a resident of village Manjhaul, 13 kms from the district headquarter Begusarai. She lives with her two daughter and is a proud owner of 4 cows and is now monetarily independent. She still remembers how she used to look for petty jobs in the neighbourhood when the monthly money order from her husband used to get delayed. The village being annually inundated by flood water, dependency of farm labour even in the peak season was not enough to meet the two meals of their family. Her husband used to migrate to Calcutta in search of labour wages in the off peak season of farming. Later he permanently settled in Calcutta only to visit his family in the festive season. She was dependent on the money order sent by him saved from his own expenditure in the town.

She is now a successful dairy farmer of Manjhaul Mahila Dugdh Utpadak Samity, an all women DCS formed from an SHG in 1997 which brought this sea change in her life. She is a member of 135 members strong DCS which though now have only 40 active members and produce 400 literes of milk everyday. Her SHG group has a corpus of Rs.30,000. (includes 10,000 grant from Block). Her group has never let any members down in their times of need. Every member has to donate Rs. 1 00/- per month and can withdraw from the group any day by taking their contributions to the corpus without any interest. Any member can take a loan on the recommendation of any five members a sum equal to three times her deposit with the SHG but only for productive purposes specifically for purchase of new cattle, treatment of ill cattle. The do sometimes give loan to members for treatment of their ill family members but they strictly do not give any loan to the members for consumption purpose. The members who recommend the loanee form a joint liability group and are responsible for the repayment of loan with interest in case of default but such a situation has never arisen in the 7 years history of their SHG's existence.

To be continued .................. ..


The Dairy Intervention in Jharkhand Mihir Sahana

The Livelihood School ---------------lllllliii15

With Financial Support from an UN development agency in the year 2003, Gram Nidhi, a livelihood promotion Institution, undertook a study in the state of Jharkhand and identified Dairy as one of the potential sub-sectors which, if developed, could promote a large number of rural livelihoods there. The key constraint identified during the study was the high cost of production of milk and consequent low profit margin per litre of milk produced. As a result, despite high demand for milk and milk products, Jharkhand farmers were reluctant to take up dairy as an income generating activity.

The study revealed that low animal productivity was one of the major problem the farmers of Jharkhand are facing. Average yield per animal in the state was 0.49 litres per day, whereas the national average was 2.781pd. Per capita milk availability in Jharkhand was only 50 gms against the recommended requirement of 220 gms per capita.Thus Jharkhand lagged far behind in the dairy sub-sector despite having high market potential. The factors responsible included: poor genetic potential of milk yield of the available breeds; limited availability of fodder due to lack of irrigation facilities in the state; poor/missing infrastructure and support system. Except in a few pockets, individual milk producers reached only a limited portion of the market, since there were no functioning milk cooperatives and established milk routes. Farmers had received no proper training in entrepreneurial skills in general and knowledge about dairy in particular. The effective available credit from banks was extremely limited. The result of all these factors was the high cost of production of milk, which came to as much as Rs?-7.25/litre.

The State Dairy (COMFED popularly know by its brand name SUDHA) paid Rs.9.50-1 0.50, based on fat and SNF content/kg for cow milk. SUDHA is the largest Dairy in Jharkhand, selling more then 60 thousand litres of milk per day to meet the local demand in and around Ranchi. Data from SUDHA Dairy showed that, due to the undeveloped dairy sector in Jharkhand, they were not able to procure more than 6,000-9, 000 liters of milk from Jharkhand. They met the shortfall in demand by procuring milk from milk surplus states like Bihar, Orissa and Anand, the milk centre in Gujarat.

Under the same UN project, based on the study Gram Nidhi undertook an action research project to develop a model for possible intervention in the Dairy SubSector for promoting livelihoods in Jharkhand. The project was for 12 months with manpower and project costs of Rs.15 lakhs, with the possibility for arranging further funding from the same donor or new donors.

The Project Manager of Jharkhand, San jay Sinha placed Rohit Kumar a young, energetic graduate from a premier management Institute based in Bhopal, as leader of the dairy action research in Ranchi and the work started in January 2004.

Designing the intervention

Gram Nidhi, with its experience in dairy sector , planned an interven in this sector in Jharkhand the way it had done in Andhra Pradesh. In AP Gram Nidhi has already collaborated with APDDCF as a channel for marketing where as the Input support in the form of credit and technical support to the farmers were provided by Gram Nidhi. After three long years of continuous work with the farmers in AP Gram Nidhi came up with a model that could be


replicated elsewhere for promoting a large number of sustainable livelihoods and at the same time can generate revenue.

Rohit initiated dialogues with SUDHA Dairy (The State dairy cooperative federation), which promoted the AMUL pattern of cooperatives, for the purpose of marketing and they agreed to be a partner in marketing support. They proposed to intervene in Mandar and Burmu blocks where they had their coverage. After quite a number of visits to the villages, the Gram Nidhi team found that taking dairy as a source of livelihood was not a viable option for farmers as the costs of inputs were too high to make the activity profitable. Those practicing dairy were of the opinion that dairy was not contributing to their livelihood but rather it was only pleasure and religious faith that pushed them to keep at least one milch animal at their place, besides meeting their household requirements at the most at certain months of the year. The scenario was such that someone who had taken dairy on a large scale was even planning to downscale the activity, as it was not remunerative at all.

While designing the dairy intervention in Jharkhand, Gram Nidhi concluded there were only two available options: either reduce cost of production of milk or increase price realized /litre of milk. Increasing price in this model was not possible as SUDHA Dairy was paying the national rate; moreover, Jharkhand was one among several states where price was kept high compared to some other states. The other option, i.e. cost reduction in the form of fodder cultivation, etc., could be taken up but they soon realized that for this, a scale was required which could be attained only if there were cattle induction on a large scale. But the question remained - why would a farmer opt for dairy if it were not remunerative? On the whole, on one side, dairy was a sector where market was not a problem, production was a problem, and hence a large number of sustainable livelihoods could be promoted due to this wide gap between demand and supply. On the other side, people did not take up dairy, as it was not remunerative for them at all. Designing a model which could bring down this gap was the challenge for Gram Nidhi .

During this point some trainees from XISS, Ranchi, did a market survey where they studied the consumers' preferences for different types of milk. They found that the home segment had a strong preference for farm-fresh cow milk compared to pouched milk supplied by SUDHA. Although they were getting adulterated milk from khatals, they were buying it as they had no other option. For pure farm fresh milk they were ready to pay a higher price.

This study gave a spin to the entire action research: The action research team felt that the farmers could be offered a better price if they were directly linked with the home segment and this way it will be remunerative for the farmers to take up Dairy in a big way. To promote a large number of sustainable livelihoods in Jharkhand through dairy, it was very important to show the farmers that dairy was a remunerative business. For this, it was necessary to offer them a better price, which would have a demonstration effect: more farmers would come in, which would help in up-scaling, and then working on inputs would be possible. Based on this assumption, the team felt that Gram Nidhi could handhold the villagers to form a cooperative and help them establish a market channel for farm-fresh milk.


Identification of potential dairy clusters and selection of villages This was a question of selling farm-fresh milk, and since milk had a very short shelf life, the preference was for the selection of villages close to the city {Market). To fulfill this criterionthree dairy clusters were identified Kanke, Ormanjhi and Aero drum area, all close to the main city. Ormanjhi was rejected for the action research being the farthest among the three potential clusters. Aero drum area was a good dairy cluster but was too close to the city and the farmers could manage their sales in the city on their own. Finally, Kanke comprising three potential dairy villages, namely Boreya, Hochar and Sukurhuttu, was selected.

Once the cluster was selected, the next question was which village? Preliminary visits were made in all the three villages. Among those, Sukurhuttu was not given priority, as it was having relatively less potential. Hochar was very good in terms of average daily milk production, but SUDHA Dairy was already operating there. Some private dairies had already cheated dairy farmers of Hochar, so there was a lot of resistance on the part of the villagers to go for this new concept of Gram Nidhi. It was not possible to work there at this point. Boreya was finally selected for reasons like good connectivity by road, interest of farmers and a fairly good production of milk {though not as high as Hochar).

Introduction to the village: Boreya Village Boreya is around 15 km from Ranchi city, well connected by road to the main town. It was a big village with two main hamlets, namely Boreya and Arsandey. The village had around 480 households, 40% belonging to the tribals, followed by Sahus, Tiwaris, Muslims and then Mahtos. Other groups, like Nayak and Kesari, accounted for a very small number. The average family size ranged from 4-6 members. The village was quite well off, both in material and non-material parameters. Literacy level was quite good but higher education had been pursued by only a small number as people go for employment at a very early age. The majority of the houses were pucca; the earthen houses that existed belonged to tribal families and some other deprived sections. However, land holding is pretty good. Since agriculture was rain fed, paddy was mainly grown in the kharif season; in the Rabi season, the main crop was vegetable, which is sold in the nearby markets.

Talking about the occupation status in the village nearly 65% of the people belonged to the service class. Workers were mostly working with BAU{ Birsha Agriculture University ), Ranchi Veterinary college {RVC), Bacon factory and government offices. Dairy was not the primary activity, though a few households had taken it on a large scale. However as per the estimation, nearly 30% of the households had dairy as the secondary source of income.

Caste dynamics played an important role in the village. Although the tribal population was the highest in this village , it was the Tiwari{A Brahmin Caste ) who ruled the village, followed by the Sahus. The tribal, Nayak, Muslim and Kesari communities had no say in the decision making of the village. The village activities were basically governed by village politics dominated by the upper caste.


Project Implementation

Concept sharing with the villagers: Once Boreya was selected as the village for intervention; some resource persons were identified and approached at the first level. As the response was positive, Rohitr and his team conducted a series of meetings in which farmers seemed to agree with the concept and formed a male co-operative. But it was an institution by name only. The producers were ready to sell their milk through the institution but not ready to invest time and effort in it. The institution was formed but it was found that it completely lacked the spirit of co-operation essential for its growth and sustenance. While working with the male cooperative in Boriya, Gram Nidhi team discovered that some women's SHGs existed there. That available platform was approached and they agreed to form an institution that will take up the responsibility of running the dairy cooperative.

At this point the Dairy Development Department, having learned that Gram Nidhi was doing something in dairy, approached Gram Nidhi and extended a collaborative hand. It offered to work on cost reduction of inputs; one possible path was the state loan-cumsubsidy scheme, which aimed at reducing the cost of cattle through provision of subsidy. This idea was shared with the women too, people got enthusiastic that they will be able to get cattle at 50% subsidy . Many people without cattle also showed interest in joining the cooperative in the lure that once they become member of the cooperative they would be able to avail the cattle subsidy. There was a lot of confusion among the members as to whether the cooperative was meant for selling milk or getting cows through Dairy Development Department (DDD). This confusion was however sorted out by clearly mentioning that the overall aim of the project was income-generation through improving the local dairy industry and one way to achieve the same is to get better price for their produce and also to improve the herds through the DDD subsidy scheme.

Formation of Shree Madan Mohan Mahila Doodh Sahakari Samiti {SMMMDSS): The women's cooperative was formed in the name of SMMMDSS in the month of April2004; it was named Shree Madan Mohan because the dominant Tiwari family of Boreya used this name everywhere.

Collaboration with Ranchi Kshetriya Grameen Bank (RKGB): In April 2004, DDD conducted a training session for the members of SMMMDSS, which was attended by some bank officials, along with the Chairman of RKGB. The chairman at this point was approached for lending cows to the villagers under the government scheme. Though, Initially resistant to the idea of promoting dairy, he finally agreed to go ahead after being convinced by the Managing Director of Gram Nidhi, with whom he had a good work relationship. The Managing Director of Gram Nidhi convinced him of good work on Dairy in the future.

Milk collection and distribution: Finally after the concept sharing operations started in the month of May'04. Milk was sold in the name of 'DoodhGanga'. The initial volume of 16 lit res per day increased to 80 liters per day by the end of the month. The membership also increased to 45 members by the end of the month. Milk was distributed in steel canes but the logistics involved in distribution in canes were difficult and time consuming. The steel canes purchased were heavy, too heavy when filled with milk for one person to lift and distribute milk at door step. Search for an alternative started at this point to make the distribution system more efficient.


There was also a concern that was raising as Gram Nidhi could not manage to involve the community in the day to day activities of milk procurement and distribution. Gram Nidhi was carrying out all the activities with the help of contractual employees. Community participation was missing even with the women cooperative. The members did not take responsibility despite their promises during concept sharing.

Election of Board members: The board elections were held in the month of May 2004 so that some lead members could be identified and trained to take up the responsibilities. A board of nine members was formed. One of the very active members of the cooperative, Sushma Devi, was not elected but offered the post of accountant in the cooperative. She could not be continued in that position, however, as she was found guilty of misappropriations. These incidences made her play against the interest of the cooperative. Her actions badly affected community participation, since she had played a crucial role in community mobilization for cooperative formation. As she was from the Sahu community, she also tried to use her caste power to close down the cooperative though did not succeeded in doing so.

Packaging in bottles:The cans purchased could not be used as there were two problems with them first, when capped, cans became air tight and the milk did not fall; and second, it could not even be used for transportation purpose, as its heavy weight made its carriage difficult. The alternatives for milk distribution were two either bottle the milk or use plastic pouches. A pouch-filling machine was a costly affair, nor was it budgeted. The second option was bottling the milk. For bottles, there were two options either use a glass bottle or use food grade plastic bottles {preferably PEARLPET). The probability of breakage was high in the case of the former, so PEARLPET bottles were purchased. Bottling the milk reduced the distribution time and the whole process became relatively simpler.

But the entire range of activities from collecting milk at the village level, to weighing, recording, testing and packaging was done by Gram Nidhi contractual employees { LPAs) with the support of one or two coop members. Lack of community participation was serious even at this point. The assumption Gram Nidhi team took was that as the business became lucrative, farmers would slowly become active and would participate in managing the dairy business on their own, both in terms of logistics arrangements and in handling the financial aspects. The Kumar team also recommended that the farmers be given a price higher then the normal market rate @ 11.50 /1 and that Gram Nidhi bear the initial overhead cost of doing the whole business. Their thinking was based on the assumption based on a calculation enclosed in Annexure I. Given that farmers were getting an assured price with no extra burden of sales {which Gram Nidhi was doing on behalf of the cooperative) the people continued to pour milk to the cooperative and the volume reached 3001/day.

Formation of coop in Hochar: When the farmers at Hochar {neighboring village of Boreya) saw all these benefits, they invited Gram Nidhi to come and guide them on the same venture. This was indeed an opportunity at the time when a regular, continuous flow of milk was required. Concept sharing was followed by a series of meetings, and finally an exposure visit to Boreya led to the formation of another cooperative at Hochar. The difference between the cooperative formations in Boreya and Hochar was that Boreya was a pushed effort of Gram Nidhi whereas in Hochar the community came forward on their own after seeing the benefits of other farmers. The team had already learned lots of


lessons from the Boreya experience; so all the mistakes committed there were corrected in Hochar. Hochar was a good dairy cluster and could assure milk supply on a continued basis. The volumes in Hochar were gradually rising and more farmers tied up with DoodhGanga on a continuous basis.

Introduction of pouch filling system: With increasing volume, the number of bottles increased and so did the time and effort required for cleaning them. Moreover, every day DoudhGanga received a number of complaints that the plastic bottles were not cleaned properly. The DDD Officer advised replacing the bottles by pouches. He presented one or twoexamples in which the coop started with a manual pouch-filling machine and when the volume increased, it could purchase a semi-automatic machine. He helped in identifying shops where food-grade plastics were available and demonstrated the pouch-filling process.

The Social issues that affected the project

Problem of leadership: The three main board members of Boreya, i.e. President, Secretary and Treasurer, were quite keen to participate in the activities of the cooperative and at first acted united while taking any decision or carrying out any activity. But the friendship did not last long. There were continuous conflicts between the three. With old JRG-Ops, the President and the Treasurer played all kinds of politics against the Secretary, with the result that the Board had to be dissolved. Another factor was that the leading members, being non-producers, clearly tried to play their influence through politics. The power game was so much into the scene that it affected the performance of the cooperative negatively.

Ownership Issues: One underlying fact for a lot of hindrance to the operations was the ownership issue. People in Boreya considered that the cooperative was an entity that solely belonged to Gram Nidhi, as any decision relating to system change, logistics, manpower planning and implementation was taken by that organization. Moreover, people were not convinced about certain ideas such as cash security, fat-based system of payment, HR planning, etc. Those members who were working only gave time for the stipend/fees they were paid, for which they considered themselves employees and not members. They did not involve themselves in the decision-making process nor did they attend meetings, as the cost of reaching the urban centre from the village was high. Moreover, the majority of the decisions were taken by Gram Nidhi without notice and put into effect immediately, Rohit was a dominating executive in that sense . The element of ownership was seriously lacking. This needed serious rethinking about the intervention and its continuance. Clear instructions were given by the seniors of the organization to Rohit that until the community took on the responsibility, in terms of both logistics and finances, the project could not be continued much longer. However, they sent warnings to the community time and again that if they did not participate more actively, the operations in the village would be closed. But, to no avail.


Caste dynamics. Power and Money

The main caste groups in Boreya were the Scheduled tribes followed by Tiwari, Sahu, Mahto and Muslims. Other than that, other caste people were small in number. Tiwaris have been the dominant people followed by the Sahu, then by Teli and finally Mahto. Caste dynamics has played a very important role in DoodhGanga operations out there and one of the reasons for poor functioning of the cooperative has been the caste dynamics of the village.

The Tiwaris were the dominant people in the village and no decision could be taken without their consent. Next to Tiwaris (represented by Gopal Narayan Tiwari), were the Sahus, in terms of power. Most of the cooperative members were Sahus, who had their own interests in the cooperative. They were not as loud or as disturbing as the Tiwaris but out of nine elected board members, four were Sahus, and they manoeuvred constantly for power. Sushma, who was removed form the post of accountant, also tried to use her Sahu power at that time and finally succeeded when the DoodhSagar dairy started.

The Mahtos were supportive, but when it came to caste issues, they united. Tribals were the most disadvantaged group; people hardly interacted with them. Interaction with tribals occurred when the tribal was relatively rich. Money was one thing that affected not only the social status but also one's influence and one's hold.

Discontinuing Boreya: The problems at Boreya were growing more complex day by day and handling operations became difficult. Everyday, some new problem came up. Problems related to ownership and leadership soured relationships all up the line. There were conflicts between members themselves. Nobody was ready to take responsibility for the operation of the cooperative. Everybody wanted to cut their connection with DoodhGanga as they had other better alternatives. A large number of cases of adulteration with water, starch and urea were reported. Under these circumstances, it was difficult to move ahead in Boreya. Gram Nidhi called a meeting during which producers took the opportunity to express their dissatisfaction. As a result, Gram Nidhi decided to close down Boreya. After Boreya was discontinued, the project as a whole was reviewed; the most vital problem was clearly the financial crunch. Gram Nidhi was left with just Rs.SOOOO and with that squeeze, the coop had to be made financially sustainable. That meant the costs had to be ruthlessly cut. The overheads at Boreya were brought to zero, as it was completely closed down.


Village politics: Gopal Narayan Tiwari

Tiwaris, who had been rulers once upon a time, were the dominant people in the village. They had a temple in the village in the name of Madan Mohan, which could be visited exclusively by the Tiwaris, and the entry of other caste groups was strictly prohibited. Any decision, big or small, could be taken only with the consent of one of the ruling Tiwari family that belonged to Mr. Gopal Narayan Tiwari, son of a Congress party leader.

When Gram Nidhi entered the village, it first approached Mr. Gopal Narayan Tiwari and shared the concept with him. Since Mr. Tiwari himself had 15-20 cows, it was definitely in his favour. He gave a green signal for it and at the same time also convinced some big producers to join the troop. He gave his house on rent to start the activities there. But quietly he pursued his interest in ruling the cooperative. His wife became a member. When she did not win in elections, he did not give up. Every new day, he created some problems, one being erratic supply of milk to the cooperative to show that the cooperative was entirely dependent on him. He also did not let activities like washing the bottles go on smoothly and used all possible methods to make the cooperative dependent on him and his family. Those were the motivations credited to him by the Gram Nidhi team. When the milk agent system was discontinued, he was the first one to withdraw supportfor the cooperative and accept the new system. He supplied 40 litres of milk per day but could not continue at that level as he was himself facing loss by supplying it to local traders. Consequently he came back to DoodhGanga within 1 Odays.

The cooperative was not strong and the spirit was always missing. Tiwari explored that as an opportunity and succeeded in dividing the leading members. Finally, when his house was vacated and the village point of transactions was shifted to a new place, he withdrew his support, with a resulting substantial reduction in the daily volume of available milk. When things were being shifted from Boreya, he and his family created a lot of problems and made all possible attempts to make the issue very political. However, winding up was accomplished but not in a peaceful manner.

This time, an entrepreneur who had a good reputation and good business turnovers was identified. He agreed to Gram Nidhi's terms and conditions and was ready to start by Jan'05. At the same time, Gram Nidhi was focusing on Hochar. They decided, in the review, to allow the coop three months, i.e. till March'05, to become financially sustainable and to provide it another three months support to enable it to grow.

In January 2005, Gram Nidhi decided that the team must withdraw soon. Given the situation, the best way to withdraw was to link the farmers with SUDHA or a private Dairy, even if they would get a lower price; but SUDHA I private Dairy would offer them regular, assured price and would take up the mammoth task of milk marketing. Gram Nidhi organized a meeting and explained to the farmers that it would get out of the marketing process, and the only alternative was to sell to local traders or sell to SUDHA.

When the farmers agreed to sell their milk to SUDHA, an exposure visit to that Dairy was arranged for the cooperative members by the SUDHA staff. Finally they got convinced to pour milk in the SUDHA collection centre from 1st Feb 2005. The team was quite happy that they could now get out of the task of milk marketing and had been able to link the farmers with SUDHA.

But, to the surprise of the team, after 5 days the farmers sent word that they had decided


not to sell their milk to SUDHA as a new entrepreneur had agreed to pay them Rs.11/litre, where SUDHA pays between Rs.9-Rs10.30 /litre and is strict about the /kg fat and SNF. The private entrepreneur would not be so stringent in his terms of collection.

The team has to decide what they should do now. Should they work with SUDHA to convince the farmers that SUDHA is the best alternative for them, or should they leave the farmers on their own? If none of the approaches so far have worked, what can the team do to develop the dairy sub sector and promote livelihoods in Jharkhand? What are the learning's from this intervention that will be worth considering for any future livelihood interventions?

Annexure /-Analysis of the overheads of Proposed DoodhGanga Cooperative Limited

Jan Feb March AJl!"il MQY: June JulY Ayg_ s~ Milk volume in liters 200 250 300 350 400 450 500 550 600 VPOTCOST Purchase cost of milk 69000 86250 103500 120750 138000 155250 172500 189750 207000 Transportation Cost 10000 10000 10000 10000 10000 10000 10000 10000 10000 Packaging Cost 6750 8437.5 10125 11812.5 13500 15187.5 16875 18562.5 20250 Cost of 'VPOT operations 6000 6000 6000 6000 6000 6000 6000 6000 6000 Rent(VPOD 800 800 800 800 800 800 800 800 800 Miscellaneous 1000 1000 1000 1000 1000 1000 1000 1000 1000 Printing and Stationary Cost 1000 1000 1000 1000 1000 1000 1000 1000 1000 Wastage at VPOT 3450 4312.5 5175 6037.5 6900 7762.5 8625 9487.5 10350 Total 'VPOT cost (Rs} 98000 117800 137600 157400 177200 197000 216800 236600 256400 Total 'VPOT revenue (Rs} 88500 110625 132750 154875 177000 199125 221250 243375 265500 Net revenue to VPOT (Rs) -9500 -7175 -4850 -2525 -200 2125 4450 6775 9100

MPOTCOST Vendor Cost 6000 7500 9000 10500 12000 13500 15000 16500 18000 Wastage 2212.5 2765.625 3318.75 3871.875 4425 4978.125 5531.25 6084.375 6637.5 Printing & Stationary Cost 1000 1000 1000 1000 1000 1000 1000 1000 1000 Rent 1500 1500 1500 1500 1500 1500 1500 1500 1500 MPOT COST (Rs} 9212.5 11265.63 13318.75 15371.88 17425 19478.13 21531.25 23584.38 25637.5 MPOT Revenue (Rs) 13500 16875 20250 23625 27000 30375 33750 37125 40500 Net revenue to MPOT (Rs} 4287.5 5609.375 6931.25 8253.125 9575 10896.88 12218.75 13540.63 14862.5

Gram Nidhi COST Employee (Number} 3 3 3 2 2 2 1 1 1 Cost 15000 15000 15000 10000 10000 10000 5000 5000 5000 Market Development 4000 2000 2000 2000 2000 2000 0 0 0 Overhead deficit 9500 7175 4850 2525 200 0 0 0 Total Liability 53525 0 0 0 0 0 0 0 0 Training and capacity building 2500 2500 2500 2500 2500 2500 2500 2500 2500 Gram Nldhl COST (Rs) 82025 24175 21850 14525 12200 12000 5000 5000 5000

The Livelihood Schooi-----------------1•5

Documents

SUDHA DAIRY A Ray of Hope in Bihar