PRAYAG UNION1

Satyendra Pandey and Sushanta Sarma wrote this case solely to provide material for student assignment and
class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial
situation. The authors have disguised certain names and other identifying information to protect confidentiality

Prayag District Coop Milk Producers Union Limited (Prayag Union) was registered
in the late 1990s under the Cooperative Societies Act, 1912 to carry out activities
conducive to the socio-economic development of agriculturists and milk producers
of Prayag district2. It was one of the 11 districts unions of a state in northern India
having the Anand Pattern Milk Coop Structure 3 (Exhibit 1). By 2006, over 950
Primary Societies were members of the Prayag Union, with around 1.9 Lakh milk
producers as members of the primaries. The union handled about 1.45 Lac Litre
Per Day milk, on an average.

The Prayag Union performed the following main activities broadly:

1.      Enhancement of milk production at the producers’ level

2.      Enhancement of procurement by the primaries
3.      Transportation of milk from the primaries to the dairy plant at Prayag
4.      Processing milk into liquid milk and milk products
5.      Marketing liquid milk and milk products by themselves and through
state federation.

Prayag Milk Union had a total staff strength of approximately 750, of which about
525 were workers and the remaining placed at different levels of management. The
administrative office and the dairy plant were located in the same premises at the
Prayag, the district headquarters. There were also 6 chilling centers situated in
different parts of the district, also run by the union.

Procurement and Payment

The Prayag Union receives milk from its Dairy Cooperative Societies (DCS) twice in
the day, once in the morning and once in the evening. The payments are made
fortnightly to DCSs, and they, in turn, pay their members in the same way.

Services

The Prayag Union arranges supply of cattle feeds on subsidy to DCSs, which in
turn provide the same to their members (See Exhibit 2). It has also provided Milk
Testers, Electronic Weighing Machines & Lacto Scanners to DCSs on a loan basis.
The Prayag Union conducts a series of training programmes for the Board Members
and staff of the DCSs in Management, Maintenance of Accounts Records, and
Primary Health Maintenance of milch cattle. At every village level, there is a trained
veterinary helper to provide services in primary health care of milch cattle. Dairy
Union has MoU with Indian Immunologicals Limited (a breeding service

1
Part 1 of Continuing Case for PRM 41 – HRM Class Assignment
2 Not same as Prayagraj district of Uttar Pradesh
3
Anand, a district in the western state of Gujarat was the first district in India to adopt this
three tier model in order to initate the cooperative movement in milk collection, processing and
marketing.
organization), a subsidiary company of the NDDB for providing artificial
insemination services to the cattle of DCSs members from artificial Insemination
Clusters.

Procurement Supervisor

Rakesh was the procurement supervisor with the Dairy (See Exhibit 3). He was
required to visit 12 Dairy Cooperative societies spreading across the district,
covering around 120 km. Although he was required to make at least four visits in a
month to each of the DCS, Rakesh could only manage two visits to some of the
DCS. During his visit, he would meet the DCS members and spoke to them about
the quality parameters and how they are being assessed for milk. It is believed that
such conversation helps build transparency in the process of pricing and
eventually in procurement. Rakesh is also required to ensure the continuing supply
of milk to the plant for smooth operation. In recent months, it was found that some
of the trucks carrying the milk were late in their arrival at the plant. While at DCS,
milk was poured at the routine schedule, but it was not delivered at the scheduled
time to the plant. Rakesh enquired about the delay with the drivers from the
selected routes and resulted in a heated conversation. This heated argument upset
the union leader at the plant, and they complained about Rakesh to the
management.

In the last one month, there were complaints from some of the DCS that the trucks
were not reaching them on time. The Chairmen from a couple of DCS raised this
issue with Rakesh, and because of Rakesh’s poor relationship with drivers, he
could not resolve the issue. In another incident, the fat content of milk measured in
one of the DCS was not providing an accurate result. Rakesh could not figure out
the problem, as he has not visited the DCS for the last three weeks. This infuriated
the Chairman of the DCS and he, along with other Chairmen (from other DCS),
made a strong demand to the management for the removal of Rakesh. The Union
leader supported Their demand at the Plant. Rakesh never bothered to have a
cordial relationship with his colleague at the plant, and not many came forward to
support him at this hour of crisis. The head of the procurement decided to fire
Rakesh.

Now there is an urgent need to fill up the position of procurement supervisor.

 Create a job description for the supervisor and report the process of job
analysis.
 The milk union is now aware that there is a position vacant. The HR
department is now under pressure from the local MLA and the union leader
pushing their candidate for the post. Design a selection process that would
help you to fill up the position neutrally and transparently. How would you
ensure that the right candidates would apply for the job? Since there is an
urgency, you want to reduce the time for processing of the application.
 Make a deck (maximum three slides) covering the two above mentioned
points.
 Exhibit 1: Anand Pattern Milk Coop Structure

In the three-tier cooperative system, at the grassroots level, farmers became

members of village cooperatives (Dairy Cooperative Societies) by paying a nominal
membership fee. In return, the DCS purchased milk from the farmers at market
price and also extended input services. The procured milk is sent to the district
level union cooperatives for processing and value addition. After district unions had
processed the milk, the state level cooperatives, also known as State Federations
play a vital role by marketing the product.

Exhibit 2: Rate of Subsidy provided by the Dairy Union to its Members

Sl. Particulars Subsidy given to DCSs by Prayag

No Union
.
1 Cattle Feed Rs. 100/- per bag
2 Veterinary Medicines 50% Subsidy
3 Artificial Insemination Rs. 50/- per case
4 Fodder Seed 50% subsidy
5 Vaccination and Dewarming 100% subsidy
6 Milch animal insurance 3% premium subsidy on animal value
7 Member life insurance coverage Accidental death 1,00,000/- and
natural death 25,000/- each
8 Training and Skill development For members free of cost
centre at the union level
Source: Files of the Union
 Exhibit 3: Structure of Procurement & Input Department at Prayag Union

Head Procurement & Inputs (P&I)

Manager Manager (Animal

(Procurement) Husbandary)

Assistant Sr. Vet. Officer Sr. Vet. Officer Sr. Vet. Officer
Manager (Loan/Insurance) (Vet. Centre) (Admin)
(Procurement -
Plant)
Supervisor Vet. Officer Sr. Vet. Officer
(Procurement – (Loan/Insurance) (Field - DCS)
field)

Driver DCS Clerk

s Secretary**

Dressers

Source: Files of the Union

** Not an employee of the union, selected by DCSs independently. Responsible for

coordination with the supervisor.