See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/332471107

PROBLEMS AND CONSTRAINTS FACED BY MILK PRODUCERS AND MILK CO-

OPERATIVE SOCIETIES IN TAMIL NADU WITH SPECIAL REFERENCE TO
VELLORE DISTRICT

Article · May 2016

CITATION READS

1 5,184

1 author:

Jayendira P Sankar
University of Technology Bahrain
51 PUBLICATIONS   75 CITATIONS   

SEE PROFILE

Some of the authors of this publication are also working on these related projects:

Welfare Economics View project

Human Resource Management View project

All content following this page was uploaded by Jayendira P Sankar on 04 November 2019.

The user has requested enhancement of the downloaded file.

ISSN: 2321-5488 Impact Factor : 2.1005(UIF) Volume - 3 | Issue - 11 | May - 2016

Research Directions

PROBLEMS AND CONSTRAINTS FACED BY MILK

PRODUCERS AND MILK CO-OPERATIVE SOCIETIES
IN TAMIL NADU WITH SPECIAL REFERENCE
TO VELLORE DISTRICT
Dr. P. Jayendira Sankar
Assistant Professor, Department of Management Studies,
Indira Institute of Engineering and Technology,
Pandur, Thiruvallur, Tamil Nadu.

ABSTRACT
Milk co-operatives are an integral part of the milk marketing and dairy development
programme in India. One of the world largest rural development programme ever undertaken, the
operation flood is aims at the setting up of the modern dairy industry to meet the India’s rapidly
increasing need for milk and its product and making it capable of viable and self-sustaining growth.
Operation flood helped dairy farmers to direct their own development, placing control of the resources
they create in their own hands. A national milk grid links milk producers throughout India with
consumers in over 700 towns and cities, reducing seasonal and regional price variations while ensuring
that the producer gets fair market prices in a transparent manner on a regular basis. Milk producers are
involved in joint action to pull their product and market them in an organized way. Its greatest strength
lies in collective action. The study provides the analysis of problems, difficulties, and constraints faced
by the respondents in the study area.

KEYWORDS :Milk Producers, Milk Co-operatives, Productivity, Problems and Constraints.

INTRODUCTION:
At global level, milk has been identified as an integral part of the food for centuries. Milk is very
essential for our life and it has good nutritive value and also rich in fat. Milk contains significant
amounts of saturated fat, protein and calcium as well as vitamin C. Considering its properties, milk is an
important food for pregnant women, growing children, adolescent, adults and patient alike. In many

Available online at www.lsrj.in

1
 PROBLEMS AND CONSTRAINTS FACED BY MILK PRODUCERS AND MILK CO-OPERATIVE SOCIETIES .......

culture of the world, especially the western world, humans continue to consume milk beyond infancy,
using the milk of other animals especially cattle, goat and sheep as a food product. Cow milk contain an
average 3.4 per cent protein, 3.6 percent fat and 4.6 per cent lactose, 0.7 per cent minerals and
supplying 66 kcal of energy per 100 grams.
Milk co-operatives are an integral part of the milk marketing and dairy development
programme in India. Popularly known as “Operation Flood” launched by the government of India in
collaboration with the world food programme of the United Nations in July 1970. One of the world
largest rural development programme ever undertaken, the operation flood is aims at the setting up of
the modern dairy industry to meet the India’s rapidly increasing need for milk and its product and
making it capable of viable and self-sustaining growth. Operation flood helped dairy farmers to direct
their own development, placing control of the resources they create in their own hands. A national milk
grid links milk producers throughout India with consumers in over 700 towns and cities, reducing
seasonal and regional price variations while ensuring that the producer gets fair market prices in a
transparent manner on a regular basis.
The bedrock of operation flood has been village milk producer’s which procure milk and provide
inputs and services, marking modern management and technology available to members. Operation
flood objectives include (a) Increase milk production (“A Food of Milk”) (b) Augment rural incomes (c)
Reasonable prices for consumers. Operation flood has created a national milk grid linking milk
producers throughout India with consumers in over 700 towns and cities, reducing seasonal and
regional price variations while ensuring that the producer gets a major share of the price consumers
pay, by cutting out middlemen. By reducing malpractices, it has helped dairy farmers direct their own
development, placing control of the resources they create in their own hands.
The milk industry in India has spread over the entire country in innumerable small units in a very
much disorganized form. In recent years, the Indian dairy industry is on the threshold of a good many
changes that would totally transform the dairy scene and give the needed thrust to its rapid growth to
meet the challenges ahead. Greater emphasis is to be needed in the areas of milk production,
processing and marketing research. In this task of development of dairy industry, co-operatives have
been recognized as an effective institution to improve the milk production potential and thereby
ameliorate the socio-economic life of millions of small marginal and landless cattle scattered over large
areas.
Dairy farming has been growing rapidly in the state and national level. In Tamil Nadu dairying,
including processing and selling of products, engaged about 848 thousand people in comparison to
17787 thousand in India during 1999-2000, even then more persons are required to process the dairy
activities like packaging, delivering of fluid milk and other milk related products due to the progress of
dairy farming in milk production.
The agriculture is seasonal in nature, so that most of the agriculturists have to live idle in the off
season. Due to the development of the dairy farming sector, the farmer can get work along with ways of
earning income throughout the year. The process of production and marketing of milk and milk
products has been helpful to provide the employment to the disguised unemployment of agriculture
sector and other weaker sections like SC, ST and OBC group, 42.6 percent workforce engaged in dairy
farming in Tamil Nadu as compared to 69.8 percent in India during 2012-2013. It was found that the SC,
ST & OBC category people have highly engaged in dairying than others. Therefore, dairy farming has
been become the supplementary source of earnings to the poor, weaker section, small and medium
farmers.

Available online at www.lsrj.in

2
PROBLEMS AND CONSTRAINTS FACED BY MILK PRODUCERS AND MILK CO-OPERATIVE SOCIETIES .......

SIGNIFICANCE OF THE STUDY

In the six decades after independence, the milk co-operative movement has registered a
remarkable growth in different spheres of the management and economy. It has attained commanding
heights in various fields such as dispensation of credit, production and distribution of inputs, milk
processing, and urban banking. Marketing of milk products, distribution of consumer articles, housing,
dairy, industries. The milk co-operative movement has been recognized as an indispensable instrument
of planned economic action in our democracy. By combining initiative, mutual benefit and social
purpose, co-operative has emerged as a vehicle for implementing the economic programmers of the
planning period. In the last few decades, it has been a common practice by government at the centre
and the states to entrust the implementation of important social and economic development
programmers to the co-operatives.
The milk co-operative movement in Tamil Nadu has made good progress both qualitatively and
quantitatively. Its activities have been considerably diversified. In 2010, the co-operative movement in
India encompassed 4.58 lakhs of various co-operative societies with a membership of more than 20.5
crores and with a working capital to the tune of Rs. 1,78,844 crores. The reach of co-operative
institutions extends to all the villages of the country covering 65 percent of the households. There is no
village or town in India without a co-operative presence. The profile of the Tamil Nadu milk co-
operative is spectacular. They have managed to attain a good financial as well as infrastructural base.
They are the most recognized providers of inputs to the milk producing community. They also help in
the maintenance of price line by undertaking procurement and market intervention activities.

LITERATURE REVIEW
Diansheng Dong, (2007), “Modelling Milk Purchasing Behavior with a Panel Data Double-
Hurdle Model”. In this study, the double-hurdle model typically used in cross-sectional data extends to
panel data structures. The new double-hurdle model can account not only for the censored nature of
commodity purchases, but also for the dynamics of the purchase process. In this model, a flexible error
structure is assumed to account for state dependence and household-specific heterogeneity.
Aden I.M. et al. (2008), in their study observed that the major constraints identified by the
farmers irrespective of their categories, include lack of quality fodder, land holding, animal purchase,
lack of animal health cover, animal feeding, guidelines and training and credit facilities. It was inferred
from the present study that animals’ productivity can be enhanced only through better feeding
management strategies along with the better health cover.
Artukoglu M.M. Oplgun A. (2008), in their article on “Co-operative tendencies and alternative
milk marketing channel of dairy producers in Turkey A case of Menemen” determines the milk
marketing structure in Menemenizmir, West Turkey. According to the results of this study, 70% of the
producers are the shareholders of the co-operatives; 49.2% of the producers are members of the
national chamber of agriculture 47.20%.
Ellis, K.A, (2009), “Public Opinion on UK Milk Marketing and Dairy Cow Welfare”. Interview
questionnaires were administered to the general public in central Scotland and northern England
during summer 2007 to investigate consumer awareness of UK dairy production methods, welfare
issues and recognition of 'quality assurance' product logos. Fifty percent of respondents gave UK dairy
animal welfare a positive rating. Recognition of individual quality assurance logos was poor and 75% of
respondents stated that they did not intentionally seek to buy products with any of the logos.
Respondents' perceptions of good dairy welfare included: appropriate feeding, good stock manship,
plenty of space, freedom to roam/free range and environmental cleanliness.

Available online at www.lsrj.in

3
PROBLEMS AND CONSTRAINTS FACED BY MILK PRODUCERS AND MILK CO-OPERATIVE SOCIETIES .......

Sekar Murugan (2009), “A Study on the Marketing Practices of the Kovilpatti Co-Operative Milk Supply
Society Ltd”. The objectives of the study are to review the structure and functions of the Co-operative
milk supply society, to find out the existing marketing practices and to identify the problems which it
has to face in the marketing of milk, to analyze the cost structure involved in the price of milk, to assess
the functioning of the society from the consumer’s point of view, to offer suitable solutions to
overcome the problems identified.
Biradar et al. (2009) also pointed out the constraints related to financial, human resources,
policies and administrative aspects that hamper the effective functioning of dairy co-operatives.
Rathod et al. (2012), on Gokul Dairy Co-operatives in Western Maharashtra pointed out that
sample respondents acquired knowledge and skills in improved dairy management practices from the
dairy co-operative staff. Different improved practices included heat detection, health care and disease
management, selection of breeds etc. They also reported that 37.33 per cent respondents were
satisfied and 52.66 per cent of the farmers were partly satisfied with the extension service delivery by
dairy co-operatives. Only 10.0 per cent of the farmers perceived that extension services delivered by
Gokul union were unsatisfactory.

RESEARCH METHODOLOGY
This study is descriptive and analytical study. It is based on both primary data and secondary
data. Co-operative is a joint action by like-minded individuals who associated with each other as social
beings. The modern form of co-operative was introduced in India by the government in order to
alleviate the suffering of the people from the evils and malpractice of money lenders, commission
agents and traders. An overwhelming majority of Indian people lives in rural areas and depends on
agriculture and allied activities for their dairy sustenance.
To a milk producer who is conscious of his social, economic and democratic interests, milk
marketing co-operatives are as important as credit co-operative. To a milk producer provision of the
service is a matter of great importance. It is, in fact, as important as increasing the production in his
farm. Milk producer often suffers from several setbacks which force them to pay a higher price for the
input they buy and get lower prices for their products.
Totally, 257 milch animals were considered for the study, out of which the respondents
possessed 125 buffaloes and 132 cows accounting for 48.64 percent and 51.36 percent, respectively.
On the whole the cows were more in number (132) than the buffaloes (125) in the study area.
The researcher collected the primary data by using pre-determined and well structured
interview schedule. Because most of schedule, there is chance to explain and an advantage of better
understanding and also collects the information through non-verbal communication. The researcher
translated the questions into Tamil to the respondents, so that they could understand the questions
well and answers correctly. The primary sources of data were interview schedule by meeting all
respondents individually. The secondary data was collected from department of economics and
statistics, government of Tamil Nadu and milk co-operatives societies all over the Tamil Nadu in general
and Vellore district in particular.

DATA ANALYSIS AND DISCUSSION

The world's biggest milk maker has not been able to keep pace with the demands at home and
may soon turn a net importer - if it does not urgently focus policy and investment into the dairy sector.
India's milk requirement is expected to be 180 mt. by 2021-22. We now produce only 112 mt. This
means milk output must go up by 5.5% per annum over the next 12 years, compared with the current

Available online at www.lsrj.in

4
PROBLEMS AND CONSTRAINTS FACED BY MILK PRODUCERS AND MILK CO-OPERATIVE SOCIETIES .......

growth rate of 4%.

The more the economy grows, the more expensive and in short supply milk is likely to get. In
urban areas, the demand for processed and packaged dairy produce will grow in consonance with a
growing population with higher disposable income and higher health consciousness.

COMMON LAND USING FOR COW POPULATION

Frequency Percentage

Not Used 194 75.3

Used 63 24.7

Total 257 100

Source: Primary Data.

Regarding the land use pattern, 75.3 per cent of the respondents have not used the common
land in their area and 24.7 per cent of the respondents have used the common land. It is observed that
the common land size decreases due to the government free land distribution scheme in Tamil Nadu
state. Therefore the respondents faced the problems and difficulties of common land for grazing
purposes as the means of food for their animals.

DOCTORS ATTENDED THE RESPONDENTS PLACE

Frequency Percentage

Not Used 150 58.3

Used 107 41.7

Total 257 100

Source: Primary Data.

Regarding the veterinary doctors’ treatment given to the animals on time. 58.3 per cent of the
respondents have expressed that the doctors have come and gave treatment to the animal on time.
And 41.7 per cent of the respondents revealed that the doctors did not give treatment for the animals in
emergency situations. From this analysis, it is concluded that the respondents faced doctor’s treatment
problem with time.

Available online at www.lsrj.in

5
PROBLEMS AND CONSTRAINTS FACED BY MILK PRODUCERS AND MILK CO-OPERATIVE SOCIETIES .......

DISTANCE BETWEEN RESPONDENTS’ HOUSE AND VETERINARY DISPENSARY

Distance
Frequency Percentage
(in Kilo Meters)
1-2 14 5.3

3-4 94 36.7

5-6 123 47.7

7 and above 26 10.3

Total 257 100

Source: Primary Data.

Regarding the distance between the respondents’ house and veterinary dispensary, 47.7
percent of the respondents have the distance between the respondents place and veterinary
dispensary as 5-6 kilometers, which is higher and 5.3 percent of the respondents have the distance
between the respondents place and dispensary as 1-2 kilometers which is lower. From this analysis the
researcher observes that the veterinary dispensary is located in the long distance. And there is no
private hospital and dispensary in the study area.

MILK PRICE EXPECTED BY THE RESPONDENTS

Price Frequency Percentage Valid Percentage Cumulative Percentage

20 16 6.3 6.3 6.3
22 10 3.7 3.7 10.0
24 10 4.0 4.0 14.0
25 29 11.3 11.3 25.3
26 19 7.3 7.3 32.7
27 25 9.7 9.7 42.3
28 79 30.7 30.7 73.0
30 32 12.3 12.3 85.3
32 6 2.3 2.3 87.7
33 4 1.7 1.7 89.3
34 19 7.3 7.3 96.7
36 8 3.3 3.3 100.0
Total 257 100 100

Source: Primary Data.

Available online at www.lsrj.in

6
PROBLEMS AND CONSTRAINTS FACED BY MILK PRODUCERS AND MILK CO-OPERATIVE SOCIETIES .......

It has been observed that, 30.7 per cent of the respondents expected the milk price to be Rs.28
per litre which is higher. 1.7 per cent of the respondents expected the milk price to be Rs.33 per litre
which is lower. From this analysis, it is concluded that 85.3 per cent of the respondents expected the
milk price from Rs.20 to Rs.30 per litre and 14.7 per cent of the respondents have expected the milk
price from Rs.32 to Rs.35 per litre.

PROBLEMS, DIFFICULTIES AND CONSTRAINTS FACED BY RESPONDENTS

Valid Cumulative
Problems Frequency Percentage
Percentage Percentage
Loan 29 11.3 11.3 11.3

Grazing Land 16 6.0 6.0 17.3

Dispensary 24 9.3 9.3 26.7

Marketing 70 27.3 27.3 54.0

Storage 34 13.3 13.3 67.3

Fodder 84 32.7 32.7 100.0

Total 257 100 100

Source: Primary Data.

It has been observed from the foregoing analysis, stated that 32.7 per cent of the respondents
faced the fodder problem of green fodder, dry fodder and particularly paddy straw. 6.0 per cent of the
respondents faced the grassing land problems for their animals.
Further, 27.3 percent of the respondents have the marketing problem and 13.3 per cent have a
storage problem due to lack of milk co-operative society (AAVIN) and common storage facilities in this
study area. The study shows that there is a veterinary dispensary and hospital problem. It focuses that
there is no private hospital and dispensary in this study area. The study pointed out that the
respondents faced the credit (loan) problem and could not get from the bank.

CATTLE INSURANCE TAKEN BY THE RESPONDENTS

Valid
Insurance Frequency Percentage
Percentage

Taken 28 11.0 11.0

Not Taken 229 89.0 89.0

Total 257 100 100

Source: Primary Data.

Available online at www.lsrj.in

7
PROBLEMS AND CONSTRAINTS FACED BY MILK PRODUCERS AND MILK CO-OPERATIVE SOCIETIES .......

It has been observed that, 89.0 per cent of the respondents have not taken cattle insurance and
11.0 per cent of the respondents have taken cattle insurance for their cattle. From this analysis the
researcher observes that the respondents have not given priority to take insurance for their cattle.
It has been observed from the foregoing analysis, the main problem faced by the respondents in
the marketing of milk in society is the low procurement price with a mean score of 70.84 followed by
non availability of loan facilities with a mean score of 67.89. High fodder cost and improper treatment
(health care) of the milch animal are the third and fourth problems. Non availability of labour and
inadequate basic infrastructure facilities is the fifth and sixth problems with a mean score of 60.86 and
60.18 respectively. The seventh, eighth and ninth problems are the low production of milk, Lack of cross
Breed animals and Delay in Payments, with a mean score of 60.16, 57.72 and 50.25 respectively. All the
respondents are highly dissatisfied with the procurement price given by the society.
The dairy sector is characterized by small-scale, scattered, and unorganized milk-animal
holders, low productivity, inadequate and inappropriate animal feeding and health care, lack of an
assured year-round remunerative producer price for milk, inadequate basic infrastructure for the
provision of production inputs and services, inadequate basic infrastructure for procurement,
transportation, processing and marketing of milk; and lack of professional management. Other
important characteristics of the dairy sector are the predominance of mixed crop-livestock farms. The
fact is, most of the milk animals are fed on crop by-products and residues, which have very low
opportunity costs. Additionally, the dairy-development policies and programs that are followed,
including those relating to foreign trade, are not congenial to the promotion of sustainable and
equitable dairy development.

PROBLEMS FACED BY MILK PRODUCERS

S. No. Nature of Problem Mean Score Rank

1 Low Procurement Price of Milk 70.84 I

2 High Fodder Cost 66.52 III

3 Non Availability of Labour 60.86 V

4 Delay in Payments 50.25 IX

5 Low Productivity 60.16 VII

6 Lack of Cross Breed Animals 57.72 VIII

7 Lack of Sufficient Veterinary Facilities 62.11 IV

8 Inadequate Basic Infrastructure Facilities 60.18 VI

9 Non Availability of Loan Facilities in Time 67.89 II

Source: Primary Data.

It has been observed that the main problem faced by the respondents in the marketing of milk
in society is the low procurement price with a mean score of 70.84 followed by non availability of loan
facilities with a mean score of 67.89. High fodder cost and improper treatment (health care) of the
milch animal are the third and fourth problems. Non availability of labour and inadequate basic

Available online at www.lsrj.in

8
PROBLEMS AND CONSTRAINTS FACED BY MILK PRODUCERS AND MILK CO-OPERATIVE SOCIETIES .......

infrastructure facilities is the fifth and sixth problems with a mean score of 60.86 and 60.18
respectively. The seventh, eighth and ninth problems are the low production of milk, Lack of cross
Breed animals and Delay in Payments, with a mean score of 60.16, 57.72 and 50.25 respectively. It can
be inferred from the table that all the respondents are highly dissatisfied with the procurement price
given by the society. However, it is noteworthy to mention that the respondents’ opined delay in
payment is the last problem of marketing of milk. Therefore, it indicates that most of the respondents
are satisfied with the timely payment of procurement price by the society.

PROBLEMS FACED BY MILK CO-OPERATIVE SOCIETIES (n=10)

No. of
S. No. Particulars Percentage
Respondents
1 Lack of Sufficient Cold Storage 10 100
2 Private Trading 3 30
3 Lack of All Weather Roads 4 40
4 Local Politics 3 30
Source: Primary Data.

It has been observed that lack of cold storage facilities was the major problem in the collection
of milk as reported by all the selected producer’s milk co-operative societies in the area, followed by
lack of all weather roads (40%), private trading (30%) and local politics (30%).

CONCLUSION
The main problems faced by the respondents in the marketing of milk in society are the low
procurement price, non availability of loan facilities and high fodder cost. In addition to these improper
treatment (health care) of the milch animal, non availability of labour, inadequate basic infrastructure
facilities, Lack of cross Breed animals and Delay in Payments result in low productivity of milk. The study
indicates that all the respondents are highly dissatisfied with the procurement price given by the
society. The study also revealed that the lack of cold storage facilities, lack of all weather roads, private
trading and local politics are the major problems in the collection of milk by the producer’s milk co-
operative societies in the study area.

REFERENCES
1)Diansheng Dong, (2007): “Modelling Milk Purchasing Behaviour with a Panel Data Double-Hurdle
Model”, Ph.D Thesis, University of Agricultural Sciences, Dharwad.
2)Basu.P, Chakraborty.J, “Land, Labor and Rural Development - Analyzing Participation in India Village
Dairy Co-operatives”, The Professional Geographer, No. 60, Vol. 3, 2008.
3)Aden I.M. (2008): “Impact of Dairy Herd size on Milk production cost, marketing and farm income in
peri-urban areas of Falsalabad, Pakistan, Journal of Agricultural Science, No. 45, Vol. 2.
4)Artukoglu M.M. Oplgun (2008): “Co-operative tendencies and alternative milk marketing channels of
dairy producers to Turkey”, A Agriculture Economics Zech, No. 54, Vol. 1, Pp. 65-69.
5)Ellis, K.A, (2009): “Public Opinion on UK Milk Marketing and Dairy Cow Welfare” A Agriculture
Economics Zech, No. 58, Vol. 3, Pp. 18-23.

Available online at www.lsrj.in

9
 PROBLEMS AND CONSTRAINTS FACED BY MILK PRODUCERS AND MILK CO-OPERATIVE SOCIETIES .......

6)Sekar Murugan (2009): “A Study on the Marketing Practices of the Kovilpatti Co-Operative Milk
Supply Society Ltd”
7)Biradar, C. (2009): “Evaluation of Livestock Service Delivery by Different Agencies in Karnataka”, Ph.D
Thesis, Indian Veterinary Research Institute, Izatnagar, India.
8)Chander, Mahesh; Sanjay Kumar and H P S Arya (2009): “An appraisal of Support to Training and
Employment Programme for Women”. Indian Research Journal of Extension Education, No. 45, Vol. 1 &
2, Pp. 79-83.
9)Rathod, P., Nikam, T. R., Landge, S. P. and Hatey, A. (2012): “Farmers Perception towards Livestock
Extension Service”: A Case Study. Indian Research Journal of Extension Education, Special Issue, Vol. 2,
Pp. 1-5.
10)“Amul Based on 50 Years of Amul Advertising by Dacuncha Communication - Based on 50 Years of
Amul Advertising” Gujarat Co-operative Milk Marketing Federation Limited, 2014

Available online at www.lsrj.in

10

View publication stats