Empowering Dairy Farmers Through CSR

Business Proposal for Godrej to fund:

Village Milk Co-operatives in Hardia
Village, Begusarai District, Bihar

Submitted to: Prof. Utpala Das Saxena

Submitted by: Nayan Shroff - 163039

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 Introduction
As per the data retrieved from National Dairy Development, the State’s estimated milk production in the
year 2017-18 was approximately 9.03 million MT, which is about 247.53 LKgPD. Bihar is currently
ranked 9th in the country, with respect to milk production. It also accounts for around 5% of national milk
production and 42% in Eastern Region. The milk production saw a sharp rise from 2009-10 to 2017-18
wherein it increased from 5.9 MMT to 9 MMT, with a CAGR of 7%.
The village milk co-operative is a society of primary producers formed under the guidance of a
supervisor or milk supply officer of the Co-operative owning the processing plant. A milk producer
becomes a member by buying a share from the co-operative after agreeing to sell milk only to it.
Members elect a managing committee headed by a chairperson responsible for recruitment of staff in
charge of day-to-day operations. Each society has a milk collection center where farmers take their milk
in the mornings and evenings.
Milk is collected at the co-operative milk collection centers located within 5-10 km of the villages
supplying the milk. Each farmer is given a plastic card as ID. At the counter he drops the card into a box
that reads it electronically and transmits the identification number to the PC. Samples of milk collected is
tested in a tube of an electronic milk-tester which is a fat testing machine. In many centers the above
transaction takes only 20 seconds. The system also reduces the number of employees and increases the
availability of daily accounts immediately at the milk collection center. The society’s profit is calculated
on the basis of data received from the dairy regarding the payment made by the dairy to the society for
the previous day’s collection.
The DISK project was conceived with two components: (1) an application running at the society level
that could be provided through the Internet connectivity and, (2) a Dairy Portal at the district level
serving transactional and information needs of all members and staff in the district cooperative structure.
The services to be offered at these centers would include: (1) Delivery of information related to dairying,
including best practices in breeding and rearing milch cattle, scheduling of government and other private
sector agency services, and collecting feedback on the quality of service provided to the catchment area;
(2) Access to a multimedia database on innovations captured by SRISHTI from hundreds of villages,
covering agricultural practices, medicinal plants, home remedies, tools and implements, etc., and a
multimedia format that has captured the description of the innovations provided by innovators and a
visual presentation of the innovations; (3) The use as a communication center offering services like
email, fax, and Internet telephony; (4) Internet Banking Services and Automated Teller Machines
(ATMs), which will enable the milk societies to credit payments directly to sellers’ bank accounts; (5) A
way for farmers to download Government Forms, receive documents and order supplies and agricultural

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inputs from manufacturers; and (6) A means of communicating with farmers via the automatic printing
process of daily payment slips.

Purpose
The purpose of this project is for Godrej to help the dairy farmers of Bihar to increase their productivity,
by optimizing the entire system through automation and establishment of the DISK project. This can help
in the transformation of the largely unorganized Dairy Sector of Bihar into an organized one. Along with
this Godrej can also empower dairy farmers with the necessary knowledge and promote growth and
development in this sector. With efficient milk collection and storage system and a fair repayment to the
farmers mechanism, as is performed under the recommended system, Bihar’s Dairy Industry can be one
of the best performing ones in the entire country.

Scope
A village called Hardia in the district of Begusarai, Bihar will be chosen for setting up the KIOSKs for
the collection and disseminating the information about the milk, cattle, veterinary services and other
related products. Total budget allotted for the project is Rs.1 crore. Begusarai district of Bihar has 1229
villages with a population of 29,70,541 people. The literacy rate of the district is 59.13 %. The entire
district possesses 15,000 indigenous cattle, 4,42,000 cross-bred cattle, 86,000 buffaloes.
Hardia village, where the project will be implemented has a total population of 7,185 people, total
number of households are 1,411. The prospective centres to be set up in the village are 3, keeping in
mind the male population of 3,824 in the village.

Problem
The availability of milk per capita in the state of Bihar was only 251 grams/day which was much below
the country’s average of 394 grams/day. According to a recent research study carried out by NDDB in
Bihar, Indigenous Cattle Milk Yield increased by 0.04 kg/day year-on-year basis. However, in case of
Begusarai it decreased by 0.10 kg/day. Against an average increase of 0.03 kg/day year-on-year basis in
the state with respect to Crossbred Cattle Milk Yield, Begusarai saw a fall of 0.04 kg/day. The Buffalo
milk yield increased by 0.08 kg/day for the state, but decreased by 0.01 kg/day for Begusarai. The same
research study showed that Bovine Milk Production increased by 527,000 MT on year-on-year basis for
the whole state. This difference between milk production and yield represents the gap in Bihar’s dairy

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sector. Some of the main reasons behind this gap is as follows: -
1. Conservative mind-set of rural population: Rural dairy farmers are generally not aware about the
big milk cooperatives and further are not in touch with technology.
2. Lack of Transport: Procurement of raw milk has always been a huge problem due to the lack
of infrastructure. The company by the way of this project would try to overcome the problem
of outbound logistics from the mentioned districts of Bihar.
3. Education and Training: There is a need to train the dairy farmers in their local language.
The farmers need education and awareness about maintaining proper hygiene in milk
production, monitor health of cattle and usage of the KIOSKs.

Project Team
The core team would be comprising of 1 Project Director, 1 IT Head, 1 Marketing Head, 1 Financial
Head and 1 Veterinary Expert and Doctor. Project director’s main function would be to coordinate the
activities off all the departments and supervise the entire project. IT head would be responsible for
managing the task of the entire IT department wherein they would be looking after the entire IT
Infrastructure. Marketing head with his team would be looking after the increasing awareness of the
project and would be responsible for convincing the households to be a part of the project. All the
financials will be taken care by the Financial Head. Veterinary doctor would be responsible for providing
the training regarding breeding, proper up keeping of milch, proper extraction of milk etc.

Background
Milk production is important to India, as milk is one of the main sources of proteins and calcium for a
largely vegetarian population. Diary provides a livelihood for millions of Indian farmers and additional
income for a large number of rural families as well as a means for women to participate in the economic
activity in rural areas. In 1999, India became the largest producer of milk primarily due to the efforts of
the co-operative movement initiated by the National Dairy Development Board (NDDB). The movement,
which started at Amul Dairy in Gujarat, is now replicated in 70,000 villages in about 200 districts of
India. The dairy sector already uses computers in 2500 rural locations for processing milk buying/selling
transactions in a transparent manner and exposes 5,00,000 people daily to the benefits of IT. The Indian
Institute of Management, Ahmedabad (IIMA) recognized the opportunity to build on this infrastructure.
Several pilot projects have been undertaken by IIMA to upgrade the application at these centres and

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connect them to the Internet to access a specialized dairy portal with content delivered in the local
language. The IIMA e-governance centre platform is a portal with illustrative content in Gujarati and
English that is currently undergoing pilot testing in two co-operative village societies of Amul Dairy in
Kheda district. The society has 2200 members, of which 1300 are active. There are 4000 cattle and milk
worth $350 is collected daily. This has propagated the utility associated with the automation of milk
collection. Nearly 600 such systems are in operation in Kheda district in Gujarat. There are 70,000
village societies in India, of which 2500 have been computerized.

On April 1, 2014, India became the first country to legally mandate corporate social responsibility. The
new rules in Section 135 of India’s Companies Act make it mandatory for companies of a certain
turnover and profitability to spend two percent of their average net profit for the past three years on CSR.

Hence, we are imitating this project to the village Hardia in Begusarai district as it is in the developing
stage and due to the good amount of milch it possesses, there seems to be a huge potential for this project
to be a success.

Procedure
The procedure for the implementation of this project is as follows: -

1. A formal meeting of the company with representatives of NDDB working in Gujarat would be
scheduled. The agenda of the meeting will be to decide upon the scope, prospect and budget of the
project. After taking the required permission and contract finalization, a meeting with core team will
be held.

2. One set of teams would visit the village and inspect the site where the project would be established.
These sites, which would be supported by required infrastructure will be leased by the company on a
contract basis.

3. In order to spread awareness of the project among the local villagers of Hardia, awareness campaigns
can be initiated by the company about milk cooperatives, as well as conducting meetings at gram
panchayats.

4. All the required and necessary permissions from various departments of state and central government
is to be taken to install DISK system.

5. Contracting the IT department and procurement of necessary equipment is to be done thereafter.

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6. Next, the staff recruitment process would be carried out. For this the local villagers can be recruited,
this will be viewed as an employment opportunity hence encouraging support for the project.

7. After successful recruitment and induction, training would be provided to all the staff members.

8. All the interested dairy farmers (to be determined via registration) can be a part of a 7-day training
session where they are instructed with respect to the optimal ways of treating their cattle for
maximum milk production. This training session will be held by veterinary experts and doctors along
with their team.

9. After the completion of the training program, each dairy farmer would be given a unique id card.

10. The transportation system will be so developed that it connects all the places of activity (farms, the
DISK and automation sites etc.) for smooth collection and swift transportation process.

11. Three Dairy Information System Kiosks (DISK) will be setup at the village level which will have IT
infrastructure and Internet connection. The information for people will be customized in the local
language, as has been done in the Kheda district of Gujarat.

12. Delivery of information related to dairying, including best practices in breeding and rearing milch
cattle, scheduling of government and other private sector agency services, and collecting feedback on
the quality of service provided to the catchment area will be provided.

13. Access to a multimedia database on innovations captured by SRISHTI (an NGO working with IIMA)
from hundreds of villages, covering agricultural practices, medicinal plants, home remedies, tools and
implements, etc., and a multimedia format that has captured the description of the innovations
provided by innovators and a visual presentation of the innovations will be provided at the kiosk.

14. The use as a communication centre offering services like email, fax, and Internet telephony, a means
of communicating with farmers via the automatic printing process of daily payment slips will also be
provided at the kiosk.

15. After implementing the project, to measure the effectiveness of the project, surveys will be done.

Equipment and Facilities

Since the project is of a fairly large scale, and makes use of a number of complex equipment, the facility
has to be substantially large (area wise). Based on the requirements of the project the facility will have

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the following equipment. For a better understanding the number of each is mentioned as well which
might change depending on the actual requirement: -

Equipment/Facilities Quantity
Identity cards 600
Electronic Milk Tester 15
Laptops/Desktops 13
Table and Chair 50
Packaging machine 15
Identity card identifying machine 5
Furniture 15
Router 20
Water purifier 5
Training rooms 6
Meeting rooms 3
Washrooms 15
Stationary items 6 basic sets
Dispute redressal room 1

Personnel Requirement
The project under CSR of Godrej will require dedicated workforce of 25 members for carrying out all the
day-to-day activities in an efficient and effective manner. These 25 people will work under the
supervision of the Core Project Team who will monitor their work and provide the necessary guidelines.
The distribution of these 25 people across various departments will be done in the following manner: -

Per district Requirement

Co-operative in-charge 1
Milk Collection Workers 5
Fat Content Examiners 3
Accountants 2

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 Engineers 2
Security Personnel 4
Other Volunteers 8
Total 25

Note: Special attention shall be paid to increase women participation at all the positions mentioned
above.

Budget
The approximate cost to the company for this project, as worked out (approximately) will be Rs. 1 Crore.
The following break-up has been calculated after accounting for the current price rates and inflation.
Actual expense at the time of incurring might differ.

Particulars Amount
Land 7,20,000
Registration and Government expenses 2,00,000
Laptops 3,00,000
Furniture 4,00,000
DISKS system 1,75,000
Electricity bill 6,00,000
Construction 8,00,000
Electronic fat tester machine 6,00,000
Training expense 30,000
Salaries (for the year) 48,00,000
Telecommunication bill 2,00,000
Punching machine 2,50,000
Packaging machine 2,75,000
Vehicles 3,00,000
Miscellaneous 3,50,000

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 Appendices
1. District website of Begusarai | Contents of Begusarai District | India
2. Villages & Towns in Begusarai Block of Begusarai, Bihar (census2011.co.in)
3. Hardia Village Population - Begusarai - Begusarai, Bihar (census2011.co.in)
4. India Map | Free Map of India with States, UTs and Capital Cities to Download (mapsofindia.com)
5. Dairying_in_Bihar.pdf (nddb.coop)
6. CSR in India is Now a Law | by B The Change | B The Change

Map of Begusarai District, Bihar

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