Dairy Farming

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This model is being carried out for PACS in the Chhindwara and Seoni districts of Madhya Pradesh by Intellecap. It focuses on 5000 dairy farmers from socially excluded groups.

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Project summary

This model involves:

Project context

There are 15 million dairy farmers, like Mohan, in India. They are organised under 150000 village-level dairy cooperative societies (DCS). Each dairy cooperative society has a village-level centre. It is here that dairy farmers have to come and deposit the milk they have collected, twice a day.

However, the process for depositing milk is antiquated and slow. Milk is weighed and tested manually and the DCS centre operators can easily manipulate results. This manipulation means that dairy farmers sometimes do not receive fair payment. Under the current system, dairy farmers only receive payment for their milk after 10-11 days.

The manual process of depositing milk takes a long time. The queues at DCS centres are long - farmers regularly spend an hour and a half queuing every day, decreasing the amount of time they can spend on other livelihood opportunities. The long queues also mean that they risk spoiling their milk in the heat. If milk is spoilt it will not be accepted.

The price for milk is based on its fat and Solid Not Fat (SNF) content - a higher fat and SNF content should equal a higher price for the dairy farmers. However, because the DCS centres do not have an accurate method for measuring milk content, they pay farmers depending on the milk quantity rather than quality. Some dairy farmers adulterate their milk with water to increase the volume, along with other contaminants to increase the thickness and viscosity of the milk.

In addition to the above problems, Indian dairy farmers lack livestock farming support. They do not have knowledge about scientific animal husbandry practices, they have little access to good livestock breeds and veterinary services are scarce.

However, with exponentially growing consumer demand, India will require 150 million tonnes of milk per year by 2017 and there are significant opportunities to export to countries in the Association of Southeast Asian Nations. There is therefore huge scope for dairy farmers.

Automated Milk Collection Units

Automated Milk Collection Units (AMCUs) are a technology that allows dairy farmers to reliably measure the fat and SNF content (and therefore quality) of their milk.

The AMCUs work by analysing a small test tube of milk (to gauge quality) and weighing the milk (to gauge quantity). A computer calculates the amount that should be paid, based on quality, quantity and current market prices (set by the milk union). A printed receipt is provided to the farmer within 3 minutes. The farmer hands this receipt to the DCS centre and payment is given on-the-spot.

The AMCUs are installed at DCS centres by Shree Kamadhenu Electronics Pvt. Ltd (SKEPL), along with battery units so that they work, even when there are power cuts. SKEPL also provides training to village DCS workers, like Kamal, on how to operate and use this technology.

The AMCUs speed up the entire milk collection system by 6-7 times, reducing spoilage and waiting times. They also make it transparent and simple for farmers to understand how much they should be paid.

A cadre of trained youth

An important aspect of this model involves supporting dairy farmers to enhance and improve milk productivity and quality. A cadre of 150 local youth, including Ram, is being trained to provide this support.

The young people are being trained in Good Dairy Practices (GDP) including information about maintaining and enhancing animal health, breeding principles and quality fodder and nutrition. The young people have also been trained in maintenance of the AMCUs.

The idea is that the young people will become trained village level entrepreneurs (VLE), employed by the District Milk Union, who can disseminate their knowledge among the dairy farmers. This will result in an improvement in cattle breed, cattle health and cattle feed, thereby increasing the quality and quantity of milk produced.

In the long term, the project will also link the VLEs with veterinary medicine suppliers, feed companies and artificial insemination experts so they can deliver last mile services in the districts.

An Inclusive Livelihood Fund

An Inclusive Livelihood Fund has been set up as part of the model, so that Dairy Cooperative Societies can access funds to buy the AMCUs. Through the increased income they gain from the increased quality of milk, they are able to repay back the loan over time.

The project is also incubating a section 8 company, which will take over the management of the fund after the project period.

Linkages to government programmes

There are various government programmes that the project is helping dairy farmers to access and leverage resources from. These include:

  • The National Dairy Development Board. This board sits under the National Dairy Plan and has planned activities to improve the processes related to milk collection and quality testing.
  • The eVet project. This project is being run by the Department of Animal Husbandry in Madhya Pradesh. It provides veterinary services and advice to livestock rearers in rural areas through online consultations. It also provides information on the prices of livestock and livestock products at different markets.
  • Ajeevika. This is a programme run by the National Rural Liveihoods Mission to support the livelihoods of excluded communities. It supports livelihood collectives over a period of 8-10 years.

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