India has attained number one position in the world in milk production. The country produces about 91.0 million tonnes of milk annually and it has been increasing by about 5 per cent annually. Milk production is one of the largest single enterprises in India with an annual output valued at Rs. 90360 crores. One of the significant features of dairying in India is that it is basically a small holders’ enterprise. Milk production is still in the hands of small holders who are spatially scattered. Majority of them maintain small herd of one to two milch animals. The productivity of these animals is also relatively low.Prior to Operation Flood, dairying in the country was largely unorganized and left in the hands of middlemen, vendors and halwaiis. There was little emphasis to link milk production in the rural areas with urban demand for milk and milk products.
In the subsequent periods, the organized dairy sector in the co-operative, private and state domain has come up in a big way. The organized dairy sector vertically integrates the process of milk procurement, processing and marketing of milk and milk products. It has successfully reduced the role of middlemen in the dairy industry. At present there are 865 dairy factories in this sector in the country that procure milk and convert it into value added products for delivering to the consumers in the form consumers want.
There is huge demand for milk and milk products in India. About 15.51% of total expenditure on food items is spent on milk and milk products in rural areas whereas in urban areas it is still higher at 18.19%. To fulfill this huge demand of people for milk and milk products, organization of milk procurement is a first step in this direction. It is indeed a tremendous task to organize milk procurement from millions of tiny milk producers scattered all over the country side and transport it to the dairy factories for the manufacture of different dairy products. What type of the organizational structure is best suited to accomplish this task? What should be the price of milk to be paid to the producers and the selling price of milk and milk products by the dairy plants are some of the other relevant questions that need serious considerations?
In the subsequent periods, the organized dairy sector in the co-operative, private and state domain has come up in a big way. The organized dairy sector vertically integrates the process of milk procurement, processing and marketing of milk and milk products. It has successfully reduced the role of middlemen in the dairy industry. At present there are 865 dairy factories in this sector in the country that procure milk and convert it into value added products for delivering to the consumers in the form consumers want.
There is huge demand for milk and milk products in India. About 15.51% of total expenditure on food items is spent on milk and milk products in rural areas whereas in urban areas it is still higher at 18.19%. To fulfill this huge demand of people for milk and milk products, organization of milk procurement is a first step in this direction. It is indeed a tremendous task to organize milk procurement from millions of tiny milk producers scattered all over the country side and transport it to the dairy factories for the manufacture of different dairy products. What type of the organizational structure is best suited to accomplish this task? What should be the price of milk to be paid to the producers and the selling price of milk and milk products by the dairy plants are some of the other relevant questions that need serious considerations?
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