Producer Organisations and Extension: A Case of Dairy Cooperatives in India


India’s milk supply comes from millions of small producers, dispersed throughout the rural areas. These farmers maintain an average herd of one or two milch animals, comprising cows and/or buffaloes. Ample labour and a small land base encourage farmers to practice dairying as an occupation subsidiary to agriculture. While income from crop production is seasonal, dairying provides a stable, year-round income, which is an important economic incentive for the small farmer. Over the past two decades, the demand for services related to animal breeding, health care and marketing support have increased manifold.

There is a considerable shift in dairying in the past two decades. Introduction of cross-bred cattle and improved buffaloes; a shift from grazing to partial or complete stall feeding systems; new animal health challenges; changes in the mode of delivery of livestock services; new marketing arrangements; and liberalized trade policies have all made dairying sector more challenging (Thirunavukkarasu et al 2008). Against this background of change, access to relevant information on all aspects of dairying is ever more essential for effective decision making by today’s dairy farmers. In the case of dairying, the producer organisations (POs), which are organised as dairy cooperatives (DCS) to primarily market milk, are playing an important role in empowering farmer members with appropriate technological knowledge and skills through various extension education and training programmes.
Understanding the strengths and limitations of extension services delivery mechanisms of dairy cooperatives is important for enhancing their contribution to the dairy sector competitiveness. With this aim, two types of discussions were organized. The first one was an e-discussion on “the role of producer organisations in strengthening extension and advisory provision in the dairy/livestock Sector” in India. The second one was organisation of face-to-face dialogues with milk producer members and officials of dairy cooperatives and their federations at district/state levels milk unions in four states, namely Chhattisgarh, Jharkhand, Uttar Pradesh and Uttarakhand.

This report discusses the major findings from these exploratory investigations on the role of dairy cooperatives in provision of extension and advisory services. The report is organized as follows. The current situation on dairy cooperatives in India is presented in Chapter 2 which is followed by the methodology adopted for this study in Chapter 3. Findings from this study are discussed in Chapter 4. The conclusions are presented in Chapter 5. The paper ends with a brief set of recommendations in Chapter 6.
Dairy cooperatives in India

India currently has about 15.1 million farmers under the ambit of 1,55,634 village level dairy cooperative societies which are federated into about 170 district milk unions and 22 state cooperative dairy federations (GOI, 2014 a).

Box 1. The Indian Dairy Cooperatives: Structure and Functions


The Indian dairy development programme “Operation Flood” has been a successful model of dairy development through capacity enhancement of milk producer co-operatives. The Kaira District Co-Figoperative1:DaryCooperativeMilkProducersSocietiesUnionin atIndiaAnand(NDDB,(AMUL)2013) wasFig2:theProducerfirstproducerMembersoriented(thousands)milkunion formed (NDDB,2013)in1946and this constituted an important landmark in the development of the dairy cooperative movement. The Anand Pattern of cooperative envisages an integrated cooperative structure that procures, processes and markets produce. Supported by professional management, producers decide their own business policies, adopt modern production and marketing techniques and receive services that they can individually neither afford nor manage. The Anand Pattern succeeded, as it involved  people  in  their  own  development  through  cooperatives  where  professionals  are

accountable to leaders elected by producers.


The institutional infrastructure under the pattern which includes village cooperative, dairy and cattle feed plants; state and national marketing is owned and controlled by milk producer members. The Indian Dairy Cooperatives are organized as a three-tier structure with Primary Milk Producers’ Cooperative Societies at the village level followed by the District Cooperative Milk Producers’ Union at the district level. A state level Cooperative Milk Producers’ Federation supports and guides district unions. All the unions in a state are normally members of a federation whose prime responsibility is the marketing of milk and milk products outside the state. There is also a fourth tier, the National Cooperative Dairy Federation of India Ltd. (NCDFI), which is a national-level body that formulates policies and programmes designed to safeguard the interests of milk producers.


Table 1.Dairy Cooperatives- Key Parameters


Parameters Nos.
No. of DCSs Organized 155634
Producer Members (‘000) 15115
Women Members (‘000) 4380
Milk Procurement (TKgPD) 32825
Milk Marketing@(TLPD) 23786
Source: NDDB, 2013  

Extension and advisory service delivery by dairy cooperatives

Extension and advisory services also play an important role in enabling application of new knowledge by livestock producers. Dairy/livestock extension services can help to assist milk producers at every stage of production, from improved animal husbandry through to better quality milk and increased production. However, compared to its contribution in the economy, livestock sector has received much less resources and institutional support. Livestock extension remains grossly neglected (Planning Commission, 2013).

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