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Project Report on Kmf, Dharwad by Samarth

2. INDUSTRY PROFILE 2. 1 INTRODUCTION DAIRY INDUSTRY IN INDIA Dairy enterprise is an important occupation of farmer.

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In India nearly 70% of the people depend on agriculture. It is the backbone of India. Dairy is linked with agriculture industry to a large extent. Animal husbandry in India is an essential part of agriculture. It is mainly a rural occupation closely associated with agriculture. 2. 1. 1 DEVELOPMENT OF DAIRY INDUSTRY IN INDIA During the Pre-independence year there was no serious stress given to dairy industry.

In 1886 the Department of Defense of the British Government established the dairy farms for the supply of milk to the British troops in Allahabad. Later, in 1920 serious steps were taken by Mr. William Smith, an expert in dairy forming to improve the milk production There was discrimination done to the Indians hence this led to the rise of the first milk union in India. In Lucknow in 1937 called the Lucknow milk producer’s Co-operative union Ltd. In 1946 AMUL (Anand Milk Udyog Ltd) was started in Gujarat to bring up the economic stability of villagers.

When the farmer Prime Minister Lal Bahaddur Shastri visited the functioning as it was rendering a social service to the society, which helped the villagers to come in the national economic stream. The dairy and Animal Husbandry received serious attention after the independence. There were lots many of progressive steps taken by the government through five year plans. This led to the formation of National Dairy Development Board in 1965 & thus in 1970 he decided to Bring a “ White Revolution” throughout the country, Initially 10 states were selected were for this purpose excluding Karnataka.

In Karnataka in 1974 an integrated project was launched to restructure and reorganize the dairy industry on Co-operative principle of AMUL and to lay foundation for new direction in dairy industry. INDIAN DAIRY INDUSTRY PROFILE India’s high-value, high-volume market for traditional dairy products and delicacies is all set to boom further under the technology of mass production. This market is the largest in value after liquid milk and is estimated at US $3 billion in India. More and more dairy plants in the public, cooperative and private sectors in India are going in for the manufacture of traditional milk products.

This trend will undoubtedly give a further stimulus to the milk consumption in the country and ensure a better price to primary milk producers. Simultaneously, it will also help to productively utilize India’s growing milk surplus. Milk production in India increased from 17 million tons in 1950-51 to 89. 6 million tons in 2007-08. India has rapidly positioned itself as the world’s largest producer of milk. Producing milk in rural areas through smallholder producer cooperatives and moving industrially-processed milk from these smallholder sources to urban demand centers became the cornerstone of government dairy development policy.

This policy initiative gave a boost to dairy development and initiated the process of establishing the much-needed linkages between rural producers and urban consumers. The performance of the Indian dairy sector during the past three decades has been truly impressive. Milk production grew at an average annual rate of 4. 6 percent during the 1970s, 5. 7 percent during the 1980s, and 4. 2 percent during the 1990s. Despite its being the largest milk producer in the world, India’s per capita availability of milk is one of the lowest in the world, although it is high by developing country standards.

The per capital availability of milk expanded substantially during the 1980s and 1990s and reached about 226 grams per day in 2003-04 the per capita consumption of milk and milk products in India is among the highest in Asia, but it is still growing. It is still below the world average of 285 grams per day, and also the minimum nutritional requirement of 280 grams per day as recommended by the Indian Council of Medical Research (ICMR). Several factors have contributed to increased milk production. First, milk and dairy products have cultural significance in the Indian diet.

A large portion of the population is lacto-vegetarian, so milk and dairy products are an important source of protein in the diet. The demand for milk and dairy products is income-responsive, and growth in per capita income is expected to increase demand for milk and milk products. Despite the fact that dairy production in India is widespread throughout the country and overwhelmingly carried out by small-scale producers, there are still large interregional and interstate variations in milk production.

Roughly two-thirds of national milk production comes from the states of Uttar Pradesh, Punjab, Rajasthan, Madhya Pradesh, Maharashtra, Gujarat, Andhra Pradesh, and Haryana. However, there have been some shifts in milk production shares of different states. In 2001-02, Uttar Pradesh was the largest milk producer in the country, with about 16. 5 million tons of milk, followed by Punjab (8. 4 million tons), Rajasthan (6. 3 million tons), Madhya Pradesh (6. 1 million tons), Maharashtra (6 million tons), and Gujarat (5. 6 million tons).

The eastern region is lagging behind in terms of dairy development, and imports milk from surplus areas in the West and North. 2. 1. 2 INDIAN DAIRY INDUSTRY PROFILE The annual milk production is presently 92 million tones, contributing around Rs. 1000 billion to the GDP. Provides assured and remunerative employment round-the-year to 60 million families. The dairy animals make a substantial contribution to household food security by providing income, quality food, energy, fertilizer and assets in over majority of the rural households in India.

The Animal Husbandry is the single largest contributor under the agriculture sector which provides a remunerative employment round the year at a very small investment. The dairy animals make a substantial contribution to household food security by providing income, quality food, energy, fertilizer and assets in over majority of the rural households in India. These livestock keepers are constrained by poor animal health and veterinary services, lack of feed and fodder, water, milk handling, chilling, etc. Besides, there has been lack of infrastructure facilities such as good roads and access to markets, etc.

The livestock keepers also lack access to advanced technologies as well as proper institutional support system. The result is that both the production and productivity remain well below its potentials. Thus the losses and wastages continue to remain high. Adapted breeds and local feed resources although available, but need proven technology supports in its preservation and processing. Such support would substantially improve production and productivity, which would result in higher income for the livestock keepers.

One of the problems faced by India is unemployment, despite the rapid growth rate. The problem is more acute in rural educated and marginally educated youths, who have no alternative but to migrate to urban areas. Due to automation in various core sectors, the employment opportunities have dwindled considerably whereas the service sector has its own limitations, especially the high investment cost per job created. In this context, the dairy industry offers a plausible opportunity of creation of self-employment with minimum investment.

There is a scope for doubling the present milk production, which can be achieved with marginal investment, such a step would not only enhance milk production and productivity, but also would create millions of additional jobs. Dairying is, in fact, a supplementary activity of the marginal farmers and the landless laborers. It is therefore suggested that dairy and such other animal farming be included within the legal framework of ‘agriculture and agriculture products’. This would enable the marginal farmers and the landless agriculture laborers to benefit from the various government incentives.

Milk is no more a luxury, but essential nutritional requirements of human being. The children largely depend on milk for nutrition. Higher milk production therefore will also increase the health status of the farmers and people at large. Due to several inherent reasons, the cost of milk production is high. One of the important reasons is low animal productivity. Because of high cost, the milk and milk products are not affordable to poor strata of the society. Milk is a perishable commodity. Hence, its conversion to products, such as, milk powder, butter and cheese, etc. s necessary. Considering these factors, it is reasonable that at par with agriculture produce, the milk products be also exempted from any excise duty, sales tax and such other taxes. This gesture of the government would go a long way in accelerating the growth of the Indian dairy industry from present annual rate of around 4. 5 % to more than 9%. The conversion of excess milk to milk-products is a necessity. The basic principle here is evaporation of water which changes its physical form only, whereas there is no change whatsoever in its chemical composition.

One of the reasons of higher cost of milk and milk products is the cost of packaging. To safeguard the quality and safety for human consumption, packaging of milk and milk product is necessary. The milk product manufacturing therefore should be construed as ‘processing milk for preservation’ and it should be exempted from all the taxes and duties like excise, central sales tax and octroi etc. To enhance milk production during the next five years as well as to address the issues referred in the foregoing sentences, there is an imperative need of policy support from the government on the following core areas ?

Clean and quality milk production, processing and packaging ? Boost the exports of milk and milk products ? Enhance milk production and mulch animal productivity  2. 1. 3 Indian Dairy: The organized sector is expanding rapidly. India’s modern dairy sector has expanded rapidly. From an insignificant 200,000 liters per day (lpd) of milk being processed in 1951, the organized sector is presently handling some 20 million lpd in over 400 dairy plants. Already, one of the world’s largest liquid milk plants is located in Delhi and handling over 800,000 liters of milk per day (Mother Dairy, Delhi).

India’s first automated dairy ‘Mother Dairy ‘ has been established at Gandhi agar near Ahmadabad, Gujarat, in Western India and its capacity is capacity is 1 million lpd. It is owned by India’s biggest dairy cooperative group, in Anand, with an annual turnover in excess of Rs 23 billion (US $500 million). Amul-III with its satellite dairies, with total installed capacity of 1. 5 million lpd has also been commissioned. India’s first vertical dairy (capacity: 400,000 lpd), owned by the Pradeshik Cooperative Dairy Federation (PCDF) has been commissioned at Noida, outside Delhi

Dairy is a place where handling of milk and milk products is done and technology refers to the application of scientific knowledge for practical purposes. In India, dairying has been practiced as a rural cottage industry since the remote past. Semi-commercial dairying started with the establishment of military dairy farms and co-operative milk unions throughout the country towards the end of the nineteenth century. The Indian Dairy Industry has made rapid progress since Independence. A large number of modern milk plants and product factories have since been established.

These organized dairies have been successfully engaged in the routine commercial production of pasteurized bottled milk and various Western and Indian dairy products. With modern knowledge of the protection of milk during transportation, it became possible to locate dairies where land was less expensive and crops could be grown more economically. 2. 2 DAIRY INDUSTRY PROFILE • Human population: 953 million (70 million dairy farmers) • Milk production: 74. 3 million tonnes (203. 5 million lpd) • Average annual growth rate (1995-2000): 5. 6% Per capita milk availability: 214 g/day or 78 kg/year • Milk animals: 57 million cows; 39 million buffaloes: • Milk yield per breed able bovine in-milk: 1,250 kg • Cattle feed production (organized sector): 1. 5 million tonnes • Turnover of veterinary pharmaceuticals: Rs. 550 crores • Dairy plants throughput: 20 mlpd Specific features of dairy in relation to marketing in developing countries The dairy industry in the developing countries has a number of specific features which distinguish it from the other sectors of agriculture and have particular implications for marketing.

First, milk consists of over 85% water, and produced daily. Consequently, high costs of transportation are incurred per unit of output marketed. Also, milk being highly perishable, it needs to be used within a short period or processed and transformed into a more stable, longer-storable form. The quality of milk depends on farm management practices, and milk is potentially subject to adulteration, so strict and comprehensive quality regulations may be necessary when marketing involves more than direct delivery by producers to consumers.

Second, the vast majority of the dairy farmers are small-scale producers, who produce milk as a source of regular cash income. Dairy production is a labor-intensive enterprise, and dairy marketing activities often provide substantial employment. However, because of asset fixity (high percentage of fixed costs), dairy enterprises often respond to market changes and incentives in a limited and gradual way. Third, milk can be used to make a wide range of high quality palatable and nutritious products, which often imply substantial value added over the cost of the raw material.

When production and consumption points are far apart and demand increase rapidly, processing of dairy products becomes very important. Fourth, as a consequence of the above features of milk and the market vulnerability of its producers, cooperatives may assume a strong position in milk processing. A survey by the International Dairy Federation in 1984 revealed that in 21 developed countries together accounting for 55% of the world’s milk supply, producer cooperatives marketed 86% of total sales of milk from farm to the first handler.

In some of these countries, cooperatives also handled 80-90% of the total processing activity. It may be noted that the history of development of dairy cooperatives in these countries are not always similar. However, in most developing countries, dairy producer cooperatives and cooperative processing are either non-existent or very weak. The need for cooperatives in these countries is driven by the need to capture some economies of scale in transportation and processing where numerous small producers are scattered far away from the consumption centers.

In many countries, this gap has been filled by establishment of parasitical dairy enterprises for collection and processing of milk to promote domestic dairy. In most cases, these enterprises ended up processing subsidized imported dairy products, neglecting the rural dairy sector. The monopolistic character of these enterprises often led to inefficiency thus they failed to serve the interests of domestic producers and consumers. Weaknesses in physical and marketing links between rural producers and urban processors and consumers are among the major constraints to dairy development in the developing countries.

It is important to be aware of and understand how such constraints can be addressed in order to devise mechanisms that can transfer growing urban demand into increased livestock production. Inadequate infrastructure and inefficient marketing may lead to increased transactions costs and/or market failure. By better understanding these costs and identifying the ways of reducing their impact, policy prescriptions can be made to promote economic development by fostering production and trade. 2. 3 NATIONAL DARIY DEVELOPMENT BOARD: 2. 3. 1 History:

The NDDB was founded to replace exploitation with empowerment, tradition with Modernity, Stagnation with growth, transforming dairy into and instrument for the development of Indian’s rural people. The NDDB was established in 1965; the board is registered under the Societies Registration Act and the public Trust Act, fulfilling the desire of the Prime Minister of India – the late Lal Bahaddur Shastri to extend the success of the Kaira Co-operative Milk producers union (AMUL) TO OTHER PARTS OF India. Dr Vergese Kurien was the founder chairman.

The success combined the wisdom & energy of farmers with professional management to successful capture liquid milk and milk product markets while supporting farmer’s investment with inputs and services. In 1969, when the Government of India approved the Operation Flood programme and it’s financing through the monetization of World Food Programme-gifted commodities, it was found that the statutes under which NDDB was registered did not provide for handling of government funds. Therefore, in 1970 the government established a public-sector company, the Indian Dairy Corporation.

The IDC was given responsibility for receiving the project’s donated commodities; testing their quality; their storage and transfer to user dairies and receiving the dairy payments. Thus it served as finance-cum-promotion entity while the entire Operation Flood technical support was provided by NDDB. To avoid any duplication in their activities or overlap of functions, the IDC and NDDB were eventually merged into a newly constituted NDDB by an Act of Parliament passed in October 1987. 2. 3. 2 The Growth: NDDB began its operations with the mission of making dairying a vehicle to a better future for millions of gross roots milk producers.

The mission archived helped to launce ‘’Operation Flood’’, a programmed extending over 26 years and with the help of World Bank Loan India become the world’s largest milk producing country. As per March 2001 India’s 96000 Dairy Co-operative are integrated thorough a three Tier Co-operative structure. The Anand pattern, which is owned by more than 10 million formers, procures an average of 1605 million liters of milk every day. The milk is processed and marketed by 170 milk producers’ co-operative unions which, in turn own 15 state co-operative milk marketing federation.

Since its establishment the dairy development board has planned and spearheaded India’s Dairy programmer by placing dairy development in the hands of milk producers and the professionals they employ to manage their co-operatives. In addition, NDDB also promotes other commodity based co-operative, allied industries and veterinary biologically on an intensive and nationwide basis. 2. 3. 3 Objectives of NDDB: ? To sponsor, promote, manage, acquire, construct or control any plant or work, which promote projects of general public utility relation to dairying. To make information available on request to technical services to increase production of Milk. ? To prepare initial feasibility studies of dairying and other dairy related projects and undertake subsequent designing planning and start up those projects. ? To undertake research and development programmed related to production and marketing of milk and milk products. ? To provide assistance for exchange of information to other international agencies. 2. 3. 4 Services rendered by NDDB: • Planning dairy and rural development projects. • Organization of farmer co-operative societies. Setting up of dairy and cattle feed plants. • Manpower planning and training. • Applied research and development. • Implementation of milk production enchantment programmed. 2. 3. 5 Objectives of the study: The objectives of the study were; 1. To study the overall functioning of the organization with help of organization structure. 2. To know about the milk procurement and processing. 3. To study about the area of operation and channels of distribution system. 4. To study their marketing Plans and sales promotional activities. 3 COMPANY PROFILE

COMPANY NAME: Dharwad Co-operative Milk Producers Union Ltd. Lakkammanahalli, Industrial Area. P. B Road Dharwad-580004 NATURE OF BUSINESS : Mfg / Service / Semi-agro based Co-operative Unit. TYPE OF OWNERSHIP : Co-Operative Unit. TEL-NO : 0836-2467643, 2461876, 2468380. RAW MATERIAL Milk : 85,000 LPD Water 5 to 6 lack liters/day Coal 4 to 5 tones. CAPACITY OF PLANT: 2, 00,000 Liter’s / Day 12 Tones milk powder, 10 T Butter, 6 T Ghee. FINISHED

PRODUCTS: Milk, Butter, Ghee, Gurtz, Peda, Milk powder, Ice creams, Curd, Lassi, Khova. TOTAL INVEST: 7 Crores TOTAL SOCIETIES AT VILLAGE LEVEL : 460 Societies 3. 1 BOARD OF DIRECTORS 1. Shri B N Arabgond. Chairman 2. Dr M N Venkatramu. Managing Director 3. Shri N S Asuti. Director. 4. Shri G M Morbad. Director. 5. Shri A M Desai. Director. 6. Shri S M Hadagali. Director. 7. Shri R N Davagi. Director. 8. Shri U M Hegade. Director. 9. Shri G G Hegade. Director. 10. Govt Dept Officers. 5 Members. 11. Govt Nominated. 3 Members. KARNATAKA MILK FEDERATION (KMF) [pic] 3. KARNATAKA MILK FEDERATION: The first dairy in Karnataka was started in Kudige in Kodagu district in 1955, further in June 1974; an integrated project was launched in Karnataka to restructure and reorganize the dairy industry on the co-operative principle and to lay foundation for a new direction in dairy development. In 1975, the World Bank aided dairy development was initiated. The present Karnataka Milk Federation (KMF) came into existence in 1984-as a result of merging of Karnataka Dairy Development Co-operation, small co-operatives and Karnataka Milk Production Development and loose vendors.

At the end of the March 1998, the network of 8023 Diary Co-operative Societies (DCS) have been established which are spread over 166 taluks of the total 175 taluks in all 28 districts of Karnataka. There are 13 Milk Unions and Dharwad Milk Union (DMU) is one among them. There are 35 Chilling centers, 3 Farm coolers, 15 Liquid milk plants and 2 Product dairies for chilling, processing, conservation and marketing of milk. To supply cattle feed there are 4 cattle feed plants. To ensure supply of quality germ plasma Bull breeding farm and frozen semen bank are also available. 3. 2. 1 Karnataka co-operative Milk Producers’ Federation Limited (KMF)

KMF is the apex Body in Karnataka representing Dairy Cooperatives. It is the third largest dairy co-operative amongst the dairy co-operatives in the country. To impart training, institutes at Bangalore and regional training institutes at Dharwad and Gulbarga are functioning. Three nitrogen plants (2 plants of 25 CPM and 1 plant of 5 CPM) are been set-up to supply nitrogen, which is used for Refrigeration purpose. Three diagnostic centers have been set-up for monitoring diseases: three fodder farms at Rajkunte, Kuttanahalli and Kodagu have been set-up to supply good quality of fodder and seed production farm at Shahapur has been set-up.

The federation giving details of the latest technology in dairy industry etc is published ‘’Ksheer Sagar’’ magazine monthly. 3. 2. 3 UNITS OF KMF: KMF has the following Units functioning directly under its control: ? Mother Dairy, Yelahanka, Bangalore. ? Nandini Milk Products, KMF Complex, Bangalore. ? Cattle Feed Plants at Rajanukunte/Gubbi/Dharwad/Hassan. ? Nandini Sperm Station (formerly known as Bull Breeding Farm & Frozen Semen Bank) at Hessaraghatta. ? Pouch Film Plant at Munnekolalu, Marathhalli. ? Central Training Institute at KMF Complex, Bangalore. ? Quality Control Lab at KMF Complex, Bangalore.

List of Co-operative Milk Producers’ Societies Union: [pic] KMF is a co-operative apex body in the state of Karnataka for representing dairy organizations and also implementing dairy development activities to achieve the following objectives. • Providing assured and remunerative market for all the milk produced by the farmer members. • Providing hygienic milk to urban consumers. • To build village level institutions in co-operative sector to manage the dairy activities. • To ensure provision of milk production inputs, processing facilities and dissemination of know-how. To facilitate rural development by providing opportunities for self-employment at village level, preventing migration to urban areas, etc. 3. 2. 4 FUNCTIONS OF KMF: • Co-ordination of activities between the unions. • Developing the markets for the increasing in milk production. • To make the brand ‘’Nandini’’ as a house hold name. • Excellence in quality is to be maintained to lay a solid foundation for wide Spread acceptance of ‘’Nandini’’ products. • To increase the market share of ‘’Nandini’’. THE GROWTH PROCESS: The growth over the years and activities undertaken by KMF is summarized briefly hereunder: Growth of KMF  Descriptions | Units |1976-1977  |2009-2010 | | Dairy Co-operatives | Nos  | 416 |11063 | | Membership   | Nos | 37000 |1956163 | | Milk Procurement   | Kgs/day | 50000  |3025940 | | Milk Sales   | Lts/day | 95050  |2129790/curd:1. 7LKPD | | Cattle Feed Consumed  | Kgs/DCS  | 220 |3010 | | Daily Payment to Farmers  | Rs. Lakhs  | 0. 90 |342 | | Turnover  | Rs. Crores  |  |2707. 00 | Source: DHARWAD MILK UNION [pic] Dharwad District Co-operative Milk Producer’s Societies Union Ltd. The Union was established in the year 1986 under the Operation Flood 2 and 3.

The Union also later took over in 1988 the Milk Products Factory with a drying capacity of 2. 10 Lakh Litres per day, earler established by the Karnataka milk Products Limited (GOK Undertaking). The Union covers the districts of Dharwad, Karwar, Haveri, and Gadag, and has chilling centres at Gadag, Haveri, Sirsi,, Ron, Nargund, Hirekerur, and Kumta with chilling capacity of 1. 20 Lakh Litres Per Day. The Union procures and sells on an average 0. 92 Lakh per Day and 0. 59 Lakh Liters Per Day respectively. There are 7 Bulk Milk Coolers in the Union.

Apart from selling milk, I sells pure buffalo milk and produces very thick 250gm Curds in mud pots specially designed for this namely “KUDIKE MOSARU”, the famous Dharwad Peda, Butter in bulk as well as in retail packs and in 10 gm chip sets, Ghee, Skimmed Milk Powder and Paneer. Establishment: The Dharwad Milk Union is Co-operative society among the 13 establishments, under KMF: The Dharwad Milk Union (DMU) is one of the most modern plants in the country. It is located in the spacious 25 acres of land, located in Lakamanahalli Industrial Area; adjacent to the National Highway-4. It is patterned the AMUL Milk Dairy, Gujarat.

NATURE AND BUSINESS CARRIED: The Nature of Dharwad Milk Union is that procuring the Milk from societies. And that milk will be bringing through tankers for various chilling centers those, which are near and convenient to various societies. The Union processes the milk and market in urban area through by various agents. The Union providing service to milk producer’s technical inputs like veterinary services, seeds, fodder etc. and also by giving training to farmer and also induction program. The Union strengthening of milk cooperative movement, organization of extension activities and the rural development services.

The Union also owns and operates the dairy plant cattle feed plant; fodder and bull mother forms, semen collection station, and herd quarter center for animal husbandry activities. The Union also takes research, development and also other promotional activities for the overall benefit of the farmer. The Union providing various product to market like toned milk, standard milk, full creamed milk, double toned milk, homogeneous standard milk, along with cheese curd, ghee, peda also providing. This is the nature and business carried of the Shivamoga milk Union. 3. 3 VISIONS MISSION AND QUALITY POLICY:

VISION STATEMENT OF DMU ? Total quality ? Honesty ? Discipline ? Cleanliness ? Transparency ? Sincerity and dedication ? Co-operation free of politics ? Sovereignty ? Respecting each other’s, opinions, ideas & feelings. MISSION STATEMENT OF DMU: Dharwad Milk Union is committed to provide maximum possible price for the milk supplied by its members and provide necessary inputs to enhance milk production while ensuring economic viability of the Union and is also committed to provide quality milk products to consumers and emerge as one of the top most milk union of the co-operative dairy industry in the country.

At DMU we Endeavor to satisfy the taste and nutritional requirements of the customers. Through excellence in marketing by DMU committed team, DMU are committed to offering quality products that provide best value for money. PUNCH LINE: “FRESH AND PURE “ DMU QUALITY OBJECTS AND QUALITY POLICY: QUALITY OBJECTS: 1) To develop the quality consciousness among all the producers or employees of the union. 2) To implement the cost reduction in each stage of collection processing and distribution. 3) Make every one aware of the every conservation in dairy. ) To maximize the customers complaints and achieve customer satisfaction. 5) To set goals or targets at all levels to achieve continuous improvement. 6) To train our workman from time to time for exposure to advanced technology for efficient operations. 7) To provide adequate infrastructure facility for improving the work environment. INFRASTRUCTURE FACILITIES: Infrastructure facilities in DMU, they have these won chilling center and they can distribute milk with the capacity of covering the 11 routes and the capacity is 2, 00,00LPD. Other facilities like: ? Security facilities Canteen facilities ? Shift: Three shift per day. ? Manual punching card and computer entries will be there DHARWAD DISTRICT CO-OPERATIVE MILK PRODUCERS SOCIETIES UNION LIMITED. Further in 1988, the Raipur Dairy and Chilling Center, setup in 1968, also came under the union. In 1989, the training center, which was controlled by KMF, came under Dharwad Milk Union. DMU was Rs. 7 crore Projects of which Government has Rs. 2Crosre of share capital and authorized capital of DMU is Rs. 5crore. DMU formed 551 milk producer’s co-operative societies in Dharwad, Gadag,and Haveri and Uttar Kannada districts.

The production capacity of DMU is 2lack liters of milk per day and also has the capacity to produce 12tones of milk powder, 10tones of butter, and 6tones of ghee per day. DMU is collecting 85 thousand liters of milk per day from its societies and sells 60 thousand liters of milk per day and the remaining milk is used for producing milk products. History: A group of experienced officers, appointed by the Karnataka Milk Federation surveyed the whole of Dharwad districts (includes two newly formed district Gadag and Haveri) and Uttar Karnataka. Further they found out there as a need for a Milk Dairy.

They traveled the surrounding villages, educated the villagers about Milk and Milk Products and the benefits they would get from the Milk Dairy. Seeing the overwhelming response and untapped resources and the huge market the Federation decided to setup the Milk Union in 1984, known as the DHARWAD DISTRICT CO-OPERATIVE MILK PRODUCERS SOCIETIES UNION LIMITED Further in 1988, the Raipur Dairy and Chilling Center, setup in 1968, also came under the union. In 1989, the training center, which was controlled by KMF, came under Dharwad Milk Union. Functions of DMU:

The main function of DMU is to procure milk from villagers and pay them the right price. • To educate the villagers about milk and its quality. • To make ‘Nandini’ as a part of daily life. • To provide good quality of cattle feed, fodder, veterinary aid seeds, etc. , to the villagers. • To see that the DCS’s are carrying out their activities properly and in an efficient manner. • To see that the milk is brought from DCS’s to the chilling centers in the prescribed time. • To look the accounts of the DCS’s supervise the purchase process and market the milk and milk products. Objectives of DMU: Providing hygienic and good quality of milk to the consumers. • To build the economic strength of the milk producers in villagers. • To eliminate middlemen’s in the business so that the milk producers receive their appropriate share of bread. • To educate the villagers about the adulteration of milk and its harmful effect on the body. • To see that every citizen becomes healthy by consuming good quality of milk. • To make villagers self-viable and build self image. GOALS OF THE DMU • Generating employment opportunity for rural mass • Procurements of good milk • Supplying quality milk to the customer in the city for appropriate price

Process at DMU: The milk collected at DCS’s is brought to the center through carriers, trucks etc. The quality and quantity of milk bought is checked at the Reception center by a supervisor. A sample of milk is taken and is tested in a laboratory for fat content, Solid Not Fat (SNF) acidity etc. As the milk is at room temperature it is to be brought down to 4°C to 5 degree C. So that it may check the growth of bacteria. To ensure this milk is passed through a chilling chamber where the milk is chilled. Its temperature is bought down and then the milk is stored in a tank called as “Ram Milk Tank”.

From this tank the milk is pumped to a pasteurizing cell where the milk is heated up to 72°C and 15 seconds, so that all the bacteria and microorganisms may be killed and then the milk is simultaneously cooled to 4°C to 5 degree C and is stored in a “Pasteurized Milk Tank” . PRODUCT PROFILE Milk Products 1. Nandini Toned milk: Nandini Toned Fresh and Pure milk containing 3. 0% fat and 8. 5% SNF. Available in 500ml and 1litre packs. 2. Nandini Homogenized toned milk: Nandini Homogenized Milk is pure milk which is homogenized and pasteurized. Consistent right through, it gives you more cups of tea or coffee and is easily digestible. . Full cream milk: Full Cream milk. Containing 6% Fat and 9 % SNF. A rich, creamier and tastier milk, Ideal for preparing home-made sweets & savories . 4. Good life: Cow’s pure milk, UHT processed bacteria free in a tamper-proof tetra-fino pack which keeps this milk fresh for 60 days without refrigeration until opened. Available in 500ml Fino and in 200ml Bricks. 4. Nandini Ghee: A taste of purity. Nandini Ghee made from pure butter. It is fresh and pure with a delicious flavor. Hygienically manufactured and packed in a special pack to retain the goodness of pure ghee.

Shelf life of 6 months at ambient temperatures. Available in 200ml, 500ml, 1000ml sachets, 5lts tins and 15. 0 kg tins 5. Nandini Curd: Nandini Curd made from pure milk. It’s thick and delicious. Giving you all the goodness of homemade curds. Available in 200gms and 500gms sachet. 6. Nandini Peda: No matter what you are celebrating! Made from pure milk, Nandini Peda is a delicious treat for the family. Store at room temperature approximately 7 days Available in 250gms pack containing 10 pieces each. 10. Butter: Rich, smooth and delicious. Nandini Butter is made out of fresh pasteurized cream.

Rich taste, smooth texture and the rich purity of cow’s milk makes any preparation a delicious treat. Available in 100gms (salted), 200gms and 500gms cartons both salted and unsalted. Product Processing Milk may be defined as the whole, fresh, clean, lacteal secretion obtained by the complete milking of one or more healthy milk animals, excluding that obtained within 15 days before or 5 days after calving or such periods as may be necessary to render the milk practically colostrums-free and containing the minimum prescribed percentages of milk fat and milk-solids-not-fat.

In India, the term ‘milk’, when unqualified, refers to cow or buffalo milk, or a combination of the two. [pic] PRODUCT PROCESSING [pic] SOURCE: DHARWAD MILK UNION |Status |A co-operative society registered under the Co-operative act 1959 | |Nature of Business |Procuring and Marketing of Milk Production and Sale of Milk Products | |Share Capital |5 corers Approx. |Plant Capacity |2 Lakhs Liters / day | | |Milk Powder 12 MT /Day | | |Butter 10 MT / Day | | |Ghee 6 MT / Day | |Milk Chilling Centers and Capacity |Gagad 20000 LPD | | |Haveri 20000 LPD | | |Hirekerur 20000 LPD | | |Naragund 8000 LPD | | |Ron 10000 LPD | | |Sirsi 20000 LPD | |Karwar packing unit |The milk in bulk is sent for packing and distribution at Karwar Which supplies and | | |need of Karwar, Gokama, Honnavar, Bhatkal, Murdeshwar and Goa | Present Value of Activity |Collection of Milk 85000 LPD | | |Sale of Milk 70000 LPD | |Area of Operation |Dharwad, Haveri, Gadag, Uttar Karnataka, Goa Parts of Maharashtra | |Board of Directors |Elected Member 8 | | |Ex-Officers 5 | | |By Govt. 3 | |Total Workers |383 Workers |Location |Lakamanahalli Industrial Area, Dharwad | |Department |8 | |Brand Name |Nandini | |Products |Milk | | |Toned Milk, Standard Milk, Shubham Milk | | |Milk Products | | |Butter, Ghee, Peda, Curd, Lassi, Paneer, Milk Powder | |Co-operative Societies at Village Level |460 Societies | 3. 4 LAYOUT OF COMPANY: This is the plant existence in industrial area lakkamanahalli in PB Road. [pic] STRATEGIES OF DMU The Dharwad Milk Union has the following set of strategies, which will be formulated every year. The present year has the following strategies. The strategies are formulated with the help of KMF and NDDB and the union members.

Below are the strategies set for this year. STRATEGIES OF PROCUREMENT AND INPUT DEPARTMENT: • To establish 10 new unions in this year. • Aims at procuring an average of 70,000 liters of milk. • Aims at establishing 15 Artificial Insemination Centers in village units. • Aims at marketing 6080 metric tons of “Nandini” fodder for cattle. • Aims of setting up of 1296 Veterinary Treatment Camps. • Aims at providing Vaccination to 50,000 cattle against Food and Mouth Diseases. • Making more milk to powder this year. STRATEGIES OF ADMINISTRATION DEPARTMENT • To Check Labor absenteeism. • To take actions against in-disciplined workers. • To reduce the intake daily workers for petty jobs. Aims at helping the employees to become more responsible towards their work. STRATEGIES OF PRODUCTION DEPARTMENT Aims at processing an average of 1. 10 lakh liters of milk daily Aims at producing | Tons | Products | | 1338 | Milk powder | | 245. 74 | Butter | | 857. 24 | Bulk Butter | | 135. 52 | Ghee | | 48. 22 | Peda | | 19. 6 | Paneer | | 537. 24 | Curds | There have been plans set to reduce the SNF and FAT content in the milk so as to protect the quality of the milk. STRATEGIES OF THE MARKETING DEPARTMENT • Aims at marketing the above products through proper Distribution Channels. • Aims to conduct 52 Consumer Awareness Programs and various Seminars. • Aims at conducting 10 wholesalers’ retailers meeting. • Aims at setting 10 Exclusive NANDINII Milk Parlors. • Aiming to set up new advertisements strategies like putting up of hoardings. • Distributing Pamphlets, contests etc. • Price list of milk and milk producs. SL |Product’s name |Net Amt |Commission |MRP | |1 |Toned Milk/Liter |24. 12 |0. 88 |25. 00 | |2 |HTM/ltr |25. 09 |0. 91 |26. 00 | |3 |HCM/ltr |27 |1. 00 |28. 00 | |4 |Curd 500gm |14 |1. 00 |15. 0 | |5 |Butter Milk 200ml |4 |1. 00 |5. 00 | |6 |Peda/250 gm |39. 00 |6. 00 |45. 00 | |7 |200 ml Ghee |54. 55 |5. 45 |60. 00 | |8 |500 ml |180. 90 |18. 10 |199. 0 | |9 |1000 ml Ghee |250 |30. 00 |280. 00 | |10 |S. F. M/ bottle |14. 47 |2. 53 |17. 00 | |11 |Jamoon mix/ 200gm |44. 64 |5. 36 |50. 00 | |12 |Mysore pak/ 250 gm |66. 97 |8. 03 |75. 0 | |13 |Paneer/kg |217. 39 |32. 61 |250. 00 | |14 |Butter 500gm |126. 79 |15. 21 |142. 00 | NANDINI PRODUCT DETAILS AND RATE (NMP PRODUCTS) |Sl No. |Product Name |Maximum Price of Sale | | |Badam Powder 200 gm Tin/Kg |250. 00 | | |Badam Powder 200 gm Tin/Kg 50. 00 | | |Badam Powder 10 gm Tin/Kg |300. 00 | | |Mysore Pak 250 gm/Kg |280. 00 | | |Mysore Pak 250 gm pack |70. 00 | | |Jamoon Mix 200 gm / Kg |250. 00 | | |Jamoon Mix 200 gm / pack |50. 0 | | |SFM Bottles |14. 00 | | |Milk 200 Ml Pack (Tetra Pack) |14. 00 | CHAPTER – 2 ORGANIZATIONAL STRUCTURE AND FUNCTIONAL DEPARTMENTS ORGANIZATIONAL STRUCTURE [pic] Organization structure is the skeleton of the organization. It prescribes the formal relationship among various position and the activities. Arrangements about reporting, relationship, how an organization member is to communicate with other members, what roles and procedures exist to guide the various activities performed by the members of all parts of the organization structure.

Organization structure plays a vital role in achieving the organizational goals. Organization structure should be properly designed to facilitate the smooth functioning of the organization. Organization structure of Dharwad milk union consists of BOD’s at the top. Then president, under whom is the Managing Director. He is the person who is responsible for smooth functioning of the organization. After Managing Director there are managers and Deputy Mangers of various departments who are responsible and accountable for the activities of their respective departments. There are subordinates, supervisors and employees who are directly linked with department managers. DEPARTMENTS OF DMU: 1. PURCHASE DEPARTMENT:

It is a sub-department, which comes under Finance Department. The main work of this department is to purchase various materials required by different department. After ascertaining the stock position by stores department and indent is sent by different department duly approved by the Managing Director. This department act to purchase materials. It also maintains records of all the suppliers calls for Tenders, quotations etc. Quotations with lowest rate are sanctioned. Purchase up to 50,000 can be made by Purchase Department. If the purchase amount is more than 50,000, then the approval of Managing Director. STRUCTURE:- The structure of Purchase Department is as shown: QUALITY CONTROL DEPARTMENT:

In DMU, at every stage, care is taken to ensure that the customer gets the products, which have a very high quality. Hence there is a separate department called Quality Department. Where the quality testing is done. There is a separate laboratory for this. Quality control is very essential as to maintain the freshness of the milk. All the containers, pipes and other equipments are washed with hot water before starting off with new production. There are many tests conducted here. The packed milk we get will have undergone 3 quality tests. First test is done on raw milk, which we get from chilling center. Next before standardization and the last test before packing. The other tests conducted are: TEST |REASON | | Temperature | Should be below 5 degrees | | Clot on Boiling | If mill curdles soon after boiling milk is | | |Rejected | | Acidity Test | To test the extent of acidity | | Alcohol Test | To check the heat stability of milk | | Lactometer | To check the density of milk | | Fat test | Percentage of fat determined | | SNF Test | Percentage of SNF determined for pricing SNF=CLR+FAT/4 | 2. PRODUCTION PROCESS AND DEPARTMENT: The main objective of this department is to follow up production schedule as per plan and to maintain close and co-ordinate relationship with other department and ensures to upgrade the technical efficiency of production. Milk, as it is highly perishable product has to process immediately to avoid spoilage milk with respect to its flavor, texture and taste. Production department is well equipped and has various types of highly sophisticated machines imported from Sweden and Denmark.

Once the milk is received from P & I department, it is first weighed with the help of weighing bowl. Later, it is poured in dump tank. Sample testing is made through lactometer reading and other tests. The fat and SNF content of each sample of milk is accessed the cow and buffalo’s milk are separately received and sent to the production section separately through two different stainless steel pipes. Later, the raw milk is passed through plate chiller of variable capacity where it is cooled up to 4-5 degrees Celsius. This cooled raw material is further stored in a silo of 30,000 liters capacity. PURPOSE OF CHILLING: This is done to avoid the growth of microorganisms, which are responsible for spoilage of milk and bitter taste.

The milk, which is stored in silos, is pumped through pipeline to the balance tank, which helps to maintain the steady speed flow of milk in the Pasteurization machine. In, DMU there are 2 milk Pasteurization machine and 1 Cream Pasteurization machine. PURPOSE OF PASTEURIZATION: Pasteurization is a process where milk is heated to high temperature and cooled instantly, to destroy any microorganism. The pasteurized milk will stored in Pasteurized milk silos and then sent to pre-packing section. Packing is done in 500ml and 1000ml and stored in cold storage at 7°. PASTEURIZATION OF CREAM: The milk in bulk is taken to the cream separator. Here, the, cream is separated.

The cream is passed through cream Pasteurization Unit. This cream is sent to Butter Section. The milk with no fat is skimmed milk. This skim milk ‘is pumped back to Pasteurization Unit and heated to 72° using steam and chilled to 4° using chilled water and stored silos. This skimmed milk is sent to powder section. The pasteurize cream is mixed in portion to pasteurized milk. CURDS: Raw milk is heated to 90° and allowed to cool to 30°. Later culture is added to it and packed; the curd is formed in the packet itself. It is stored and packed in 200gms and 500gms. BUTTER: The cream, which is stored in cream refining tank, is taken to the churning section where it is churned.

Here butler fat and buttermilk are separated. The vacuum pump removes excess of moisture and butter comes out of continuous butter making machine (capacity – 1500 kgs/hour). Butler is packed in 100, 200 and 500 gms and also in 10, 25 gms, these are stored in deep freezer room with temperature – 22° and if the order of salt butter they mix the salt water with cream and other process is same. GHEE: There are 2 Ghee Boiler of capacity 1500 kgs/batch. A Butter of 2. 5 tons is melted and is brought to Ghee Boiler. Here it is heated to 116-117 degree Celsius for 15 minutes so that the residue is allowed to settle down and Ghee is passed to setting tank through clarifiers.

Later Ghee is allowed for cooling (at 30°-40°) and packed in Tin of Liter, 500 ml and 200 ml of pack and kept in the cold storage. PANEER: If there is excess of milk, then, Paneer is been made. The milk is heated to 900 for 15-20 minutes. Glacial acetic acid is added to milk and then milk is strained through fine muslin cloth. The solid potion is retained and is put in water and then it is put in chilled water and left overnight. Later it is packed and stored in cold storage. MILK POWDER: When there is excess of milk. Milk powder is made. The capacity of the powder plant is 12 tons. There are two sections – Evaporator and Spray Drier through which milk is converted to Milk Powder. In Evaporator, milk is boiled for 55° at high vacuum.

Milk is concentrated to drier 40-45% of milk is solid, moisture is removed and the milk power obtained consists of 4% moisture. PEDHA: Dharwad is famous for its delicious Peda. DMU has separate Peda section. About 80 Liters (depends upon the demand) is heated continuously for 3 hours till the milk is semi-solid, later sugar and other ingredients are added and stirred continuously on low flame. Later it cooled and it is shaped in small balls and packed. The milk produced here is differentiated by the content of fat and SNF |TYPE |FAT |SNF | |Toned ‘Milk |3. 1% |8. % | |Standard Milk |4. 5% |9% | |Shubham Milk |6% |9% | |Full Cream Milk |5. 1% |9% | The below table gives a brief idea of the milk products, their fat SNF, moisture Content: |PRODUCT |FAT |SNF |MOISTURE | |Butter |83% |1% |16% | |Ghee |99. % |- |0. 2% | |Pannier |20% |30% |50% | The production department has the following structure: Package of milk: The company has three machines with double head; six persons for packing the milk. The milk is heated from 70-80 degree temperature and compressed air for filling of milk. Total workers in this department are 24. Liquid milk weight in grams a) 200 ml=208 +/-3 gms b) 500 ml=517 +/-3 gms c) 10,00 ml=1034 +/-5 gms Curds weight: • 200 gms = 202 +or- • 500 gms = 503+or-2

Film length: a) 200 ml= 100 mm b) 500 ml= 150 mm c) 1000 ml= 230 mm While packaging of milk. The crate is washed from 3 to 5 degree temperature and then the milk is set in crate and the milk is stored in cold room. The temperature of cold room is 2 to 5 degree Celsius. 3. PROCUREMENT AND INPUT DEPARTMENT: Input required per day: Milk procurement up to 85000 liters 5 to 6 lakh liters of water 10,000 units of electricity 4 to 5 tones of coal Generator in case of electricity failure and manpower Quality Control: At different stages of production the officer from the Quality Control department keeps verifying the quality of the products frequently.

Any defects or unconformity to standards is immediately reports and necessary measures are taken to correct them. It is only that after the approval of this department the goods can be dispatched to the market. Waste materials are sent to Effluent Treatment Plant (ETP). The buttermilk liquid containing a small percentage of fat content is sold to the soap manufacturers, otherwise it is sent to a special tank with agitator rotating in it. Different chemicals are used and sterilized fresh water is released for agricultural purpose. Caution is taken with regard to the height of the chimney to avoid air pollution. Steam plant: In various steps of production for instance melting of butter to ghee etc. steam is required. This steam is produced in steam production plant where coal is used for this purpose. Everyday nearly 4-5 tones of coal are required. The ash is sold to the brick manufacturer. THE STRUCTURE OF P&I DEPARTMENT: Procurement and input department is play a vital role in the DMU. In any any milk union this department handles the procurement of the milk required amt to the production process. FUNCTIONS OF P&I: • Procurement of milk from milk producer’s co-operative societies. • Establishment of milk producer’s co-operative societies. • Encouraging farmers to produce more milk. • Provide fair price to the good quality milk. PROCUREMENT OF MILK:

Daily procurement of DMU is 80,000 liters/day on average. Procurement of milk seasonally variated from September – December the milk productivity is high and in summer it is low. M Milk collection process Milk procurement process has done all the 365 days and two times a day and procuring milk routes through transportation. DMU making Rs11 for cow milk and Rs13. 50for buffalo milk as minimum and other rate will depend on the SNF and FAT. After the chilling the milk is loaded and brought to the near by union. Once milk brought to the union it is rechecked for quality, quantity, freshness and then it sent for the further production process.

If the milk is spoilt in transit it brought to the notice of concerned society, in case of away society if the milk is spoilt due to carelessness/delay of the driver it is brought to the notice to the contractor who is responsible for the loss. ESTABLISHMENT OF DAIRY CO-OPERATIVE SOCIETIES:- This is the important task carried by the P&I dept, societies are established in villages. There should be a min 50 members from societies and there should surplus of 75 liters of milk collection per day. There should be localities should produce milk from buffalo or cow or both, there is cheap elected from members who has ability to run a society successfully he is responsible for selling the shares to the formers who contributed from the societies. Share of Rs100 each should be allocated a society should gather an Rs20, 000 from the society.

After registration, a commencing a general body meeting will held with 9 members who are influential and knowledgeable elected becomes director of the societies two as take as secretary and tester. It is the duty of secretary to maintain all records and ledgers of dairy transactions. The tester verifies quality of the milk a sheet a send with the carrier. PROMOTIONAL ACTIVITIES:- This dept takes some promotional activities to increase the rate of production of the milk. • Veterinary services to keep up the good health of cattle through a) Regular health Camps b) Emergency service round the clock c) First aid, Vaccination, Infertility Camps, Fodder • Artificial Insemination facilities for improvement of Cattle breed. Facilitating Training Programs regarding management of Cattle. • Supply of Fodder to the cattle. PRICE TO THE PROCURED MILK:- | |Fat content |SNF |Price/Liter | |Buffalo. |6% |9% |12. 60RS | |Cow’s Milk. |3. 5% |8. 5% |9. 75Rs | The price given below is based on the SNF and Fat 4. STORES DEPARTMENT: STRUCTURE:- The stores department in DMU follows the Cordex System (Coded Control System). A card is maintained for each item and a number is allotted.

The card attached to each article consists of amount balance, date of issue, purchase etc. this is later recorded in separated ledger book. The inventors are of different kind ranging from mechanical, spares, packing items to animal drugs, and stationary and veterinary drugs. There are at least 4000 different inventories. This department has the following services: It tries to maintain maximum and minimum level of inventory so as to avoid blockage of capital and storage. Ordinary and local available commodities are maintained at minimum possible level. Items of urgent and not easily available are stored sufficiently for further demand. Finished Goods Stores Department:

The FGS department has the following structure Finished Goods Stores: This department acts as an interface between production and Marketing Department. It is concerned with maintenance of finishes goods connected records. It receives all the finished goods and issues the stock to marketing department as per indents. It ensures that the goods are maintained properly with respect to quality. Accounts are maintained and daily and monthly report is submitted to the production. Marketing and Finance Department, as the products as perishable first-in-first-out method of inventory is followed 5. FINANCE DEPARTMENT: The structure of finance Department is as shown:

This Department is responsible for keeping all the inward and outward flow of money of union. It prepares budget every year and fi

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Project Report on Kmf, Dharwad by Samarth. (2016, Dec 19). Retrieved September 20, 2019, from https://phdessay.com/project-report-on-kmf-dharwad-by-samarth/.