“DOODH KA DOODH AUR PAANI KA PAANI” REAL THREAT TO GLOBAL COMPETITIVENESS

OF

INDIAN DAIRY INDUSTRY

PRESENTATION

BY Mission Director

INTERNATIONAL IMPROVEMENT MISSION

Regd.office: #53-A, Sector 18-A, Chandigarh-160018

DOODH KA DOODH AUR PAANI KA PAANI

“Dekhio Preet ki reet bhali, Jal path saras bikai”“Bilag hoe ras jaie, Kapat khattaie parat puneh”.

Above quotation from our great epic “RAMAYNA” appears more relevant during present times than it was during “RAM RAJYA’ in our country. As per essence of this

quote, convention of love bond between milk and water is so good that water mixed with milk gets sold at a price that milk commands in the market. However, when deceptive bitterness (KAPAT) is mixed in it then milk component separates from water and its taste gets spoiled. Divine nectar (AMRIT) often becomes poison (ZAHIR) while it remains in transit between milk producer and consumer due to mishandling and unethical trade practices being followed by unscrupulous middlemen dominating the market scenario.

Research findings of in-depth study conducted by our Mission associates indicate techno-commercial limitation and misuse of 60:40 two axis formulae (used for milk purchase transactions) by one and all as single factor responsible for most of the quality related problems and poor financial performance of dairy plants. Despite gross margin of more than Rs.7/Kg between consumer price of pasteurized milk and farm gate price of raw milk most of the dairy plants are either in loss or making only nominal profits.

DOODH KA DOODH AUR PAANI KA PAANI Analysis of actual milk bills of prominent dairy institutions in India using innovative digital

analytical technique (D.A.T.) developed by our Mission associate in Canada indicates hidden loss of Rs.1.00/Kg to Rs.3.00/Kg. in milk purchase transactions. Unfortunately these hidden losses remain undetected with conventional milk billing calculations. Due to non availability of accurate method for analyzing exact % of cow milk, buffalo milk and added water in the mixed milk received on the dairy dock it is almost impossible to find out actual net worth of mixed milk and co-relate the same with total payment released by the dairy plant against manipulated milk bills.

Digital analytical technique (D.A.T.) has inbuilt capability to analyze complex multiple equations relating to mixed milk containing cow milk, buffalo milk and added water (used for dilution and manipulation of milk bills) and provides accurate output as net worth of mixed milk received on the dairy dock. Simple arithmetical cross check system evolved by the company under this technique convincingly points out hidden loss suffered by the purchaser due to conversion of buffalo milk as cow milk or vice versa and added water getting paid as milk.

An actual case study of a prominent dairy institution in north India indicated loss of over Rs. 100 crores per year only due to dilution and manipulation in milk bills (Assuming no adulteration except added water ) concerned senior executives of the organization admitted and confirmed this loss (on camera) when arithmetically accurate and scientifically logical digital analysis using D.A.T. was explained to them.

(documentary and video evidence is available with us)

DOODH KA DOODH AUR PAANI KA PAANI MILKI FACTS

C.L.R based 60:40 formulae for purchase of buffalo milk and cow milk (60% weightage to fat value and 40% for SNF) is accurate up to nine decimal points provided S.N.F: FAT ratio remains undisturbed as compared to specified standard i.e. 8.84/6.5 = 1.36 for buffalo milk and 8.50/3.50 = 2.42851428 for cow milk.

Cow milk is purchased on two axis basis by allocating fat value for cow milk as ½ of per kg fat rate for buffalo milk and S.N.F value as 1/3rd of per kg fat rate for buffalo milk containing 6.50% and 8.84 S.N.F.

Example 1:- If specified rate for standard composition buffalo milk (6.50% fat and 8.84% S.N.F.) 29 C.L.R. is Rs 200/kg fat then per kg rate for standard buffalo milk would be Rs 13.00/kg (6.50x200)/100 and fat value Rs 120/kg [(13x0.60)/6.50]x100 and S.N.F. value Rs.58.8235294/kg [(13x0.40) /8.84]x100.

Example 2:- If specified rate for standard buffalo milk 29 C.L.R. (6.50% fat and 8.84% S.N.F.) is Rs 200/kg fat then corresponding fat value for cow milk would be

Rs. 200/2 = Rs.100/kg fat and S.N.F. value for cow milk would be Rs. 200/3 = Rs. 66.66666666/kg S.N.F. thus per kg rate for standard composition cow milk would

be Rs9.16666666/Kg. (Thumb rule or empirical formulae))or {(3.50x120+8.50x58.8235294)/100} =Rs.9.20/kg).{Gravimetrically}

So long standard buffalo milk 29 C.L.R.(6.50% fat and 8.84% SNF) is mixed with only standard cow milk 30 C.L.R. (3.50% fat and 8.50% S.N.F.), composition of mixed milk can easily be analyzed and worth of mixed milk can be accurately worked out even without using Digital Analytical Technique. (D..A.T.)

Example 1:- 50% B.M when mixed with 50% C.M , worth of resultant milk would be Rs.(13.00+9.20)/2 = Rs.11.10/kg. Mixed milk prepared in this manner would contain [(6.50+3.50)/2 =5.00% Fat and (8.84+8.50)/2=8.67 % S.N.F.] C.L.R. of mixed milk so produced would be (29+30)/2=29.5

DOODH KA DOODH AUR PAANI KA PAANI

Example 2 :- 75% B.M when mixed with 25% C.M worth of resultant milk would be: Rs. (13.00x75/100+9.20x25/100) =Rs.12.05/Kg. Mixed milk prepared in this manner would contain [(6.5+5)/2=5.75% Fat and (8.84+8.67)/2=8.755 % S.N.F.

C.L.R. of mixed milk so produced would be (29+29.50)/2=29.25

Example 3 :- 75% C.M when mixed with 25% B.M worth of resultant milk would be: Rs. (13.00x25/100+9.20x75/100) =Rs.10.15/Kg. Mixed milk prepared in this manner would contain [(5.00+3.50)/2=4.25% Fat and (8.67+8.50)/2=8.585 % SNF] C.L.R. of mixed milk so produced would be (30+29.50)/2=29.75

When mixed milk ( B.M.+ C.M) is accepted by the purchaser without gravimetric analysis for each individual purchase transaction then added water (diluent) and manipulation in milk bills (adding cream in buffalo milk and extracting fat from buffalo milk and converting that milk as cow milk after dilution with water produces multiple complex formulations that can not be analyzed with conventional milk billing calculations. C.L.R. of mixed milk can easily be modified by the seller using edible or synthetic adultrants so analysis of mixed milk carried out by quality control laboratory becomes ineffective and futile exercise to eliminate or control such hidden losses. Digital analytical technique evolved by one of our mission associate in Canada is arithmetical correct and scientifically logical to deal with this critical issue /unresolved problem called manipulation by dilution.

DOODH KA DOODH AUR PAANI KA PAANI C.L.R. BASED FORMULAE FOR FAT% & S.N.F%

S.N.F.=C.L.R./4+0.2xFat+C.L.R./100

100% B.M.:- S.N.F=29/4+0.2x6.5+29/100=8.84%

{75% B.M+25% C.M}.:- S.N.F=29.25/4+0.2x5.75+29.25/100=8.755%

{50% B.M.+ 50% C.M.}:- S.N.F= 29.50/4+0.2x5+29.5/100=8.67%

{75% C.M+25% C.M.}:- S.N.F,=29.75/4+0.2x4.25+29.75/100=8.585%

100% C.M:- S.N.F =30/4+0.2x3.50+30/100=8.50%

*Using this formulae unknown (any one component i.e Fat, S.N.F. or C.L.R.) can be worked out by solving the formulae equation incorporating known values of other two components)

DOODH KA DOODH AUR PAANI KA PAANI REFERENCE BENCH MARK PARAMETERS FOR (BUFFALO MILK)

S.No Parameter Measure Value (basis assumed rates)

1 Basic rate Rs./Kg.Fat Rs.200/Kg fat2 Basic rate Rs./Kg.Milk Rs(6.5x200)/100=Rs.13/Kg.3 Basic rate (60:40) Rs./Kg. Fat Rs.{(13x0.60}/6.50}x100=Rs.120/Kg4 Basic rate (60:40) Rs./Kg. S.N.F. Rs.{(13x0.40)/8.84}x100=Rs.58.82/Kg5 Total solids in milk % (6.50+8.84)=15.346 Basic rate (T.S. basis) Rs./T.S. (13/15.34)=Rs.0.8474576277 S.N.F. :FAT ratio S.N.F/FAT (8.84/6.50)=1.368 C.L.R. (Standard) Number 29 (Basis specific gravity)9 Natural water content % (100-15.34)=84.6610 Color Appearance White

11 * Any modification or manipulation in above parameters would affect the true worth of milk and confuse the purchaser and ultimately result in hidden loss in milk purchase transactions that remains undetected with conventional milk billing calculations.

DOODH KA DOODH AUR PAANI KA PAANI REFERENCE BENCH MARK PARAMETERS FOR (COW MILK)

S.No Parameter Measure Value (basis assumed rates)

1 Basic rate Rs./Kg.Fat Rs(9.20/3.50)x100=.262.857/Kg fat

Rs(.9.1666666/3.5)x100=Rs.261.90/Kg.Fat (Empirical formulae or

thumb rule)2 Basic rate (Gravimetric) Rs./Kg.Milk Rs(9.20/Kg) {(3.5x120/100)+(8.5x58.82/100)3 Basic rate (60:40) Rs./Kg. Fat Rs.{(9.20x0.60)/3.50)}x100=Rs.157.71/Kg4 Basic rate (60:40) Rs./Kg. S.N.F. Rs.{(9.20x0.40)/8.5)}x100=Rs.43.29/Kg5 Total solids in milk % (3.50+8.50)=12.006 Basic rate (T.S. basis) Rs./T.S. (9.20/12)=Rs.0.766666667 S.N.F. :FAT ratio S.N.F/FAT (8.50/3.50)=2.42857148 C.L.R. (Standard) Number 30 (Basis specific gravity)9 Natural water content % (100-12)=8810 Color Appearance Slightly yellow

* Any modification or manipulation in above parameters would affect the true worth of milk and confuse the purchaser and ultimately result in hidden loss in milk purchase transactions that remains undetected with conventional milk billing calculations.

DOODH KA DOODH AUR PAANI KA PAANI REFERENCE BENCH MARK PARAMETERS FOR (MIXED MILK 50:50)

• S.No Parameter Measure Value (basis assumed rates)

1 Basic rate Rs./Kg.Fat Rs.{(13+9.20)/2}/{(6.5+3.5)/2}x100=Rs.222/Kg 2 Basic rate Rs./Kg.MilkRs(13+9.20)/2=Rs.11.10/Kg.3 Basic rate (60:40) Rs./Kg. Fat Rs.{(11.10x0.60)/5.00}x100=Rs.133.204 Basic rate (60:40) Rs./KgS.N.F. Rs.{(11.10x0.40)/8.67}x100=Rs.51.215 Total solids in milk % (5.00+8.67)=13.676 Basic rate (T.S. basis) Rs./T.S. (11.10/13.67)=Rs.0.8119970737 S.N.F. :FAT ratio S.N.F/FAT (8.67/5.00)=1.7348 C.L.R. (Standard) Number 29.50 (Basis specific gravity)9 Natural water content % (100-13.67)=86.3310 Color Appearance Off white

11 * Any modification or manipulation in above parameters would affect the true worth of milk and confuse the purchaser and ultimately result in hidden loss in milk purchase transactions that remains undetected with conventional milk billing calculations.

DOODH KA DOODH AUR PAANI KA PAANI HIDDEN LOSSES IN MILK PURCHASE TRANSACTIONS

Unscrupulous middlemen/ agencies between milk producers and processing plants siphon out Rs. 2.00 to Rs .3.00 per Kg. by dilution and manipulation while milk remains in transit between milk producers and dairy plants.

There is no analytical system to accurately work out hidden loss on account of conversion of B.M to C.M or vice versa and to know accurately the actual worth of diluted and manipulated mixed milk received on the dairy dock.

Skilled manipulators are making effective use of dilution with water and manipulations in milk billing record, causing significant hidden loss to dairy plants purchasing such milk.

Conventional milk billing calculations are inadequate for analyzing these hidden losses. “Hansa test” evolved by NDRI few decades ago can only tell if cow milk is mixed with buffalo milk but it does not indicate the quantity of cow milk added to buffalo milk.

Most of the dairy countries purchasing only cow milk use cryo-scope reading as basis for analyzing added water in raw milk. Since freezing point of cow milk, buffalo milk and water have different values so using cryo-scope readings as basis for purchase of mixed/ manipulated milk for working out true worth of raw milk would also be a futile exercise.

Digital Analytical Technique (D.A.T.) is arithmetically accurate , scientifically logical and effective in eliminating/controlling such hidden losses.

DOODH KA DOODH AUR PAANI KA PAANI PRIZE OF RS.1 LAC FOR MILKI QUIZ

 • Our Mission announced a prize of Rs. One lac three years ago to any one who can

accurately analyze mixed milk containing Buffalo milk, Cow milk with certain amount of added water used for dilution/manipulation and work out net worth of such mixed milk .

• Prize money has not been claimed by anyone so far despite wide publicity and issue of circular to large number of commercial dairy plants and eminent dairy institutions in our country.

• Our contention explained in this presentation thus gets testified so it deserves our immediate attention and professional intervention to eradicate and control such hidden losses in order to improve quality, productivity and profitability of dairy business operations.

• Professionals managing dairy institutions can easily improve profitability of dairy business by Rs.2.00 to Rs 3.00 per Kg. by controlling such hidden losses without any negative impact on their milk procurement.

DOODH KA DOODH AUR PAANI KA PAANI SAWAL SAU CRORE KA

An ounce of live example is better than a pound of precept so we have decided to sum up our presentation with actual case study of a prominent dairy institution that suffered hidden loss of more than Rs.100 crores per year due to dilution in milk and manipulation in milk bills.

Summary statement of milk bill of institution in this case study is given on the next slide for your information and examination.

Detailed digital analysis of this case as carried out by our Mission associate using innovative digital analytical technique (D.A.T.) indicate hidden loss of more than Rs. 100 crores in one year.

Please refer to Excel file titled “SAWAL SAU CRORE KA” for detailed digital analysis (Attachment)

Any professional providing due justification for this analysis carried out by our mission associate as arithmetically incorrect, scientifically illogical or not co-related with 60:40 two axis formulae used by dairy plants for purchasing raw milk would be entitled to receive a prize of Rs.one Lac. For detailed terms and conditions to participate in this competition for claiming prize money you may contact us on our postal address or email account.

DOODH KA DOODH AUR PAANI KA PAANI

TECHNOECONOMICS OF DAIRY BUSINESS

SWAL SAU CRORE KA

CASE STUDY-MFP2006

{BASIS PROFIT & LOSS}

Category Quantity Quantity Fat Total Solids S.N.F. Rate PaymentB.M/C.M % Lac Kgs % % % Rs/Kg. Lac Rs.

B.M . 49.41852 69.69 7.13 15.74 8.61 13.92 970.0848

C.M. 50.58148 71.33 3.73 11.59 7.86 8.99 641.2567

M.M 100 141.02 5.41 13.64 8.23 11.63 1640.063