Pradesh Milk Federation

7/29/2019 Pradesh Milk Federation

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PRADESH

MILKFEDERATION


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GISTMr. Mohan Kumar,50, is newly appointed Managing Director

at Pradesh State Co-Operative Milk producers Federation.

PMF was set up in 1985, with headquater in Raajpur city.

PMF have 3 tire system.

Village level- district level milk union- board of milk federation

PMF.

It provides the farmer a remunerative price and an assured

outlet for his or her entire milk production throughout the

year.PMF showed a loss Of Rs 1.5 crore in march 2001 and Rs 5

crore in march 2002.


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Mr. Mohan was an engineer with several years of production

experience in the textile industry.

Mr. Mohan strongly believed that company failed because they did

not use the degree of freedom they already had.

The PMF board od directors had farmer representatives from eachdistrict union as well as some government nominess.

Mr. Ethiraj Kasturi, 46, Manager of Dairy Extention briefed the new

MD about extention activities.

He told the MD that the scope and reach of PMFS extention

activities was increasing and were satisfactory but the cost ofproduction for farmers was on the rise.

At the present procurement price, he had estimated that a farmer

with two milch animals could make a net profit of less than Rs. 1000

annually from dairy farming.


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Mr. Pradeep Kanga, 48, Manager (Procurement) then briefed

the new Managing Director about the milk procurement

activities at PMF.

The steady procurement price provided by the village dairy

co-operative, farmers in villages located near the privatedairies had the best of both worlds.

They sold the milk at higher prices to private dairy in summer

and what ever milk was refused by the private dairy in winter

was sold to the co-operative.

Mr. Pradeep Kanga noted that this behaviour of farmers was

against the co-operative norms and looked down upon by the

village co-operatives, but little could be done by the PMF to

prevent it.


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Mr. Ashwin Prasad, 47, Manager said milk production was

typically high in winter compared to summer, while liquid milk

consumption was steady throughout the year, adequate

processing facilities were essential to convert surplus milk

procured in winter into milk powder, butter, butter oil, gheeand other products for storage and sale across the year.

Mr. Murlidhar Mathur, 40, Manager said that the demand for

milk was growing at the same rate as the population within

the state.


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PROBLEMSDairy Extension

Inspite of extension production cost for farmers is high ( net

profit less then Rs 1000 with 2 animals).

Village Cooperative pressurizing PMF to increase

procurement price.

Milk Procurement

Small pvt dairies have set up in 1995 the procures 5 llpd a

year.

Villagers sell milk to pvt to get higher price and in winter themilk refused by pvt was sold to PMF.

This is against norms but no actions has been taken against

the chairperson.


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Milk Processing

In winter milk production is more compared to summer but

demand is constant throughout.

In summer when they lack milk , butter milk, butter oil that

they make with excess milk, mix that with skim milk powder

and blend it with fresh milk and sell.

All these led to unavoidable cost of Rs 3- 4 per liter.

Liquid Milk Sale

Higher processing cost , packaging cost , higher retailer marginincreased cost to Rs 12 for 500 ml

Net Profit on the product was thin .

Retailer were even not interested to sell.


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Milk Product Sales

Profitable in the liquid market section of the market due to

low distribution and packaging cost.

Selling of the remaining whitener in kolkata wholesale market

unbranded.

Losses on sale of skim milk powder.

Environmental Question

Reduction of market share due to the entry of foreign

competitors.


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SOLUTIONSProper market research of the customer requirements.

As mentioned in the case study that raajput is quality

consicous and not price offering products accordingly.

Better packaging techniques.

Long lasting products.

Can have line extention.

Proper promotion of products.

Offering varities of product.

Making strategies to increase the profit.

Documents

Pradesh Milk Federation