Value Chain Analysis of Informal Dairy Processing Units in Haryana (India): A System Dynamic Approach
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FULL-LENGTH RESEARCH ARTICLE
Value Chain Analysis of Informal Dairy Processing Units in Haryana (India): A System Dynamic Approach Amit Thakur1 • Anil K. Dixit1 • Shiv Kumar2 • Gunjan Bhandari1
Received: 22 February 2020 / Accepted: 31 August 2020 Ó NAAS (National Academy of Agricultural Sciences) 2020
Abstract The study intends to examine the value chain of liquid milk of informal sector based on procurement systems by dairy processing units, applying simulation model Vensim PLE x32 package. Mapping of product flow and core actors involved in value chains are based on primary data pertaining to year 2019. The total sample size was 27 of small and micro dairy processing units in Karnal district of Haryana state. The study concluded that cost of milk procurement was the least in collection centre (Model-I). The integrated production and processing system (Model-II) could attain higher profits (Rs. 9.56/L) compared to Model-I (Rs. 2.65/L) and Vendor system, i.e. Model-III (Rs. 1.78/L). The identified three key interventions, viz. training in milk handling, packing and processing; efficient transportation and processing technology and efficient design of procurement systems need to be applied for leveraging of milk value chain. Keywords Value chain Raw milk Distribution Informal channels
Introduction Dairying has provided livelihoods to millions of the poorest in our country [6]. A large part of Indian population including 70.2 million rural households, primarily having small and marginal farmers and landless labourers, are connected directly or indirectly with the dairy sector [13]. Farm households derive triple benefits from dairy sector in the forms of nutritive food, supplementary income and productive employment for family labour [8, 11]. In the past more than three decades, the pace of production growth of livestock sector has continuously outperformed, in value terms the rate of production growth of most of the food and non-food grain crops. The dairying has become
& Anil K. Dixit [email protected] 1
Division of Dairy Economics, Statistics and Management, ICAR-National Dairy Research Institute, Karnal, Haryana 132001, India
2
ICAR-National Institute of Agricultural Economics and Policy Research, Pusa, New Delhi 110012, India
indispensable for gaining momentum in the growth of rural India in general and agriculture sector in particular. Value of output from livestock sector is dominated by milk product group which contributes around 66% of total value of livestock sector [12]. Milk procurement, processing and marketing is an important source of income for over 70 million milk producers, which signifies its role to alleviate rural income and employment [5]. Indian dairy industry is characterized by the dominance of informal milk distribution system which deals with 80% of total milk surplus [15], unlike advanced countries where 90% of milk is distributed through formal organized channels [10]. There also exist an economic significance of informal milk sector in terms of value addition [17]. Info
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