Different Methods of Milk Procurement
Milk procurement refers to the collection of milk from dairy farmers and its delivery to milk processing plants or chilling centres. In India, milk is procured through various systems depending on local practices, infrastructure, and ownership models. Below are the major milk procurement methods, along with their merits and demerits:
1. Direct Procurement by Dairy Plants
In this method, the dairy company or cooperative collects milk directly from farmers through its own network of milk collection centres or chilling units.
Merits:
- Eliminates middlemen, ensuring farmers receive a better price.
- Allows better control over milk quality and hygiene.
- Helps build a long-term relationship with farmers.
Demerits:
- Requires heavy investment in infrastructure like chilling plants and transport.
- Needs trained manpower for milk testing, record keeping, and logistics.
- Difficult to cover remote villages without local support.
2. Procurement through Middlemen or Contractors
Milk is collected from farmers by local agents, contractors, or vendors, who then sell it to dairy plants or processors.
Merits:
- Convenient for dairy plants, as agents handle collection and transport.
- Agents can reach areas where dairies may not have presence.
Demerits:
- Farmers get lower prices due to exploitation or commission cuts.
- High risk of milk adulteration or dilution.
- Lack of transparency and poor traceability of quality.
3. Procurement through Cooperative Societies (Anand Pattern)
This is the most popular and organized system in India. Farmers form village-level cooperative societies, which collect milk and send it to district-level unions and then to state federations (like AMUL, Aavin, Verka, etc.).
Merits:
- Fair price to farmers based on quality.
- Profits are shared among members.
- Encourages clean milk production, record keeping, and training.
- Ensures regular payment and support services (veterinary, feed, training, etc.).
Demerits:
- Requires strong governance and leadership to avoid corruption or mismanagement.
- In some regions, political interference hampers cooperative functioning.
4. Bulk Milk Coolers (BMC) Based Procurement
Milk is collected from nearby farmers and cooled immediately using Bulk Milk Coolers placed at village or cluster level. It is then transported to processing plants.
Merits:
- Maintains high milk quality by reducing bacterial growth.
- Reduces spoilage and increases shelf life.
- Enables collection of larger quantity from multiple villages.
Demerits:
- Initial cost of BMCs and power supply is high.
- Requires skilled staff to operate and maintain equipment.
5. Milk Collection through Self-Help Groups (SHGs) or Women Dairy Federations
Women-run SHGs collect milk at village level, often supported by NGOs or government schemes.
Merits:
- Empowers women and promotes rural entrepreneurship.
- Encourages financial inclusion and capacity building.
- Often linked with government subsidies or social welfare schemes.
Demerits:
- Limited milk volume due to small herd size.
- Lack of professional management or technical support in many cases.
Different Criteria of Milk Payment
Dairy farmers are paid based on several criteria that assess the quantity and quality of milk supplied. The major payment systems are:
1. Volume-Based Payment
Farmers are paid based only on the quantity (litres) of milk supplied.
Merits:
- Simple and easy to implement.
- Suitable for areas with less testing infrastructure.
Demerits:
- No incentive for better quality milk (fat/SNF).
- Farmers may dilute milk to increase volume.
2. Fat-Based Payment
Payment is based on the fat percentage in the milk. The formula used is:
Payment = Quantity of milk × Fat% × Rate per kg of fat
Merits:
- Encourages farmers to improve feed and breed for higher fat content.
- Suitable for producing ghee, butter, and cream-based products.
Demerits:
- Does not consider SNF (solids-not-fat), which is important in milk processing.
- May lead to manipulation of fat levels using chemicals or additives.
3. Fat + SNF Based Payment (Two-Parameter System)
This is the most common method in India today. Payment is made based on both fat and SNF content using the following formula:
Payment = Quantity of milk × (Fat% + SNF%) × Composite rate
Merits:
- Balanced approach, rewarding both fat and SNF.
- Reflects true economic value of milk.
- Reduces chances of milk adulteration.
Demerits:
- Requires regular testing and infrastructure for both fat and SNF.
- Slightly complex for illiterate farmers to understand.
4. Quality-Based Payment (Three-Parameter or More)
This includes Fat%, SNF%, and other factors such as bacterial count, MBR time, freezing point, etc.
Merits:
- Encourages clean milk production.
- Helps dairy plants to maintain international quality standards.
- Rewards high-quality producers.
Demerits:
- Requires high-end testing equipment and trained staff.
- Not feasible for small or remote village societies.
Best Method and Why
The best milk payment system is the Fat + SNF based payment system.
Reasons:
- It considers both the major commercial components of milk.
- It is fair, widely accepted, and scalable.
- Suitable for the Indian dairy market, where milk is used for multiple products (paneer, curd, sweets, etc.)
- It can be easily implemented using Electronic Milk Testing Machines at the village level.
Conclusion
A fair and transparent milk procurement system is essential for improving milk quality, farmer income, and consumer safety. Among various systems, cooperative-based procurement with Fat + SNF based payment strikes the best balance of efficiency, equity, and quality assurance. With growing demand for high-quality milk and milk products, India must continue to invest in clean milk production, milk testing infrastructure, and farmer training at the grassroots level.