Kmf Brief Write Up.docx

Karnataka Milk Federation: Ensuring Rural Prosperity The Karnataka Milk Federation (KMF) has strived hard to create a supportive and conducive environment for the holistic growth of dairy cooperatives as autonomous economic and social institutions. This has significantly contributed to creating a self-reliant and vibrant rural economy in Karnataka. The Karnataka State Government is also according top priority through milk price incentive and financial support to dairy infrastructure and other programs. Dr V. Kurien, Father of Indian dairying, once said “When I witness the pace at which the dairymen of Karnataka are progressing, I fear that they may overtake our Amul. But, I also ardently desire that they surge ahead”. Karnataka Cooperative Milk Producers’ Federation Limited (KMF) is almost there, having achieved second position after Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF) in terms of milk procurement and total turnover. In four decades, Karnataka has turned from a milk-deficit into a milksurplus state based on strong cooperative dairy movement. Although Karnataka stands third position in milk production amongst southern states and 11th among the states in India, in cooperative milk procurement, it stands second at the national level and leading in South India. Today the milk producers of Karnataka get the best milk price for the milk supplied to cooperatives and consumers get milk at very competitive prices. More than 82% of the consumer rupee of milk is transferred to producers. Achievements of the KMF are summarized in Table 1. Table 1: KMF - Key performance parameters. 201516

2018-19

Particulars

197576

1995-96

2005-06

Farmer (lakhs)

0.03

13.87

18.10

Annual average procurement (lakh kgs/day)

0.66

12.07

29.64

Annual average sales (lakh liters/day)

0.64

11.44

17.14

Annual average curd sales(lakh kgs/day)

0.03

0.11

1.20

3.96

4.16

4.39

9

Total turnover (in ` crores)

3.94

535.59

1,753

11779

13133

13550

-

members

23.51 64.88 34.38

2016-17

23.94 65.51 34.01

2017-18 (upto

Jan’19)

24.60

24.6 5

70.81

75.8 2

34.72

34.7 6 4.5

Genesis of cooperative dairy development The cooperative dairy development activity in Karnataka started during 1975 with financial

assistance

from

International

Development Agency.

Karnataka

Dairy

Development Corporation (KDDC) was formed for implementing the dairy development program under the technical guidance of National Dairy Development Board (NDDB). Initially, cooperative dairying was implemented in eight districts in southern Karnataka. In 1984, KDDC was converted into the Karnataka Cooperative Milk Producers’ Federation Limited (KMF) and dairy development was extended to all districts of the state, under Operation Flood-II and III. As of now, the KMF has 14 District Milk Unions covering all the 30 districts of Karnataka. KMF and its Unions have producer-elected boards of directors to manage the activities. Similarly, the village cooperatives also have elected management committees. Effectively, the milk producers are democratically governing the entire federal cooperative structure of KMF. This has helped the higher tier organizations to understand needs of the lower levels so as to serve them better. The effective functioning of all the three tiers helps in flowing the financial gains to the milk producers. In short, the instruments of dairy development of the state are effectively in the hands of the farmers themselves. Milk Procurement Over the four decades, KMF has been successful in reaching over 2.4 million farmer families in 22908 villages, thereby covering more than 80% of the villages in the State. There are 14471 Dairy Cooperative Societies (DCS) of which 3,814 are Women DCS. More than 96% of the DCS are in profit. They have been able to bring about such changes as to be successfully creating productive employment, overcoming poverty and achieving social integration. The average milk procurement during the year 2018-19(upto

Jan’19) was 75.82 lakh kgs per day (LKPD), with peak reaching up to 84.44 LKPD( JUNE’18) . During the year 2017-18, KMF has registered a CAGR of more than 9% in procurement growth, during the last ten years. KMF Vision-2025 document has projected to procure about 133 LKPD, with peak reaching up to 153 LKPD by 2025.

To support milk production and improve productivity of animals, KMF has implemented efficient and effective producer-responsive technical input services such as genetic up gradation of bovines, control of diseases, providing timely veterinary health care and first-aid facilities, accelerating fodder development, implementation of artificial insemination program, supply of balanced cattle feed, inculcation of modern animal husbandry practices among farmers and other production enhancement activities.

Producer empowerment The KMF has made large investments in member education and training. It has one central training institute and strategically located two regional training centres. These training centres have state-of-the-art facilities, competent trainers and well-equipped hostels to conduct wide range of need-based training programmes to farmers, DCS staff, DCS management committees, officers of the Unions and Federation. Due to these training programmes, today the milk producers of Karnataka are better informed about technologies and economics of more efficient and quality milk production and are motivated for higher achievements in dairying. Regular interactions with the farmers at different levels have helped KMF to understand the needs of farmers and to fine-tune its developmental efforts. Business strategy To give remunerative price to producers and to give value for money to customers, KMF is striving to excel on three critical factors of business – Quality, Cost and Delivery. •

QUALITY – Under the concept of “Quality excellence from cow to consumer”, KMF has implemented best quality practices at all stages of procurement, processing and marketing. This has resulted in best quality milk and milk products being supplied to consumers.

•

COST – Constant and sustained efforts are being made to minimize price spread between the purchase price to producers and selling price to consumers. Although KMF gives, one of the best price in the country for the purchase of cow milk to farmers (excluding Govt subsidy to farmers), the selling price to consumers is one of the least in the country. More than 82% of the consumer rupee is being passed on to producers.

•

DELIVERY – Nandini milk in the state is known for prompt and assured delivery, at any time and at any place in the state. The hallmark of Nandini milk is that, it

has never missed its early-morning appointment with consumers in all these years. It is on-time every-time. Leveraging quality for business competitiveness Of late, KMF is giving greater emphasis for procurement of quality milk from DCSs. It has adopted the theme “Quality Excellence from Cow to Consumer.” Many Clean Milk Production (CMP) initiatives have been implemented at all the stages of procurement, processing and marketing. Among these CMP initiatives, noteworthy is the setting up of Community Milking Parlours in villages. This system has several advantages such as prevention of mastitis in milch animals and improvement of productivity. The milk from milking machines, collected through Automatic Computerised Milk Collection Units is chilled directly in Bulk Milk Coolers. This chilled raw milk, untouched and unadulterated by human hands, has very high microbiological quality, comparable to international standards. This high quality milk is being utilised for manufacturing high quality value added milk products. Other Clean Milk Production (CMP) Initiatives include: •

Providing Electronic Weigh Scales, Automatic Milk Collection Units and Bulk Milk Coolers to DCSs;

•

Training of milk producers on hygienic management of animals, milking methods and handling of milk;

•

Providing SS-304 pails to producers;

•

Providing antiseptic solutions for udder cleaning on pre and post milking;

•

Training to DCS staff on CMP;

•

Replacing aluminium milk cans and collection vessels with SS-304;

•

Posters, documentary films and booklets on Clean Milk Production.

Milk processing and marketing KMF is creating necessary milk processing facilities, cattle feed plants and other infrastructure from time to time in the state. Some notable facilities, including the Mega Dairy and Mother Dairy at Bangalore, Hi-tech Product plant at Channarayapatna, incorporate the latest state-of-the-art-technology in milk processing and product manufacturing. Several infrastructure projects such as milk products manufacturing

facilities, milk powder conversion facilities, UHT and Flexi plants, new generation cattle feed plants, etc are under implementation. Cost competitiveness is another important factor for continued viability of milk unions and to ensure that its producer members received the highest possible share of the consumers' rupee. The gap between the producer and the consumer price of milk is being reduced by improving efficiency in processing, and reducing costs in collection, processing and distribution of milk and milk products. These efforts are benefiting both the producers as well as consumers. One such noteworthy initiative towards achieving cost competitiveness is the implementation of Total Energy Management Programmes by the Unions of KMF, conducted with the assistance from NDDB and IRMA. This has resulted in huge savings in energy and water consumption. In recognition to these stellar efforts, the Milk Unions of Karnataka are being regularly conferred with Energy Management Awards by Bureau of Energy Efficiency of Government of India. The value addition at procurement and processing stages can be realized by the cooperatives only through better control over marketing. Hence, KMF is making all out efforts for marketing of milk and milk products, and is successful in garnering a significant market share of more than 65% in liquid milk in the state, which is considered to be one of the highest by a cooperative brand. KMF marketed 7.77 LLPD (lakh litres per

day) of milk during 1990 which has increased to 34.75 LLPD during 2018-19(upto Nov’18). KMF is market leader in selling curds to the tune of 4.65 LKPD , which is highest in the country. A marketing chain consisting of nearly 3,000 retail outlets, across the state ensures timely availability of Nandini milk and milk products to consumers. Nandini with its brand motto of “Spreading wealth of health” has become synonymous with assured quality and timely supply of milk and milk products at competitive prices. KMF has introduced wide range of milk and milk products, across all categories catering to various consumer age groups and taste profiles at varied price points. Now, under Nandini brand, over 65 different milk and milk products in more than 250 SKUs (Stock Keeping Units) are being marketed. KMF believes that a loyal consumer is key to growing the brand image and hence making all-out continuous efforts to delight customers by offering wide range of high quality products at highly competitive rates, unmatched by any competitor in the market.

KMF is also exporting skimmed milk powder, whole milk powder, UHT milk and other milk products to Nepal, Oman, Madagascar, Myanmar, Bangladesh, Pakistan, Singapore, Thailand, Philippines, Russia, etc. Recently, several indigenous sweets were exported to USA. UHT milk is also being supplied to the defence forces. Support from Karnataka Government

Government announced this scheme during the year 2008-09 with the objective to encourage rural farmers to take up dairying by giving Rs.2/- per litre as incentive. Government with effect from 14.5.2013 enhanced this incentive to Rs.4/- per litre. About 8.4 lakhs milk producers are being benefitted by this scheme. This scheme has resulted in enormous increase in milk procurement as a result post implementation of Rs 4/ Litre incentive. Government of Karnataka raised the incentive from Rs.4/- to Rs.5/- (from Dec’16) for every litre of milk supplied by producer to cooperatives Ksheera Bhagya Scheme - The Ksheera Bhagya Scheme was launched on 1 st Aug

2013 by GOK in co-ordination with KMF to provide nutritious food with protein and fat which is essential for healthy growth and all-round development of School Children as well as Anganwadi in the State. Under this scheme 150 ml of Nandini milk is being distributed freely to more than 1 crore children, five times a week. This program is not only assisting in eradication of prevailing malnutrition in children of the state, but also facilitating disposal of around 8 Lakh litres of surplus milk of our farmer members. The Government of India is also supporting cooperative dairy development in Karnataka through

Rashtriya

Krishi

Vikas Yojana

(RKVY),

National

Program

for

Dairy

Development(NPDD) and National Dairy Plan. KMF has demonstrated that with appropriate policy environment and supporting infrastructure and services, Dairy Cooperative Societies can become engines for the growth of rural sector and help to contribute towards reduction in poverty. As a testimony to this, the World Bank experts have noted in an assessment study of villages with DCSs in Karnataka that “There is a positive impact on those who are at the lower end of the economic ladder”.