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Milky way to making good

Dairy produce is the currency and women the protagonists in a business that has proved a blessing for more than 115,000 farmers in five states

Kanya Venaramji Jat has studied till class X but until a few years ago, she knew nothing about finances, budgeting or bank accounts. “These are not things we are taught in school,” says the 36-year-old resident of Karanwa village in Rajasthan’s Pali district. “Then we get married and our husbands take care of the finances. Many women don’t even get to know how much money comes into the home.”

That’s the past. In the present, Ms Jat has progressed to running an enterprise. She is the chairperson of a milk producer company (MPC) called Asha, based in Udaipur, which has more than 35,000 members, all women who earn their living from the business of milk. Ms Jat helps these members increase their incomes and manage their finances.

Asha is one of five MPCs set up under the Dairy Health and Nutrition Initiative India (DHANII) Foundation, a collaboration launched in 2016 by the Tata Trusts and NDDB Dairy Services, a subsidiary of the National Dairy Development Board. Include the other four in the group — Shwetdhara in Ayodhya, Uttar Pradesh; Sakhi in Alwar, Rajasthan; Ruhaanii in Sirsa, Haryana; and Indujaa in Yavatmal, Maharashtra — and you have in excess of 115,000 milk producers, 95% of them women, who are also members and shareholders of these companies.

DHANII, the implementation arm of the wider-ranging Tata Dairy Mission, was set up to bolster the incomes of rural families by supporting them in taking up milk production as a supplementary business alongside farming. The programme has evolved so well that milk production has become the mainstay for many of these families.

Dairy farmers belonging to the Sakhi Mahila milk producer company from Nithari village in Rajasthan’s Alwar district
Dairy farmers belonging to the Sakhi Mahila milk producer company from Nithari village in Rajasthan’s Alwar district

Ms Jat’s family, for instance, were once agriculturists who owned two buffaloes on the side. “With my earnings from the business, we were able to buy so many more cows and buffaloes that my husband has given up farming to lend me a hand in the dairy business,” she says (the Jat family makes a minimum of 35,000 a month from dairy).

Dairy has always made sense in India. More than 100 million farmers in the country earn their livelihood from it and some 70 million of them own at least two or three milch animals. The dairy sector contributes around 5% to the national economy, and also plays a critical role in ensuring food security, reducing poverty and creating a sustainable income stream for small and marginal rural folks.

World leader

India is the world’s largest producer and consumer of milk, accounting for 24.64% of global milk production in 2021-22. Milk production in the country has grown by 58% in the 2015-23 period. Despite the positives, dairy is still not perceived as a profitable venture by many farmers. Milk yields remain well below international standards and the sector struggles with challenges such as unorganised value chains, predatory middlemen, and cattle breed of poor health and quality.

DHANII has tried to craft a model that streamlines, formalises and standardises processes, while bringing more organisation to operations, particularly at the village level. This means supporting farmers already engaged in milk production and also showcasing it as a viable source of additional income.

The setting up of MPCs was a step in that direction. The five under DHANII currently provide an income source to people in 2,700+ villages in five states. On average, the MPCs collectively sell more than 450,000 litres of milk every day. In 2022-23 the five companies did a cumulative business of 7.75 billion.

DHANII’s goal is to, in the coming years, link at least 300,000 households with MPCs and ensure coverage of 5,000 villages in 25 districts in five states. Importantly, it aims to enable dairy farmers to make a minimum of 60,000 a year.

The women milk producers attached to the MPCs are actually ‘dairypreneurs’, dairy entrepreneurs who have set up robust businesses that make their families less reliant on fickle agriculture.

“With farming you can get an income only at the end of the cropping season, say six months or a year, depending on what you grow,” says Baljinder Singh Saini, head of operations at DHANII and a regional manager with the Tata Trusts. “But households need cash on a daily basis and that’s where dairy helps. Milk producers at our MPCs get paid in a 10-day payment cycle and the money goes directly into their bank accounts.”

The effect of having dairy as an income generator is enormous because most village households already have some livestock at home. DHANII’s research has shown that 75% of rural households own an average of two to four animals. But as of now only one-third of rural household incomes is dependent on dairy-related livelihoods which, unlike conventional farming, is an all-season occupation.

DHANII reckoned, when it started, that since 75% of women farmers are already engaged in dairy activities, they may as well turn that into a lucrative, home-based business. And that’s how the MPCs idea has panned out.

Says Komal Menaria, a manager with the Asha MPC: “The system works like this: milk producers go to a common pooling point in the village in the morning and in the evening to drop off as many litres as they can generate from their cows and buffaloes. They are paid based on the quality of their milk, which is assessed using machines.” Better quality or high-fat milk garners more money.

The milk is taken from the pooling points to a chilling centre and sold directly to either an institutional buyer such as Mother Dairy, delivered at the doorstep of individual buyers or converted into milk products. Besides convenience, this process has transparency built into it.

Middlemen out

“Before the MPCs were formed, we had to sell the milk to collectors and middlemen who visited the village,” says Ms Jat. “We would get whatever price they decided, usually as little as 20 a litre. Now the minimum we get from the pooling point is 60 a litre.”

“The milk producers were also struggling to find good market linkages, having traditionally sold only to intermediaries or dudhias,” adds Mr Saini. “MPCs were created with a two-pronged strategy in mind. The first was to augment the knowledge of beneficiaries about milk production, cattle nutrition, animal husbandry, etc. Second, we wanted to create an institution that would incorporate marketing as part of its work. The purpose of the MPCs is to cement a long-term and sustainable source of income for dairy farmers through community-owned institutions.”

To give them greater ownership of the process, individual milk producers are made shareholders of the MPC they are attached to. At the end of the year, they receive additional funds in the form of dividends for the shares they own. Each MPC is run by a board of directors comprising 11 members, eight of them women. There are two experts to help the milk producers with technical and animal husbandry know-how.

This is important because the dairypreneurs struggled initially with manging their livestock, breed improvement and veterinary issues. “Earlier we used to toil away at the milk business but could not make enough from it,” says Pinky Sharma, chairperson of the Sakhi MPC in Alwar, Rajasthan. “But now we know how to take better care of our livestock.”

Members of the Asha milk producer company from Vellangari village in the Sirohi district of Rajasthan at the common pooling point where they sell their milk

Instead of crop residue, which does not provide enough nutrition, the MPC farmers now give their animals a mixed-minerals feed. “We’ve also learned about artificial insemination and improving the quality of livestock, and have access to prompt veterinary interventions,” adds Ms Sharma. “We have become much more organised about our business.”

Ms Sharma and her family, who live in Bamboli village in Alwar, started with 10 cows and buffaloes. Today they have 20 and most of the women in this joint family of 18 are in the dairy business. “My three sisters-in-law and I have been able to buy many more milch animals over the years from our milk production earnings,” says Ms Sharma.

Money was the big motivation for Durga Keshav Shende, who lives in a village near Yavatmal in Maharashtra, with her husband, a daily wage labourer. Their family of four was always short on money but Ms Shende did not feel qualified enough to seek a job. In 2019, when the Indujaa MPC was set up in the area, she decided to join it.

From one to many

Ms Shende took a loan from the local self-help group to buy a cow (the family didn’t have one). “I was confident about making a success of it,” she says. “My little business is doing well now and dairy has become my family’s primary occupation.” Ms Shende currently has three buffaloes and three cows and earns about 15,000 a month from milk production.

“In male-dominated Alwar, as in many places in rural India, woman have no say in the household’s financial matters,” says Shivani Sharma, a management information systems expert with the Sakhi MPC. “DHANII’s milk producers receive their payments directly in bank accounts under their names, not their husband’s or any other family member’s.

Members of the Indujaa Mahila milk producer company, which is based in the Yavatmal district of Maharashtra

“They manage the family’s expenses, pay the children’s school fees and even buy more livestock with loans from the bank. All this has made a big difference to their standing in the village.”

Some MPC women members who had to give up their education, because they were married off early, are now going back to it. Zulfina Bano, a 29-year-old member of Sakhi who dropped out when she got married as a preteen, has now completed high school and earned a science degree as well with her dairy earnings.

“The dairy business has given our members financial independence, decision-making powers and respect in society,” says Ms Sharma. “That’s true empowerment.”