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  • Writer's pictureNITARA

Milk Co-operatives : Backbone of a Dairy Farmer

Updated: Jan 6, 2022

Milk Co-operatives facilitate the Ease of Doing Business in the dairy domain. Their work has made the sector organized in major parts of the country especially in the rural areas.

Some of the key services offered by them are as follows:

Milk Trading:

Reception of milk:

Each society has a milk collection center either in an owned or hired premise. Each morning and evening, the milk producers bring milk in their own containers (stainless steel) to society. A representative sample of milk is drawn for testing the quality milk. Milk is collected in milk cans or directly to the cooler.

The collection accessories are made up of stainless steel (AISI 304). The measurement of milk is done carefully to avoid foam, shortage, etc.

The quantity of milk supplied by everyone along with the sample bottle of milk is recorded against her/his name in the purchase register and the card/passbook of the pourer. In many societies, the process is semi-automatic with the help of computers and Electronic Milko Tester placed online.

A printed slip is generated for each member giving details about the date, shift, type of milk, producer identification number, weight and fat% of milk, rate, price, etc.

Testing of milk:

Where the Gerber Centrifuge/Electronic Milk tester is used for fat test of milk samples, once enough samples are collected these are tested as per the laid down procedure. The test results are recorded against each sample number in the Fat Test Register.

This ensures the confidentiality of the owners of the samples. After the testing is over, the records are compiled; the left-over sample milk is disposed of in a manner decided by the management committee.

At pourers’ request retesting is also carried out before the samples are disposed of and the changes if any, are recorded.

After the milk collection is over, a composite sample is drawn from the total quantity of milk collected observing the general procedure to draw the sample. This sample is tested for fat and lactometer reading is also noted in the test register.

This is commonly known as the General Test (GT) of milk collected by the society. All the accessories/equipment used in reception and testing of milk, are then cleaned thoroughly with warm water and or detergent solution.

Dispatch of milk:

Lids cover all the filled milk cans tightly and the cans are loaded in the milk vehicle/truck as per the time schedule of a particular society. The staff of the truck delivers the fat slip of the previous shift, letters from the milk union, other materials as indented by the society.

This is done quickly to avoid any stoppage of the vehicle more than the schedule. The vehicle also unloads the cleaned empty cans received from the dairy plant for the use of the society for the next shift milk collection.

Wherever the AMCU/Bulk Cooler is installed in the society, the milk tanker from the dairy/chilling center comes once or twice a day as per the requirement to lift the chilled milk from the society.

Payment for the milk:

The milk union depending upon the policy it adopts on pricing decides the price of the milk. Quality and quantity form the basis for the payment. Normally a price chart or ready reckoner is prepared and supplied by the union to the societies. The society pays the pourers daily/weekly/after every ten days as per the decision of the managing committee. The relevant entries are made in the Card/Passbook of the members and the registers of the society.

Milk union generally pays the price of milk so procured from societies through bank advice on a regular interval i.e. weekly, every ten days as the case may be. This frequency is generally not changed and is the same for all societies.


There is a set of standard registers, most of which are to be completed daily. The others are completed as and when any transaction takes place. It is the responsibility of the concerned staff of the society to complete the records on time and regular basis.

All the records are to be countersigned by the Secretary/ Chairman as per the decisions of the society and as required under the provisions of bye-laws. The registers and formats are designed in such a way that they reflect the volume of business and financial standing of the society at any given time.

A society appoints a local person as an internal auditor who audits the transactions made by the society on regular basis. The society prepares its monthly accounts statement for the managing committee meeting and other accounts statements on a quarterly basis.

The annual accounts are prepared for statutory audit.


Milk is a perishable commodity. To have improved the quality of raw milk and avoid spoilage besides contamination of milk, a society maintains cleanliness through the clean milk production process and techniques from producers to society level. Various activities and steps are undertaken for the cleanliness of the utensils, staff, equipment/ accessories, and building emphasizing procurement of clean milk.

Standardization of Testing Equipment and Chemicals:

Generally, the milk union supplies to the society milk testing equipment, accessories, and chemicals that have BIS and or another relevant standard. However, society needs to check the quality/standard of these articles periodically. Otherwise, a society may face milk and fat shortage problems and eventually run into losses.

Local Milk sale:

The managing committee is authorized to fix the quantity and price of milk to be sold locally. The price varies from season to season. The general fat in the milk, local demand, etc. determines the price of milk.

Sample Milk sale:

After conducting the fat test for all the samples and the retests, if any, the remaining sample milk is spooled for sale. This sale is generally done on an open contract basis (quarterly/half-yearly/yearly) with a fixed price as decided by the managing committee.

Distribution of profit:

Besides regular payment of milk price, the society at the end of the year pays dividends on paid-up share capital.

The major portion of society’s net profit is paid in the form of bonuses to the producers proportionate to the value of milk supplied by them during the year. The extent of these benefits is decided in accordance with the provisions made in the bye-laws.

Inputs Services:

The second important work of society after milk trading is making available the technical inputs to the milk producers for production enhancement activities. Generally, the basic facilities are owned by the milk unions and the services are provided to the members through the societies on a cost / no profit no loss/grant basis as decided by the milk union.

The society has a trained Artificial Insemination (AI) and Veterinary First Aid (VFA) Worker who looks after the job regularly through a Single or Cluster Centre basis. Generally, the milk union supplies liquid nitrogen, semen doses, and veterinary medicine, cattle feed, fodder seed to the society at cost for the members.

Apart from this cattle insurance and other group insurance schemes are also available for the benefit of the members.

For instance, Anand Pattern is a multi-tier vertically integrated cooperative structure that is governed by the elected representatives of the milk producers and managed by Professionals.

Ensures a direct linkage between milk producers and consumers through integration of production, procurement, processing, and marketing of milk.

The salient features of Anand pattern dairy cooperatives are:

  • Effective governance by elected representatives of farmers.

  • Effective professional management.

  • Availability of rounds the year market to the milk producers.

  • Availability of inputs for enhancing milk production of animals of the members of dairy cooperatives

  • Sharing of profits by members of the dairy cooperatives on an equitable basis.

The function of a Dairy Cooperative Society (DCS)

The functions of a dairy cooperative society can be listed as follows:

1) Collection of milk twice a day from farmers.

2) Make regular payments to suppliers.

3) Dispatch the milk collected to the Milk Union.

4) Provide to members:

a) Balanced cattle feed.

b) Fodder seeds of improved variety.

c) Services for animal health care.

d) Services for breeding of milch animals.

e) Patronage-based portion of the surplus.

f) Contribute to village development.


Functions of a Milk Producers’ Cooperative Union:

The major functions of Milk Union are:

1. Procure, process, and market milk and milk products.

2. Arrange/Provide macro-level inputs like cattle feed, animal health, and breeding care, etc.

3. Arrange for training and education of managing committee members, staff, and members of dairy cooperative society and for the Board members, managers, and staff of the milk union.

Functions of a Milk Federation:

The important functions of the state milk marketing federation are:

1. Marketing of milk and milk products.

2. Manage production planning and State Milk Grid (movement of milk within the state).

3. Coordinate with state government, central government, NDDB, and other agencies.

Sources: FAO, NDDB, DAHD, Dairyknowledge

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