Dairy Business in Ghorahi, Dang
EXECUTIVE SUMMARY
This summer project is done on the topic of “DAIRY BUSINESS IN GHORAHI, DANG”. The data collected for this project are primary as well as secondary. In this project, I have introduced and divided the study into three chapters.
The first chapter is about the general background of study, Dang short description, review of literature, objectives of the study, importance of the study, limitations of the study, benefits of the dairy milk, Dairy enterprises in Ghorahi, dairy Products manufactured in Ghorahi,Dang, Process of Packed milk in dairy, Theoretical framework and methodology, hypothesis, and research methodology.
In second phase, I have described about the Data Presentation and analysis, Critical factors in marketing of dairy Products, major Problems faced by dairy enterprises in Ghorahi and SWOT analysis of the dairy in Ghorahi all of which includes the relevant qualitative and quantitative data and analysis.
In third chapter, I have presented the summary and conclusion and recommendation.
I have even attempted to drive meaningful findings and deliver useful suggestions and recommendations.
The dairy sector in, Ghorahi-Dang, is characterized as small-scale, widely dispersed and unorganized milch animal holders; low productivity; inadequate basic infrastructure for provision of production inputs and services, and lack of professional management.
The acute shortage of trained manpower is the major constraint hindering the growth of this sector. To promote this sector, a Dairy Training Facility equipped with a pilot dairy plant should be established to organize, regulate and provide need oriented training programs in this area.
There is need to enhance their competitive economic advantage in dairy products in terms of both quality and cost. Beside this, the National Dairy Development Board (NDDB) needs strengthening and the decision to restructure the Dairy Development Corporation (DDC) could help in promoting private dairy business. Local capabilities of the Dang Dairy Association should be fully exploited and strengthened.
Due to the growth rate of urbanization life style in Dang is changing and quality consciousness is increasing in minds of people. So, it is therefore, they are switching toward processed milk and other dairy product. However, these changing treads are increasing the potential customers and consumers for the dairy industry and also due to the increased literacy rate, the hygiene and health conscious among people is increasing and they are searching of good quality dairy products.
During the study of this project, I have found that the dairy business enterprises has strong name in the market as they provide quality products and good services to the people. They especially work for the increasing employment opportunities, women empowerment by increasing income, self employment for farmers’, etc. and they should continue their work with new plans and programs for better marketing.
CHAPTER ONE
INTRODUCTION
1.1Background Information
After the Second World War, industrial development accelerated rapidly in multidimensional all over the world. Agriculture being the vocation of the majority was considered the genuine industry to be technologies worldwide. So this acknowledged phenomenon enlarged the agro-based industry amazingly and unprecedented during the last three decades. As the market- oriented concept of business and trade holds the popular and attractive behind the process of manufacturing consumer goods, the progressive businessman to explore new fields,and positions resulting in consumer satisfaction do always efforts. This delightful and fascinating process of exploration and Research was basic factor, which brought about the origin and innovation of milk industry to meet some unsatisfied needs of milk- consumer.
It is an accepted fact the milk from the very origin of man’s life on the earth, has been the most likely and captivating food due to its energetic qualities. In the early days, milk could be easily managed and availed. But with the industrial growth, population explosion, change in life style, above all over, increasing consumption of the meats of milk generating cattle and their removal from cities caused the problems of milk scarcity and unavailability at its gravity level, especially, in the big crowded cities. To meet this milk scarcity problems, powder milk was launched into market but it could not achieve the real target despite its advertisement of its hygienic effects and still the need of fresh and natural milk were felt among the consumer. Hence to fulfill the human need, dairy industries established.
The Livestock Sector contributes 9.4 per cent to GDP and 39 per cent towards agriculture. Dairy is one of the vital sub-sectors of Livestock Sector and holds great growth and export potential. It forms an important component of Nepal’s economy and supports around million rural families. The contribution of milk in the national GDP is over 2% and nearly 40% of the livestock GDP. Thus the growth of dairy sector has a vital bearing on the overall development of the country.
Above 1000 farmers deliver milk, and above 500 people are engaged in the milk processing in both rural and urban areas in Dang. Private sector participation is
however on the increase and more than 15 small, 7 medium and 2 large scale dairies are operating. Hundreds of people are engaged in production and marketing of indigenous dairy products like Ghee, cheese, curd, etc. The industry has made significant contribution in rural income and employment generation, and subsequently rural poverty alleviation.
1.2 Dang Short Description
Dang is the most developed district and commercial center of Rapti zone. Ghorahi and Tulsipur are the main commercial hubs for whole Rapti zone. Because it is located in relatively plain area, the transportation and the communication is much better comparing to other four districts. Dang District is an Inner Terai district some 420 km west of Kathmandu in Rapti Zone of Nepal's Mid-Western Region. Dang covers an area of 2,955 km² with population (2001) of 462,380. Tribhuwannagar (usually called Ghorahi) is the district's administrative center.
Dang’s climate is nearly tropical and it is well watered by the river as well as abundant groundwater. Dang Range rises to peaks as high as 1,000 meters with passes at about 700 meters. Then the district extends upslope to the crest of the Mahabharata at 1,500 to 1,700 meters elevation. Bordering districts to the north are Pyuthan, Rolpa and Salyan, eastern border is with arghanchachi and southern boarder is with India.
Mahendra Highway the main east-west highway across Nepal -- follows Deukhuri Valley, passing Bhalubang bazar at the upper end and Lamahi downstream. Ghorahi has scheduled connections to other cities in Nepal and a motorable road goes north into Salyan District.
Dang Valley is higher, less tropical, drier and less malarial than Deukhuri. Despite fertile soil and more seasonal stream flow, its healthier climate made it more attractive to settlers.
Most of the people follow agriculture as their main occupation. Milk production in recent years has been subject to substantial fluctuations, with supplies . The drought, coupled with increased cost of production inputs have been sighted as the factors which have the greatest negative impact on the dairy sector.
1.3 Literature Review
Dairy sub-sector shares more than 60 % of livestock sector contribution to GDP in Nepal. Annual production of milk is about 1.4 million metric ton. Buffaloes contribute more than 2/3 of the volume and rest by cows. 13 % of total cattle population (0.9 million) & 26 % buffaloes (1.2 million) are milking.
Dairy Development started in Nepal in early fifties with FAO support. Production system crop-livestock-forest integrated in hills. In high mountains, yak and chauries are reared in transhumance system. Seasonal fluctuation in milk production-collection in hill and mountain areas where the feed supply is better and availability of green forages are main reason. In terai due to plain and fertile land, agriculture is easily accelerated. Livestock as a part of agriculture, people are rapidly obeying their occupation. For the welfare of people ADB has been supporting farmers in livestock and agriculture along with public private partnership strategy.
Public-private partnership strategy promoted by the DLS in ADB supported projects has been useful for;
1. Expansion of milk collection networks; chilling facilities.
2. Raising awareness in hygienic milk production and improving keeping quality of milk products diversification.
3. Strengthening management capabilities of dairy coops and private dairies (small and medium scale).
4. Attracting private sector investments in dairy processing and marketing for increased demand for milk.
Human resources development strategy in dairy sector did not receive due priority; lack of qualified professionals in the public as well as in the private sector. Forage based milk production system has not been expanded widely limited in some production pockets.
Milk is by far the most important livestock commodity (nearly half livestock GDP), by-product of the milk subsector (APP 1998). Average per capital annual milk consumption amounts to about 48 liters. Annual milk production is about 11,76,000 tons which is over 5% of GDP at current market price (Presently the government is also putting emphasis on free market economy, and private sector development.
The total milk production from cow and buffalo is presented in Table-1.
Table 1: Total Milk Production in Nepal in 2004/2005.
SpeciesPopulationMilk Production (MT) % share in Production
Cattle7,257,23135068333.82
Buffalo 3,672,68268620866.18
Total9,309,9131036891100
Livestock sector significantly contributes to national GDP by nearly one third and the dairy sub-sector shares more than half of the livestock sector contribution. Crossbreeding with Jersey and Holstein Friesian cattle and Murrah buffaloes is the major breed improvement activity. Nearly 125 thousand farm families are engaged in milk production and are organized in about 1500 primary cooperatives.
Dairy Development Corporation (DDC) was established under corporation Act in 1964. DDC started functioning from 1969. DDC is the pioneer in dairy development in Nepal a fully government state owned corporation DDC was initiated for the economic advancement of the poor small milk producing farming communities. It is still one of the major players in the milk market and handles about half of the total milk marketed in the formal sector (about 13 percent of the total milk produced in the country is believed to be marketed through formal marketing channel.
Private sector investment in dairy has increased over the years and in past two decades their share has increased to nearly half of the total milk marketed in formal sector. The National Dairy Development Board (NDDB) was established as apex body to oversee that dairy sector in the country in 1992. The DANNIDA Support Project funded by the Royal Danish Government supported to prepare and implement Ten Year Dairy Development Plan (1990-2000) and strengthened NDDB.
1.4 Objectives Of The Study
1. To collect Comprehensive information for investment opportunity in dairy business.
2. To collect Specific information regarding different areas like, marketing, technical, industrial information etc. for the existing entrepreneurs to improve their exiting setup.
3. To find Project investment information and financial projections to support the dairy business
4. To increase Skill development of Students and farmers.
5. To enhance knowledge/skills of the farmers and the extension workers in dairy production, processing and marketing.
6. For Improved marketing.
7. To increase private sector participation in dairy production, processing and marketing.
1.5 Importance Of The Study
Milk and Diary products are such an important field that for this purpose and development, several Universities around the world have included the Bachelor and Masters Degree in Food and Dairy Technology.
There are different sectors within the dairy industry that promise great business investment opportunities:
1. Dairy foods such as milk, yogurt and cheese provide several important nutrients in the diet and are the richest dietary sources of calcium
2. The nutrients supplied by dairy foods help ensure normal body functioning and also help lower the risk of developing a variety of health problems
3. The dairy industry creates many different jobs, not just for the dairy farmers Forevery person employed in the dairy industry another 4 jobs are created in the community.
4. Dairy farming is very important because it gives us quality products and employs many people.
1.6 Limitations Of The Study
1. The study is concerned with only dairy and it cannot be accurate unless compared with other such areas.
2. Due to the unavailability of sufficient references and resources, most of the data used are of secondary type in forms of profile, brochures, annual reports and other sources.
3. The project report has been prepared under the constraint of the limited time. So, it couldn’t be possible for depth analysis.
4. Lack of time, confidence on the researcher was the major problem.
1.7 Introduction:
Milk is a white liquid produced by the mammary glands of mammal buffaloes and cows. It is the primary source of nutrition for young mammals before they are able to digest other types of food. Early-lactation milk contains colostrum, which carries the mother's antibodies to the baby and can reduce the risk of many diseases in the baby. The precise components of raw milk vary by species and contains significant amounts of saturated fat, protein and calcium as well as vitamin C..
A dairy is a business enterprise established for the harvesting of animal milk—mostly from cows or goats, but also from buffalo, sheep, horses or camels —for human consumption. Humans continue to consume milk beyond infancy, milk has been processed into dairy products such as cream, butter, yogurt, ice cream, and especially the more durable and easily transportable products.
In Ghorahi Dang, there is not a long history of dairy industry establishment. In 2050, Lila dairy was established byliladhar Sharma. According to him in those days people were not conscious about dairy although market was monopoly. It was very difficult enlarge the market due to unconscious of people. But later on population was increasing and other dairy enterprises also entered into the market.
According to chairman of Dang dairy association {DDA}, the primary goal of DDA has been to build a strong society economically through an innovative cooperative network, to provide quality service and products to end-consumers and good returns to the farmer members.
The livestock sector occupies an important place in the economies whole economy of the country. It contributes to their economies in four different ways, as it provides:
1. Energy in the form of draft and traction power for various activities and fuel for cooking and other heating purposes;
2. Food in the form of milk, milk products and meat;
3. raw materials in the form of wool, hair, skins, hides, bones, hoof and horns and a number of other products of pharmaceutical and industrial use; and
4. Manure for crops.
The livestock sector in Dang is characterized by the preponderance of smallholders typically possessing only one or two milch animals, low productivity, lack of proper feeding and animal health care, an inadequate supporting infrastructure for supply of feed and veterinary medicines, procurement, processing, storage, transport and marketing of milk,etc
The dairy sector has emerged as an important source of livelihood for a vast majority of the rural population, especially the poor. Besides being a source of supplementary income and nutrition, the sector also provides draft power, fuel and organic manure. More importantly, the sector contributes significantly to the national economies
Milk is the cheapest source of all nutrients when compared with other food items. Thus, it has an important role in national nutritional programs, particularly for those below poverty line, children and expectant mothers. As we know Nepal is the least developed with a per capita GDP of about US$ 300. Hence all the regions and place are under poverty in Nepal.
In Dang Approximately 60% of the population lives in rural areas. About 70% of the population is involved in agriculture and this sector contributes their daily needs. Most of the families live below the poverty line. Furthermore, concentration of poverty is greatest in the rural areas and in the entire agriculture sector.so they rear domestic animals for dung and milk. They feed milk and sell in market to consume daily needs.
Small holder milk producers are vulnerable to fluctuations in the prices of both milk and the inputs that go into milk production. Milk production is less vulnerable than crop production to weather-induced risks and hence serves as an informal means of insurance for milk producers.
Accelerated growth of the dairy sector is essential to the overall growth of the agriculture sector in Dang as well as country. Poverty alleviation and enhancing of women's participation are also the major objectives of dairy development. The growth of the dairy sector calls for increased participation of the private sector in production, processing and marketing.
In the mid and western part of Dang, raw ghee used to be collected by the ghee refineries and was processed, packed and exported to India. The demand for liquid milk and dairy products in Dang is likely to continue to increase. The most important reason for this is the rapid growth of the human population. Other variables influencing demand are the growth of per capita income and the increasing price of milk.
At global level, milk has been identified as an integral part of food for centuries. Milk and milk products are one of the important components of the food industry. Consumption of milk and milk products is deeply rooted in our tradition and it is an essential item during rituals, festivals and other auspicious events. Dairy still continues to be the major sector in economy. To meet the growing demand of milk and milk products, there is a need to enhance milk policy and promote manufacture of high quality dairy product and meet international standards. Hence there is very good scope for new entrepreneurs in dairy business in Dang .
1.8 BenefitsOf Dairy Milk
The Benefits of Dairy products are:-
1. Low cholesterol content helps prevent high blood pressure and various cardiac disorders.
2. Low fat content helps you stay smart.
3. High calcium content prevents Osteoporosis (deterioration of bone mass) especially in women after menopause.
4. High protein content helps strengthen and builds muscles.
5. Low fat milk can reduce the risk of intestinal cancer.
6. Dairy is an especially good source of vitamin D for those people who don't spend a lot of time in the sun.
7. Dairy foods provide several important nutrients, including protein, B vitamins and vitamin D, and are considered major sources of calcium in the diet. For vegetarians who consume milk and other dairy products, dairy is a good source of high-quality protein and B vitamins otherwise found in meat and other animal products.
8. Eating several servings of dairy foods throughout each day can help prevent calcium deficiency.
9. Low fat milk helps in reducing the Alzheimer’s disease.
1.9 Dairy Enterprises InGhorahi,Dang
1. Goraksha dairy
It is the biggest dairy industry in dang.It is located in KapaseRawatGaun .It was established in 2064 B.S with the aim of bringing farmers together for better co operative. The proprietor of Goraksha dairy is Mr. BhorajPandey. There are 9 energetic employees in Gorakshadairy. It collects milk from many villages and places such as saudhiyar, khaira, Hapur, Rampur, Bharatpur, Ratanpur, etc. Its products are packed milk,icecream,bottled milk, butter, ghee, curd, etc.
2. Lila dairy
It is the oldest dairy in Ghorahi.It is located in umeshmarg ghorahi.it was established in 2050Bs .the proprietor of Lila dairy is Mr.LiladharSharma. There are 5 workers in Lila dairy. It collects milk from saudhiyar, Rampur, chaugera, etc. Its products are Cake,Packed milk, ice cream, butter, ghee, curd, etc.
3. Swargadwari dairy
It is located near swargadwari Fm. It was established by Mr. PuranGiri in2060. It collects milk from Rampur, Masina, and Dodheni. Its products are birth day cakes, packed milk, ice cream, butter, ghee, curd, etc
4. Rijal dairy and coffee center
The proprietor of Rijal dairy is Mr. Ramesh Rijal .It was established in 2064 inTribhuwan park. It collects milk from fursekhali, Sewar, bangaun,, etc. Its products are cakes, packed milk, ice cream, butter, ghee, curd, etc
5. Krishna dairy
It was established in 2062. Its proprietor is Mr. Krishna Shrestha. It is located i n Municipality road. It collects milk from badahara, and Sewar, Its products are butter, ice cream, packed milk, curd, ghee, etc
6. Jaljala dairy
It was s established in in 2065. Its proprietor is Mr. Shakti Pun .It is located in nayabazaar. It collects milk from badahara, Masina and Sewar, Its products are butter, ice cream , packed milk, curd, ghee,etc
7. Sisne dairy
It was established d in 2064 .it is located in Milan chowk . Its proprietor is Mr. Bishal BC. It collects milk from badahara, and Sewar, Its products are butter, ice cream , packed milk, curd, ghee,etc
8. Bhandari dairy
It is located in naya bazaar. Its proprietor is Mrs.MauSamiBhandari. It was established in 2066. It collects milk from nuwagaun, bagale, Ramana, Hapur, etc. Its products arebutter, ice cream, packed milk, curd, ghee,etc
9. Ganga dairy
It was established in 2067 by Mr. Ganga Shrestha. It is located in Ratanpur .It collects milk from Ratanpur, Bharatpur, Narayanpur etc. Its products arebutter, ice cream, packed milk, curd, ghee, etc
1.10 Dairy Products Manufactured In Ghorahi Dang
The famous dairy products manufactured in Ghorahi are:-
ChocolatesChocolates is the favorite item of children. Chocolates supply proteins, fats, Carbohydrates, Vitamins and Minerals.The increasing Craze and demand for Chocolate, not only in children but the adults as well, surely provides the investor, a good market potential in the field.
Cheese
Cheese is basically milk product, which is manufactured from milk .There are
few seeds and cereals grain contains highly soluble protein, fat and carbohydrate. By
grinding and mixing with water, it forms substitute of animal (cow, buffalo) milk.
Basic raw materials are groundnut, soya beanetc., for manufacturing of analogue
cheese, which are sufficiently available in Dang throughout the year. . There is very
fair market demand of this product.
Ice Cream
As Dang has hot climate, people prefer ice cream mostly in hot climate. Today ice cream may be considered a luxury food item, although its popularity is increasing rapidly. Ice cream is defined as a frozen dairy product made by suitable blending and processing of cream and other milk products together with sugar, flavor, stabilizer and incorporation of air by agitating during the freezing process. Ice cream is consumed more in cities, however occasionally particularly in meetings and social gatherings also. With efficient marketing of the product, entrepreneurs are sure to realize profit in their business.
Packed Milk
In Dang dairy industries manufactured packed milk. Its demand is increasing due to its easy availability and containing many benefits. It is consumed especially in hotels as well as at home also. With efficient marketing of the packed milk, dairy industries produce packed milk as their main and heavy product.
Butter
Mostly milk fat, produced by churning cream. Buttermilk, the liquid left over after producing butter from cream, often dried as livestock food. It is used by bakery industries in Dang
Ghee
In Dang Ghee is very popular product of dairies. Ghee produced in dang is often exported to India also. Ghee is properly done when water is completely evaporated from butter. With experience one can tell if ghee is done with the smell and color. Ghee is a clarified butter without any solid milk particles or water. Ghee is used in Nepal, India and throughout the South Asia in daily cooking.According to the ancient Ayurveda, a moderate amount of ghee is the best cooking oil.
The soft curdled part of milk (or skim milk) used to make cheese or other products or eating directly. Its demand is increasing in market due to its good taste.
Bakery products
The consumption of bakery items has grown significantly over the years in Dang . The bakery stores in the town say they are seeing growth in business over the years due to increasing consumer preferences.
“Owner of janaki Bakery further claimed that dairy had brought a revolution in bakery sector as it deals in around 50 varieties of bakery products. He said, adding that sale of bakery items goes up during festival occasions like Father´s Day, Mother´s Day, Valentine´s Day, Birthday and other festival occasions.
“Unlike other readymade meals, there is no harm in consuming bakery items,” He informed, Bakery items like bread, cakes, black forest, rolls, pies and other products are becoming popular among different groups of people.
1.11 ProcessOf Packed Milk In Dairy
Packed milk is processed milk. Dairy collect milk from the farmers and process it keeping the highest standards. Many people doubt that packed milk is made of chemicals or its proceeds synthetically but it is a quite misleading conception.
Milk Collection
The method adopted in collection of milk from dairies is, to only collect milk from the approved suppliers who are running their cattle. The temperature is maintained at 80C without adding ice. The containers are especially cleaned before milk is stored in them.
Reception
As soon as milk reaches the factory reception the qualified chemists conduct a series of tests once again test it. This enables us to mark the milk confirming it to be standards.
Process
The milk is then pasteurized at 780C killing 98% germs / bacteria. The milk after pasteurization is then standardized as prescribed by the Food Laws at 35% fats and 8.9% SNF (Solid Non-Fats). This process makes it a premium quality product.
Standardization
Standardization is a process in which the excess fats and SNF’s are removed from the milk in order to achieve the standard of 3.5% Fat and 8.9% SNF as prescribed by the government
Homogenization
Homogenization is a process in which all the cream in the milk is mixed. In this process, milk is passed through 200 Bars of pressure, which in turn breaks each cell to 0.5 microns, which is 200 times smaller than its actual size.
By applying this enormous pressure the entire cream mixes in the milk. This process makes every drop of milk highly nutritional, energy giving and homogeneous to the other parts.
1.12 Theoretical Framework And Methodology
Theoretical framework and methodology contains the subject matter that we studied in Research methodology and Data analysis and methodology.
This method is used to know about trend of customers whether they prefer dairy milk or fresh milk that is provided directly at home by farmers or milk men.
Target segment = Retailer and Consumer
Simple size = 30 families
Consumer = 10,000 families
Sampling = Probability Sampling
Instrument of Survey = Questionnaire
Method = Personal Interaction
This project is related to “Marketing.” The Methodology is being developed after understanding the needs and requirements of the project on dairy business
Problem Statement
To what extent, people are responding towards the packed milk?
I have observed that, most of the families prefer fresh milk. Why is this so? Problem is to be defined and investigation is to be carried out that whether fresh milk is really preferred over packed milk or not and what could be the possible reasons for it.
Fresh milk-milk directly provided by farmers at home
Packed milk-milk produced by dairy
Hypothesis:
Ho = Fresh milk is preferred over packed milk.
Hi = Packed milk is preferred over fresh milk.
Research Methodology
Tools of research use for the data collection are personal interviewing and questionnaire and secondary data as well.
Sampling TechniquesOf The Research
What do we mean by sampling is the use of simple random technique of sampling. While selecting a book. We read some pages or lines or related topic of the research and selected the Sampling Techniques.
Sampling
The process of using a small number of items or parts of the whole population to make conclusions about the whole population.
Samples
A sample is a subset or some part of a large population.
In research 30 respondents were selected by me to represent the sample.
Population
A complete group of entities shares some common set of characteristics. The population of our research was the total population of Ghorahi municipality.
Sampling Unit
A single element or group of element subject to the selection in the sample in case of this research-sampling unit was selected respondents.
Sampling Techniques Applied
We select non probability sampling techniques, under which We applied quota sampling and probability sampling by means of which We applied systematic sampling.
Sampling Interval
Sampling interval is the number of population elements amongst the units selected for the sample. So, in order to represent the consumer behavior of all income classes.
The areas, which were selected for the purpose of the study, are below.
I interviewed the people at their home. I selected those people who were willing to answer the question. Direct Questionnaire with face to face Interview technique was used.
Sample Size Selection
The selection of sample size proves to be the most difficult job while we are going to get the information from the people. I have taken sample size of 30. The reason behind this selection is that in such type of informal studies that is enough number of samples to get the conclusion.
CHAPTER TWO
DATA PRESENTATION AND ANALYSIS
2.1 DataPresentation AndAnalysis
The identification of the main fields of the database for information are collected by dairy enterprises and theoretical framework was referred by general peoples’ support.
Actually the project has been effectively and strongly supportedby dairy enterprises. The project has used all these original data and information to convert and put in the local datas.
During conducting research and fulfilling the tasks of the project, I was supported by and cooperated with many experts, farmers, dairy enterprises, etc. especially in terms of cooperation with them during project was a very good foundation for developing project.
In this chapter, the obtained data from the various resources are presented below in tables and bullets form and mainly data and facts are analyzed and interpreted in qualitative way.
Milk production in Dang from 2064 to 2066 BS is given below.
Year(B.S)
|
Milk Production in MT
|
2064
|
41743
|
2065
|
42328
|
2066
|
42917
|
According to the description and the graphs illustrated, it is clear that the analysis technique, it is clear that the production of milk is increasing in dang in recent years due to the increase in demand of milk in market.
In Dang district In 2064 Farmers in Dang district produced about 41743 metric ton milk worth around Rs. 516 million. In 2065 they produced about 42328 metric ton milk worth around 523 million and similarly in 2066 they produced about 42917 metric ton milk worth around 530 million.
According to District Livestock Services Office, about 2200 farmers have taken to commercial animal husbandry in the district, and about 66 percent farmers are taking benefit from the occupation. The farmers sell the milk to milk-cooling centers of the district, Dairy Development Corporation Office, private dairies and local market. Milk is sold at Rs 16 to 20 per liter in the local market, it is said.
2.2 Critical Factors In Marketing Of Dairy Products
Milk is a highly perishable and complex product to handle. Smallholder farmers could therefore diversify into value addition and convert raw milk into processed dairy products. These factors are at most times determined at the downstream end of the production chain i.e. inputs into dairy could determine above factors carried out by the following issues:
1. Packaging
packaging of dairy products in Dang are regarded on average as poor, unattractive and lacking in imagination. The packaging of cheese, fresh cream were picked up as typical examples of a poorly packaged product
2. Taste and Sight
Local producers are viewed as having less innovativeness in the introduction of new flavors of dairy products i.e. sugar-free ice-cream and fat-free yoghurt. Local cheese varieties were also regarded as too salty.
3. Food Safety
Due to better packaging some imported products were viewed as being safer from micro-biological contaminants than local products in poorer packages. The packaging of most brands of Dang cheese products was viewed as poor.
4. Health Consciousness
The lack of varied brands of sugar free, low fat content and fat free dairy products was regarded as a weakness of the local dairy processors as they were not catering fully for the health conscious consumer.
2.3Major Problems Faced By Dairy Enterprises In Ghorahi, Dang
1. Lack of regular dairy training program and training facility
2. Lack of conducive policy promoting the private sector dairy business;
3. Weak quality control and enforcement mechanism; and limited diversification of dairy products.
4. Lack of sufficient knowledge of the farmers in cooperative management, cooperative development and technical and business management.
5. Predominance of small holder producers; high cost in production as well as in collection.
6. Access to animal health and breeding services is limited.
7. Lack of elite herds of cattle -Sustaining the productivity of improved animals
8. Control and eradication of economically important diseases
9. Lack of business plan/ entrepreneur skills
10. Scientific milk pricing policy is lacking. A persistent problem the dairy industry faces is poor milk quality. This is associated with a lack of farmer awareness in clean milk production. Unhygienic milk production starts with the farmer and causes loss of income along the milk chain.
11. Lack of human resources and technology support in private sector
12. Milk Producers Cooperatives Societies involvement in milk processing and marketing (large scale) is constrained by limited investment capacity and technical capability.
13Human resources development in dairy sector have not received due priority there is lack of qualified professionals in the public as well as in the private sector.
14Adoption of code of practices in dairy industries and its monitoring/ regulation has not been implemented effectively. There are wide variations in the quality of milk and milk products in the market.
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2.4 SWOT Analysis of The Dairy
The study of this SWOT analysis shows that the Strengths and opportunities are fundamental and weaknesses and threats are transitory. Any investment idea can do well only when we have three essential ingredients: entrepreneurship (the ability to take risks), innovative approach (in product lines and marketing) and values (of quality/ethics).
Completion of the S.W.O.T. analysis will give the team a better idea of the strengths, weaknesses, opportunities and threats of sector. These will guide on journey to a successful and most importantly, an improved dairy operation.
•S - Strengths: What the dairy does best. These strengths will be considered for business augmentation.
•W - Weaknesses: Areas that the dairy needs to improve. Generally the dairy needs to make some changes to recognize improvement.
Now external components, or those over which the dairy has little influence:
•O - Opportunities: What conditions in the dairy or the community might the business use to improve its position?
•T - Threats: What conditions in the industry or community might undermine the success of the business operation?
Strengths:
1. Availability of raw material:
Presently, more than 50 per cent of milkproduced is flowing into the unorganized sector, which requires proper channelization.
2. Technical manpower: Professionally-trained, technical human resources are
lacking in this sector.
3. Efficient milk collection system
4. Keeping high quality standards
5. Successful related diversification
Weaknesses:
•Perish ability:
Pasteurization has overcome this weakness partially. Surely, many new processes will follow to improve milk quality and extend its shelf life.
•Lack of control over yield:
Theoretically, there is little control over milk yield. However, increased awareness of developments properly managed animal husbandry practices, coupled with higher income to rural milk producers should automatically lead to improvement in milk yields.
•Logistics of procurement:
Bad roads and inadequate transportation facility make milk procurement problematic. But with the overall economic improvement, these problems would also get solved.
•Competition: With so many newcomers entering this industry, competition is becoming tougher day by day. But then competition has to be faced as a ground reality. The market is large .
•prevalence of traditional raw milk marketing systems; a long chain of middlemen;
•lack of capital investment; low and non-remunerative producer prices; poor quality of animal health care and breeding services; lack of professional management; and lack of a well-defined national policy for dairy development.
Opportunities:
"Failure is never final, and success never ending”. If dairy entrepreneurs are looking for opportunities in, the following areas must be tapped:
Steps should be taken to introduce value-added products like shrikhand, ice creams, paneer, khoa, flavored milk, dairy sweets, etc. This will lead to a greater presence and flexibility in the market place along with opportunities in the field of brand building.
Huge unsatisfied domestic demand for milk and milk products; and substantial scope for increasing domestic milk production through improvement in the marketing system and by ensuring a year-round remunerative price to milk producers.
Potential for increasing domestic milk production through improvement in the genetic potential of local milch animals, better animal feeding and disease control, and a producer-oriented price policy.
Reasonable growth rate of dairy market: The growth rate of industry was between 7 to 10 percent per annum. The market is expected to grow at approximately 5-6 percent annually over the next two years due to Population growth rate, high urbanization rate, high literacy rate and flexible government policies for food industry
Threats:
Milk vendors, the un-organized sector: Today milk vendors are occupying the pride of place in the industry. Organized dissemination of information about the harm that they are doing to producers and consumers should see a steady decline in their importance. The dairy sector has manystrengths and weaknesses. The new era characterized by privatization and globalization has opened up many opportunities but also poses many threats to the smallholders.
Unregulated imports of dairy products at cheap prices; inadequate public and private investment in modernization of the sector; and vested interests in perpetuating the dependence on imports of dairy commodities.
Subsidized cheap imports of milk powder. While fixing procurement price, producers’ interests should receive the utmost attention. The producer price should at least cover the long-run average cost of milk production and provide a reasonable mark-up.
CHAPTER THREE
SUMMARY, CONCLUSION AND RECOMMENDATION
3.1Summary,
In Dang Low productivity of milch animals is a serious problem to dairy development as it is also a constraint all over Nepal. The productivity of dairy animals could be increased by crossbreeding and suitable exotic breeds in a phased manner. The cattle breeding policy should not only focus on milk yield but should also provide for the production of good quality bullocks to meet the draft power requirement of agriculture. High yielding purebreds, such as jersey,Murrah, Mehsani or Nili Ravi, should be given high priority in all areas where buffalo are well adapted to the agro-climatic conditions. The contribution of the dairy sector is significant in the economy by generating employment at producers, processors and marketers levels, thereby facilitating the flow of urban money to the rural milk producers, greatly helping in rural poverty alleviation. The acute shortage of trained manpower is the major constraint hindering the growth of dairy industry especially within the private sector. Imports of dairy products at cheap prices pose a threat to domestic production; and inadequate public and private investment in modernization of the sector.
In summary, the dairy sector in Dang has only a few strengths but many constraints and weaknesses. The major weaknesses include low productivity, low non-remunerative producer prices for milk and a lack of basic supporting infrastructure. In rural areas, milk is mainly produced by small and marginal farmers, and landless and agricultural laborers. In many instances, the producer price does not even cover the out-of-pocket cash costs of milk production. This is mainly because of unregulated competition from heavily
- High inflation rate
- Low purchasing power
- Increasing interest rates
- Decreasing investment
- Recessionary period in business cycle
3.2Conclusion
Due to the increase in population, demand of milk is increasing and dairy enterprises are growing in the market. Income of farmers is also increasing.
The contribution of the dairy sector is significant by generating employment at farmers, processors and marketers levels, and greatly helping in rural poverty alleviation.Dairy is one of the vital sub-sectors of Livestock Sector and holds great growth potential. It forms an important component of economy and supports around million rural families. Thus the growth of dairy sector has a vital bearing on the overall development of the country
Dairy business is one of the leading businesses in Nepal. It has contributed in various sectors such agriculture promotion, farmers self dependent, poverty alleviation, employment opportunity, etc.
Milk and milk products are one of the important components of the food industry. Consumption of milk and milk products is deeply rooted in our tradition and it is an essential item during rituals, festivals and other auspicious events. Agriculture still continues to be the major sector in economy. There is very good scope for new entrepreneurs.
3.3 Recommendation
Following should be done to develop dairy sector in dang as well as in Nepal
1. Establishment of regional Dairy Training Facility all over the country.
2. Regular operation costs are to be met by commercial processing and marketing of plant that can organize regular and need oriented training programs.
3. While fixing procurement price, producers’ interests should receive the utmost attention. The producer price should at least cover the long-run average cost of milk production and provide a reasonable mark-up.
4. Development of appropriate technology to the benefit of small and medium scale dairy entrepreneurs.
5. The quality monitoring and inspection mechanism should be strictly enforced. Incentive/premium pricing should be encouraged.
6. Management of veterinary care and Improve feeding, breeding / genetics
7. Increase milk output per animal. The shortfall is only 3.5 liters milk per animal
8. Under the promotional strategies, the dairy should go for sales promotion, advertisements & public relations.
9. As the policies are on the national basis, it is more suitable to go for regional basis policies associated with promotion.
10. The advertisement of dairy at present is not being exposed on media. Still many consumers can be conveyed through media.
11. They should also start to manufacture powder milk in order to meet the domestic demand and so that it can be helpful in saving the foreign exchange that is expensed in importing the powder milk from foreign countries.
12. NDDB is at the infantile stage, it should be fully strengthened to plan and coordinate total dairy development activities in the country.
13. Decision on DDC restructuring could clear a way for future dairy development plans and programs.
14. Local capabilities of Dang Dairy Association and Nepal Private dairy Association should be fully exploited, and these institutions should be strengthened.
Bibliography
1. Basnet, S.; Schneider, M.; Gazit, A.; Mander, (April 2010). "Fresh Milk for Infants: Review".
2. Hemme and Otte (2010). "Status and Prospects for Smallholder Milk Production: A Global Perspective".
4.Pant, Prem R., Essential of Business Research Method, First Edition.
5. Possibility of Dairy in Dang,2066-5-24 Yougbodh newspaper
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