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A study on Sikkim Co-operative milk union limited, Tadong

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CHAPTER-1
1.1 INTRODUCTION TO THE STUDY
Sikkim is a landlocked Indian state located in the Himalayan mountains. The
state is bordered by Nepal to the west, China's Tibet Autonomous Region to the
north and east, and Bhutan to the east. The Indian state of West Bengal lies to the
south.With 610,577 inhabitants as of the 2011 census, Sikkim is the least
populous state in India and the second-smallest state after Goa in total area,
covering approximately 7,096 km2 (2,740 sq mi). Sikkim is nonetheless
geographically diverse due to its location in the Himalayas; the climate ranges
from subtropical to high alpine, and Kangchenjunga, the world's third-highest
peak, is located on Sikkim's border with Nepal. Sikkim is a popular tourist
destination, owing to its culture, scenery and biodiversity. It also has the
only open land border between India and China. Sikkim's capital and largest city
is Gangtok.
On the merger of Sikkim with the Indian Dominion in 1975 the then
Governor of Sikkim Shri B.B.Lal initiated the idea of forming a Co-operative
Milk Union in Sikkim, probably being encouraged with the success that had been
achieved in the State of Gujarat. Therefore, the matter was taken up with
Dr..V.Kurien, the then Chairman of National Dairy Development Board(NDDB)
who also paid a visit to Sikkim in 1977 as a guest of the State. After discussion
with the State Government Dr.Kurien agreed to implement Anand Pattern Co-
operative societies in Sikkim. Accordingly, from 1978 the Spear Head Team of
NDDB started working in the three districts of the State viz East, West and South.
Prior to this, Sikkim Livestock Development Corporation (SLDC) looked after
the dairying business since its existence in 1977. Ultimately, on 1.7.1980, Sikkim
Co-operative Milk Producers' Union Limited was formed after being registered
under the State Co-operative Societies Act, 1978 and having taken over the
project from NDDB, it started functioning at the present complex at 5th Mile,
Tadong and at Karfectar, Jorethang w.e.f. November 1981, as an apex level (two-
tier) Organisation of the primary Milk Producers' Co-operative Societies (MPCS)
at village level. The Sikkim Milk Union came into being during the Operation
Flood II programme of the NDDB and was established through financial
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assistance by the erstwhile Indian Dairy Corporation (IDC) and technical
guidance of the implementing agency, the NDDB.

Status of societies organized under the union as on 31/3/2012
SL
NO
Registration
Status
WEST
DISTRICT
SOUTH
DISTRICT
EAST
DISTRICT
TOTAL GRAND
TOTAL
F NF F NF F NF F NF
1
Registered
(Jorethang)
65 8 22 15 0 0 87 23 110
2
Registered
(Gangtok)
0 0 5 5 26 26 31 31 62
3
Un-
registered
(Jorethang)
22 25 11 11 0 0 33 36 69
4
Un-
registerd
(Gangtok)
0 0 3 17 14 28 17 45 62

TOTAL
87 33 41 48 40 54 168 135 303
*F-Functional; NF-Non-Functional at present






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1.2 HISTORY OF CO-OPERATIVE MOVEMENT IN SIKKIM

To speed up states socio-economy, the early account of the Cooperative
Movement was started with the enactment of Sikkim Cooperative Societies Act 1955.
Under the Act, Consumers cooperatives mostly managed by Ex-soldiers and
agricultural cooperatives were promoted. After the State joined the Indian mainstream,
the 1955 Cooperative Act was repealed and replaced by a comprehensive Sikkim
Cooperative Societies Act, 1978 and Sikkim Cooperative Societies Rule, 1981. Milk
cooperative network on Anand Model with Sikkim Milk Union at the Apex Level is
being promoted. A chain of consumer cooperative societies under Public Distribution
Scheme (PDS) of Govt. of India, Sikkim State Cooperative Supply and Marketing
Federation with village MPCS as members for farm input supply, consumer
distribution, farm output marketing, credit disbursement and deposit mobilization is
also being set up. The Sikkim State Cooperative Bank is also being organized and
actively promoted. The Sikkim State Cooperative Union organized and established in
2002 is being promoted to progressively develop standard of the general people in
cultivating cooperative ideals.

With the policy and dynamic decision of the Govt., the erstwhile 35 MPCS were re-
organized with one MPCS in each of the 166 existing Gram Panchayat Units of the
State. The labor contract and construction cooperatives are vigorously being promoted
and keeping in mind the broad policy priorities of the Govt. to concentrate
development of economy on areas like tourism, medicinal herb plantation, livestock
farming including dairy, floriculture and orchid farming etc. The State has proposed to
promote producers cooperatives rather than continuing with the traditional
consumerism form of economic development concept. The Cooperation Department is
also suitably expanded, strengthened and needful extent of decentralization were done.
Since inception of policy for formation of various construction cooperatives by the
Govt. especially focusing educated unemployed to execute all construction works falls
under village Gram Panchayat and Municipal wards worth up to Rs. 3.00 Crores
without tender. Similarly, cooperative societies formed by registered contractors and
labour including women are also eligible for awarding construction works up to Rs.
1.00 Crores of Gram Panchayat and Municipal wards wards without tender. The
provision of 10% mobilization advances against work's value shall also be given to the
cooperatives to execute the works. As on March 2013 there are 2337 such GP level
construction cooperatives were organized from where 27489 individuals became the
members of these cooperatives out of which 11041 are female.
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As on 31st March 2013, there are all together 3013 cooperatives of which 6
are apex level cooperatives in the State. There are all together 90290 individual
share holder members of cooperative societies in Sikkim. The total paid-up
Share capital of these cooperatives is Rs. 2370.51 Lakhs and working capitals
is Rs 25021.16 Lakhs. The annual business turnover of Rs. 17777.66 lakhs,
loans and advances of Rs. 4053.54 lakhs, bank deposits of Rs. 18529.42 lakhs
and also execution of construction works about to Rs. 8257.83 lakhs awarded
to over 300 GP level construction cooperatives are the major achievements of
the cooperatives during 2012-13.
























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1.3 ORGANISATION PROFILE
The Sikkim Cooperative Milk Producers Union Ltd. was set up in the year
1980. The society has been registered under the Sikkim State Cooperative
Societies Act, 1978. It is an apex cooperative federation and the primary milk
producers cooperative societies formed at the village level. Its area of operation
extend the whole of Sikkim expect North District. Initially, two Milk processing
plants one at 5th Mile Tadong, Gangtok and other at Karfectar, Jorethang having
processing capacities of 10,000 and 5,000 litres per day respectively were setup
with financial assistance of Rs. 1.63 Crores from Government of India under
Centrally Sponsored scheme executed by NDDB. A further sum of Rs. 65.66
lakhs was received under Operation Flood II. Later in the year 1991, a chilling
plant was installed at Gyalshing in the West District. The Board of Directors
consists of 12 members of whom six are elected members and the rest being
nominated by the Government.
It was in the year 1979-80 that Govt. of India has launched Operation Flood-II
programme through National Dairy Development Board (NDDB) to promote milk
marketing and dairy activities on Anand Model. The scheme was also extended
to State of Sikkim under OF-II in 1982, which gave birth to primary milk
producers cooperatives and their federal body - the Sikkim Cooperative Milk
Producers UnionLtd.

The major objectives of the Union is to provide a ready market and remunerative
price for poor and marginal milk producers who are reside in the far flung remote
villages of the State and to supply hygienic milk to the urban consumers at
reasonable rates and also stabilize consumer milk price in the market
MILK PROCUREMENT RATES OFFERD TO FARMERS

WITH THIS, FARMERS ARE TODAY RECEIVING 135.29% MORE SINCE THEIR
EARNINGS IN APRIL 2007
The Sikkim Milk Union [SMU] has enhanced its procurement price for the farmers
with effect from 01 April 2012. A press release issued by the Managing Director,
SMU informs that the decision on this was accorded by the Sikkim Milk Union Board
and the same was concurred by the state government.
The Sikkim Milk Union has shown consistent progress in the last four years by
making profit and transferring benefit to the farmers in form of price hike and bonus
incentives. To go in tune with the business requirement and to benefit farmers, the
Sikkim Milk Union recently revised its procurement and consumer price of milk, the
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release informs.
In the last four years, the Sikkim Milk Union has revised its farmers procurement
prices with an increase of about 111.76% from the 2007 levels. The increase was done
by Rs. 2 per litre in July 2011, Rs. 1 per litre in October 2010, Rs. 1.50 during the
month of March 2010, Rs. 1.50 per litre during June 2009, Rs. 2 per litre during 2008
and Rs. 1 per litre in the month of August 2007.
Now, a further upward revision of Rs. 2 per litre has been provided to the farmers.
The release states that with this revision, the farmers procurement has gone up by
135.29% higher than the rates of April 2007 to benefit them.
At the revised rate, the price of average milk having 4.0% Fat and 8.0% SNF milk is
paid the rate of Rs.22.05 per litre and the minimum acceptable quality of having 3.5 %
Fat and 7.5 % SNF is paid at the rate of Rs. 20.00 per litre and good quality milk with
5.5 % Fat and 8.5 % SNF is paid at the rate of Rs. 26.80 per litre to the village milk
cooperative societies.
The newly revised milk payment for the month of April 2012 to the village Milk
Cooperative Societies was released by the Sikkim Milk Union on 03 May 2012.
Subsequently the village milk societies are releasing the payments at the revised rates
to farmers for the milk supplied during the month of April 2012. About 10000
farmers families are being benefited out the enhanced procurement milk price, the
release adds.








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LIST OF PRODUCTS MANUFACTURED
S
N.
PRODUCTS TYPES OF
FLAVOUR
AVAI LABES I N MARKETED AS
1 Pasteurised
Packaged Milk
a. Pasteurised
High cream
Milk
b. Pasteurised
Toned Milk
a. Pasteurised
High Cream
Milk-1000ml
b. Pasteurised
Toned Milk-
500ml

SIKKIM MILK
2 Curd - a. 500 ml packets
b. 200 ml cups
MUSKAN


3 Lassi - 200 ml packets SIKKIM LASSI

4 Butter - 1 kg Packs SIKKIM BUTTER

5 Ice cream a. Vanilla
b. Strawberry
c. Alaichi
d. Mango
e. Chocolate
a. Family Packs of
250 ml,500 ml,
1000 ml
b. Cups of 90 ml
c. Candy bar of 60
ml

ICE CREAM
FROM
SIKKIM
EMPIRE
6 Paneer - 200 g,500 g, and 1 kg SIKKIM PANEER

7 Cream - 250 g and 500 g CREAM

8 Churpi - 500g packs SIKKIM
CHURPI

9 Flavoured Milk - 250 ml bottles -




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DETAILS OF MAJOR DAIRY EQUIPMENTS
GANGTOK DAIRY PLANT
S.N Particuarls of Dairy Equipments Quantity Capacity
1. Milk Weighing Balance For RMDD 1 300 Kg
2. SS Dump Tank For Milk Reception 1 1000 Kg
3. SS Can Scubber (Old) 1
4. HTST Milk Pasteurizer 2 5 KLPH
5. Plate Type Milk Chiller 1 5 KLPH
6. Cream Seperator 1 1 KLPH
7. SS Chilled Milk Storage Tank With 2
Agitator Motor Hp
1 10 kl
8. SS Processed Milk Storage Tank 4 5 kl
9. SS Processed Milk Storage Tank 2 10 kl
10. Automatic Milk Packaging Machine Single
Head (Old)
2 2500 Packets Per
Hour (PPH)
11. Automatic Milk Packaging Machine Double
Head (New)
3 5000 PPH
12. Automatic Curd Packaging Machine Single
Head
1 2500 PPH
13. SS Vat For Curd Making 1 1000 Lts.
14. Curd Incubator 1 1000 Lts.
15. Curd Incubator 1 500 Lts.
16. SS Curd Ripening Trough 1 200 Lts.
17. Butter Churn (Old) 1 300 Lts./Batch
18. Flexi Herm Vat 1 1000 Lts.
19. Homogenizer (2 Stage) `1 1000 LPH
20. Air Compressor With Air Receiving Tank 2 1000 Lts.
21. SS Hot Water Tank (Old) 1 1000 Lts.
22. CIP System 1
23. Oil Fired Boiler (Old & New) 2 600 Kg/Hr
24. Water Softener 1 300 Lts./Hr
25. Ammonia Reciprocating Compressor System
(Frick Vilter 454 XI)
1 53.6 TR At 14
o
f
Suction Temp. &
185 Psig Condensing
Pressure
26. Ammonia Receiver 1 7.5m x 2.5m x 2.4m

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AIMS AND OBJECTIVE

The primary aim of the Sikkim Milk Union is to provide remunerative
market for milk producers in the far-flung remote villages and make hygienic
milk and milk products available to the urban consumers at reasonable rates
thereby achieving the following objectives.

a
Stabilize price of milk by connecting areas of surplus milk to the milk-deficient
towns and cities.
b
Uplift the socio-economic condition of the rural poor by increasing their income
through sale of
their milk.
c
Enhance milk production of milch animals by providing technical inputs such as
balanced milch
ration, fodder seeds, fodder saplings thus helping to increase the income of the
farmers.
d
Enhance milk yield of the milch cattle of the farmers by improving their genetic
potential through
artificial insemination and by providing pedigree bulls for natural service.
e
Provide year-round assured market for the milk of the farmers unlike other
agricultural produce.
f
Provide rural employment both as dairy farmers and as employees of the MPCS
as Secretary/Tester/Helper.




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SUMMARISATION OF ABOVE FLOW DIAGRAM:
An organisation set up,the government of Sikkim rest at top as an open body and
under government of sikkim it has two subheads-animal husbandary,livestock and
veterinary services department which provide technical support and solve
administration issues where as the other co-operation department solves co-operation
related issues.
The Sikkim cooperative milk producers union is headed by a board of directors.the
board of directors is composed of onechairman elected by the board of directors for a
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period of 3 years,nine elected representative from the milk producers cooperative
societies,secretary from department of animal husbandary,livestock fisheries and
veterinary services,register of co operative society,representatives from the finance
department,government of Sikkim,managing director from Sikkim State Cooperative
Bank (SISCO),Representatives from the National Dairy Development Board and
Managing Director as member secretary or on deputation from the government of
Sikkim.
The union has two productions units-one at 5
th
Mile Tadong,Gangtok in East Sikkim
and another at Karfectar,Jorethang in South Sikkim.Each of these units is headed by
Joint General Manager working directly under the administrative supervision of the
Managing Director.With the help of subordinates,these two Joint General Manager
perform various activities like procurement and input,processing and product
marketing,accounting and administration at units levels.


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BOARD OF DIRECTORS OF THE ORGNISATION
SL
NO.
NAME DESIGNATION POSITION IN TH
E BOARD
01 Shri M. B. Ra
i
Chairman, Sakyong MPCS, Wes
t Sikkim/Sikkim Milk Union.
Chairman
02 Shri Khemlal
Luitel
Vice Chairman, SMU / Chairm
an
Dhanbari MPCS, East Sikkim.
Vice Chairman
03 Shri. D.P. Sha
rma
IAS, Secretary, Animal Husband
ry and
Veterinary services Department,
Govt. of Sikkim
Director
04 Shri. Dadul B
hutia
Registrar, Cooperation Departm
ent,
Government of Sikkim
Director
05 Shri D. N. Sh
arma
Principal Director, Finance, Rev
.& Exp,
Government of Sikkim
Director
06 Shri M. L. Ra
i
Chairman, Tikpur MPCS, West
Sikkim.
Director
07 Shri B. K. Gu
rung
Chairman, Bada Samdong MPC
S.
Director
08 Shri N. B. Pra
dhan
Chairman, Melli Dara MPCS Director
09 Shri Sher Bdr
. Gurung
Chairman, Kaluk MPCS Director
10 Shri A. B. Rai Middle Raigaon MPCS, East Si
kkim
Director
11 Shri Mangal J
it Rai
Chairman, Beng MPCS, East Si
kkim
Director
12 Shri Gokul R
ai
Chairman, Bikmat MPCS Director
13 Dr. P. Senthil
Kumar
IFS, Managing Director, Sikkim
Milk
Union.

Member Secretary

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1.4 SIKKIM DAIRY MISSION:AIMING TO MAKE SIKKIM
A DAIRY HUB

Another path-breaking initiative of the State government under the leadership of
the Honble Chief Minister, the Sikkim Dairy Mission 2009-2012 envisages multiple
long term benefits to the farmers and to open up livelihood avenues for unemployed
rural people. The mission was launched with the primary objective to enhance milk
production level making Sikkim a milk-surplus State. It also aims to make dairy
enterprise a sustainable source of income for the rural populace of Sikkim, according
to the vision of the Honble Chief Minister.

Dairy development is a vital tool to uplift the socio-economic status of the rural
farmers. Recognizing such importance, the Sikkim Dairy Mission has been mandate to
enhance milk procurement by the dairy cooperatives to substantial volumes per day.
Young entrepreneurs are also encouraged to take up dairy farming as an attractive
commercial activity.

Among the strategies outlined in the mission, high yielding crossbreed cows are
provided to farmers and dairy cooperatives. Sikkim Milk Union is one of the
exemplary dairy cooperative in the State and a successful venture of the State
government in dairy farming expansion.

The Sikkim Dairy Mission is an effort of the State government to expand the
traditional system of animal husbandry into commercial activities through cluster
development approach. This involves free distribution of high yielding milching cows,
high breed of goats, piglets, etc to the rural households.

The Sikkim Dairy Mission while providing sustainable income generating activity to
the farmers also aims to make milk products readily available to all rural and urban
households. This is to ensure that the nutritional requirements of the households are
met.

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The mission further supports feed and fodder production for supplying nutritive
requirement of livestock for better productivity. High yielding milching cows are
being provided under the mission to farmers at regular intervals.

To cater to the needs of veterinary services, very important for the success of the
Sikkim Dairy Mission and other animal husbandry activities, the State government
has a network of hospitals, dispensaries, stockman centres, Artificial Insemination
(AI) Centres and disease investigation laboratories. With the support of all these
institutions and due to intensive preventive measures, there has been no incidence of
Foot and Mouth Disease (FMD) in livestock and no incidence of Highly Pathogenic
Avian Influenza (HPAI) have been recorded for the last two to four years period.

The targeted beneficiaries would be provided with training for capacity building under
the Sikkim Dairy Mission. Awareness programmes under the mission are also held to
enable them to take up dairy farming in a full-fledged manner. The mission provides
for proper health care and management of the cows and dairy enterprises by making
required vaccinations and medicines free of cost or at subsidized rates.

In order to allow the progressive farmers to easily expand their dairy farm, the State
government is facilitating them for financial tie up with public financial institutions
like NABARD and SISCO Bank. Credit facilities are provided to them at prescribed
reasonable rates.

One of the major achievements of the dairy sector is the Sikkim Alpine Cheese Spread
launched in 2003 produced by a dairy unit in Dentam, West Sikkim. The product has
scored over similar products of major dairy firms and has made forays in national and
international markets. The unit has also launched Alpine Cheese Gouda, rated one of
the best in the country and is being exported to other nations under Amul.