Lucknow Producers Cooperative Milk Union Ltd Lucknow

Brief Profile:
With a view to provide reasonable price to dairy
farmers and protecting them from exploitation of
farmer and to arrange supply of hygienic and good
quality milk to consumers of capital city Lucknow,
Lucknow

Producers

Cooperative

Milk

Union

popularly known as Parag Dairy was setup in the year

1938. It was founded by Late. Rai Bahadur Gopal Lal
Pandya. The setup cost of the dairy plant was Rs.5
crore approximately. Its present handling capacity is 400000 litres of milk per day with a
processing capacity of 150000 litres of milk per day.

In course of time Lucknow Milk Union has diversified its activities in the brand name of
Parag and handles:

Liquid Packed Milk

Standard Loose Milk

Parag Butter

Parag Ghee

Parag Dahi (Curd)

Parag Butter Milk or Chhach

Parag Flavoured Milk

Other products include Peda, Paneer, Chhena Kheer, Rice Kheer, Milk Cake, Mattha,
Rasgulla, Kalakand, Laddu and Gulab Jamun

Lucknow Milk Union is controlled by democratically elected directors having 14 members on

the Board. Its elected chairman is Mr. Ganesh Shanker Verma. In all there were 264
employees in the Milk Union which included 26 working Managers. General Manager of the
Milk Union is Mr. Dinesh Kumar Singh.
Union was affiliated to Pradeshik Cooperative Dairy Federation (P.C.D.F.) which was an
Apex Level organisation of Cooperative Milk Union of the State which provided technical,
managerial and financial assistance to the union. There was a statutory State Milk Board and
Milk Commissioner at the State Level. They also reviewed and guided the affairs of Milk
Union from time to time.

Area for Procurement of Milk

For procurement of Milk, Lucknow Producers Cooperative Milk Union Limited has to
depend on other Districts also apart from Lucknow District which has 860 villages and 8
Development Blocks of which 4 Development Blocks slowly and gradually have come in the
city limits, leaving only 4 Blocks from where Milk Producers Cooperative Society are
supplying milk to Lucknow Milk Union.
2. Village
Dairy
Cooperative
Societies

1.
Producers

7.
Consumers
of all age
groups

Milk Supply Chain in

Lucknow Producers
Cooperative Milk Union from

3. Lucknow
Producers
Cooperative
Milk Union

Producers to Consumers
6.
Marketing
and
Distribution
to Agents
and Booths

4. Quality
Testing
5.
Processing
and
Packaging
2

With facility like timely payment, Lucknow Milk Union has been successful in attracting
Cooperative Societies not only from the villages in Lucknow District but also from the
villages of other districts which included Cooperative Societies of:

Unnao

Rai Bareilly

Barabanki

Sitapur

Hardoi

Sultanpur

In all there are 38 Bulk Milk Cooler centres from which 807 Milk Cooperative Societies
(Annexure 8) were attached. Average sale of Liquid Milk per day was 51002 litres in the year
2014-15 which was expected to reach the magic figure of 1 lakh litres per day by the year
2015-16.

Organisational Structure
Of
Lucknow Producers Cooperative Milk Union Limited

General Manager

Manager

Manager

Manager

Administration

P&I

Finance

Manager

Manager

Manager

Factory

Marketing

Engineering

Manager

Manager

Manager

Quality Control

MIS

Store

PCDF and its role in Lucknow Producers Co-op Milk Union Ltd.
PCDF or Pradeshik Cooperative Dairy Federation was formed in 1962 with the aim to
develop organized dairying in the State on Cooperative lines. PCDF is a cohesive body that
successfully does away with the exploitative forces of years to years-the Middlemen.
Therefore a direct link is established between the producer and the ultimate consumer. This
Apex level organisation provides technical, managerial and financial assistance to Lucknow
Producers Cooperative Milk Union and other Milk Union of the State.

The role of the Federation includes:

The overall responsibility for the planning policies

Mobilization and utilization of financial resources

Member and public relations

Liaison with agencies of the state and central government, financing institutions etc.

PCDF's objectives are:

Collection of milk directly from producers through Village Dairy Cooperative

Societies

Increasing production of milk by providing technical support e.g., facilities for breed
improvement, providing good quality fodder seeds, training to farmers etc.

Ensuring fair and remunerative prices to producers by the elimination of middleman.

Ensuring good quality milk available to urban consumers at reasonable price.

Three Tier Cooperative Structure

To achieve its objectives, PCDF works through a professionally managed Three Tier Cooperative
Structure which links the Village level milk producers to the milk consumers in the Cities.
The Three Tier Cooperative Structure:

STATE
LEVEL

DISTRICT
LEVEL

VILLAGE
LEVEL

PCDF (Pradeshik Cooperative Dairy Federation)

DUSS (Dughd Utpadak Sahakari Sangh) or MPCU

(Milk Producers Cooperative Union)

DUSS (Dughd Utpadak Sahakari Samiti) or MPCS

(Milk Producers Cooperative Society)

Village Dairy Cooperative Societies

Milk producers be it cows or buffalos milk usually milch their
cattle twice-once in the morning and once in the evening
(Annexure 5&6). They either used it for self-consumption or for
selling it in the market or for both. When these potential milk
producers pooled their milk for selling it through a single
channel they formed a milk cooperative society.

Milching of Buffalo at Naguamau Village

Various steps involved in organisation and registration of Milk

Societies were:
1. For the organisation of new milk societies, first of all the areas were surveyed and places
with milk availability were identified.
2. After the survey, villages were selected and identified on the basis of excess availability
of marketable surplus of milk.
3. In one of these villages, an open general meeting was held to apprise the villagers about
Parag dairys objectives and advantages of forming a society.
4. Those participating milk producers, who gave their consent for selling their milk through
the medium of cooperative society, were made members and with a minimum number of
30 members a society was formed.
4.1. The membership fee for joining the society is Rs.55 per member which includes a
share money amount of Rs.50 and an entry fee of Rs.5.
5. A general meeting comprising the newly-made members and the chief coordinator was
held in which members elected 9-members who constituted the Managing committee of
Society.
5.1. For electing the management committee, it was necessary for the society to have
minimum of 27 members who have worked for minimum of 180 days and had at
least produced 500 litres of milk in a year.

6. The nine members of the society then elected a chairman from among themselves, and
any educated milk producer/individual was nominated as secretary of the society, who
performed all the daily duties of the society and maintained records.
7. The secretary was paid a salary form the societys income.
8. The process of registration of the society then takes place and the society was formed.

Milk Collection from Members

After the society is formed the producers turned members bring their produce to the
collection centre which is usually the house of the secretary which has all the equipment for
testing milk and weighing it and also the required stationery for maintaining the record.
The societys equipment usually included:

A weighing machine

An electronic milk tester

Pipette

Test tubes

A computer system or a data processor

A printer

A Gerber fat testing machine (manual fat testing machine)

Analyser

Stationary for record keeping

Gerber Machine

The equipment are so chosen that they are affordable, easy to operate and easy to maintain.
Currently the equipment in use are from Rajasthan Electronics and Instrument Limited
(REIL).

The steps involved in milk collection at the society level are:

The secretary at the centre weighs the producers milk and simultaneously takes a
small sample from it.

The sample is tested for its fat content at 84 degree Fahrenheit and a lactometer
reading is recorded.
8

For every rise in temperature by 4 degree, the lactometer reading is corrected by

adding 1 to it and vice versa.

The SNF is either calculated manually with the help of a formula or automatically by
the software provided by REIL.

After recording the fat, corrected lactometer reading (CLR) and SNF the sample is
added back to the milk container.

The exact data is recorded along with the members name.

To ensure transparency societies give a printed receipt to the members on a daily

basis.

Overall the work at the society level mainly relies on the trust every member has on its
secretary. Likewise the process remains the same for all members and once the milk is
collected it is sent to the nearest associated BMC. The morning collection is usually done
between 7 AM-9 AM and similarly in the evening it is done between 6 PM-8 PM. The
collection at the BMC takes slightly longer as the milk from every society is pooled over
there so the timing can exceed till 10.30 AM in the morning and 10 PM in the night.

Bulk Milk Coolers

Each society is linked to its nearest BMC or Bulk Milk Cooling centre. It is the responsibility
of the society to carry its milk produce to the BMC within the assigned time frame. Headload
allowance is provided by the Parag dairy to the society depending on its distance from the
BMC. BMC centres are none other than the milk societies but as they are centrally located
with respect to other nearby societies. The BMC works like any other society be it weighing,
grading or testing.
The major difference is that the BMC not only deals with the milk of its own society but also
receives milk from the nearby societies which is chilled in the bulk milk coolers provided to
the BMC. The temperature of the milk is maintained at 4 degree Celsius till the time it is
transported and sent to Parag dairy via tanker. The tanker makes two trips to the BMC as the
milk is collected in the morning as well as in the evening. BMC is powered by generators so
as to facilitate chilling even during the power cuts. The BMCs role does not limit itself to
just chilling of milk, it also acts as an interface between the Parag dairy and the society. In
rare events like BMC machinery failure, the milk is transferred to other BMCs depending on
their storage capacity.

Payment to the Societies and Members

The payment of the milk produce is done by the milk union to the society in the form of
cheques which is handed over to supervisors visiting the field for depositing in the societys
account. The payment is done on a weekly basis (Annexure 7). At the end of the week
withdrawal was made from the bank and distribution of milk price was done according to the
quantity of milk supplied by members. Registers were maintained by the secretary on which
the signatures of members or thumb prints were taken as a proof that he or she received the
payment. As per the parameters set by the union in case of buffalos milk minimum required
fat and SNF was 5% and 8.2% respectively whereas in case of cows milk minimum required
fat and SNF was 3% and 8% respectively (Annexure 3). If the producers milk was not
fulfilling the above parameters then they were liable for 20% deduction in their payment.
This measure was to ensure that the purest milk reached the Parag dairy. Milk production was
affected by seasonal changes. The three seasons identified with respect to dairies were Lean
season, Mean season, Flush season.

Lean season was the period from May to August. It resulted in less production of
fodder and affected cattle directly so it leads to a heavy decline in milk production.

Mean season was the period from March to April and from September to October.
This season experienced Average milk production.

Flush season was the period from November to February. It was a season which
resulted in higher production of milk.

Due to these seasonal changes the producers experienced heavy fluctuations in their
payments which at times adversely affected their financial condition. To lessen the burden
from the shoulders of the producer and motivate them, milk union adds a society value in
order to benefit the society in unfavourable conditions. The society value is a percentage of
total producers value which added back to the producers value in the weekly payment
receipt. In Lean season, Society value is 3% of producers value; in Mean season, Society
value is 2.5% of producers value; in Flush season, Society value is 2.25% of producers
value.
After collecting and testing of milk at BMC it is transported to Parag Dairy at Lucknow both
in the morning and evening with the help of 20 tankers.

10

Field Visits
In order to have a grass root level experience of milk procurement following 4 Milk
Cooperative Societies of Bakshi Ka Talab block were visited. Description and details
pertaining to the above Societies were as follows -

1. Naguamau Society
Village

-Naguamau

Block

-Bakshi Ka Talab

District

-Lucknow

Chairman -Ms. Neelam Singh

Secretary -Mr. Abhishek Singh
Naguamau society has 135 members which comprises of both small and large milk
producers. It is the largest milk producer society in Bakshi Ka Talab block with a daily
average production of 216 litres and 211 litres of milk in the morning and evening
respectively. It is linked with Parsahiya BMC. As the milk is produced in large volume,
this society makes use of private vehicles for transfers of milk to BMC.
Mr. Abhishek Singh secretary is very particular with regard to timing of milk collection
and does not entertain members coming late to the centre. Being in this profession from a
long time, Abhishek is well aware of the Milk business. Like if a member who regularly
produces milk suddenly doesnt appear in the evening, then his milk is thoroughly
checked the next morning. It is essential according to Abhishek as chances are that the
milk has become stale and might spoil the entire milk collection of the society. Abhishek
is devoted towards the societys work and he himself cleans the milk containers early in
the morning as well as in the evening before the collection starts.

2. Parsahiya Society
Village

-Parsahiya

Block

-Bakshi Ka Talab

District

-Lucknow

Chairman -Ms. Mithilesh Kumari

11

Secretary -Mr. Awadhesh Kumar Gupta

Parsahiya serves both as a society and as a
BMC. It receives milk from 35 societies
including its own society. It acts as an
interface between the societies and milk
union. Parsahiya society has 86 members out
of

which

50

members

are

actively

BMC machinery at Parsahiya Society

contributing towards supply of milk to the society. Mr. Awadhesh Kumar Gupta
Secretary does not completely rely on the machine data and hence tallies the fat content
by the manual Gerber machine too. Its sole contribution in the BKT block lies just below
Naguamau. It is also has AMCU plus bulk milk cooler which keeps the milk chilled at a
temperature of 4 degree Celsius.
The cooler is fitted with a pair of rotators which keeps on stirring the milk at low speeds
to prevent freezing of milk. It has a generator backup which is used in times of power
cuts. In Flush season or in any nearby BMC breakdown, Parsahiya is capable of storing
extra milk as it has an additional storage tank which can maintain the milk temperature
for 8-10 hours.
Here the society wise collective milk testing and weighing is done and the data is
recorded. After this process the milk is poured in the milk cooler using a muslin cloth as a
huge strainer. The milk is then transferred to the Parag milk tanker truck which then
carries it to the Parag dairy.

3. Ramgadha Society
Village

-Ramgadha

Block

-Bakshi Ka Talab

District

-Lucknow

Chairman -Mrs. Prema Devi

Ramgadha Society. Left - Mrs. Nisha Goswami;
Right - Mrs. Prema Devi

Secretary -Mrs. Nisha Goswami

This society was setup under Mahila Dairy Scheme or Mahila Dairy Pariyojna (MDP). It
started on 17th January 2014. It consisted of 43 female members. It is linked with
Parsahiya BMC. It has an average daily produce of 65 litres of milk. It is a DPMT and
12

makes use of data processor, electronic milk tester, weighing scale and is provided with a
dot matrix printer.
As per MDP scheme every member received
2kg of fodder seeds free and now also they can
buy it at 75% subsidy. The society also received
5 quintals of cattle feed. MDP benefits also
included cattle insurance up to 3 years. It even
DPMT at Ramgadha society

promoted cattle purchase by paying Rs. 1000/to the member against every cattle purchased. It

also received 1 almirah, 1 single bed, 4 chairs, and 1 table as per MDP scheme free of
cost.

4. Bharsar Society
Village

-Bharsar

Block

-Bakshi Ka Talab

District

-Lucknow

Chairman -Administrative Committee

Secretary -Mr. Ramdas
Bharsar is a society which has 50 members but only 15-16 members are actively
contributing to milk supply, it is not as flourishing as Naguamau or Parsahiya Societies.
The society is adversely affected by illiteracy, poverty and lack of motivation. It has an
average daily produce of 40 litres of milk only. It is linked with Parsahiya BMC. It is a
DPMT which is powered with solar energy with the help of solar plates. Its equipment
includes data processor, electronic milk tester, vibrator, weighing scale and printer.

13

Testing of Milk Samples and Analysing Variation on 23rd April

2015
Society

Naguamau Society

Village

Naguamau

Block

Bakshi Ka Talab (BKT)

District

Lucknow

Chairman

Ms. Neelam Singh

Secretary

Mr. Abhishek Singh

Sampling Method

Convenience Sampling

Early In the morning I visited Naguamau Society before the collection started. My purpose
was to test the milk samples of 10 animals and analyse the variations occurring in the
reading. The sampling methodology adopted while selection of Society Members animal
was Convenience Sampling.
The Minimum criteria for testing milk is given in the table below:

The Criteria of Milk Quality

Animal

Minimum
Fat required

Minimum
SNF
required

Buffalo 5%

8.20%

Cow

8%

3%

Note- If Fat or SNF is lower than the

minimum required level then the
member is liable for a 20% deduction
in his earnings

14

The 10 readings were as follows:

#

Member name C/B Fat

Ritu

3.08 29

32

Guddi

5.2

27.3

Rajan

6.16 20

31

Sandeep

4.6

30

Molahe

Vandana
Rawat

Jagdish

3.4

8.8

CLR

27

25

28

26

26

Temp(C) SNF

Conclusion
Fat is almost on the lower side.
8.366 Possible reasons: Fresh Cow/Last
portion excess in fat is left for calf
Fat is on the lower side. Possible
8.29 reasons: Last portion excess in fat is
left for calf/Animal has been hit
SNF less than 8, CLR very low and
Fat unexpectedly high. Possible reason
- The cow has not been milched
6.732
regularly hence stale milk possible.
Liable for 20% deduction due to low
SNF
SNF less than 8 and CLR is less.
Possible
Reason7.67 Adulteration/unhealthy
animal
/
improper feed. Liable for 20%
deduction due to low SNF

30

30

30

8.18

Fat is on the lower side. Possibe

reasons: Last portion excess in fat is
left for calf/Animal has been hit

8.76

Slightly lower CLR. Overall good

quality milk. Possible reasonsProperly fed healthy animal

8.6

Slightly lower CLR. Overall good

quality milk. Possible reasonsProperly fed healthy animal

Bhola Singh

4.8

28

31

8.46

Kalavati

3.7

28

32

8.24

5.4

28

30

8.58

10 Anil

15

Good quality milk. Possible reasonproperly fed healthy animal/good

living conditions
Fat on the lower side, overall good
quality milk. Possible reasonsProperly fed healthy animal/last
portion excess in fat left for calf
Fat is high, SNF is high. Best quality

Fodder Arrangements
The Milk Union provides support and services to the farmer by routing them through the
village Dairy Cooperative Societies. Thus it provided cattle feed, organizes fodder
development programmes and made available good quality fodder seeds so that not only the
quality of milk improves but also the quantity increases.
Green fodder is an economic source of nutrients for the livestock. It is rich in vitamins,
minerals and growth factors. Leguminous green fodder crop also increases soil fertility. It
was provided to the dairy farmers by Lucknow Producers Cooperative Milk Union Limited
with a view:

To increase milk production

To improve health of the cattle

To improve the quality of milk

Fodder seed is provided to the dairy farmers as per their requirement. The requirement is also
affected by seasonal changes. In the Lean season in the fodder production declines, the
demand gradually moves up whereas in Flush Season it is vice versa.
When we talk about fodder production, it is the seed which is the most critical input as it
helps in increasing fodder productivity. Various Green Fodder Crops are:

Crop

Sowing period

Jowar
Makka
(Maize)
Bajra
(Millets)
Lobia
Sugar Beet
Oats

March-July

Seed rate
Rupees
(Kg/hec)
40-50

March-August

Barasim
Sudan Grass

in

Reaping
time in days

Yield in
quintals

60-80

300-450

60-75

60-70

300-400

March-July

10

50-60

350-450

April-July
October-November
October-December
SeptemberOctober
March-April

40-50
8-10
70-75

60-70
90
120-140

25-30

35-45

30

40-50

200-250
900-1000
450-550
10001250
750

16

Similar to the milk, the seed also come across a various process which included:

Production

Processing

Seed cleaning

Grading machines

Marketing of quality fodder seeds

The seed travels through various stages i.e. from production to grading in fodder seed
processing plants under PCDF:
1. Ramghat Road, Aligarh
2. Sultanpur Road, Dahila Dairy Plant, Dahila
On requirement the Dairy Cooperative Societies place their order to the nearest linked BMC.
The BMC further forwards the order to the Union which provides the society with Fodder on
cost basis.

17

Veterinary Arrangements
In order to have an uninterrupted and good quality of milk, Lucknow Milk Union (Parag
Dairy) ensures that the society members cattle is healthy and for that the union has a panel of
3 veterinary doctors which serves the entire Lucknow district. Veterinary Care is a kind of
technical input provided to the members by Parag Dairy.
The various veterinary arrangements included:
1. First Aid Box
At the Grass root level or the Society level First Aid Box is provided with the First Aid
worker in the Artificial Insemination (AI) Centre. Some of the common medicines provided
in the box included:

Magnesium Sulphate

Sodium Bicarbonate

Sulphur Powder

Tincture Iodine

Tincture Benzoin

Zinc oxide

Boric acid

Band Aid

Cotton

Phenyl

Turpentine oil

2. Veterinary Emergency
Parag Dairy facilitates Veterinary Emergency, according to which in cases of emergency a
doctor will visit the member to examine his or her animal for which the member will be
charged a fee of Rs.50. If needed the doctor will prescribe medicines which again will be
provided on cost basis.

18

3. Vaccination
Vaccination is also provided for the prevention of animal against diseases by the Doctors of
Milk Union. It is usually given before the onset of monsoons. The vaccines are available on
cost basis. The vaccines were provided for the following diseases:

HS or Haemorrhagic Septicaemia It occurs notably in cows and buffaloes. It is

characterized by a sudden onset of high fever, shortness of breath, salivation, hot
painful subcutaneous swellings and death in about 24 hours.

FMD or Foot and Mouth Disease - It is an infectious and sometimes

fatal viral disease that affects cows and buffaloes. The virus causes a high fever for
two or three days, followed by blisters inside the mouth and on the feet that may
rupture and cause lameness.

4. Sterility Camp
Huge population of dairy animals fail to exhibit oestrus, ovarian inactivity and causes
anoestrus. For removal of this problem camps are organised by Lucknow milk union in the
village societies.

5. Ticks Control
The Ectoparasite which is very common in dairy animals in which ticks stick on the animals
skins & sucks blood. It may causes anaemia, reduction in milk yield & heavy infection may
cause tick fever, tick paralysis & death of animal. For prevention doses of tick control kit are
distributed to the Cooperative Societies on cost basis.

6. Other Veterinary arrangements include:

Calsagar-Plus It is an animal feed granules which completely satisfies the

calcium requirement of milch animals. Calsagar-Plus is highly palatable and
increase milk production in cows and buffaloes, under field conditions. It contains
appropriate composition of Ca, P and Vitamin D3, for synergetic effect on
calcium absorption.

Mineral Mixture (Aanchal) These are animal feed supplements which

improves digestion, helps to conceive, increases and improves milk production

19

Artificial Insemination Arrangements

Artificial Insemination or A.I. is the only tool for improvement of animals breed and hence
increase in milk production. There is one semen production station at Dalpathpur, Moradabad
under PCDF from where semen is transferred to Parag Dairy. To maintain its vitality the
semen is stored at temperatures around -196 Degree Celsius. Such low temperature are
possible with the use of Liquid Nitrogen which are used basically for freezing purposes.
Cryocans are the insulated cans designed to carry Liquid Nitrogen. The semen at freezing
temperature then transferred to the 39 artificial insemination centres which are working in
Lucknow District and are associated with Lucknow Producers Cooperative Milk Union. The
four varieties of semen used are:

HF or Holstein Friesian

Crossbreed

Sahiwal (Cow)

Murrah (Buffalo)

A.I. centres are usually located in villages where at least one or two persons are trained with
processes of Artificial Insemination and are known A.I. workers. A.I. centres are also
equipped with First Aid facility and therefore A.I. workers are also known as First Aid
workers. The process of Artificial Insemination takes place under the supervision of doctors
from the dairy and this service is provided on cost basis.

20

Processing and Production of Milk at Dairy Plant

After the tankers delivered the Milk at Plant of Lucknow Dairy, it is thoroughly checked
before processing, pasteurised & packed in food grade polyethylene under ultraviolet
radiation, which minimizes contamination. During its processing & packing, milk is not
touched by hand. (Annexure 11)
As per Prevention of Food Adulteration Act {PFA}, Milk was required to meet the prescribed
norms of Fat & SNF {Solid Not Fat}. Milk contained Milk Fat and Solid not Fat which
included Milk Protein, Lactose. Minerals etc. In rainy & winter seasons, because of the
availability of green fodder and lactation cycle of Milch animal, milk production increases &
in this season milk meets the quality norms prescribed by PFA where as in summer season,
there is scarcity of Milk and Milk products not meet the quality norms, especially SNF.
The excess of milk produced in winter season is converted into good quality White Butter &
Milk Powder & these commodities are again recombined in summer season to produce milk.
Milk Powder is being added to milk to increase the SNF % as per norms. In Flush season
Lucknow Producers Cooperative Milk Union Limited converted the excess supply of its milk
into milk powder. This conversion takes place in Milk Powder Processing Unit of Meerut
Dairy in Meerut (U.P.)
In Parag Dairy milk is being standardized to different categories as per the requirements.
Heart patients need low fat milk whereas underweight people needed high fat milk. Toned or
standard Milk were good for tea and Coffee. Hence to meet the aforesaid requirement, Dairy
has to standardize milk in to:

Skimmed Milk (Fat Nil)

Double Toned Milk (Fat 1.5%)

Toned Milk (Fat 3.0%)

Standard Milk (Fat 4.5%)

Full cream milk (Fat 6.0%)

S No.

Content

Full Cream Milk

Toned Milk

Skimmed Milk

1.

FAT%

6%

3%

NIL

2.

SNF%

9%

8.5%

8.7%

21

Apart from Milk other products which are processed and produced in Parag Dairy on a daily
basis are:

200 kg of Butter

250 litres of Ghee

5000 litres of Curd

12000 litres of Butter Milk or Chhach

5000 litres of Flavoured Milk

Peda, Paneer, Chhena Kheer, Rice Kheer, Milk Cake, Mattha, Rasgulla, Kalakand,
Laddu and Gulab Jamun are also being prepared as per demand of the market and
consumers.

22

Marketing Arrangements of Milk and Milk Products

While on the one hand Lucknow Producers Cooperative Milk Union Ltd. Is protecting the
dairy farmers from exploitation of private vendors by purchasing their Milk, it is serving the
city consumers by providing hygienic and good quality Milk and Milk products at a
reasonable price. Following arrangements were made for marketing of products by Parag
dairy:
1. 2800 Milk Distribution centres were in operation for handling the general requirements
of city consumers
2. Milk Booths have been setup at various key points where there was an excessive
demand of Milk and Milk Products. There were a total of 37 Milk Booth (Annexure 10)
currently in operation out of which 11 were owned by the Lucknow Milk Union itself
whereas the remaining 26 were owned by private agency.
2.1. The Booths owned by Lucknow Milk Union were:

1) Jawahar Bhawan
2) PCDF Milk Booth
3) Dairy Gate
4) Alambagh Bus Stand
5) Parag Milk Parlour Lohiya Path
6) Kachehri Booth
7) Sachivalaya
8) Wave Cinema
9) Ganjariiya Farm
10) CSI Booth Gomti Nagar

2.2. The Booths owned by Private Agency were:

1) Shakti Bhawan
2) Bhole
3) Medical College
4) Civil Court
5) Narhi

23

6) Udyan Bhawan
7) Nagar Nigam
8) Civil Hospital
9) Chidiya Ghar
10) Sahakarita Bhawan
11) Homeguard HO
12) Ganga SIC
13) Ambedkar University
14) Gole Market LDA Colony
15) Jal Sansthan KKC
16) Jal Sansthan Meera
17) Northern Railway Booth
18) Nai Basti
19) Hansraj General Store
20) Shiv Kumar (Dist)
21) Marimata
22) Parag ATM
23) Jopling Road
24) SSP Office Booth
25) Madhukar Pandey
26) Radhey Shyam

3. New Milk Distribution scheme through Agents have been introduced in:
1) Gomti Nagar
2) Indira Nagar
3) Vikas Nagar
4) Aliganj
5) Jankipuram
6) Kalyanpur
7) Khadra
8) Daliganj
Good Results of the above schemes have been noticed and the scheme is being
extended to other areas as well.
24

4. Open Milk Distribution Scheme

Like Delhi Mother Dairy, Open Milk Distribution Scheme has been introduced in the
city whereby 24 hours Milk Supply to consumer is being made available. This scheme
has shown good results. Under this scheme 131 Automatic/Semi-Automatic vending
machines have been setup. Scheme is being extended to other areas as well.

MONTHWISE

MILK

PROCUREMENT

IN

LITRES ON DAILY BASIS

MONTH

2012-13

2013-14

2014-15

APRIL

60446

55002

48131

MAY

57448

34543

36537

JUNE

42333

45080

38340

JULY

41971

44289

41289

AUGUST

46002

35169

41264

SEPTEMBER

55472

47992

50553

OCTOBER

53300

45151

51149

NOVEMBER

51578

47000

62588

DECEMBER

60551

56051

62755

JANUARY

67283

64947

63368

FEBRUARY

69460

60805

59144

MARCH

68760

57572

56901

AVERAGE

56217

49467

51002

Despite the above Marketing Arrangements, sale of milk in Lucknow city has shown a
decline due to certain rosy schemes introduced by other Brand sellers of Milk to attract the
retailers and consumers of Milk.
Nevertheless for running in field, Parag has introduced its own supply schemes of milk
produces e.g. Ghee, Butter, Paneer, Curd, Peda, Flavoured Milk, Butter Milk, Chhena Kheer,
Rice Kheer, Gulab Jamun, Rajbhog, Rasgulla in New Packages.

25

Quality Control
With the motive to provide Good quality Milk and Milk Products, The Central Research and
Development Laboratory was established by Pradeshik Cooperatives Dairy federation ltd. In
the year 1989 & in the year 1992 the laboratory received recognition as in-house R&D Lab
by the Department of Scientific and Industrial Research (DSIR) Government of India, New
Delhi. The Laboratory was established in the premises of Lucknow Producers Co-Operative
Milk Union Limited. The Laboratory is equipped with complete modern equipment and
testing facilities, set up with help of assistance from government of U.P. and Ministry of food
processing industries, government of India, New Delhi.
The major objectives of the Laboratory are:

To provide technical guidance on analysis of milk and milk products and

testing/analysis of their compositional, microbiological and adulterant contents.

To conduct storage life studies of milk and milk products and packing materials.

To conduct R&D activities on, and testing of packing materials, raw materials and
milk testing equipment.

Testing and analysis of cattle feed (Raw material and finished goods), Dairy water
and dairy effluents.

To provide general/technical trainings to trainees of MBA, Diary technology & Biotechnology Courses.

Under financial assistance of both Government of U.P. and Government of India, Lab
equipment were made available which included:
1. UV-VIS Spectrophotometer Sartorius
2. I.R. Moisture Balance
3. Lab Drier
4. Fibretech
5. BOD Incubator
6. Flame Photometer
7. Photoflorimeter
8. Sodium Analyzer
9. HPLC with ion Chromatography
10. FTIR Spectrophotometer
26

11. Digital Refractometer

12. Viscometer
13. Body texture Analyzer
14. Acidometer
15. Metal Trace Analyzer
16. Mycotoxinfluorometer
17. Metler Balance
18. Water Purification
19. Elisa Reader & Kit
20. Iodine Analyzer
21. K.F. Titrator
22. Tray Drier
23. Tensile Strength Tester
24. Cheese Vat
25. Moisture Analyzer
The various facilities provided in the Laboratory are:

Chemical and Microbiological analysis of milk and milk products.

Chemical & Physical analysis of different packing materials e.g. Milk and ghee film,
corrugated boxes, tins cartons, Hessian bags/HDPE bags, HDPE crates, parchment
paper etc.

Global migration of milk and ghee polyfilms.

Analysis of raw materials and milk testing equipment.

Chemical and microbiological analysis of dairy water and dairy effluent.

Chemical and microbiological analysis of different raw materials of cattle feed,

mineral mixture and finished cattle feed.

Analysis of different adulterants in milk.

Analysis of pesticides/insecticides residues, heavy metals and Aflatoxin in milk and

milk products.

The major achievements of the Laboratory till date are:

Developed Three Types of Testing kits for detection of adulterants in milk.

27

Developed paper testing strips for detection of adulterants (Soda, urea, Starch) in
milk.

Developed Rose/Kesar Flavoured Milk powders Cheese and Fit milk.

Cost cutting in milk packing by introducing LLDPE/LDPE blended milk Polyethylene

Film.

Conducted more than 100 market surveys/lab studies in the field of marketing, HRD
and quality assurance.

28

National Dairy Plan-Phase I (NDP I)

The NDP is a World Bank sponsored project that covers eight states in the first phase. The
other states, besides Uttar Pradesh, are Punjab, Karnataka, Tamil Nadu, Gujarat, Madhya
Pradesh, Odisha and Maharashtra. Milk cooperatives in these states will be provided support
in providing rural milk producers with greater access to the organised milk processing sector.

Project Area
NDP I will focus on 14 major milk producing states namely Andhra Pradesh, Bihar, Gujarat,
Haryana, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Odisha, Punjab, Rajasthan,
Tamil Nadu, Uttar Pradesh and West Bengal which together account for over 90% of the
countrys milk production. Coverage of NDP I will however be across the country in terms of
benefits accruing from the scheme.

NDP I and Lucknow Producers Cooperative Milk Union Limited

Under National Dairy Plan Phase I, Lucknow Producers Cooperative Milk Union Limited
(Parag Dairy) is working on the following three schemes:

Ration Balancing Programme

Fodder Development Programme

Village Based Milk Procurement System

1. Ration Balancing Programme

There are evidences to show that when a milch animal is fed a balanced diet, it receives the
required nutrients to produce milk commensurate with its genetic potential. Research and
field trials indicates that this approach to feeding has the potential to increase milk yield,
reduce cost of milk production, and contribute to reducing methane emissions. Milch animals
are usually fed one or two locally available concentrate feed ingredients, grasses and crop
residues which often leads to an imbalanced. Imbalanced feeding adversely impacts not only
the health and productivity of animals but also affects income from milk production.
To overcome the adverse impacts of imbalanced diet of animals, Parag is facilitating the
dairy farmers with a Local Resource Person per society which will provide advisory services
to dairy farmers feeding balanced ration to their animals. LRPs would also educate milk
29

producers on the latest technologies such as feeding milch animals with bypass protein,
bypass fat, Area Specific Mineral Mixture (ASMM), treated or enriched crop residues etc.
The LRP is elected person from the village. LRP is further interviewed by a panel of
members from NDDB and Lucknow Milk Union. On selection the LRP is trained and
supervised by existing dairy cooperatives and producer companies. The project will finance
the training costs, necessary equipment, and a modest monthly stipend for the LRPs on a
tapering basis for about two years. Thereafter, the LRPs would be expected to earn a selfsustaining income from the commission through sale of area specific mineral mixture
(ASMM) and other nutraceutical products.

2. Fodder Development Programme

Green fodder is an economic source of nutrients for the livestock. However its availability is
limited. With the limited land under fodder cultivation, there is a need to focus to improve
productivity of fodder crops & common grazing lands and demonstrate to conserve surplus
green fodder to enhance availability during the lean period.
Under NDP, Lucknow Producers Cooperative Milk Union Limited has setup a Seed
Processing Unit in Dahila Dairy Plant which is about 40 km away from Lucknow on
Sultanpur Road. The Seed Unit involves production, processing & marketing of quality
fodder seeds and comprises seed cleaning and grading machines. It aims at producing
certified/truthfully labelled fodder seeds, annually through registered seed growers, following
standard seed production protocol.

Silage

As an alternative method and also to ensure year round availability of quality fodder silage
making, a practice to conserve surplus quantity of green fodder, is also promoted under NDP.
Through silage making large quantity of green fodder can be preserved for longer period
without significant loss of quality and palatability. Silage contains around 65-70 percent
moisture and preserved due to fermentation of sugars available in the green fodder through
anaerobic fermentation. Silage can be fed to livestock in place of green fodder.

30

3. Village Based Milk Procurement System

Lucknow Milk Union has been performing Milk pooling activities proposed under NDP I.
These activities consist of milk collection, testing for quality of the milk supplied
quintessential with standardized Automated Milk Collection Units (AMCU) and Data
Processor based Milk Collection Units (DPMCU) and improving milk quality substantially
by installing bulk milk coolers in villages/ cluster of villages.
Lucknow Milk Union has its 314 AMCU and 31 DPMCU Cooperative Societies operational
in the Lucknow District.

31

Various Centrally-Funded Schemes

Lucknow Producers Cooperative Milk Union Limited popularly known as Parag Dairy and its
807 Dairy Cooperative Societies have been benefitted overtime with various Centrally
Funded Schemes running under Government of India. The various schemes are:

1. Integrated dairy development scheme

This scheme is 100% financed by GOI. This scheme is run with the objective to increase
milk, milk procurement, processing and milk marketing in the state. Assistance is received
from GOI for expansion of existing dairy/chilling plant, for purchase of AMCU/BMC, for
construction of cattle feed godown, for purchase of audio visual kit and also for organisation
of societies. Under society organisation, assistance is received for:

Milk testing equipment

Stationary

Managerial subsidy

Head load subsidy

Green fodder minikit

Working capital

Vaccination

First aid milch cattle

Training & for purchase of animals.

2. Assistance to cooperatives
Under this scheme heavy subsidy is provided to Lucknow Milk Unions which are running in
constant loss and are financially weak, with the objective to make them viable. Milk unionsselected under this rehabilitation plan are provided with financial assistance by ministry of
Agriculture, GOI. Accumulated losses of milk unions subsidised by GOI & state govt. in the
ratio of 50:50.

3. Strengthening Infrastructure for quality & clean milk Production

Milk producers are taught to produce clean milk under this scheme. They are helped with
32

training, use of detergent, antiseptic solution, muslin cloth, utensils etc. Testing labs are
strengthened under this scheme for purchase of Bulk Milk Coolers. 75% subsidy is granted
from GOI.

4. Fodder Development Project

Fodder Development project is running in this department by subsidy of GOI. Under this
scheme fodder seed is provided to milk producers for green fodder to animals. Under this
scheme 75% is borne by GOI and rest 25% borne by Institution.

5. Central Quality Assurance Lab (Central Lab)

By courtesy of the Food Processing Ministry, Government of India, funds has been approved
as grant by the Government of India for the setting up and strengthening of the Central Lab.
The quality assurance department mainly develops kits and testing strips for checking
adulteration in milk and provides them to units as well as consumers. Under the consumer
awareness programme, training camps are held in different districts and important
information provided to consumers about milk adulteration. This lab has been set up in the
campus of the Lucknow Milk Union. Anyone can get a milk sample tested after paying the
required fees.

6. Mahila Dairy Scheme

To promote woman participation, Mahila Dairy Scheme came into being. Proposed facilities
under the Scheme:
i.

Support to mahila dairy societies The following items are given subsidy under
this program- Testing, equipment, managerial subsidy, first aid kit and mixing, AI
equipment.

ii.

Support to women members Subsidy cattle feed and subsidy de-worming

and vaccination & insurance of their cattle.

iii.

Training and awareness programme Free training is given to secretory &

management committee member, chairman of society, first aid worker, A.I. worker,
health education program, animal husbandry & green fodder program, women
education program, farmer induction program & child care program.
33

Competition and Future Planning to Safeguard the Interest of

Lucknow Producers Cooperative Milk Union Limited
Competition is what keeps us active and motivates us to improve. Being associated with Milk
business since 1938, Parag Dairy has faced active competition from various players of the
same industry which include:

Private traders in the Unorganised sector (i.e. Milkmen)

Dairy Cooperatives such as Amul

Other private companies such as Gyaan, Paras, Namaste India etc.

The competition though had an adverse effect on Parags sales and the cumulative losses in
the year 2014 have gone up to Rs.1.5 crores.
Parag has decided to rework its marketing strategy which includes:

Parag would tie up with Resident welfare societies which would mean that people
living in apartments may not have to run to the market every morning to pick their
daily stock of milk.

Parag would augment its sales targets by collaborating with Lucknow Municipal
Corporation by opening mobile kiosks.

The possibility of a tie up with Government hospitals is also being explored as

hospitals consume dairy products under schemes like Janani Suraksha Yojana.

Parag would innovate its packaging by introducing Tetra Pak technology which is a
layered packaging. It will increases the shelf life of milk and milk products

Other strategies include setting up a Powder plant (proposed) and curd processing
plant.

During the course of my Summer Internship, Lucknow

Producers Cooperative Milk Union Limited introduced new
Stock Keeping Units of 200ml both in Gold (Full cream)
and another of 250ml in Toned Milk category both priced
at Rs. 10 per packet. This step was expected to revive and
boost the sales of Parag Milk significantly and enable it to
face the competition from Private Players and Amul.

34

SWOT Analysis
SWOT Analysis plays an important role in formulating the business strategies of any
organisation which is based on its Strength, Weakness, Opportunities and Threats.
SWOT Analysis of Lucknow Producers Cooperative Milk Union:

Vast consumer base

Extensive
Distribution Network
Government Support
Growing Segment
High Operating
Margins
Demand from all age
groups
NDP Phase I

Lack of promotional
strategies
Home
Delivery
services not available
Short Shelf Life
Increasing Input Cost
Political Interference

Strengths

Weaknesses

Threats

Opportunities

Urbanisation
Education
Health Conscious
people
Awareness to buy
packed milk
Parag ATM

Changing government
policies
Political Environment
Unorganised Sector
Private Companies
Other Cooperatives

35

Recommendations

More milk ATM should be established to enhance the availability of Parag milk.

Make the customers aware about the Parag products through different mode of
advertisement.

There should be no leakage in the liquid milk & if the exists than these packets should
be replaced.

Tetra Pak packaging should be adopted.

Milk Powder Processing Unit should be set up in the premises of Lucknow Producers
Cooperative Milk Union as it will help in reducing the cost incurred for Milk Powder
conversion at Meerut Dairy.

Packing of the liquid milk should be reusable that helps to reduce the price of the
products.

Lucknow Milk Union should diversify into products like ice cream just like Amul.

Marketing of Milk and Milk Products to various city caterers should be done as they
always come up with huge demand of such products on various occasions.

Focus should be on forming new Cooperative Societies as they will help in catering to
the excess demand.

On line information about the Parag products & trading should be facilitate by the
company.

There should be regular visit for getting the customer feedback about the Parag
products. This helps to know the changing demand of the customers.

For fulfilling the increasing demand of milk the company should try to increase the
production.

36

Conclusion
It would be seen from the study that large potential exists for expanding Lucknow Producers
Cooperative Milk Union and its products. What is required is determination and innovative
methods on the part of Management and a little support from the State Government.
Competition from Private Trade and also from Amul can be effectively met by associating
the Dairy farmers through Village Dairy Cooperative Societies by giving a personal touch
through regular payment of Milk Price, better serving on Fodder Front and Animal care
through timely supply of medicines and other requirements.
Arrangements of credit to Dairy farmers for purchase of milch cattle and then consumption
requirements and recovery of the same through Milk Price can win the hearts of Dairy
farmers and it can permanently ensure the supply of good quality Milk to Parag Dairy
through Village Dairy Cooperative Societies. Regular Meetings of Dairy farmers could be
organised where problems faced by them could be addressed by the Staff of Lucknow Milk
Union including payment of Milk price, supply of Fodder and Medicines. Training in quality
control could also be a part of these meetings.

37

References
1. Pradeshik Cooperative Dairy Federation Ltd. (http://paragmilkup.in/Static.aspx)
2. Dairy Development Board, Uttar Pradesh (http://dairydevelopment.up.nic.in/)
3. Parag mulls tie-ups to cope with losses (The Times Of India, Jan 8, 2015, 01.22AM IST)
4. Dainik Jagran (Front Page, 24th May, 2015, Lucknow Edition)
5. Dairy sector in UP to get a boost (The Times Of India, Feb 25, 2013, 10.43PM IST)

38

ANNEXURES

39