• Saturday, July 20, 2024
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What the Nigerian Dairy Sector Can Learn from the Indian Dairy Cooperative Model

Sahel Delegation to India (1)

Dairy development requires a concerted effort and cooperation by all stakeholders especially smallholder farmers whose livelihoods depend on the sector. There are several lessons that can be applied from developing countries such as India that have built their dairy sector using farmer-driven innovations and support systems from the government.

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In 1946, the Indian dairy farmers rejected milk payments from the colonial processors due to low prices and the exploitative activities of middlemen. The farmers sought out Mr S.V. Partel, a reputable opinion leader in Anand, Gujarat for advice and support. He advised the farmer representatives to establish a dairy cooperative to improve their income from milk and limit the activities of middlemen in the dairy value chain. This led to the Indian “white revolution” in which farmers formed self-help groups to co-own milk collection infrastructure and improve access to markets. The dairy farmers proposed four conditions for dairy development in India, which included: a) setting up of milk cooperative societies, b) the establishment of district union in Anand, Gujarat, c) ensuring that only milk farmers could register in the society regardless of religion, social class or political views and d) the routing all milk purchases through the same cooperatives. The dairy cooperative (names Amul) started in 1946 with less than 50 members producing 250 litres per day. Today it has grown into 162,186 dairy cooperatives consisting of 15,495,000 farmers that are currently producing about 34,174,000 litres of milk per day across India, accounting for about 21% of the domestic milk production as of 2018.

The milk cooperative structure was formalized in 1965 and referred to as the “Anand Pattern”, a three-tier cooperative structure which consists of a dairy cooperative society at the village level and is affiliated to a milk union at the district level. In turn, the milk union in is integrated into a milk federation at the state level. Under this arrangement, milk collection is handled at the village dairy society. The district milk union purchases the milk and adds value for onward transmission to the State Milk Federation, responsible for marketing the dairy products. This system eliminates internal competition and enhances economies of scale. The dairy cooperative membership requires the ownership of lactating cows and supply of milk, while the leaders of the various village cooperatives are automatic members of the district milk union and the leaders of milk unions constitute the dairy marketing federation. The Anand Pattern has succeeded in breaking barriers in dairy development by providing access to markets and processes in which farmers determine their own business models, adopt modern production and marketing techniques and access services that they cannot afford or manage individually.

A key success factor of the Anand pattern is the participatory approach to development where professionals are accountable to the leadership of Village Cooperative Society (VCS) that are elected by dairy farmers. The Anand pattern provides a platform for smallholder farmers to co-own critical infrastructure such as feed plants, animal health services and genetic improvement centres. This model was replicated all over the country under the ‘Operation Flood’ program otherwise known as the “Anand Pattern of Dairy Cooperatives”.

Through the cooperative model, India has transformed the dairy sector by investing in artificial insemination, animal health services, feed and fodder, training and research. One of the key service delivery units of the cooperative is the Amul Research Development Association (ARDA) which was established to provide training for personnel and quality animal health services to smallholder dairy farmers and artificially inseminate their cows. ARDA runs a call-centre that allows farmers to report animal diseases or request for services such as artificial insemination and pregnancy diagnosis. The organization deploys veterinary doctors to the farmer’s location within 30 minutes in cases of emergency and 2 hours in normal cases. Farmers pay 100 rupees (N505) per cow, for treatment. ARDA charges 250 rupees (N1,264) for emergency situations, which can be paid directly by the farmer or deducted from milk proceeds by the cooperative.

Another key achievement of the Anand pattern is the shared ownership of milk collection infrastructure by smallholder farmers and the innovative milk collection system.  Under this arrangement, each farmer is assigned a unique identification code by the Village Cooperative Society (VCS) to easily track, check for consistency and provide value add services. The VCS invests in farmer level data collection including name, amount and quality of milk supplied which is printed on a voucher each time the farmer supplies milk. The milk payments are based on quality and the proceeds could be withdrawn as cash, allocated to animal feed and drug procurement, payment for artificial insemination and animal health services or saved with the union. Each VCS employs quality assurance personnel who ensures milk quality by carrying out various tests. The VCS does not accept poor quality milk and offenders are prevented from future supply of milk.  At the end of each year, the VCS shares part of its profits with members as patronage bonus based on the quantity of milk supplied during the year.

The Nigerian ecosystem can adapt many of these best practice examples from India. For example, the Federal Government of Nigeria can integrate the Indian cooperative system into the implementation of the National Livestock Transformation Plan (NLTP) by partnering with Miyetti Allah Cattle Breeders of Nigeria and National Veterinary Research Institute to deliver similar animal health services and cooperative systems in a sustainable manner in order to achieve its goals.

In addition, the Nigerian dairy development needs to be championed by the farmers themselves for the gains to be sustainable and inclusive. A strong dairy cooperative system will increase farmers’ access to inputs and markets. As a result, it is imperative for governments at the state and national level and development organizations to provide the required policy and investment support, respectively to build a sustainable and integrated dairy system through cooperatives in Nigeria.

Ayodeji Ojo