Dairy Farming-डेयरी फ़ार्मिंग

Churning Prosperity: Dairy Cooperatives as Economic Catalysts for Remote Regions

Team Pashudhan Praharee

June 28, 2025

361

Churning Prosperity: Dairy Cooperatives as Economic Catalysts for Remote Regions

Aditya Singh Bijalwan ¹

adityasinghbijalwan069@gmail.com

Dr. Yashwant Singh Parmar University of Horticulture and Forestry, Solan, (H.P)¹

Abstract

The development impact that, dairy cooperatives have in inclusive growth and socio-economic development of India’s tribal and rural areas is astounding. This is especially true given the fact that India ranks first in milk production at 225 million tonnes with a 5.57% increase per year for the last decade. Economically, there is rampant gender inequality, underdeveloped infrastructure, and rural poverty which do not help the case domestically. The cooperative model born from the 1904 Cooperative Societies Act and exemplified by Amul’s success has worked time and again to alleviate these issues. Not to mention, the dairy sector employs women who make up 70% of the workforce. They also increase women’s empowerment because cooperatives improve women’s access to credit, education, and training. The structure of cooperatives drastically improves market access and doubles or triples dairy farmers’ incomes (20-40%) by removing middlemen. In dairy farming, these cooperatives encourage the building of primary milk collection facilities to process plants. The provided analysis focuses on driving responsive policy frameworks to deepen youth employment and ensuring holistic strategies to respond to.

Keywords: Dairy Cooperatives, Rural Development, Tribal Communities, Economic Empowerment, Women Empowerment, Market Access, FPO, India, Sustainability.

Introduction

Driving both the nutritional landscape and economic resilience of the nation, India’s dairy sector critically underpins the livelihoods of millions in its vast rural expanse. Producing 225 million tonnes of milk every year, India stands atop all nations when it comes to milk production. The annual nationwide increment in milk production is almost 6 percent and the last decade saw an overall compound annual growth rate of 5.57 percent. This growth is widely attributed to the cooperative movement within the Indian dairy sector.

The history of cooperative movement in India is some 100 years old. This movement was born with the passage of Cooperative Societies Act, 1904, which was based on the Raiffeisen model borrowed from Germany. It aimed at providing defence to farmers against private money lenders. And it has proven to be able to achieve that to a greater extent. Amul (Anand Milk Union Limited), established in 1946 under the aegis of Sh. Tribhuvandas Kashibhai Patel and Dr. Verghese Kurien is a prime and legendry example that we have of the Dairy cooperatives. This milk cooperative, today has a network of 3.6 million milk producers who generate a total revenue of Rs. 90,000 crore per annum. The Amul cooperative model is not a mere dairy success story, rather it’s a symbol of socio-economic transformation.

Cooperatives Driving Rural Change

A cooperative is a membered organization formed voluntarily to meet the common needs of the members viz. social, economic, cultural etc. the profits or loss is shared by the members equitably. The cooperative societies are formed and registered under Cooperatives Societies Act, 1912. Since, the formation of cooperative societies is a state subject, individual states have their own acts based on the 1912 Act, which is a central act. A group of at least 10 adults with a common need or interest must come together and apply for the registration of the society with the Registrar of Cooperative Societies for the concerned state, who then provides the certificate of registration, green signalling the establishment of the cooperative. India is a pluralistic country, with a wide set of problems. Gender inequality, economic disparities, the significant rich-poor divide, and limited access to basic amenities in rural areas remain pressing challenges. What must now be examined, from a scientific and developmental perspective, is how the dairy sector—with its extensive workforce, substantial potential, and promising turnover—can serve as a conduit to address and alleviate these issues. One important fact that needs a highlight is that the dairy sector is dominated mainly by females, as around 70 percent of the workforce is females, who play diverse roles pertinent to the enterprise. But they face a lot of hurdles along the way, e.g. lack of access to credit, less education and training, gender disparities and reliance on men. All these challenges can be overcome if we organise these farmers into cooperatives. That will solve more than half of their problems like it would be easy for them to obtain credit, have training and become self-reliant and hence more empowered.

This paradigm is equally applicable to rural populations at large, and more specifically, to marginalized sections of society. They lack resources, live in remote areas, no amenities and no awareness. Dairy is one of their major occupations. They rear cattle, goats, sheep, buffaloes, camels etc. depending upon their habitat. For example, the gaddi community and Bakarwals/Gujjars delve high in the Himalayas with sheep, goat and buffaloes as their major source of income. They sell dairy products, wool and meat in unorganised manner and are still in the back of the race. Dairy cooperative model can be a life changing scenario for them. It will make them organized, pool their produce and sell it in a larger market with a diverse consumer base. The camel farmers of the Thar can also be put well into the circle of cooperative business which can help them yield a stable and reliable source of livelihood.

Value Chain Development and Market Integration

The dairy cooperatives also enhance market access for tribal farmers much better than through middlemen, which once more boosts their income by 20–40%. Their recipe for success is building value chains—innovation from milk collection to processing, packaging, and direct selling. For example, the Mehsana Cooperative in Gujarat shifted into producing ghee, ice cream, and cattle feed so that profit remained at the community level. While such development relies on capital as well as talent, partnership with the government, NGOs, or private players has enabled growth to cooperatives without compromising control. The Himachal Pradesh State Cooperative Milk Federation (Milkfed) has been functioning under the brand label “Him” in particular for the hilly regions, once again linking local producers to an organized market. Gaukaran Farmers Producer Company Limited, initiated by Kamdhenu Hitkari Manch and under the Company Act 2013 registered, in April 2017, is a successful FPO development with its milk pasteurization plant at Haripur, Solan, having a daily capacity of 15,000 liters and presently operating 3,000 liters from 350 milk producers. Kamdhenu Hitkari Manch was also recognized by Himachal Pradesh Government in the form of “Himachal Gaurav Puraskaar” during 2012 and the very first award under “Best Milk Co-Operatives” in the extremely high-level “Gopal Rattan Purskar” given by the Government of India during 2021 Kamdhenu Milk – Pure Dairy Products from Himachal. for farmer community contribution in Bilaspur and Solan districts.

Employment Creation and Youth Engagement

Anchored in community participation, dairy cooperatives contribute meaningfully to reducing youth joblessness in underserved rural areas. Agriculture, which was originally based on traditional methods, cannot absorb all the youths within rural communities and thus push them into urban centers. But dairy cooperatives bring about new opportunities for employment that are capable of retaining the youths within their communities. The profession included are technical professions such as artificial insemination technicians and veterinary assistants and business professionals such as marketing managers and financial officers. Most of these professions need education and skills that are attractive to the youth. Universities in agriculture contribute to passing on vital education and on-hand training, with most of the students in rural areas enrolling at higher levels.

Policy Implications and Recommendations

Supportive policies are investments in market development programs, technical assistance programs, concessionary credit, and infrastructure policies. Support policies are not helpful to tribal cooperatives because policies helpful to mainstream farming are not helpful to tribal cooperatives. Thorat and Sadana (2009) give alternate policy recommendations:

Investment and regulatory systems must be adaptable that will be compatible with financial responsibility-based traditional systems of governance.
They require patient capital that is compatible with their long-run development horizons.
Responsive technical assistance schemes that recognize indigenous knowledge but adopt new technologies.

Top-down development strategies collapse because they are insensitive to people’s agendas and capabilities. The most effective policy strategies offer inputs and assistance with the freedom for people to determine their own paths of development. In Himachal Pradesh, there is government intervention directly in dairy development with schemes such as the “Him Ganga” scheme, which is supporting the Dhagwar, Distt. Kangra milk factory. The significant rise in the minimum support prices for milk also indicates a policy-favorable environment to boost the rural economy.

Challenges and Mitigation Strategies

In remote areas, it is seen that poor transportation, lack of cold storage, and weak communication systems are major hurdles. Complex problems need creative solutions like insulated milk containers that can be run on motorcycles, The solar-powered milk cooling systems documented by Kumar and Singh (2018) are perfect examples. These systems use basic solar panels, insulated containers, and simple water circulation pumps – all components that can be maintained by local technicians. They cost less than conventional refrigeration systems and are more reliable in areas with unreliable electricity supply., and even boat-based collection scenarios in riverine areas. These community-driven and need based systems are often more reliable and sustainable than ones which are externally provided without any prior knowledge of the region. In Himachal Pradesh for example, tribal regions like Kinnaur, Lahaul-Spiti, Pangi, and Bharmour are especially secluded, with sparse populations and difficult terrain making infrastructure development costly and tedious. This isolation limits the producers’ access to market and forces them to sell their produce at low prices. However, new milk processing plants—like the one in Dhagwar (Kangra)—are strategically set up to serve multiple districts, helping bridge these geographic gaps and offering tribal farmers a stable and fair market. Himachal Pradesh is also moving towards digital solutions. A digital milk procurement system is set to be implemented by March 31, 2025. This system will provide farmers with real-time data on milk quality and price via SMS and ensure direct bank payments, bringing much-needed transparency and efficiency to the process. Such an initiative is instrumental in aligning the dairy sector with modern practices and equipping farmers with critical, data-driven insights.