- 70 - CHAPTER-IV EXCHANGE FUNCTIONS RELATING TO MILK AND MILK PRODUCTS IN CDCMPU AND KDCMPU 4.1 Functions of Exchange: The MPCS plays an important role in distributing milk to various places of the district. Its main function is to transfer the excess milk from the localities of abundance to the places of demand, it thereby maintains a balance between the demand and supply of milk throughout the district. The exchange of milk is done both in the organized and unorganized sectors. The sale of milk through organized sector means sales through co-operative societies. The sale through unorganized sector means sale of milk by the unregistered vendors or private vendors or direct sale by the milk producers themselves to the consumers. In the organized sector the producers have to register themselves with the nearby MPCS. The society collects the milk from the producers through the milk vendor or the producers themselves have to directly deliver at the Co-operative Societies. The MPCS then sends the milk so collected to the Milk Producers Union. The Milk Producers Union after processing the milk, sells or distributes it to the middle men and consumers. The Union also gets milk from the other Unions of TamilNadu, occasionally.
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CHAPTER-IV
EXCHANGE FUNCTIONS RELATING TO MILK AND
MILK PRODUCTS IN CDCMPU AND KDCMPU
4.1 Functions of Exchange:
The MPCS plays an important role in distributing milk to various places of
the district. Its main function is to transfer the excess milk from the localities of
abundance to the places of demand, it thereby maintains a balance between the
demand and supply of milk throughout the district. The exchange of milk is done
both in the organized and unorganized sectors. The sale of milk through
organized sector means sales through co-operative societies. The sale through
unorganized sector means sale of milk by the unregistered vendors or private
vendors or direct sale by the milk producers themselves to the consumers.
In the organized sector the producers have to register themselves with the
nearby MPCS. The society collects the milk from the producers through the milk
vendor or the producers themselves have to directly deliver at the Co-operative
Societies. The MPCS then sends the milk so collected to the Milk Producers
Union. The Milk Producers Union after processing the milk, sells or distributes it
to the middle men and consumers. The Union also gets milk from the other
Unions of TamilNadu, occasionally.
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The Union supplies the milk throughout the district under the brand name
“Aavin Milk” in polythene bags of different size like 500 ml, 250ml and 200 ml.
Whenever surplus milk is collected, it will be stored for a few days in specially
built refrigerators. In addition to dealing with milk, the unions also produce and
sell milk by- products.
4.2 PURCHASE AT KDCMPU
The KDCMPU has a purchase Department, headed by the Managing
Director and controlled by a quality control Manager. Milk has been purchased
from the suppliers and the other Co-operative members. It also purchases AMUL
skimmed milk powder from Anand town of Gujarat. Poly film has been purchased
from Tristar industries, Nasik of Maharashtra and Sugar has been purchased from
the local supermarkets.
4.2.1 Mode of payment of purchase:
All the suppliers of milk have been paid fortnightly. For the skimmed milk
powder, advance payment has been made, and for the films they are paid one-
week after the supply. Sugar has been purchased on a liberal credit basis
4.2.2 Milk Purchase routes and the number of Societies supplying
milk
The KDCMPU has been purchasing milk from the different milk societies
which are situated in the district. Because the societies are at different places, for
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efficient collection of milk they are divided into five routes. The number of
societies and the places are given below in table 4.1.
Table:4.1
Milk producing routes and the number of societies in KDCMPU
S.No. Routes No. of Societies
1 Azhagappapuram 10
2 Derisanamcopu 14
3 Manavalakurichi 15
4 KanyaKumari 11
5 Kaliyakkavilai 12
Total 62
Source: Route wise milk collection abstract report from KDCMPU.
It is clear from the Table No. 4.1 that only five procurement routes are
available in KDCMPU. Sixty two Co-operative societies have been supplying
milk to the Union. In Manavalakurichi route fifteen societies has been supplying
milk and this happens to be the highest, whereas Azhagappapuram route with ten
has the lowest number of societies supplying milk to the Union1.
4.2.3 Calculation of quality based price
The price of the milk has been fixed by the quality of SNF (Solid Non Fat)
and Fat present in the milk. Normally, the price of milk is calculated by using the
formula
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Price = (FAT + SNF) = Rs 80.77/ Kg
Calculation of purchasing rate per litre
Cow milk
Fat = 4.5%
SNF = 8.5%
So the total solids = 4.5 + 8.5 = 13%
Rate per litre = Standard rate x total solids
80.77 x 13% = Rs 10.50 per litre
The Milk is measured in kilograms and 100 kg of milk is equivalent to 102
litres of milk.
4.2.4 Varieties of Purchase reports
In the purchase Department, the following five reports are maintained.
1. Daily milk purchase statement
In this report one can see the details of milk collected both in the morning
and in the evening from various societies of the five routes and also the detailed
information about: the quality of the milk per liter, total quantity and the total
amount to be paid to each society.
2. Daily Milk Purchase Abstract
In this report one can see the details of quantity of milk collected
both in the morning and in the evening from various societies of the five different
routes, individually as well as collectively.
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3. Route Wise Milk Purchase Abstract
This report is prepared once in 15 days. It contains a detailed information
on a chronological basis on: the quality of milk collected in the morning and
evening times, the Fat and SNF contents, rates of the milk and the total amount
due.
4. Payment of Milk Purchase Report
In this report one can see the total quality of milk in terms of: Fat, and SNF
and total value. This report is prepared once in 15 days. The distinguishing
feature of this report is that from this report, the detailed informations relating to
the individual societies in a particular route can also be got very easily.
5. Monthly Purchase Report
From this report one can see the total quantity of milk collected from each
society and also, the average of the milk purchased.
4.2.5 Procurement of Milk in KDCMPU
The KDCMPU receives milk from the local societies and from the other
district Dairies namely Tirunelveli, Karaikudi, Madurai and Virudunagar. The
union daily procure raw milk from the members of the member societies
producing milk. However, not all of them send the milk to the procuring union.
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The details regarding the milk procurement at the union from 1990-‘91 to
2005-‘06 has been given in the Table No. 4.2.
Table No:4.2
The statement of procurement of KDCMPU from 1990-’91 to 2005-‘06
Year Quantity (litre) Total value
(Rs)
Rate per litre
1990-1991 4214721.300 16754497.14 4.00
1991-1992 3818172.250 14698061.67 3.85
1992-1993 3933183.150 15318564.20 3.90
1993-1994 3663075.500 17486729.29 4.77
1994-1995 4628799 22614393.43 4.89
1995-1996 5390347.500 30180999.66 5.59
1996-1997 4643094.500 28560451.82 6.15
1997-1998 3811250 24724331.12 6.49
1998-1999 5691087.800 45376999.18 7.97
1999-2000 6849938.900 45943811.73 6.70
2000-2001 7150834.250 48568204.94 6.79
2001-2002 6692889.850 45813950.70 6.84
2002-2003 6024119.300 45206854.02 7.50
2003-2004 4904687 49283401.48 10.04
2004-2005 5832822 58143293.76 10.00
2005-2006 3057615 32104951 10.49
Source: Compiled from the yearly audit report of the KDCMPU
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It is clear from the above given Table that the milk procurement of the
Union was high during the year 2000-01, with a quantity of 7150834.25 litres with
a total value of Rs 48568204.94. However, In the year 2005-06 the union was
able to procure only 3057615 litres at a total value of Rs.32104957. This is the
least procurement throughout the years under study2. Further to state that
whenever the union purchases milk from Tirunelveli DCMPU, the cost increases
due to the expenditure on transportation and packing and forwarding costs.
4.2.6 Purchase or Production of By-products in KDCMPU
The KDCMPU purchases by-products from other dairies in addition to
what they have been producing. The by-products are: milk peda, Ghee, Butter,
Badam Mix, Flavoured milk and Butter Milk. The production and purchase of by-
products of ‘KDCMPU’ in the year 2005-‘06 on a month wise basis is given
below the Table No 4.3
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4.3 PURCHASES OF CDCMPU
The procurement Department of the CDCMPU had been headed by its
Managing Director, and controlled by Quality Control Manager. Milk is
purchased from the milk producers and MPCS. The main dairy in Coimbatore,
has 200000 litres handling capacity and four chilling centers. The
Shanmugapuram chilling center has 50000 litres handling capacity. Sultanpet
chilling centre, has 50000 lit handling capacity, Tirupur and Annur chilling center
has 10000 lit handling capacity each. There are totally 47 procurement routes
within the district3.
The details regarding the milk collected by the milk producers union
Coimbatore from 1990-‘91 to 2005-‘06 is stated in Table No 4.4.
Table No.4.4
The statement of Average Milk procurement of CDCMPU from 1990-91 to
2005-06.
Year Litre
1990-1991 32533910
1991-1992 31139245
1992-1993 31385255
1993-1994 38978715
1994-1995 39518185
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1995-1996 36179530
1996-1997 30641385
1997-1998 30549405
1998-1999 41550505
1999-2000 43186800
2000-2001 45882325
2001-2002 46163740
2002-2003 45978320
2003-2004 56652015
2004-2005 70063940
2005-2006 75778015
Source: Compiled from the hand Books of CDCMPU.
It is clear from Table No.4.4 that the procurement of milk by the CDCMPU
increases year by year particularly from 2002-03 onwards.
About 7,57,78,015 litres of milk was procured during the year 2005-06. It is
the highest procurement of the study period of 16 years. In the year 1997-98 only
30549405 litres was procured. This is the least procurement in the study period.
At present the procurement is very high.
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Per day area wise procurement of milk in CDCMPU is given below.
Table No.4.5
CDCMPU per day area wise procurement
Place Morning (lit) Evening (lit) Total litres
New Dairy Complex 28933 27686 56619
Shanmugapuram CC 22651 20062 42753
Sulthanpet CC 27765 24807 52592
Tirupur CC 10512 9926 20438
Annur CC 18253 14540 32893
Source: Compiled from the details CDCMPU handbooks.
It is clear from Table No. 4.5 that four chilling centers and one main dairy
have been utilizing milk from the Co-operative societies. The procurement from
these chilling centers is done both in the morning and evening. The new dairy
complex procures more quantity in the morning and evening. That dairy average
in the morning is 28933 litres and 27686 litres in the evening. So it stands in the
first place in procurement of milk, second place goes to the Sulthanpet chilling
center which deals with 27765 litres in morning and 24804 litres in the evening.
Thiruppur Chilling Center stands last, it procurement in the morning is 10512
litres and 9926 litres in the evening4.
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4.3.1 Quality of milk procurement in CDCMPU
The CDCMPU collects milk from various places and societies. The
procurement of milk and its pricing is on the basis of quantity. Fat and S.N.F. can
be measured and that quantity based payment was made from the year 1991 to
2006. The average quantity of milk procurement is recorded in the auditor’s final
report. It is clearly stated below in the Table No.4.6
Table No.4.6
Quality of milk produced from 1991 to 2006 in CDCMPU
Year Fat % SNF %
1991 4.2 8.1
1992 4.23 8.17
1993 4.25 8.16
1994 4.21 8.19
1995 4.19 8.2
1996 4.2 8.18
1997 4.23 8.07
1998 4.263 8.089
1999 4.28 8.114
2000 4.287 8.132
2001 4.325 8.127
2002 4.298 8.122
2003 4.236 8.187
2004 4.143 8.141
2005 4.179 8.115
2006 4.10 8.20
Source: Compiled from the quality maintain records of CDCMPU
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It is noted from the Table No.4.6 that the Fat content is high in 2001 with
4.325% fat. The solid Non Fat (SNF) content is high in the period of 1995 and
2006 where the percentage is 8.2 in the milk procured5.
4.3.2 By products production in CDCMPU
The CDCMPU produces by-products such as Butter, Ghee, Flavored Milk,
Mysorepa and Milk peda. The production of by products with quantity in the year
2005-2006 is given below in the Table No.4.7
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4.4 Sales of KDCMPU
Selling is another important function which involves transfer of the title of
goods to the buyers from the seller. Selling is important from the point of view of
the seller, the consumer and the general public.
The KDCMPU collects milk from various societies. The so collected milk
is subjected to Fat test and SNF test. After the test of Fat and the SNF value, the
rate is calculated and compared with the standard quantity. The milk with 3.0 fat
and 8.5 SNF is considered as the minimum standard quantity. The collected milk
is processed in the dairy industry and then packed in 250 ml, 500ml, for sale. The
packed milk is distributed through various places within the district.
4.4.1 Types of sales
There are five types of sales which are as follows:
1. Cash sales
Cash sales can be done at any time. I can be rectified irrespective of
the inventory of milk. KDCMPU is selling milk packets in all the four
towns in Kanyakumari District namely, Nagercoil, Padmanathapuram, Colachel
and Marthandam. The rate of the milk packet per litre is Rs.12.50 for cash sales.
The selling rate of the standardized milk is Rs.14.00 per litre and for the full cream
milk it is Rs.16 per litres for cash sales. fortnight, month wise, year wise reports
are recorded6.
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2. Credit Sales
KDCMPU employee sells the milk in and around Nagercoil. The route
wise credit sales is done to many institutions like schools, hostels, college, hotels,
canteens, hospitals etc., in credit. This is also called the approval sales. The rate
of milk is Rs.12.50 for credit sales.
3. Card Sales
The Union issues milk card, the valid period is from 16th
to 15th
of every
month. The customer has to purchase the milk card in advance. Since the
customer pays the amount in advance the rate per litre of toned milk is Rs.12 only,
in the prescribed bars.
4. Agent Sales
Agents are to pay the amount in advance for the delivery of packets. He
gets a commission of 20 paise per litre. The rate of the milk Rs.12.50 per litre for
agents.
5. Special order Sales
Special orders can be placed at any time. It can be rectified irrespective of
the inventory of milk. For the marriage and other functions the consumers can pay
in advance to the union. The milk is then supplied on the demanded day and at the
doors. The rate of the milk is Rs.13.50 per litre for special order sales.
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The details regarding the milk sales by the union of KDCMPU from 1990 –
‘91 to 2005-’06 is stated in the Table No 4.8
Table No 4.8
Statement of sales of milk in KDCMPU from the year 1990-‘91 to 2005-‘06.
Year Sales (Lit) Rate (Rs.)
1990-1991 4219958.300 23190771.29
1991-1992 3818507.750 20596569.19
1992-1993 3931551.650 23472943.41
1993-1994 3848933.950 27636439.97
1994-1995 5006010.800 37192285.32
1995-1996 5698991.950 47895838.91
1996-1997 5259668.850 47727704.03
1997-1998 5344748.350 53627999.09
1998-1999 5689277.800 65169123.90
1999-2000 6846468.950 74827649.49
2000-2001 7152934.250 79206168.29
2001-2002 6696852.850 78343641.84
2002-2003 6023705.300 61597600.89
2003-2004 6404643.100 79382937.23
2004-2005 7006449.700 87582317.64
2005-2006 7726296 97485239.15
Source: Compiled from the final year audit report of KDCMPU.
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It is noted that from Table No. 4.8 that the sales quantity and sales rate of
KDCMPU has been increasing, particularly from 1990-‘91 to 2005-‘06.
Sales of milk was about 4219958.300 litres in 1990-‘91 and it has increased
to 7726296 litres during the year 2005-‘06.
4.4.2 By-product sales in KDCMPU
The Union sells milk and its by-products under its trade name “Kanya
milk”. It prepars milk by-products like, milk peda, Ghee, ice cream, rose milk and
mango drinks from Salem dairy and supplies the same through their agents and
through milk bars maintained by the union. it was well appreciated by the general
public. The by-products quantity and sales price are given below in detail in Table
No: 4.9
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4.5 SALES AT CDCMPU.
4.5.1 Sales Plan I
Except the Coimbatore and Ooty customers all those who purchase ½ lit
milk per day get one Coupon also. They get 7 Coupon continuously then on the
seventh day they can submit the seven Coupons in the booth and get 50 grams
Aavin ghee for free. It accelerates sales.
4.5.2 Sales Plan II
This plan is to Create awareness to the customers. Except Coimbatore city,
in all other places one coupon is given to the customers. Those who purchase ½
litre would submit the coupon of the previous day in the booth and get a small gift
and in addition to it they get one more coupon. The aim of the Union is to boost
the sale of the products.
1st day gift - tea powder packet worth Rs. 1
2nd
day - coffee powder packet worth Rs. 1
3rd
day - shampoo sachet worth Rs. 2
4th
day - shampoo sachet worth Rs. 2
5th
day - sugar packet worth Rs. 4
6th
day - fair & lovely sachet worth Rs. 5
7th
day - . soap worth Rs. 5
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If the customer purchases 1 lit toned milk they get 200 ml free
If the customer purchases 500 ml toned milk they get 100ml free
If the customer purchases 200 ml Fat they get 50ml free
These schemes were introduced for promoting milk sales7.
Symbol
The National Dairy Development Board introduced a common sign or
Mnemonic symbol. It is based on good quality of milk.
4.5.3 Bulk sales
The Excess product is sold in bulk only through the TCMPF to the other
States. Under the information of the TCMPF, the union sends the product to the
other states. the union does not collect the money from the party directly, but the
TCMPF collects the money from the party and they get 5% commission for the
sales and then the TCMPF pays the amount due to the product to the union. This
type of sales is under the agreement of TCMPF and the Union. Commissioned
forwarding agents are appointed by the TCMPF in every State for product sales of
Aavin. They have the power to fix the rate of the product for the international
sales of Milk by products.
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4.5.4 Direct Sales
In CDCMPU 75% of milk is sold directly as fluid milk. Only surplus ghee
is sent to the TCMPF which amounts to 50 tonnes per month. In the year1975
only 15000 litres milk was sold per day. But now the sale per day is nearly
150000 litres8.
4.5.5 Excess of Milk
The excess Milk in CDCMPU is sent to Erode Union to prepare milk
powder (Skimmed Milk)
The CDCMPU Collects milk from four chilling centers and their member
societies. These milk is then processed and sold through parlours and various
places. The sales of toned milk from the year 1990-91 to 2005-06 is given in the
table No. 4.10.
Table No.4.10
Average milk Sales details of CDCMPU from 1990-91 to 2005-06
Year Sales (Litre)
1990-1991 27066210
1991-1992 263252260
1992-1993 77790735
1993-1994 31271010
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1994-1995 34639230
1995-1996 33379250
1996-1997 32379150
1997-1998 33765785
1998-1999 36971945
1999-2000 36620450
2000-2001 36318230
2001-2002 36086820
2002-2003 35927315
2003-2004 41508895
2004-2005 48363230
2005-2006 53497685
Source: Compiled from the Details of CDCMPU handbook.
It could be noted from the Table No.4.10 that the sales quantity of
CDCMPU is on the rise particularly from 1990-91 to 2005-06. Sales of milk is
about 27066210 Litres in the year 1990-91 and it has increased to 53497685 litres
in the year 2005-069.
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Per day Sales of milk in CDCMPU is given in Table No: 4.11
Table No.4.11
Area wise sales of packet milk per day
Area .500 Lit (000) .250 Lit (000) .200 Lit (000) Can (000)
Coimbatore 97.81 38.06 - 0.86
Pollachi 1.38 0.13 0.24 -
Udumalpet 0.69 0.38 0.04 -
Valparai 0.45 .05 - -
Mettupalayalam 5.67 1.93 - -
Tirupur 12.28 4.55 3.38 -
Total 118.28 45.10 3.66 0.86
Source: Compiled from the details of distribution report in CDCMPU.
It is noted from the Table No. 4.11 that the area wise sales of packet milk
per day stands first with 500 litres and can sales is very low in Coimbatore
District10
.
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END NOTES
1. Milk supply register of KDCMPU
2. Auditors report of KDCMPU in the year 2005 -2006
3. handbook of CDCMPU in the year 2005 – 06
4. Milk Procurement records in the year 2005 – 06
5. Quality maintaining records in CDCMPU
6. sales register of KDCMPU in the year 2005 – 06
7. Marketing Plan records of CDCMPU in the year 2004 – 05