Indian dairy sector is a blend of formal (cooperatives and private) and informal sector (small processing units, milk vendors etc.). Informal sector still dominates in terms of procurement of the sizeable milk surplus of the country. The present paper has examined the cost and return structure of 27 informal dairy processing units in Karnal district of Haryana for the year 2018-19. The net returns of these processing units are mainly attributed to varying level of milk handling capacity and diversification towards value added products. Dahi turned out to be most profitable product with 53 per cent of profit over cost followed by ghee (12.75 %). The costs of dairy products were found to be decreasing with rising milk processing capacity. Solvency status of dairy processing units was found to be satisfactory yet there is a need for further strengthening.
In the rural sector, dairying and milk production is an important economic activity and has become a secondary source of income and employment. Cooperatives play an important role in animal husbandry and dairying sector, which contributes about one-fourth of agricultural GDP of the country. This study works out the cost of collection, chilling and transportation to arrive at economics of milk processing and manufacturing of milk products in Haryana by selecting milk plants from different zones in the cooperative sector. The economics of milk processing in Haryana show that procurement cost was found to be higher in Western zone which was estimated to Rs. 1.83 per litre of milk compared to Rs. 1.67 per litre in Eastern zone. Out of which transport cost accounted for maximum share (54.57%) followed by transportation cost (54.5 7%), chilling cost (24%), collection cost (17.1 4%) and reception cost (8.57 %). The highest profit was recorded in Dahi making which which yielded a profit over cost of 23.76 percent. The other higher profit giving products were double toned milk and ghee, which yielded profit over cost of 15.21 and 11.88 percent respectively. The profit margin for Paneer was found to be lowest at 7.76 % with cost of Rs 16.05 per kg. The information on the profitability of different products in Haryana can be handy to reorient the product mix and production scale by superimposing the cost of manufacturing and demand of different products over it.
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