Accessing value-added market through cooperatives: a case study of Sitajakhala Dugdha Utpadak Samabai Samiti Ltd., India

Abstract

PurposeMember-owned business organizations, such as cooperatives, are engaged in various economic activities that touch our everyday lives. Sitajakhala Dugdha Utpadak Samabai Samiti Limited (Sitajakhala Dairy Producers Cooperative Society Limited) is a successful cooperative society in the northeastern region of India. The purpose of this case study is to illustrate how the cooperative manages its production and supply chain of milk and milk products and highlights several issues that the cooperative encountered in the recent past and how those issues were managed. This case also illustrates how an agribusiness cooperative has been growing over the years, including expansion of business and the creation of a brand image, as well as benefiting its members and their communities.Design/methodology/approachThe authors used a case study approach where they went for in-person interviews of Sitajakhala's executive members and office staff; in addition, the authors were given access to Sitajakhala's marketing and financial records as well as its annual reports and vision documents.FindingsSitajakhala Co-op provides a platform where individual dairy farmers (most of who are small farmers and many of them are illiterate) can unite to bargain for higher prices for their milk. Due to its member-oriented business strategy, Sitajakhala Co-op has been growing well with active support of its members. Consistent quality control and marked improvements in labeling, bottling and packaging of milk and milk products has helped the cooperative to establish itself as a leader in dairy products supplier in Assam among bulk buyers as well as individual consumers. Sitajakhala cooperative also provides dairy farming related services to its members for free of charge to improve milk production and quality. One of the shortcomings of the cooperative is underutilization of its modern milk processing plant which needs to be addressed by the management in earnest.Research limitations/implicationsThis case study is based on information from one dairy cooperative in Assam, India; thus, the findings of this case may not translate into other dairy cooperatives in India or elsewhere. Nonetheless, cooperative practitioners may find the findings useful from a management perspective.Social implicationsSitajakhala Co-op management was keenly aware of the non-dairy related needs of the community it serves. Some of such services include free medical ambulance service for its members, supporting secondary education through providing merit and need-based scholarships and funding physical improvements to a local high school and a local college. In addition, the cooperative regularly provides funding to local sports and cultural events and local social institutions which have positive impact on the larger community. Sitajakhala cooperative has been providing employment to the local youth in the Morigaon area and plans on continuing to do so.Originality/valueTo the best of our knowledge, this is the first case study focusing on the management and operations of a dairy cooperative in the northeastern part of India. Knowledge gained from such study is expected to benefit not only Sitajakhala cooperative but also other dairy cooperatives in a similar situation. This case study will also benefit senior undergraduate and/or graduate students specializing in agricultural economics/agribusiness and can also be used for executive training for the management of academic institutions and food companies.