Synthesis of Agribusiness Success Models Under Co-Operative and Private Sector in India

Abstract

The present study attempts to address issues relating to supply chain management of Indian dairy sector with focus on both cooperative and private sector. Supply chain management is the most comprehensive approach since it integrates all the stakeholders in the system to make the product or the service available at least cost and with maximum customer satisfaction. In dairy sector, supply chain consists of coordination of production, procurement, processing and distribution system. Amul supply chain model under cooperative sector is a three-tiered structure with the dairy cooperative societies at the village level federated under a milk union at the district level and a federation of member unions at the state level. It eliminates middlemen and directly engages farmer with the processor. The model has linked rural dairy producers to urban consumers through dairy cooperatives, trucking networks, chilling plants and processing plants. The milk grid model is instrumental in establishing the Indian dairy industry as an organized sector with efficient supply chains from production to consumption. However, dairy cooperatives have been facing increasing competition from private sectors, both in procurement and retailing of milk. The turnover of Amul is much lower than a large MNC dairy company like Nestle, which uses the Milk District model for its agro-industrial activity in India. The Company's activities in India have facilitated direct and indirect employment and provides livelihood to about one million people including farmers, suppliers of packaging materials, services and other goods. In the private sector, Reliance Fresh has also been actively involved in supply chain management of milk in India. In order to ensure sustained supply, it not only extends low-interest loans to farmers but also provides advices to them on business development, livestock insurance, and other technical advisory services. These private sector players involved in the supply chain management of milk have capability to handle larger volumes, expand reach, balance costs and address the demographic variations. They have also motivated dairy producers and others involved in the supply chain to invest and increase their earnings from dairying. Since efficient supply chain management involves adequate planning, implementation and control of operations, long term profitability and sustainability of cooperative and private sector players will depend on how their supply chain is realigned into efficient, agile and adaptable network.