Milk production in Baramati doubles

Pune, Dec 29 | Updated: Dec 30 2006, 06:35am hrs
A large scale private milk processing company, innovative funding from a public sector bank and enthusiastic dairy farmers are blending together to churn out a successful modern dairy business model.

Milk production in Baramati has doubled with this milk going into large food brands from HLL to Britannia to Nestle.

Funding has come from State Bank of Indias contract farming and value chain financing, while Schreiber Dynamix Dairies Ltd has brought in the processing power and this has touched a wide base of one lakh milk producers in the milkshed area of seven districts of western Maharashtra.

We are seeing a payout of Rs 300 crore to milk producers every year, Rajesh Lele, VP, milk procurement, Dynamix, said. To ensure consistent supply and quality of milk, Dynamix set up Sahyadri Agro Produce & Dairy Ltd for backward integration and building a network of bulk coolers.

For most of the products milk has to be fresh which these bulk coolers provides to the company while the farmers get payments directly in their bank account immediately. The chain has gone to 101 villages covering 7,011 milk producers and procuring 90,000 litres milk per day at a premium of 40 paise per litre over the government rate.

It is this relation between the company and the farmer that gives confidence to SBI to fund the installation of the bulk coolers, Narayanan Raja, CGM, SBI Mumbai, said. SBI funded Rs 12 crore for installing bulk coolers. This is part of the Rs 106 crore dairy finance by SBI Pune module. We want to go with them as the track record in established, they pay cash on the spot and are transparent in paying for quality, Raja said. SBI is keen on expanding this financing to other dairy players especially with all the action on the retail front.

Under contract farming, farmers in the region got Rs 4.5 crore loans from SBI for buying 1,700 cross breed milch cows so that they can make the best of the opportunities.

Milk production in Baramati taluka has gone up from 95,000 litres per day to 1,75,000 litres and the primary reason was that we are buying all the milk and in fact we are falling short of milk to meet our demand, Lele said. Sahyadri plans to install 250 bulk coolers by end of this fiscal and in the next fiscal the state wants to double it to 500.