Hand in Hand India
Promoting fair price realization & access to services through “Dairy value chain development” i.
Background: Many of the SHG women who are in the dairying activity, face exploitation by middle men, local distributors and larger operators, as they are operating in an unorganized manner. These individual entrepreneurs find it difficult to invest in market information and value chain unless they are organized into a federation and empowered or supported by development organisations to deal with the intermediaries and the corporates. Due to the lack of market information and value chains, many women tend to limit themselves to a minimum production through the activity at a very basic level, which yield only a marginal income; and others unable to foresee the potential and stand up to challenges, opt to discontinue mid-way, while many do not feel confident even to start.
The specific issues faced by the dairy entrepreneurs in the area were:
 Lack of capital to purchase the cross bred cows.
 Delayed payments for the milk procured sometimes even for more than two months,
 No consistent price for the milk supplied,
 Many market players paid a poor price in the range of Rs. 13 to Rs.15 per litre.
 Except the milk procurement, no other support services (especially Insurance and animal health care) were provided by the intermediaries.
 Most of the dairy entrepreneurs have not used the Balanced feeding method, which resulted in poor milk yield.
Hence, Hand in Hand India had planned to provide a continued support through a dedicated dairy value chain. To start with, Hand in Hand had initiated a “Dairy hub” to deliver these missing links and to offer value added services to the SHG members involved in the dairying. ii.
Objectives: Hand in Hand India had launched this Dairy value chain development activity with the following objectives. o To promote dairying as a remunerative enterprise by providing financial linkages, increasing income through bulk procurement of inputs and collective sales of milk o To promote value added products. o To provide better animal health care access. o To facilitate insurance cover to the dairy animals to mitigate the risk o To avoid exploitation by middle men through direct selling and transparent price realization. o To promote common facilities and infrastructure to support the dairy entrepreneurs. iii.
Dairy Hubs: These hubs will be like training cum production centres, but managed by the entrepreneurs themselves. Hub will ensure that the following tasks are undertaken by them viz. enrolling new entrepreneurs in the hub (a registered entity), market research, getting orders, entering into contract with bulk consumers, providing or procuring inputs, training in new skills, ensuring quality control, packing, branding & financial management, providing veterinary care, facilitating insurance cover, promoting collaboration with govt. agencies, fair & ethical trade practices and so on. Individual entrepreneurs will reap the benefit on the basis of their contribution to the production. Each hub will be expected to serve around 250

iv.
women at the outset. Melmalayanoor dairy hub was started in October 2013 as a separate
Mutual Benefit Trust. Melmalayanoor location has been selected as Hand in Hand India has already financed many SHG women for dairying and many private operators are available nearby to lift the milk in bulk. Two more hubs are in the start-up stage at Walajabad and
Tindivanam.
Value Chain development: Hand in Hand India facilitated the provision of various services by developing appropriate structures, systems and processes across the Dairy value chain so as to offer the SHG members integrated services to benefit them in a more holistic and sustainable manner.
a. Provision of Credit: Facilitating the credit to SHG members for purchase of dairy animals was a challenge at the outset, as there was no “Proof of Concept”. Even though Hand in Hand had promoted
Activity Based Groups since 2011 for promoting Dairy clusters, the first breakthrough was achieved in
August 2012 as ADFT of NABARD had come forward to finance to Hand in Hand for Rs.100 lakhs for onlending to 92 ABGs for dairying. As the project took off well and created the visible impact at the SHG members level, the subsequent loans came through easily. In the second phase also, ADFT of NABARD extended further support of Rs.186 lakhs to 42 ABGs and Pallavan Grama Bank also lent support by sanctioning loans of Rs.59 lakhs for dairying through 55 SHGs. The credit facilitated procurement of
1257 cross bred cows.
b. Access to Veterinary care: Three Veterinary Doctors provide the regular check up to the dairy animals owned by SHG / ABG members. Each animal has been given the “Health card” and deworming and periodical vaccinations are done for Foot and Mouth Disease (FMD), Black Quarter and
Haemorrhagic Septicemia. Artificial inseminations are done in time, which has improved the productivity of the animals. Even though, Foot and Mouth Disease (FMD) occurred widely in Tamilnadu in 2014, FMD has not impacted in the Hand in Hand India’s dairy Hub area.
c. Provision of insurance cover: Hand in Hand facilitated insurance cover through Dairy hub by negotiating with United India Insurance company and New India Assurance company and so far 1257 dairy animals have been insured at a subsidized rate (50% subsidy) of Rs.1200 per animal for 3 years.
d. Technical training to SHG / ABG members: Dairy entrepreneurs have been trained on dairy animal rearing especially in balanced feeding methods, animal husbandry management, value added products and on dairy hubs.
e. Procurement of inputs: Dairy hubs procure the ground nut cake and rice bran in bulk and they sell it to the members. The members pay the amount in two instalments. This has resulted in savings on the feed cost. Mineral mixtures are also being sold by the hub.
f. Marketing of milk: There are 7 Satellite Milk Collection Centres (SMCC) under the 3 dairy hubs. Each
SMCC is managed by a SHG member. SMCC collects the milk from their area and send it to the hub.
Lactometer reading is taken at the SMCC. The hub supplies the milk to 3 private milk processing units and realizes a better price of Rs.23.29 to Rs.25.38 a litre of milk. The hub is provided with a freezer, cream separator and milk testing facilities.
g. Promotion of Green fodder: Dairy hub has distributed CO 5 fodder slips to 85 women and ensured more than 200 SHG women raise the fodder in their farms. The inclusion of green fodder in the cattle feeding, increases the fat% of milk, which results in higher price per litre of the milk.

h. Value added products: Dairy hubs also took up the preparation of value added products like curd, buttermilk, rose milk and Badam geer. The value added products have been prepared only during the festival days and sold in the local market. i. Technical Assistance –Backstopping support by Hand in Hand: The technical assistance for the project is being given by Hand in Hand through the backstopping support by placing dairy experts in Dairy hubs to manage the hub, facilitate collaboration with KVK (Krishi Vigyan Kendra) & Animal Husbandry department for technology transfer and nurture the capacity of the community to handle on its own. v.
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Sustainability: Melmalayanoor dairy hub crossed its break even and it is recording a sales of around 1500 lits of milk per day and a turnover of more than Rs.10 lakhs per month now. It covers a part of the staff cost also including the salary of veterinary doctor, accountant, mobilizer and logistics persons.
Challenges: Promotion of dairy value chain with a focus on the community managed structures have a lot of challenges. Hand in Hand is addressing these challenges one by one by trying out various options evolved in consultation with the SHG / ABG community. The major challenges are
Availability of good quality cows within the loan amount of Rs.30,000.
As members take advance from the private vendors, bringing them out of the clutches of vendors is a huge challenge.
Difficulty in negotiations with private players to get the fair price.
Mobilizing SHG / ABG members to take the responsibility for operations in the dairy hub. vii.
Impact from the clients’ perspective:
Around 1257 SHG women got the credit of Rs.3.45 crore at an affordable rate through Hand in
Hand’s micro finance program funded by ADFT of NABARD and through SHG Bank linkage program loan funded by Pallavan Grama Bank.
SHG women now gets a price of Rs.20.79 to Rs.22.88 per lit of milk compared to the price they got in the pre-project period at Rs.13 to 15 a lit. Incremental income is tangible.
SHG members have a good access to professional veterinary care and the incidence of diseases have come down in the project area.
Out of the 1257 animals purchased under the project, so far 21 animals have died and for 11 animals, the insurance amount was received and the new animals were purchased and ten claims are under processing and hence, SHG members did not face any loss of capital assets.
As the SHG members are purchasing cross bred cows and feeding the animals through balanced nutrition including the green fodder and mineral mixture, the average milk yield of animals have gone up from 3 to 4 lits per day per animal to 6 lits to 8 lits per day.
SHG members get the feeds (Ground nut cake at a price of Rs.33 – 36 and rice bran at a price of
Rs.10) cheaper from hubs than the market rates paid by them earlier (groundnut cake at Rs.42-
45 per kg and Rice bran at Rs.12 per kg).
SHG members gets the milk sale proceeds once in ten days through SMCC.

“Through Hand in Hand India’s training I have enhanced my knowledge on cattle rearing. Today, I know how to select a healthy milch animal, the appropriate feed that has to be given to the cow, as this can impact the milk yield, and how to prepare hay for the cattle.”
Selvi, Avanampattu village, Shakti 2 ABG
Poongoodi w/o Palani from Endiyur village (Marakanam Block) belongs to Ambigai SHG and Sri Krishna
ABG bought cross bred dairy cow in Oct 2012. Apart from following the balanced nutrition by giving green fodder, dry fodders and concentrates, She followed the insemination procedure in a correct way advocated in the training. Mostly her animal became pregnant within 2 or 3 inseminations. Now she has taken 2 heifer calves so far. Her assets value including the mother cow (Rs.30000) and 2 calves
(Rs.20,000) is at Rs.50,000 and she is very happy about this appreciation of assets value within a period of one and half years. viii.
Way forward: Hand in Hand is planning to merge all the three dairy hubs into a Producers company so that the scaling up can be faster, as the producers company format has got its own advantages for building the institutions for social businesses. Under the Producers company, the production will go up from 1500 lits per day to 10,000 lits per day in the next
3 years.