Annual Progress Report: UNITED NATIONS DEVELOPMENT PROGRAMME
Project Title
Project No.
Type of support
Geographical Coverage
Project Duration
Reporting period
Total Budget
Unspent Balance
Implementing
Organization
Address
Contact Person
Phone and e-mail
Direct Beneficiaries
P 11.245
Grant
Jaunpur District in Uttar Pradesh, India
3 years (October, 2011 – October, 2014)
November 2011 – November 2012
$ 114,845 received on 3.11.2012
$ 5194.24
United Nations Development Programme, India
55, Lodi Estate, New Delhi 110003
Ms. Prema Gera, Assistant Country Director & Head, Poverty Unit
Tel: +91 11 46532363
Email: prema.gera@undp.org
12,000 Dairy Producer Company Members; 1200 Self Help Group Members;
100 Dairy Development Service Providers
Project Information
Brief Description
Since 2009, UNDP in collaboration with the IKEA Foundation has been working to strengthen the
social, economic and political empowerment of 50,000 women spread across 500 villages in Jaunpur,
Mirzapur and Sant Ravidas Nagar districts of Uttar Pradesh. The project is currently organizing rural
and socially marginalized women into collective group, enhancing their capacities and capabilities to
become entrepreneurs and supporting them to contribute effectively in local decision making
forums. The project aims to ensure at least a 20% increase in the income earned by these women.
Based on feasibility studies, which indicate that the dairy value chain has greater untapped potential
in this region, which could be harnessed by involving women in dairy production thereby leading to
an increase in their income in a sustainable way - dairy development has been identified as a priority
sector for intervention. Despite favorable conditions and the growing demand for milk in the region,
women dairy producers have been unable to improve their incomes from dairy production and
effectively participate in milk marketing. The project ‘Support to operationalization of a Dairy Value
Chain and the establishment of a Dairy Producer Company of 12,000 women in eastern Uttar
Pradesh’ with the support of the Rabobank Foundation is aiming to harness this opportunity gap by:
1.
2.
3.
Establishing a women-owned and controlled Dairy Producer Company
Strengthening the Producer Company through marketing and capacity building support
Linking women milk producers across 8 geographical clusters by setting up 8 to bulk milk
chilling units (BMCU’s). The Producer Company will own and manage the BMCUs and shall be
the single window interface for market development, price and profitability and risk
mitigation. This intervention will bring 12000 women as members of the Producer Company.
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General impression of project proceedings:
To impact the livelihoods of approximately 12,000 women producers linked to 1200 Self Help Groups
across 160-200 villages in Jaunpur District of Uttar Pradesh, UNDP is implementing the project
‘Support to operationalization of a Dairy Value Chain and the establishment of a Dairy Producer
Company of 12000 women in eastern Uttar Pradesh’, with funding support from the Rabobank
Foundation since November 2011. In order to achieve the agreed objectives spelt out in the project
document, the project aims to establish a Diary Producer Company, install 8 (Eight) Bulk Milk Chilling
Units, establish market linkages and ensure convergence with Government programs to secure the
commercial viability and sustainability of the producer company.



In the reporting period, the project established a Dairy Producer Company.
Establishment of Milk Collection Centers (MCCs) and Bulk Milk Chilling Units (BMCUs) have
supported women dairy producers’ increase their earnings as the milk price in market has
surged from INR. 14 (as per initial value chain assessment) to INR. 19 (as per current
purchasing rates).
The milk business has been successfully linked with the state cooperative dairy (PARAG) and
chilled milk is supplied directly to PARAF and regular payments disbursed to producers once
in fortnight.
Despite considerable progress, the project is facing quality and quantity concerns, low animal
productivity due to the lack of knowledge and awareness coupled with delay in the release of weekly
payments by PARAG, resistance by middlemen, shortage of competent techno managerial personnel
have served as impediments to progress. UNDP is making attempts to address these challenges
through focused attention on these components in the coming year.
Project activities during period:
A brief activity wise progress against each output is presented below:
Objective I: Capacity Building
Related Outputs:


Establishment of Producer Company:
The first ever women’s owned and managed producer company in the region ‘SWAAYAM KSHEER
PRODUCER COMPANY LTD’ (SKPCL) has been established vide Registration No.
U74120UP2011PTC046928. This has been registered under the Government of Uttar Pradesh
Companies Act 1956.

Up till now, 9,000 women are directly linked with the activities of the producer company and the
dairy value chain. Efforts towards establishing the milk grid has been instrumental in
transforming a traditional livestock activity into an income generating milk enterprise.

10 Board of Directors from among the 9000 women dairy producers have been elected and in
this capacity to oversee the management of the company since November 2011. So far, systems
have been established for milk collection, transportation and marketing. The board of the
producer company has also developed a fair understanding the dynamics of the milk business
through exposure visits, specialized trainings and hand holding. In the near future, it will be
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UNDP’s focus to improve the capacities of the board and strengthen their abilities to manage the
milk business themselves.
Marketing Linkages:
As the milk business expands in Jaunpur, it will be critical to establish and sustain strong market
linkages. During the first year of implementation, efforts have been made to explore possibilities to
link the Producer Company with the broader market. A significant milestone to report is the SKPCL
agreement with PARAG. To this end, The Producer Company has already signed a MoU with the
State Level Cooperative Society to undertake milk marketing. In addition, SKPCL in October 2012
participated in a buyers- seller meet to which various national and local agencies and national and
state government officials were invited. As a breakthrough, SKPCL signed a letter of intent to supply
milk to Poorvanchal Dairy (operated by Banas Dairy). This move is expected to not only streamline
supply and timely payments but considerably enhance SKPCL’s ability to engage professionally with
reputed market actors. Initiatives are also on to link the company with leading players like
AMUL/NDDB etc.
In addition, the project has been also able to build linkage with the government supported PARAG
Training Institute and Rural Self Employment Training Institute (RSETI) to train the members of the
producer company and its beneficiaries.
Objective II: Infrastructure Support
Related Outputs:

Installation of 8 Bulk Milk Chilling Units
The producer company formed under the initiative is proposed to establish 8 Bulk Milk Chilling Units
over a period of 3 years.

During the reporting period, the company has already established 4 BMCUs in the project
locations and has identified the locations for two more BMCUs.

Milk collection at the BMCU at Sultanpur started on 25th November 2011 and at Hanumangunj
on 1 December 2011. The project has installed additional BMCU’s at Ramnagar and Etayee bazar
in the month of October 2012. Milk collection operations have started in 26 Milk Collection
centers (MCCs). As of now, total 120 MCCs covering approximately 140 villages have been
identified and it is expected that more MCCs will be operational with the recent agreement with
Banas dairy and installation new BMCUs.

Setting up the MCCs and BMCUs has supported women to enhance their income substantially.
Earlier women either sold milk through middleman or travelled to far off areas to make a sale.
Now with facilities in their own villages/nearby villages, they are able to get an assured market
all throughout the year with transparent pricing on the basis of quality. This has contributed in
reducing women’s drudgery and lowering their risk.

A key achievement has been that SKPCL has become well accepted within the community local
people understand and value the importance of the initiative. Women who were earlier
reluctant to supply milk to the grid are now showing keen interest to be a part of the value
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chain. Apart from all this, the fact that the institution is to be run and managed by women
themselves creates a strong sense of ownership and commitment.
Project progress
Objective 1: Total No. of Members
Projected for reporting period
Actual
6000 women producers are to 9000 women are linked with
be linked with dairy value chain dairy value chain who have
received training on dairy and
animal management
Reason for Difference
It has taken time to break ties
with middlemen and there has
been considerable interference
from them in rolling out dairy
operations
Over 2000 women currently
supply milk regularly
When the initiative was
launched,
the
middlemen
created a lot of resistance and
rumors which led to confusion
and lack of faith among the
community.
Delay in receipt of payment
from PARAG has resulted in
some women opting out of
supplying milk to SKPCL. Trust
building efforts needed to be
undertaken regularly to bring
them back as regular suppliers.
The number of women
regularly supplying milk is
expected to rise.
Proposed Action: Extensive investments are being made to improve women’s understanding of the
benefits of joining SKPCL, understand its pricing patterns and quality assurance systems. Village
motivation campaigns are expected to encourage women to trust the activities of SKPCL and
regularize their supply of milk. Towards this, in collaboration with RSETI, several training programs
are proposed and consultations with NABARD have been initiated to formalize animal loans.
Objective 2: Incremental Income benefits to farmers
Projected for reporting period
Actual
Profitability
of
Individual Increase was INR.19.33
members expected to increase
from INR 15 to INR 18 per liter
of milk
Reason for Difference
Farmers receive INR 1.33 more
than planned per liter of milk
Proposed action: Efforts are currently underway to link the dairy initiative with national players like,
NDDB and AMUL. The recent signing of the letter of intent with Banas Dairy/Poorvanchal dairy is
expected to boost supply and payment schedules and have positive results in incomes.
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Objective 3 Improve market access
Projected for reporting period
Market engagements will be
established for the producer
company
Actual
Reason for Difference
As of now, the entire volume of  Looking at the current
milk collected by the company
capacity utilization (35% of
is being marketed to PARAG
infrastructure), only one
marketing channel is being
The company is expected to
explored
make 80% milk sales through
 The agreement with PARAG
cooperative dairy and 20%
is binding and for a
through direct local sales
minimum quantity of milk
supply everyday. Currently
SKPCL is only able to meet
this supply
 Absence of new level of
operation for local sales
Proposed action: 35% capacity utilization was expected in the first year of operations. It is expected
that with trainings on productivity enhancement for producers, there will be a boost in production
levels. Simultaneously, efforts are being made to link more women with the dairy value chain. As a
long term strategy, it may be beneficial to establish MOUs with 1-2 major dairies and not initiate
sales to the direct local market.
Objective 4: To provide diversification opportunities
Projected for reporting period
Actual
Reason for Difference
Production of value added Process has been initiated but 1. Current marketing is of
products
activity is yet to start
liquid milk only
2. High value products such as
ghee, peda, yogurt is being
explored
and
market
analysis is underway
3. Certification of government
has to be obtained
Proposed action:
The company intends to draft a business strategy for market development in value added segments
and will phase in the products by 2013 once milk supply stabilizes.
Objective 5: Quality improvement
Projected for reporting period
Actual
Reason for Difference
Quality
improvement
by Quality of milk increased in All MCCs conduct 100% testing
conducting 100% milk testing at terms of fat and SNF.
of milk supplied by producers
MCCs
Adulteration
reduced
at All MCCs have facilities for
producer level
conducting milk testing
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Regular trainings on clean milk
production are undertaken by
the project
Proposed action:
There have been long standing issues with quality in the area and sustained action is required to
change the practice of dilluting milk - once women see the quality linked to profits. While stringent
check points have been introduced across the supply chain, quality of milk still requires
improvements. To this end, the company is conducting regular trainings to farmers on clean milk
production. Further, farmer exposure trips will be organized in 2013 to see good quality control
practices in other regions.
Objective 6: Increase in productivity
Projected for reporting period
Actual
Reason for Difference
Increase milk production at Project has not achieved much Enhancing
productivity
is
producer level
progress.
through encouragement to
women to buy more animals
Some producers have increased and improve the productivity of
the production up to 20% by their current livestock. This has
purchasing new animals.
been limited as linkages with
financial institutions has been
weak and breed development
initiatives have yet to be
initiated.
Proposed actions
In order to increase production, UNDP is interacting with financial intuitions for providing loans to
farmers. Shortly a 7solution will be worked out with finance institutions and SKPCL. Feed and fodder
development modules have been developed foe trainings with farmers. Attempts are already
underway to converge with the government breed development programs that can improve the
genetic breed.
Objective 7: Increase in employment
Projected for reporting period
Actual
Employment to staff and The
company
provides
associates
employment to 240 paid
Secretaries, 150 transporters, 4
BMCU managers, 4 assistants
and 14 field staff (employees
are placed at collection centers,
BMCU’s
and
Producer
Company)
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Reason for Difference
As the company expands its
production, employment is also
expected to increase from
current level
Proposed actions
The company intends to draft a business strategy for market development in value added segments
and will phase in the products by 2013 once milk supply stabilizes. This is expected to increase
employment
FINANCIAL REPORT :
Opening balance 2012
$114, 845
Tranche received in 2011
$114,845
Uptil 10 Nov 12
AWP
Budget
Project Components
Expenditure
Utilization
Rabobank Economic
114, 845
109, 650.76
95.5%
Total
114, 845
109, 650.76
95.5%
Closing balance 2011
$5194.24
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