Sustainable milk marketing channels through agribusiness innovations: Insights from buffalo farmers in Haryana, India

Introduction

In India, the dairy industry has undergone significant transformations, transitioning from deficit to surplus milk production, driven by technological advancements. Dairying provides livelihoods for millions through milk production and associated activities. India produces 230.8 million tonnes of milk, accounting for about 25% of global milk production (DAHD, 2023). Buffalo milk constitutes approximately 45% of the total milk production, the highest share among bovine species. India is endowed with rich biodiversity in buffalo germplasm, comprising 20 recognized breeds and several non-descript types. According to the Breed Survey (2020), about 54.6% of buffaloes are of descript type, while the remaining 45.4% are non-descript. Among descript buffaloes, the Murrah type dominates with 42.80%, followed by Mehsana (4.00%), Surti (2.20%), Jaffrabadi (1.90%), Bhadawari (1.80%), Banni (0.70%), Pandharpuri (0.50%), Marathwadi (0.20%), and Nili-Ravi (0.20%). Murrah is regarded as one of the best buffalo breeds in the world, often referred to as the "black gold" of India due to its high milk yield, superior fat content, and efficient feed conversion, even with lowquality roughages. The breeding tract of the Murrah buffalo falls in Haryana, which has 5.01 million Murrah buffaloes, including 2.40 million purebreds and 2.60 million graded breeds (Kumar et al., 2019) [10] . In Haryana, the livestock sector contributes 30% to the agricultural Gross Domestic Product (GDP), with milk accounting for 60-65% of the livestock GDP (Anonymous, 2019). The state ranks 8th in milk production in India, producing 116.29 lakh tonnes annually, of which approximately 80% comes from buffaloes, highlighting the dependence of the dairy industry on buffaloes. Haryana also has the highest per capita milk availability (1,283 grams/day) after Punjab (1,098 grams/day), compared to the national average of 459 grams/day during 2022-23 (Department of Animal Husbandry, GoI). Despite this high per capita milk consumption, 65-70% of the marketed surplus is made available to non-producers through various marketing channels. The efficient marketing of surplus milk is critical for improving the performance of the dairy sector in Haryana. www.extensionjournal.com

In India, milk is marketed through two primary channels: unorganized/traditional and organized systems. Despite the success of dairy cooperatives in the country, about 60% of surplus milk is still handled and procured by unorganized channels, while the remaining 40% is handled by cooperatives (20%) and private dairies (20%) (DAHDF, 2018). Even in Haryana, milk marketing is predominantly dominated by unorganized channels. This dominance reflects the limited impact of cooperative dairy development in curbing the traditional marketing system's hold (Kumar et al., 2011) [9] . Consequently, milk producers often remain reliant on traditional milk marketing channels due to the shortcomings of cooperative and public-sector initiatives. In this context, the present study was undertaken to analyze milk production, consumption, marketed surplus, and the marketing channels used to dispose of surplus milk, alongside exploring agribusiness innovation strategies to strengthen and encourage milk marketing systems in the state.

Research methodology Sampling plan

A total of 120 buffalo farmers from Karnal and Hisar districts of Haryana were selected using multi-stage random sampling techniques. Karnal and Hisar, located in the eastern and western parts of the state respectively, have the highest buffalo population (Livestock Census, 2019) [4] . Two blocks from each district were selected, and two villages were randomly chosen from each block. In the final stage, fifteen buffalo farmers from each village were personally interviewed using a pre-tested structured interview schedule. The respondents were categorized into three groups based on the number of milch Murrah buffaloes they owned: Group I (1-2 milch Murrah buffaloes), Group II (3-4 milch Murrah buffaloes), and Group III (5 or more milch Murrah buffaloes). Approximately 46.67% of buffalo farmers were in Group I, while 33.33% and 20% were classified under Group II and Group III, respectively.

Fig 1: Depicts selection of the study area

Analytical technique

The Compound Annual Growth Rate (CAGR), binary logistic regression and Garret Ranking Technique (GRT) were applied.

Compound Annual Growth Rate (CAGR)

The Compound Annual Growth Rate (CAGR) was used to calculate the growth rate of milk production, milch animal population, number of artificial inseminations, veterinary institutions, buffalo population, buffalo contribution to milk production, number of artificial inseminations performed in buffaloes, milk procurement through dairy cooperative societies, number of dairy cooperative societies, and the chilling capacity of dairy cooperative societies during the period 1990-91 to 2022-23. The formula used to calculate the Compound Annual Growth Rate is as follows:

(1) Where, Yt = Buffalo population/milk production at time 't' Y0 = Buffalo population/milk production at initial time r = Compound growth rate t = Time period The equation ( 1 Here, β1 and β2 are estimated by Ordinary Least Square (OLS) method and CAGR (r) is computed using the relationship Here, CAGR is calculated in the percentage term.

Binomial logistic regression

A binomial logistic regression was used to recognize the discrete choice nature of the dependent variable (Karli et al 2006; Priscilla et al 2016) [7,12] . The model postulates that Pᵢ, the probability that i th buffalo farmer choice of the milk marketing channel is a function of an index variable Zi, summarizing a set of explanatory variables. Zi is equal to the logarithm of the odds ratio, i.e., the ratio of probability that buffalo farmers likely to choose the organised milk marketing channels to the probability that they choose the un-organised milk marketing channels. Zi is expressed as a linear function of explanatory variables Xi. Mathematically, the logistic regression model is expressed as:

Where, Pi = Probability that i th buffalo farmer chose the organised milk marketing channel i = 1, 2, ……., N = Number of buffalo farmers k = 1, 2, ……., M = Number of explanatory variables α = constant β = unknown parameter The parameters used in the regression model were estimated using the maximum likelihood method. The index variable Zᵢ indicating whether buffalo farmer chose the organised or unorganised milk marketing channel is linear combination of a set of explanatory variables and the functional form for the same is given below: Zᵢ = α+ β1 X 1i+ β2X 2i+ β3 X 3i+……..+ β6 X 6i Garret Ranking Technique (GRT) It helps in ranking the most important reasons of buffalo farmers in preference for the milk marketing channel. The formula used for percent position calculation in GRT is given below.

Where, Rij = Rank allotted for i th reason/factor by the j th individual Nj = Number of reasons/factors ranked by the j th individual Using Garret chart percent position was converted into scores (Garret and Woodworth, 1969) [1] . For each reason, the sum score was calculated and later divided by number of respondents to arrive at mean scores. The final rank was given based on mean scores. The reason with highest mean score value ranked first and the lowest mean score reason ranked last.

Results and Discussion

Growth trends in milch animal population, milk production, artificial inseminations and veterinary institutions in Haryana

The compound annual growth rate of milk production, total milch animals (including indigenous cows, crossbred cows, and buffaloes), and artificial inseminations performed in Haryana during 1990-91 to 2022-23 is presented in Table 1. Overall, milk production achieved a growth rate of 21.19% during the study period. An inter-period analysis revealed that the highest growth in milk production was recorded during 2015-16 to 2022-23. Similarly, the milch animal population grew at a rate of 1.68% during the same period. The population estimates were based on livestock census data from 1992, 1997, 2003, 2007, 2012, and 2019. Milch animals included indigenous cows, crossbred and exotic cows, and buffaloes. However, inter-period analysis indicated a significant decline in the milch animal population during 2015-16 to 2022-23 (between the 19th and 20th livestock censuses). Despite this decline, milk production achieved its highest growth rate in the same period. This could be attributed to increased bovine productivity, as dairy farmers prefer to retain elite animals while selling low-yielding ones. Higher milk productivity is also linked to technological interventions, particularly artificial insemination using elite germplasm. The total growth rate of artificial inseminations (AIs) performed in bovine species was 41.38%. The period 2000-01 to 2005-06 recorded the highest growth rate of AIs at 155.76%. This improvement can be largely credited to the expansion of veterinary infrastructure in the state. During the same period, veterinary institutions such as Government Veterinary Hospitals (GVHs) and Government Veterinary Dispensaries (GVDs) grew at rates of 14.59% and 20.39%, respectively. www.extensionjournal.com (1992, 1997, 2003, 2007, 2012 & 2019) data was used

Growth trends in number of dairy cooperative societies, membership and their milk procurement in Haryana

The growth trends in the number of dairy cooperative societies, membership, and milk procurement in Haryana during 1990-91 to 2022-23 are presented in Table 2. Dairy cooperative societies grew at an annual rate of 24.57%, while membership enrollment increased by 17.13% annually. Inter-period analysis revealed that the highest growth rates in the establishment of dairy cooperative societies and membership enrollment were achieved during 2000-01 to 2005-06. The number of dairy cooperatives and their membership directly influenced milk procurement in the study area. The highest growth rate in milk procurement through dairy cooperative societies was observed during 1995-96 to 2000-01. Overall, milk procurement through dairy cooperatives grew at a rate of 33.30%. Despite these advancements, the share of dairy cooperatives in the total milk production remains low due to the dominance of unorganized milk marketing channels in the state.

Milk production, consumption and marketed surplus among selected buffalo farmers

The average production, consumption, and marketed surplus of milk among buffalo farmers are presented in Table 3. On average, households produced 22.75 kg of milk per day. Of this, approximately 23.84% was consumed at the producer level, primarily as raw milk or processed into milk products such as curd, ghee, and paneer. The remaining 76.16% constituted the marketed surplus, which was sold to nonproducers through various milk marketing channels. Intergroup analysis revealed that Group III had the highest marketed surplus (82.66%), followed by Group II (72.79%) and Group I (58.01%). This trend can be attributed to the larger herd size of buffaloes maintained by Group III farmers compared to their counterparts.

Different milk marketing channels

Milk is a highly perishable commodity, requiring surplus milk to be disposed of as quickly as possible. There are two primary milk marketing channels: organized and unorganized. In the present study, 68.33% of buffalo farmers preferred unorganized milk marketing channels, while 31.67% opted for organized channels to sell their surplus milk. www.extensionjournal.com

Reasons to choose different milk marketing channels Organized marketing channels

The reasons for choosing organized milk marketing channels are presented in Table 5. The most significant reason, ranked first by buffalo farmers based on the highest Garret score, was the availability of a regular and assured market for disposing of surplus milk. Farmers emphasized that a secure and guaranteed market is essential for ensuring regular and sustainable income from milk production in the study area. Regular and timely payments ranked as the second most important reason, as these payments enable farmers to purchase necessary inputs for uninterrupted dairy activities. Government and private dairy cooperatives, as well as Farmer Producer Organizations (FPOs), were noted for providing consistent payments. Proximity to the dairy cooperative society emerged as the third most important reason, suggesting that farmers are more likely to participate in organized milk marketing channels when these facilities are located near their residences. Other notable reasons included dairy societies being run by known individuals, support in obtaining dairy farm loans, provision of veterinary services, supply of inputs at comparatively lower prices, transparency in quality checks, minimal price variations in milk, and a lack of alternative market options. These factors collectively underline the preferences of buffalo farmers for organized milk marketing channels in the study area.

Un-organized marketing channels

The important reasons for choosing unorganized milk marketing channels among Murrah and Nili-Ravi buffalo farmers are presented in Table 6. Both categories of dairy farmers ranked doorstep milk collection as the primary reason for opting for unorganized milk marketing channels. This preference can be attributed to the fact that dairy farmers are often busy with agriculture and allied activities throughout the year. The second most important reason was the availability of advance payments for the purchase of farm inputs, which motivates farmers to sell surplus milk to unorganized channels in the study area. Regular and timely payments were ranked third by Nili-Ravi buffalo farmers and fourth by Murrah buffalo farmers as important reasons for choosing unorganized channels. Conversely, regular and assured markets were ranked third by Murrah buffalo farmers and fourth by Nili-Ravi buffalo farmers. Other factors, such as transparency in quality checks, less variation in milk prices, the familiarity and trustworthiness of vendors/processors, provision of inputs at lower prices, lack of strict quality checks, and no alternative market options, were ranked fifth through tenth in importance by both Murrah and Nili-Ravi buffalo farmers. These reasons collectively reflect the preferences of buffalo farmers for unorganized milk marketing channels in the study area.

Socio-economic determinants influence choice of milk marketing channels

The results of socio-economic determinants influencing buffalo farmers' choice of milk marketing channels are presented in Table 6. The findings indicate that parameters such as the age of the respondent, educational level of the farmer, land holdings, number of Murrah buffalo holdings, and marketed surplus of milk had a positive influence on www.extensionjournal.com

Murrah buffalo farmers' preference for selling surplus milk through organized milk marketing channels. On the other hand, variables such as family size showed a negative relationship with the preference for organized milk marketing channels in the study area. Age and educational level of the buffalo farmers were found to be statistically significant. This implies that Murrah buffalo farmers in older age groups with higher education levels are more likely to prefer organized milk marketing channels for disposing of their surplus milk. These strategies collectively aim to enhance the efficiency, inclusivity, and sustainability of milk marketing channels, ensuring long-term benefits for both farmers and consumers.

Conclusion

This study highlights several critical policy implications for promoting sustainable agribusiness innovation in milk marketing channels for buffalo farmers in Haryana. Strengthening organized milk marketing channels requires policymakers to prioritize the expansion of dairy cooperatives and Farmer Producer Organizations (FPOs) in rural areas, ensuring greater accessibility for farmers. Financial incentives such as subsidies or low-interest loans for the establishment of dairy processing units could further encourage farmers to participate in formal milk marketing systems. Given farmers' preference for doorstep milk collection, improving infrastructure and logistics within these channels is essential. Establishing collection centers closer to farms and offering regular pick-up services would address logistical challenges, making organized milk marketing more appealing. Enhancing cold storage and chilling facilities would also improve the quality and shelf life of milk, making formal markets a more attractive option for farmers. Recognizing the importance of financial stability, policies should provide revolving funds or credit facilities linked to dairy cooperatives. Offering regular payments and advances for farm inputs ensures a steady cash flow, allowing farmers to invest in their dairy operations. Furthermore, implementing education and training programs that focus on the benefits of organized marketing channels and improving management practices would play a pivotal role. Given the correlation between education and the preference for organized markets, such initiatives could drive higher adoption rates of formal milk marketing systems. Strengthening the regulatory framework is crucial to ensuring quality assurance, standardized pricing, and transparency in milk markets. This would build trust among farmers, encouraging more participation in organized milk marketing channels. Additionally, integrating support services such as veterinary care, farm loans, and the provision of farm inputs within dairy cooperatives or FPOs would improve the productivity and profitability of buffalo farmers. Adopting these strategies will enable policymakers to foster agribusiness innovations that enhance the sustainability of milk marketing channels, ultimately benefiting both buffalo farmers and the dairy industry in Haryana.

Acknowledgement

AcknowledgementAll the authors thank Director, ICAR-Central Institute for Research on Buffaloes, Hisar for support and financial help to conduct research.

References

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