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The contribution of the post-harvest food system to employment generation and nutritional improvement: Case studies of the potential of dairy technologies

Mogens Jul

Department of Food Preservation, Royal Veterinary and Agricultural University, Copenhagen, Denmark

It is frequently thought that the main contribution that food science and technology can make is that of helping people with tasks such as achieving less food loss during harvest and storage and finding better methods for food preservation in the home. There is now general agreement, however, that the main cause of malnutrition and other signs of underdevelopment is poverty. Poverty can be averted only by giving people better access to resources, normally by improving their income, which must usually be achieved by increasing the productivity of those who are economically engaged and providing jobs for those who are not. Thus, in development the main concern is simply to increase productivity and create jobs. Since agriculture is the main economic activity in most Third World countries, it seems logical that the first industry to build up must be a food industry, small or large. Food science and technology then play a major role in helping to select the right type of industry and the right type of technology.

I have been engaged in activities related to the evaluation of the nutritional and socio-economic impact of several dairy projects. Therefore, some examples from this area of activity will be described in this article.

As a first case study, there is a large dairy development project in India called Operation Flood. This project grew out of a purely local development, centred in Anand in the state of Gujarat in northwest India. Here, the keeping of milk animals is widespread, and selling milk is one major source of income for the rural population. Some 30 years ago, most of this milk was purchased by private dairymen, who sold the milk in Bombay. The farmers, however, became dissatisfied with the prices they obtained from the private trade and decided to form co-operatives. However, if they were to collect their own milk, they would also have to process it; therefore, they constructed their own dairy. They organized their activities very skilfully, and the project turned out to be an overwhelming success. By the late 1960s, a very impressive dairy had been constructed in the city of Anand, owned by a federation of cooperatives, which collected milk from some 500,000 suppliers. The system had accepted that in order to help the milk producers' dairy, the organization had to provide the necessary inputs, such as farmers' training, an artificial insemination service, and veterinary aid. Also, cattle feeds manufactured at the organization's own plant were made available at very low prices at all milk collection points and other points.

The development was, indeed, remarkable, and when the President of India visited the project, he decided that efforts should be made to replicate this development all over India. The objectives were to build up an efficient dairy system, help rural people produce milk and get a better price for their milk, and at the same time make certain that the gap between milk prices at the producers' level and in retail sale was as small as possible. Specifically, the objectives as formulated by the government of India were

i. to increase processing facilities,
ii. to create modern milk supplies,
iii. to resettle city cattle,
iv. to develop storage and transportation,
v. to improve milk collection,
vi. to improve dairy farming.

For such an ambitious scheme, however, major funding was required. Therefore, the Indian government contacted the World Food Programme (WFP), a United Nations system body, and negotiated the donation to the project of considerable amounts of butter oil and dried skimmed milk. Such donations would fit very well into such a scheme. The idea was that the project would have to build dairies both in cities and in the milkshed areas. These dairies could initially be used for recombining the donated commodities, and the milk could be sold through the retail sales system which was also being built up. By this means, considerable funds (about US$150 million) could be generated and used for dairy development in such a way that eventually the donated commodities could be dispensed with and a local supply could be used. Before final agreement between the government of India and the WFP was reached, however, a feasibility study was undertaken. On the whole, the mission that carried out the study reported very favourably on the project, but it suggested that the main emphasis should be on making milk available for vulnerable groups and satisfying consumers' needs, and formulated the objectives for the WFP assistance as follows:

i. to make milk available for vulnerable groups,
ii. to satisfy consumers' needs and get producers a larger share of the price,
iii. to improve the productivity of dairy farming,
iv. to remove cattle from cities,
v. to form a basis for a national dairy industry.

As explained below, these were probably idealistic but somewhat ill-conceived objectives.

What mattered at this point, however, was that commodities and, thereby, financing be made available. Dairies, feed plants, milk tankers for long-distance road and rail transportation, and automatic vending machines for retail distribution were among the resources provided. Further, the project paid equal attention to what was to happen in the rural areas. After the Anand pattern, it organized what can be termed true co-operatives, including provisions for all necessary inputs, for the milk producers.

For an evaluation of the project in 1975,1 was asked to assess its nutritional impact, i.e. to what degree it had achieved the objective given to it by the WFP of providing milk for the vulnerable groups in cities. Table 1 shows how very little milk is actually consumed by low-income groups in Indian cities. I looked further into this question and concluded that milk was not purchased by the low-income groups in sufficient quantities to be of any nutritional significance. The reason was simply that milk was an expensive commodity. Where money was scarce, it was probably wiser for the urban poor to try to cover their daily needs from other, cheaper nutritious foods. Table 2 shows the relative prices for some nutrient factors in Indian foods observed in Calcutta. I calculated that even at prevailing retail milk prices, which are subsidized, it was hardly advisable for poor people to try to obtain a balanced diet through the purchase of milk.

TABLE 1. Approximate Milk Intake (Grams per Capita per Day) for Some Areas and Income Groups in India

Location Income Group
Lower Lower
Middle Higher
Andra Pradesh 26 49 112 138
Calcutta 20 87 133 238
Gujarat 58 107 150 265
Maharastra 43 60 152 347
Tamil Nadu 9 38 100 191

TABLE 2. Average Consumer Cost for Average Daily Requirement of Various Nutrients (for an Adult Male) Obtained from Milk Compared with the Cheapest Source for Each Nutrient - Calcutta, 1970

Nutrient Cheapest
Cost (Rupees)
Cheapest source Milk
Energy tapioca 0.79 6.97
Protein lentils 0.35 2.63
Vitamin A carrots 0.16 3.71
Thiamin wheat flour 0.33 5.01
Riboflavin pink beans 0.19 1.58
Niacin rice 0.62 31.73
Calcium buffalo milk 0.77 0.77
Phosphorus wheat flour 0.26 1.24
Iron wheat 0.20 8.35

Also, I calculated data on the food intake of impoverished groups in Calcutta. Table 3 shows the average per capita food expenditure for a poor household with about six members. The calculations indicate that this diet is nutritionally not very satisfactory. I then calculated the nutritive value of an alternative diet in which neither milk nor meat was included (table 4). As is illustrated, such a diet is nutritionally considerably superior to the diet with milk and meat. This is, of course, a purely theoretical calculation. The diet in table 4 may not be very appealing, but considerations such as these seem to suggest that it would not be advisable nor even realistic to seek the achievement of this part of the project's goal-to provide milk-in so far as the urban poor are concerned. Furthermore, table 3 indicates that it would require a major change in food expenditure and food habits for the underprivileged groups in Indian cities to take milk in nutritionally significant quantities.

Some of the UN personnel involved in the project had realized that some urban groups would be beyond the reach of commercial milk sales. Therefore, the project included some nominal arrangement whereby milk was distributed free in poor sections of some cities. These arrangements did not seem very rational. Milk is difficult to distribute since it is a perishable, spillable product. Besides, its price is much above that of other suitable supplementary foods, as indicated in table 5. Therefore, where supplementary food programmes are considered, these other foods should probably be given preference, and this should also be the case for all major projects of this kind in India.

TABLE 3. Cost and Adequacy of an Average Daily Diet for a Poor Person in Calcutta

Food Item Quantity
Nutrient Nutritional
Wheat, rice 400 0.80 Energy 93
Pulses, oil seeds 50 0.18 Protein 109
Vegetables 50 0.11 Vitamin A 121
Fruits 20 0.03 Vitamin C 23
Meat, fish, eggs 5 0.08 Thiamine 153
Milk 35 0.09 Riboflavin 37
Oils 10 0.12 Niacin 68
Jaggery 20 0.09 Calcium 40
Total   1.50 Phosphorus 192
  Iron 157

* Percentage of requirement for energy; percentage of recommended allowance for other nutrients.

TABLE 4. Nutritionally Improved Diet Maintaining the Same Total Cost as the Diet in Table 3

Food Item Quantity
(g )
Nutrient Nutritional
Wheat, rice 225 0.45 Energy 100
Pulses, oil seeds 200 0.70 Protein 143
Vegetables 50 0.11 Vitamin A 170
Fruits 20 0.03 Vitamin C 100
Meat, fish, eggs - - Thiamine 250
Milk - - Riboflavin 52
Oils 10 0.12 Niacin 105
Jaggery 20 0.09 Calcium 140
Total   1.50 Phosphorus 252
  Iron 252

* Percentage of requirement for energy; percentage of recommended allowance for other nutrients.

When these facts were explained to the evaluation mission, it was about to conclude that the project had not achieved the first part of its pre-empted objectives, namely reaching the vulnerable groups in the cities; there was a general disenchantment in several circles and an inclination to feel that the project had at least partly failed. However, I thought that a final judgement on the overall value of the project should be deferred until the impact of the project on the vulnerable groups in the rural areas had also been determined. About 80 per cent of all Indians and most of India's poor live in rural areas. In these areas, it is customary that even poor households have a cow or a buffalo. The situation today is that the project has succeeded in organizing some 1.8 million rural milk producers into cooperative milk societies. They collect milk generally twice a day. The milk is graded for fat content according to a blind sampling system, making certain that every supplier gets his fair price for his milk. Often, the system pays for one morning's milk collection the same evening, and for that evening's collection the next morning. In other cases, milk may be paid for at a two-week interval.

TABLE 5. Cost of Fixed Quantities for Energy and Protein Obtained from Various Foods - 1975

  Cost (Rupees)
1,700 kJ
15 g
Standard milk 0.97 0.67
Double-toned milk 0.87 0.37
Extruded vegetable food 0.61 0.50
Multipurpose food 0.30 0.11
Rice 0.28 0.46
Home-prepared balanced food 0.25 0.25
Bal ahar 0.18 0.20
Wheat 0.15 0.21
Ground-nut flour 0.14 0.06

The project has managed to create a remunerative market outlet for rurally produced milk and thereby has made possible a fairly constant income among the milk suppliers, some of whom are very poor and some of whom rely on dairying for their main cash income. The project has also organized inputs to farmers. Cattle feed is being manufactured in plants built by the system and sold at the various collection points at prices considerably below those for concentrates in the private trade. Other inputs have also been made available through the co-operatives, such as artificial insemination and veterinary services, available all year round on a 24-hour-a-day basis. The system also looks after training at all levels, including farmers, managers of milk plants, and milk technicians. In the Kaira district, where the system originated, it has gone even one step further. It organized a local television network, and educational and entertainment programmes are put on the air every evening. There is a receiving set at each co-operative society's headquarters, and the village co-operative members assemble there every evening to view the programmes, which include educational material on milk animal management, cooperative organizations, and milk hygiene.

It is a general experience that all such development programmes tend to reach mainly the larger targets, such as the larger farmers and the larger milk producers, simply for such reasons as that they are often more accessible and it is easier for them to accept new procedures. Therefore, it is interesting to examine the profile of the memberships of co-operatives in various places. Table 6 illustrates that, as mentioned above, it is characteristic for India that even poor rural households have milk animals. When the membership of the co-operatives is analysed, it is clear that a significant part of the income generated goes to the rural poor, often even the very poor. Further, there is much to indicate that milk-animal husbandry is attractive mainly to the small farmer partly because it is quite labour-intensive.

TABLE 6. Distribution of Milk Animals in a Village of Sabarkantha District in Gujarat

  Number of
Households holds
Households with Animals
Number Percentage
Landless 82 22 27
Small farmers 131 100 76
Medium and large farmers 115 100 87

TABLE 7. Comparison of Incomes of Farmers Participating in an Organized Village Dairy Cooperative System with Those of Others Not in a Co-operative System - Kaira District

  Income ( Rupees) Dairy
Total Dairy
Small (<5 acres) 1,511 1,151 76
Medium (5-10 acres) 3,353 1,917 57
Large (>10 acres) 10,492 3,851 37
Average 4,097 1,985 48
Non participants  
Small (<7.5 acres) 752 453 60
Medium (7.5-15 acres) 2,081 1,212 58
Large (>15 acres) 6,002 2,556 43
Average 1,192 675 57

One need also analyse to what degree income has actually been generated in the rural areas. Table 7, which is a study from the state of Gujarat, compares a village with an organized dairy cooperative milk collection system with one that has no such organization. Such comparisons are difficult to make completely meaningfully because other differences between the two villages are bound to exist. Nevertheless, table 7 does suggest that milk income has more than doubled in the area where an organized milk collection system is established. It is interesting to note that non-dairy income has also doubled in these areas. There is much to indicate that the introduction of a well organized dairy co-operative society has had a carry-over effect on other activities, which have also been organized and, therefore, have become more remunerative.

In my view, there is no doubt that the dairy co-operative development in the Operation Flood area has had a very beneficial effect on rural income, but this question merits further investigation, and I am at present engaged in obtaining further data on this aspect.

It is noteworthy also that the dairy system in itself has created considerable economic activity. Table 8 indicates the number of people engaged in the various parts of the milk system in 1981. Over and above this, the project has caused the establishment of a very considerable number of peripheral supply industries. Before the project was started, India imported about 90 per cent of all equipment for dairy activities. Now, where dairy activities have been very much expanded, only 10 per cent of the total equipment is imported. Thus, directly as well as indirectly, the project has had a very considerable employment-generating effect.

The project has also had indirect effects that are no less impressive in my view. It seems that the creation of true dairy cooperatives, has given to many villagers a sense of self-reliance, the value of which may go beyond any direct economic gains. One indication is seen in the fact that it is customary for these co-operatives, which are by no means wealthy organizations, to set aside out of each year's profit certain amounts for philanthropic purposes. Table 9, from the annual accounts of one dairy co-operative, shows how such funds were spent one year.

While the project as a dairy project, of necessity, has concentrated mainly on activities such as animal husbandry, artificial insemination, and animal health and welfare, it has created among many the feeling that it should also look after the human beings in the villages. The project has taken up this challenge and now operates the very well run Tribhuvandas Foundation, which offers village health care schemes for any group that shows an interest in such assistance.

TABLE 8. Jobs Created in the Operation Flood Dairy System - to 1981

Professional (engineers, technologists,
veterinary animal health specialists,
agricultural specialists, business
management experts, and others)
Other graduates 1,700
Skilled workers 2,000
Unskilled workers 5,000

TABLE 9. Contributions towards Community Development Work by the Mogri Milk Producers' Cooperative Society, Ltd. (Rupees)

Boys' school 6,300
Kindergarten 2,800
Dispensary 6,500
Construction of water trough 250
Social association 101
Flood relief fund 5,853
Mahatma Gandhi Vidyalaya 1,000
Fixing benches at the public place in the village 1,198

Another interesting aspect of the project is that its means of creating income for rural poor and of employment generation has by no means been simple cottage technologies. On the contrary, the project has as its main technical headquarters the National Dairy Development Board in Anand. This is a large organization with very modern equipment and highly trained specialists. Very sophisticased, large, modern plants are required to create receiving and processing dairies in rural areas and to arrange for the processing of liquid milk or the manufacture of processed milk products for distribution to and in cities. Through the National Dairy Development Board, the project has developed the full capacity for planning, erecting, and operating such facilities. Similarly, the project has developed competent teams for all aspects of farmers' organizations, animal husbandry inputs, and veterinary services. Lately, the project has identified, as one important need, that it must provide also for skilled management for all its facets, from village milk societies to managers of large dairy plants. It was felt that education in the areas of management, often carried out by Indian management institutes, addressed itself mainly to persons who plan to take up positions in such workplaces as industries and urban corporations, most of whom are unwilling to work in villages. Therefore, the project initiated the creation of a very large educational institute in Anand, the Institute of Rural Management Anand, normally referred to as IRMA.

When the project's imputed objective, namely that of helping the vulnerable groups nutritionally, is considered, it might be appropriate to analyse to what extent the project has been capable of improving nutrition in rural areas. I consider nutritional improvement to be but one indicator of general economic and social improvement. Nevertheless, figure 1 may be of interest. The project has improved rural income quite substantially, and this income has reached down into the poorest groups. This illustrates how income elasticity of intake of energy and nutrients, especially among the very poor in rural areas, is very large. I estimate that the income elasticity of nutrient intake for this group, the very poor, is about 0.4 to 0.5. This means that, if the project has been capable of doubling income, as suggested by table 7, it has improved the intake of nutrients in poor families some 40 to 50 per cent.

FIG. 1. Observed Average Intakes of Energy and Protein in Rural Communities in Gujarat, as a Function of Monthly Per Capita Income

The whole question of the impact of the project on the various social sectors and other factors is of wide interest. Obviously, the project's success should not be measured solely in terms of outputs such as dairy plants erected and societies organized. One would need also to know what the real impact of the project on socio-economic indicators has been in rural areas as well as in cities. It is noteworthy, therefore, that the project itself spent a very considerable sum of money on carrying out, through I RMA and through other contract research organizations, a very complete study of the project's impact, both nutritionally and economically, in various areas. These impact studies have largely, and in considerable detail, confirmed the very favourable analyses of the project's achievements which are described above.

The possibility of using dairying as a development tool is not unique to India. I have had occasion to visit villages about four kilometres up in the high Andes of Ecuador. Here, the rural Indian population is generally very poor and often has no means of finding any cash income, and they live in a complete subsistence economy. The landscape is one of very steep mountainsides, so that only with care may a crop of, for instance, potatoes be grown. Most of the area is grassland, well-suited to the grazing of sheep, goats, and cows, and of little use for anything else. It is customary for the villagers to keep some cows, but, generally, little income is derived from them. Roads are so poor that liquid milk cannot be transported down to population centres.

Lately, however, partly through Swiss aid, it has been possible to establish some local cheese factories. The villagers have welcomed this opportunity; they generally deliver from 10 to 20 litres of milk per day and receive for that a cash income that for them is very substantial and, for the most part, the only cash income they have ever received. The cheese factory is run as a co-operative, and the cheese is sold in Quito or other population centres. The whey from the cheesemaking is collected by the villagers and has given rise to a considerable pig industry. In this case also, the dairy activity has resulted in an impressive socio-economic organization. The co-operative has established its own supply store for agricultural inputs and a store for daily goods. Before that, there was no store in the village. The co-operative has also established a bakery, a small sausage-making plant, a sales organization for homemade knitted woolen clothing, and an assembly hall and provisions for taking in trainees from other areas who might be interested in starting up a similar development. In my view, there is no doubt that, in this case, a meaningful dairy development has been capable of a very impressive social improvement.

Another example may be taken from the Dominican Republic, where considerable areas exist for cows to graze, for among palms and on waste areas. A series of example, very small, modest cheese factories have sprung up. Some of them manufacture rather crude cheeses for local sales in the villages; others are capable of making products suitable for the more sophisticated sectors of the market in the larger population areas. Here again, the existence of a cheese plant has resulted in an opportunity for a cash income for a rural population that is very poor.

In considering dairy technology as a development tool, there are also several government undertakings in various countries, which try to provide milk, which is considered necessary for nutritional purposes, in urban areas. Several quite large government-subsidized plants exist. Since organizing rural milk collection is very difficult, they have often and mostly resorted to the use of imported raw material, i.e. milk powder or dried skimmed milk and butter oil. These products are reconstituted or recombined into liquid milk, which may be sold in plastic pouches or sometimes even in "Tetrabricks" or "Tetrapacks" after ultrahigh-temperature processing. While it is assumed that these products will help the underprivileged poor in urban areas, it is quite obvious, considering the prices for that milk and the data on incomes in the cities concerned, that such milk is beyond the reach of the urban poor. As a matter of fact, it is general experience that such milk is mainly available in the better stores catering to the middle-or high-income groups. Such activities, of course, may satisfy an economic demand for liquid milk. In their organization such dairies require a considerable degree of dairy expertise for all facets of the process, including manufacturing, quality control, and processing. It must be realized, however, that the milk from such activities is not available to population groups which are deprived nutritionally or otherwise. It is, therefore, somewhat questionable whether the large strains on a country's income budget which such activities may constitute are justified, and it seems certain that no government subsidy for such operations is justified. However, in most cases, knowledge about milk and the role of milk in nutrition is somewhat unclear, and many believe that these activities really serve social and nutritional goals. It is clear that the right choice of activity and the right choice of technology will decide whether the project is beneficial to the country and to the poor and to what degree it serves social and nutritional purposes.


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