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Automatic milk collection units

Introduction

India is endowed with the largest livestock population in the world. It accounts for about 57.7 per cent of the world’s buffalo population and 16.5 per cent of the cattle population. Indian dairy industry is the major contributor to the country's economy surpassing rice in amount.

The Government of India had promulgated the Milk and Milk Product Order (MMPO) 1992 under the provisions of Essential Commodities Act, 1955 consequent to de-licensing of Dairy Sector in 1991. As per the provisions of this order, any person/dairy plant handling more than 10,000 liters per day of milk or 500 MT of milk solids per annum needs to be registered with the Registering Authority appointed by Central Government. The objective of the order is to maintain and increase the supply of liquid milk of desired quality in the interest of the general public and also for regulating the production, processing and distribution of milk and milk products.

Recognizing the necessity suitable amendments in Milk and Milk Product Order-1992 for faster pace of growth in dairy sector, Government of India has amended milk and milk product order-92 from time to time in order to make it more liberal and oriented to facilitate the dairy entrepreneurs. The Government of India has notified the last amendment proposals in the official Gazette on 26/3/02. Now there is no restriction on setting up of new milk processing, while noting that the requirement of registration is for enforcing the prescribed Sanitary, Hygienic Conditions and Quality and Food Safety Measures as specified in the 5th Schedule of MMPO-1992. With the introduction of Food Safety and Standards (licensing and Registration of Food Business) Regulations, 2011 with effect from 05 August 2011, all the food processing units including the Dairy processing units comes under the purview of the act.

Even though India is the highest milk producing country, productivity per animal is very poor. The organized dairy sector (both cooperatives and private) is presently handling only 24-28 percent of total milk production in the country. Thus leaving a wide scope for enhancing the procurement, processing of milk and manufacture of milk products for domestic consumption as well as exports. The quality of milk collected is also poor which is acting as the main deterring factor in preparation/marketing of different value added products. Even today many parts of the country are not covered with organized milk procurement and at times the milk is procured only once a day. Having made significant strides in production and processing, it is the time to upgrade the quality of milk by increasing the efficiency of procurement as well as the testing of milk for quality. In India the milk pricing is based on the fat percentage and to some extent Solid Not Fat (SNF) in milk. The determination of fat is based on the butyrometer method which is one of the oldest technology adopted by the Milk Collection Centres/Milk Cooperative Societies. Since 1980's many of the societies have been using Milk o testers for testing the fat percentage in milk as this is a rapid method compared to former one. Of late Milk Collection Centres/Cooperative Societies are installing Automatic Milk Collection Stations (AMCUs) (PC based milk collection stations, smart automatic milk collection stations and automatic milk collection stations) which measure the weight of milk, fat contents and gives a print out of payment slip to farmers in each shift. The systems also facilitates storing 10 days/monthly/yearly data and printing of cumulative summary of shift as and when needed. The state of art equipment is able to perform 120 to 150 operations in an hour. The milk analyser replaced the milk o testers.

Objectives

Financial assistance is extended for purchase of various equipment in the Automatic Milk Collection Stations with the following objectives.

  1. To increase the efficiency and accuracy of fat testing in milk. To test for other constituents of milk like SNF%, Water % etc,.
  2. To reduce the staff of the society/collection centre through automation and economise the operations by avoiding manual registers.
  3. To gain confidence of milk producers through transparent systems and thereby increasing the milk procurement.

Potential areas

Many of the milk processing plants in cooperative as well as private sector introduced the Automatic Milk Collection Stations in their procurement network. These stations can be financed in most of the societies/milk collection centres where daily milk procurement is more than 350 litres.

Beneficiaries

These units can be established by the Milk Cooperative Societies of the Cooperative Milk Union or Milk Collection Centre of private dairies. Alternatively individuals also can be encouraged to set up these stations in tie up with organized dairies.

Project Details

Components

Automatic Milk Collection Station is a specially designed integrated unit which is a combination of several units i.e. automatic Milk Weighing System, Electronic Milk Testing, Personal Computer with printer and battery for data processing and providing the output. The procurement centres handling higher quantities of milk can go for modern systems wherein automatic milk analyser can be used in place of milk testing equipment, (provides Fat%, SNF%, water % etc). These higher procuring agencies can also go for web based data management where in the farmer wise data from the AMCU will be sent to server and the payment details will be sent to the bank directly by the milk processing plant. The AMCUs can be made to use dairy to bank concept where farmer’s bill amount is directly deposited in its bank account and even without going in bank, he/ she can withdraw money as per requirement directly from Milk collection center. Some of the model AMCUs are shown in the figure below.

Capacity

The capacity of Automatic Milk Collection Stations is to analyse 120 to 150 samples per hour. Based on the equipments used, parameters will be varying.

Specifications

The machinery used should be as per BIS specifications and the broad parameters measured are as under:

  1. Fat measurements: 0 - 13%
  2. Measuring capacity: 120 to 150 operations per hour.
  3. Power supply: AC 220 to 240 watts 5O HZ.

In case of milk analysers, in addition to fat content, SNF content from 3 to 15 % and water content as well as other parameters also will be measured.

Equipment suppliers

The equipment are being supplied by various agencies which are as follows: IDMC, Ananad, Gujarat; DSK Milkotronics, Pune, Maharashtra; Kamadhenu, Ahmedabad, Gujarat; DODIA Himmatnagar, Gujarat; PROMPT Baroda, Gujarat; OPTEL Anand, Gujarat; CAPITAL Electronics Anand, Gujarat; REIL Jaipur, Rajashtan. The list is only indicative and suitable systems can be purchased from any of the reputed agencies.

Functioning

Each milk pouring farmer will be given with a unique number /card by the Collection Centre in consultation with Milk Processing unit. When the farmer comes for pouring milk his number or card will be used for identity. After feeding the number, the sample will be collected for analysis. Simultaneously his milk will be poured into the container where it is weighed automatically and based on the fat content and quantum of milk poured the rate will be calculated and payment slip is printed. If a milk analyser is used other parameters of milk also will be analysed and based on these parameters and quantity of milk the rate will be calculated and displayed. Some manufacturers had come up with mobile Milk Collection Units which can be fitted on the vehicle and milk can be procured from different locations.

Mobile AMCU Milk Collection Units

Now a days Mobile AMCUs are also available in the market. MMCU comprises of following components.

  1. Data Processor with In-built Printer & Splitter
  2. Milk Analyzer
  3. Electronic Hanging Weighing Scale
  4. Digital Display

In Mobile Milk Collection Unit, the system is implemented on a bicycle or on any two-wheeler. The system consists of all hardware i.e. Milk Analyser, 60 kg hanging weighing scale, splitter and digital display. The Operator goes to the farmers’ doorstep and does the milk collection. In this system, the data is collected of various farmers. As the system is mobile, using a single system, the operator can collect milk from various farmers, giving transparency with respect to milk quality and milk quantity. The battery backup is also provided in-built with the system in order to complete a smooth and trouble free milk collection on the move. The system is in automation mode while doing the milk collection process. A single operator can handle the system. The operator can provide milk rate receipt to farmer and can maintain other reports also like shift-end report, deduction report, farmer periodic bill, and monthly report etc.

Working of MMCU:

The unique code is given to the each farmer. The operator selects the date & morning shift or evening shift. Then operator enters farmer code. The operator takes milk sample from the farmers milk can & holds it to an inlet tube of milk analyzer. To measure the quantity, the operator keeps the milk can on the hook of a hanging weighing scale. As the system is in automatic mode, all the parameter i.e. FAT, SNF, Weight are displayed on the digital display for the farmer and the operator receives same data on MMCU. The operator gives milk rate receipt to the farmer. As the MMCU has an in-built thermal printer, the preparation of milk receipt & timely payments to farmer can happen on shift basis.

The operator can collect the data in the pen drive. So that data can be available at any center or dairy head-office. To do deduction, operator can maintain deduction details like Cattle feed, Artificial insemination etc. in MMCU. The operator can also maintain the reports like daily morning, daily evening, Monthly, Member bill & Deduction report etc.

Milk rates are predefined for each quality of cattle milk. The quality parameters like FAT, SNF are also maintained for each society. Milk bill is prepared by the Union for a predefined period. At various farmer villages, the rate chart is different, so operator can feed rate chart in the MMCU in a very short span of time. The operator can use dot matrix printer to take the print out of all reports.

Advantages of AMCUs

  1. Saving in quantity of sample milk, chemicals and detergents, expenditure on glassware, stationery and time, expenditure on staff.
  2. Gaining confidence of milk producers through transparent system and increased milk procurement.
  3. Reduced human errors
  4. Wastage is reduced
  5. Transparency in activities
  6. Spot payments can be enabled or the data can be directly transferred to the bank account of the owner or to the milk union, so that direct benefit transfer can be effected.
  7. Operational integration

Technical Collaboration

Since the unit is an integrated unit, no technical collaboration is envisaged for the project, however the Milk Unions/Private Dairy Plants would be providing guidance to the societies/collection centres in purchase and installation of Automatic Milk Collection Stations and also training of manpower in operations and maintenance. In case of individual AMCUs necessary arrangements should be made with the suppliers for after sales service.

Capital Cost:

The capital cost varies with the specifications and also the manufacturers. However, based on the information furnished by the manufacturers and also as observed in the field , an average unit cost of Rs.1.20 lakh including the cost of battery has been considered.

Economics of the project : AMCU

It is assumed that AMCU will come up in the existing building of the collection centre and hence civil costs were not considered for the AMCUs. Based on the various techno economic parameters furnished in

Unit Cost and Techno economic parameters - Automatic Milk Collection Stations

Sl.NoParticularsUnitAssumptions
Unit Cost, Bank Loan, Margin money
1 Cost of AMCU Rs 120000
2 Margin Money Rs 30000
3 Bank Loan Rs 90000
Income Parameters
1 Volume of milk procured Lts/day 500
2 No.of milk samples Samples per day 25
3 Quantity of sample milk saved M1 per sample 80
4 Sale of sample milk @ 10 ml/sample (1t/month) 60
5 Sale price of sample milk Rs./litre 25
6 Saving in expenditure on staff Rs./month 6000
7 Saving in stationery Rs./month 800
8 Saving on chemicals & detergents Rs./day/sample 0.2
9 No.of days considered in month days 30
Expenditure parameters
1 Repairs and maintance Rs./month 5000
Others
1 Depreciation on AMCU (%) % 15
2 Interest rate % 12
3 Repayment period Years 7

The economics of the project has been worked out and presented in

Income and Expenditure – Automatic Milk Collection Station

Sl.NoParticularsI YearII YearIII YearIV YearV Year
1 Volume of milk procurement Lt/day 500 500 500 500 500
2 No.of milk sample per day Samples/day 25 25 25 25 25
3 Quantity of sample milk saved Lt/day 2 2 2 2 2
Income
1 Sale of sample 0.1825 0.1825 0.1825 0.1825 0.1825
2 Saving in expenditure on staff 0.72 0.72 0.72 0.72 0.72
3 Saving in stationery 0.10 0.10 0.10 0.10 0.10
4 Saving on chemical and detergents
Total income
Expenditure
1 Repairs and maintenance 0.60 0.60 0.60 0.60 0.60
Total Expenditure 0.60 0.60 0.60 0.60 0.60
Gross surplus (A-B) 0.5445 0.5445 0.5445 0.5445 0.5445

The items of income include saving in expenditure on staff, stationery, chemicals and detergents and glassware and also income from saving of sample milk, while the items of expenditure are consumables, repairs and maintenance of the Automatic Milk Collection Stations.

Financial Analysis:

The cash flow analysis covering the Benefit Cost Ratio (BCR) Net Present Worth (NPW) and Internal Rate of Return (IRR) has been worked out for the project and presented in below table

Financial Analysis ( NPW, BCR & IRR ) – Automatic Milk Collection Stations

Sl.NoParticularsI YearII YearIII YearIV YearV Year
1 Capital Cost (Fixed cost) 1.20 0 0 0 0
2 Recurring Cost 0.60 0.60 0.60 0.60 0.60
3 Total Cost 1.80 0.60 0.60 0.60 0.60
4 Benefits 1.1445 1.1445 1.1445 1.1445 1.1445
5 Depreciated value of AMCUs 0 0 0 0 0.5324
6 Total Benefits 1.1445 1.1445 1.1445 1.1445 1.1445
7 Net benefits -0.6555 0.5445 0.5445 0.5445 1.0769
8 Discount factor @ 15% 0.884956 0.783146 0.693050 0.613318 0.542759
9 Net Present Value (NPV) 1.0465
10 Benefit Cost Ratio (BCR) 1.39
11 Internal Rate of Return (IRR) 82%

For the model under consideration, the BCR is 1.39:1 NPW is Rs. 1,04,650/- and IRR is 82%. The entire bank loan can be repayable in five years without any grace period. Hence repayment has been fixed at 5 years for the model project.

Repayment Schedule- Automatic Milk Collection Stations.

YearBalance outstanding at the begining of the yearInterest Gross IncomePrincipal amount Total repayment Net surplusDSCR
I 0.90 0.1080 0.5445 0.18 0.2880 0.2565 1.8906
II 0.72 0.0864 0.5445 0.18 0.2664 0.2781 2.0439
III 0.54 0.0648 0.5445 0.18 0.2448 0.2997 2.2243
IV 0.36 0.0432 0.5445 0.18 0.2232 0.3213 2.4395
V 0.18 0.0126 0.5445 0.18 0.2016 0.3429 2.7009

Source: NABARD



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