Case Study: Profitability Assessment of Urmul Dairy Bikaner

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  • Topic: Milk, Dairy farming, Dairy
  • Pages : 2 (351 words )
  • Download(s) : 670
  • Published : October 12, 2010
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Lucrative alternate employment opportunities are often not available in Indian villages, making dairying an attractive option for many villagers. Low capital intensity, a short operating cycle, and steady returns make dairying a preferred activity among marginal (less than one hectare of land holding) and small farmers (those having 1-2 hectares of land holding), who make up about 57 per cent of rural households in India. Dairying is feasible even for the landless, who depend for fodder on common grazing and forest lands. These small producers account for some 70 per cent of the milk production. On average, 22.5 percent of the income of rural households is contributed by milk. Uttari Rajasthan Sahkari Dugdh Utpadak Sangh Ltd. known as URMUL was established on August 28 1972 (a co- operative body registered under co-operative act 1956). With the onset URMUL covered Bikaner, Shri Ganagnagar and Churu districts. Before the establishment of the plant at its present site i.e., up to 1976 D.M.S. (Delhi Milk Scheme) used to collect milk in these districts and it collected maximum of 20,000 liters of milk per day.

As a test case, this paper presents a profitability assessment through investment returns and sensitivity analysis for the purposes of evaluating the feasibility of URMUL plant at Bikaner. The analysis formulated assumptions based on secondary data. The data was collected by reviewing both printed and electronic articles from research publications in the library. To evaluate the profitability of the venture, indicators of investment returns were determined. A sensitivity analysis on stocking density, survival rates, cost of feed, and sales price was also conducted. The findings of the analysis indicate that though dairying is financially feasible, URMUL is reeling under losses for several years. The findings also indicate other important strategic factors/problems of milk producers at society level, faced by officials, consumers which affect the...
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