Value Chain Analysis of Informal Dairy Processing Units in Haryana (India): A System Dynamic Approach

Abstract

The study intends to examine the value chain of liquid milk of informal sector based on procurement systems by dairy processing units, applying simulation model Vensim PLE x32 package. Mapping of product flow and core actors involved in value chains are based on primary data pertaining to year 2019. The total sample size was 27 of small and micro dairy processing units in Karnal district of Haryana state. The study concluded that cost of milk procurement was the least in collection centre (Model-I). The integrated production and processing system (Model-II) could attain higher profits (Rs. 9.56/L) compared to Model-I (Rs. 2.65/L) and Vendor system, i.e. Model-III (Rs. 1.78/L). The identified three key interventions, viz. training in milk handling, packing and processing; efficient transportation and processing technology and efficient design of procurement systems need to be applied for leveraging of milk value chain.