Research on Credit Union

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<ul><li><p>8/6/2019 Research on Credit Union</p><p> 1/16</p><p>Low Growth of Dairy Co-operative Societies in</p><p>Bangladesh: Causes and Remedies</p><p>Abstract: This study is designed mainly to evaluate the growth of dairy co-operatives</p><p>and its milk production in Bangladesh A brief picture on milk production, quantity ofimported powder milk, nutritional demand of milk in Bangladesh etc. are outlined.</p><p>Major causes of low growth of dairy co-operatives, important suggestions for growthand development of DCS provided by both executives of Bangladesh Milk Producers'Cooperative Union Limited (BMPCUL-Milk Vita) and management of primary milk</p><p>producers' co-operative societies have also been included in this study. Beside these a</p><p>good number of relevant literatures on different aspects of management and economicanalyses relating to dairy sector have been reviewed and some recommendations for</p><p>overcoming the current problems and for high growth of Dairy Co-operative Societies(DCS) have been discussed. The paper concludes that if the policy makers of the Govt.take corrective measures for developing the dairy sector of the economy by followingthe recommendations outlined in the study the deficits of dairy products must be</p><p>removed even the country will export dairy products and earns huge amount offoreign currency every year.</p><p>I. Introduction: Bangladesh is over populated as well as agro based country. Itsmajority people are engaged in agricultural activities. As such agriculture is the mainstay of Bangladesh economy. About 21.91 percent of the Gross Domestic Product(GDP) comes from agriculture and agro related industries (Govt. Economic Review,June 2006). More than 90 percent of the total population lives in the villages (Govt.</p><p>Economic Review, The Second Five-Year Plan-1974) and More than 75 percent of thetotal population of Bangladesh directly depends on agriculture (Hossain, M. 1987).Most of the people here posses cows for draught purposes. The Dairy sector of thecountry is one of the principal agricultural industries. At present there are some dairyorganizations in Bangladesh which process milk through dairy firms or from thefarmer through village level cooperatives or from the dairy farmers directly. Suchtypes of organizations are Bangladesh Milk Producers' Co-operative Union Limited(BMPCUL) i. e., Milk Vita, Arong, Amomilk, Shelaidah Dairy, Bikrampur Dairy,Savar Dairy, Aftab Dairy, Safa Dairy, Tulip Dairy etc. Among these organizations themarket share of Milk Vita is the highest and it supplies about 63.15 percent of the total</p><p>demand of processed milk in the country. In deed, Milk Vita is one of the largestnational level co-operative organizations in Bangladesh. It is mentioned here thatBangladesh has a great deal of land and favorable climatic conditions which help to</p><p>build-up the dairy organizations as a result of good cultivating livestock or cattle. Inspite of these favorable conditions the government of Bangladesh has to import a largequantity of dairy products every year spending huge amount of foreign currency. Inthe year 2008-09, the value of imported powder milk in Bangladesh was Tk.347.21cores approximately (Project Concept Paper, Milk Vita -2006)</p></li><li><p>8/6/2019 Research on Credit Union</p><p> 2/16</p><p>Whereas our neighboring country India does not import dairy products but exports inspite of the almost same natural, economic, climatic and social conditions particularlyin the west Bengal of India. These facts clearly emphasize the importance of dairysector in the economy of the country. The operation areas of BMPCUL operation inthe rural sector are spread over to 12 Milk-shed areas covering about 20 districts with48 police stations and 1005 villages. Through its activities for the last 3 decades,BMPCUL has made a significant impact on the national economy &amp; especially in themilk production sector benefiting the farmers. 80,000 poor, landless and marginalmilk producing farmers who were earlier exploited by the traditional middlemen(ghoses), but at present receiving fair price through sale of milk in a guaranteedmarket. 4, 00,000 farmers' family members who are directly dependent on the incomeof the co-operative members for their livelihood (Project Concept Paper, milk Vita-2006). Although the present production capacity as well as the over all activities ofmilk vita is growing up gradually. But its growth level is very low. In this study anattempt has been made to find out the causes of such low growth and the remedies toovercome these problems simultaneously. Here some picture about milk production,imported powder milk and demand of milk production in the country are given below:</p><p>Table 1: Milk production in the Country (Million Metric Tons)</p><p> product 2000- Yearly2001 Increment</p><p>2001-2002 2002-2003 2003-2004</p><p>2004-2005</p><p>2005-2006 2006-2007</p><p>2007-2008</p><p>Milk 1.62 1.89 1.65 1.68 1.71 1.76 1.79 1.82 1.86</p><p>Source: Current Records of Milk Vita</p><p>Table 2: Import of Powder Milk in the Country</p><p>SI NO Years Metric Tons Million US$ US$=Tk. Total Cost (Crore Tk.)</p><p>1. 1995-1996 55.000.00 130.00 38.15 503.582. 1996-1997 45,000.00 89.42 39.14 349.993. 1997-1998 35.000.00 75.00 40.00 300.004. 1998-1999 25,000.00 62.00 40.20 249.245. 1999-2000 21,000.00 49.00 40.84 200.116. 2000-2001 14,000.00 53.00 42.70 226.317. 2001-2002 13,000.00 45.00 45.46 204.47</p><p>8. 2002-2003 15,000.00 56.00 48.06 269.149. 2003-2004 16,000.00 60.00 50.31 301.8610. 2004-2005 19,000.00 62.00 53.96 334.5511. 2005-2006 20,000.00 59.00 57.43 338.8412. 2006-2007 18,600.00 61.00 57.90 353.1913. 2007-2008 16,250.00 57.00 59.85 341.1514. 2008-2009 16,003.00 56.00 60.25 347.21</p><p>*Approximate.Source: Current Records of Milk Vita, Directorate of livestock services, Bangladesh and</p><p>Bangladesh Bank</p></li><li><p>8/6/2019 Research on Credit Union</p><p> 3/16</p><p>Table 3: Imported Vs Domestic Milk Use in the Country</p><p>Domestic</p><p>Product Production(Million Tons)</p><p>Imported Milk Total Milk Use</p><p>Converted (million Tons)Equivalent(Million Tons)</p><p>Total</p><p>Deficit%</p><p>Liquid Milk 1.79 0.16 1.95 8.33%</p><p>Source: Current Records of Milk Vita</p><p>Table 4: Nutritional Demand of Milk in the Country</p><p>Use Total Demand</p><p>ProductUse</p><p>DomesticProduction</p><p>Import TotalUse</p><p>NutritionalDemand/Person</p><p>NutritionalDemand for140.00 Million</p><p>TotalDeficit</p><p>TotalDeficit %</p><p>Product</p><p>Milk</p><p>Mil. Ton</p><p>1.79</p><p>Mil.</p><p>Ton</p><p>0.16</p><p>Mil.</p><p>Ton</p><p>1.95</p><p>Gram</p><p>240</p><p>Mil. Ton</p><p>12.26</p><p>Mil.</p><p>Ton</p><p>10.31</p><p>%</p><p>84.09%Source: Current Records of Milk Vita</p><p>From the study it is believed that a sound management practice and effectiveness indairy sector may ensure the growth of dairy organizations that will make-up thedeficits of dairy products as well as save foreign currencies of Bangladesh.</p><p>II. OBJECTIVES OF THE STUDY: The main objective of the study is to evaluatethe growth of dairy co-operatives and its milk production in Bangladesh. The specificobjectives are as follows:</p><p>i) To review the major literature in relation to problems of dairy co-operatives inBangladesh;</p><p>ii) To outline an overview on present picture of dairy co-operatives as well as milkproduction in Bangladesh;</p><p>iii) To find the causes of low growth of dairy co-operatives in Bangladesh; and</p><p>iv) To outline some remedies or suggestions to BMPCUL for high growth of dairy</p><p>co-operatives as well as dairy sector in Bangladesh.</p></li><li><p>8/6/2019 Research on Credit Union</p><p> 4/16</p><p>III. Methodology of the Study: This study is based mainly on primary data andinformation. The study was conducted on 15 primary dairy co-operative societies assamples operating under Bangladesh Milk Producers' Co-operative Union Limited(Milk Vita). In this study the societies were selected by using random samplingtechniques. Again a total number of 125 respondents engaged in Milk Vita (20executives from milk union, 45 managers and assistant managers including chairman,and 60 general members from PDUSS) were selected basing on the random samplingtechniques from the selected areas for the present study. In this regard, a speciallydesigned questionnaire was prepared and selected respondents were interviewed bymaintaining interview schedule. Besides these, some academicians and experts indairy sector have also been consulted. Different relevant research works andmanagement literature on dairy organizations have also been sought as the sourcesof secondary information.</p><p>IV.Review of Literature: A summary of major researches and studies in relation tothe dairy co-operatives in Bangladesh are enumerated as follows:</p><p>1. Obaidullah (1971) had made a study on Comilla co-operative creamery plant witha view to helping the farmers in marketing their milk and cream, making proper use ofthe milk resources of rural areas by producing butter, cheese, pasteurized milk etc.,making quality products available at a reasonable price, earning profit for the CentralAssociation. He made an attempt to find out whether the creamery really fulfilled itsobjectives. He found that almost all the objectives of the creamery except earning of</p><p>profit for the central association were fulfilled. He also found that the market share of</p><p>Comilla dairy products was estimated to be nearly 100 percent, which means thatavailability of quality milk products of the Comilla dairy plant was reasonablyassured. Creamery products, particularly butter and cheese, became popular in bighotels and big towns in the then East Pakistan (Presently Bangladesh). Arrangementshave also been made to send them to West Pakistan.</p><p>He noted that due to non-availability of sufficient raw materials the creamery couldnot utilize its productive capacity to a reasonable extent. He identified the reasons</p><p>behind it, lower sale plus equally lower utilization of the plants productive capacitywith higher cost of production for which the unit incurred loss. The study suggested</p><p>that installation of the deep freeze plant would make it possible for the creamery tomaintain regularity in the supply of its products round the year. It may be mentionedhere that at present the creamery plant is a unit of CICS with loosing concern due tocorruption of farmers, import of butter from foreign country, lack of sufficient grassyland etc.</p><p>2. Chowdhury (1992) undertook a study on Primary Milk Producers' Co-operatives inBaghabari Milk-shed Area (BMSA) under Pabna and Sirajgonj districts. It wasconducted with a view to evaluating the performance of dairy co-operatives in thestudy areas. The study found that the average family size of societies' member was</p><p>7.58, which varied from 7 persons in case of landless farmers to 11.43 persons in caseof large farmers. The findings of the study revealed that the level of education waspositively related with the land holding farm size groups. The study revealed that milkproduction was the main source of income both for landless and small farms. The</p></li><li><p>8/6/2019 Research on Credit Union</p><p> 5/16</p><p>researcher also found that among the executive members, more than 18% wereilliterate and the remaining almost 78% were literate and their level of educationvaried from primary to graduate and above. The researcher also found that theultimate beneficiaries of co-operative milk production were the landless and smallfarmers in the study area.</p><p>The study identified some problems faced by the managers and the members of thesocieties: lack of credit facilities, lack of cattle feeds, lack of training facilities, low</p><p>price of milk, insufficient treatment and medicine facilities, irregular attendance ofmembers in the meetings, lack of transportation and communication system etc. Theauthor suggested that credit facilities to the farmer members should be provided understrong supervision by the central society of the BMPCUL, that the government musttake necessary steps to lease the Bathan land only to the milk producers' co-operativesocieties and that the authority of the society should arrange veterinary and animalhusbandry education program for the members of the societies.</p><p>3. A case study on Milk Vita - The National Dairy Co-operative of Bangladesh bySaha (2001), reported that over 60,000 poor, landless and marginal milk producingfarmers who were earlier exploited by the traditional middlemen, but at presentreceiving fair price through sale of milk in a guaranteed market under the fold of 518</p><p>primary milk producers' co-operative societies, delivered milk to this organization.Thus, around 400,000 farmer family members were being benefited by thisorganization. The study revealed that the activities of Milk Vita have created about4000 job opportunities in the rural areas with 750 plants and the milk production in</p><p>the milk-shed areas was increasing every year. The study further revealed that themilk vita has emerged as a net profit earning organization after 18 years of itsoperation due to the reshuffle of the top management level of the organization in1991. From the financial year 1991-92, the net profit of the organization has beengradually increasing every year. In this study, some major problems such as lack of anappropriate dairy policy, shortages of quality cattle feed with reasonable price, lack ofadequate supports from the government, national and international donor agenciestowards undertaking a dairy development program for increasing overall milk</p><p> production, absence of adequate training facilities and support to adopt newtechnology for milk production, lack of appropriate and up-dated co-operatives rules</p><p>and regulations, illegal political pressure by the power-group in major issues forvested interests etc. were identified. The study recommended to form an appropriatedairy policy for the country, acquisition of Bathan land for the farmers of PDUSSwithin the shortest possible time, all sorts of political pressure by the power-groupshould be lawfully avoided; and amendment of the co-operative Acts, Rules and Bye-laws.</p></li><li><p>8/6/2019 Research on Credit Union</p><p> 6/16</p><p>4. Amin, MR. (2004) has made a study on dairy co-operatives in Bangladesh foranalyzing the historical development of dairy co-operatives in Bangladesh. In hisstudy he also shown some dairy organization those are not based on principles of co-operatives and they do not collect milk from the farmers through village level co-operatives. The study explained that it is to be possible to collect milk by primaryvillage co-operatives, the members of co-operatives will be benefited by selling theirmilk with a fair price in a stable market. The study concludes that if the governmentmakes a proper policy regarding milk products in Bangladesh i.e., import of milk</p><p> products can be turned off gradually through proper patronization of dairy co-operatives, it would be possible to cover the requirement of milk products in thecountry without any import of dairy products. And the country can save huge amountof foreign currency. The study revealed some major recommendations such as i) TheGovt. should take immediate action for formation of an institution like National DairyDevelopment Board (NDDB). ii) The Govt. should provide sufficient grazing land torear dairy cattle for every primary society to the development of dairy sector, iii) Thehonest, dutiful and dedicated local leade...</p></li></ul>


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