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अमूर्त

Economic Analysis of Value Addition in Milk Processing

Kiran Kumar R Patil*, Chinnappa B and Manjunatha G R

India is the largest producer of milk in the world with annual production of 187.7 million tonnes. About 70 percent of milk is consumed as liquid milk and the rest is processed into various products like ghee, curd, butter, buttermilk, ice-creams and sweets by public sector companies like milk federations and private entrepreneurs. It was observed that the private entrepreneurs are venturing into the field of milk processing finding it more remunerative. Few such entrepreneurs were selected for the purpose of study in Malnad region of Karnataka. The economics of value addition in milk processing was examined using basic statistical analysis. It was found that capital investment made by entrepreneurs on milk processing unit came to Rs. 63.51 lakh. On an average, 1,64,250 litres of milk per annum was processed incurring an expenditure of Rs.66.87 lakh and realizing net returns of Rs.25.38 lakhs per unit. Among various products, Champakali has registered highest value addition of 285 percent yielding net returns of Rs.2.78/piece (278/kg). The investment was economically feasible as indicated by discounted cash flow analysis. The products were marketed through marketing channels involving bakeries as market intermediaries. The producer’s share was maximum in case of dharwad peda, round peda and badam burfi (70%). The processing unit generated employment for local labour to an extent of 2805 mandays per annum.