Masters Theses

Date of Award

12-1962

Degree Type

Thesis

Degree Name

Master of Science

Major

Agricultural Economics

Major Professor

Irving Dubov

Committee Members

Stanton P. Parry, Cecil E. Fuller, William E. Goble, Charcles C. Thigpen

Abstract

From the very early days of domestication of animals, milk has been a vital food and is still recommended as an essential food containing most of the nutrients required for body growth. Because of the importance of milk in the diet, in most of the advanced nations there has been an increase in its production and use. This increase in milk production has been associated with incentives to producers in the form of increased returns. In the early "take off" stage of a developing nation, both producers and consumers move to a position where they can obtain knowledge about each others wants and capacities. In the case of milk consumption, consumers, as their standard of living rises, are likely to demand more milk, especially if the per capita consumption is low in the beginning of the "take off." As the level of education rises also, consumers become more conscious of the quality of the products they buy. So the availability of pure and wholesome milk at reasonable prices becomes an important matter in a nation with a developing economy. As producers become aware of an increased demand for milk, they can,in anticipation of increased returns, increase their production and thus the supply of milk will also increase. But a mere increase in milk production on farms will not help the producers unless form, place and time utilities are added to basic product. In the case of milk, which should satisfy a high sanitary standard for human consumption in fluid form, processes such as pasteurization or sterilization are necessary, requiring the use of elaborate and specialized equipment. The financial investment required to set up a milk processing plant is so high that under the present economic conditions in Trichur district (India) an individual producer can not process his own milk economically enough to sell it at prevailing prices. Also, in areas where the per capita income as well as the output of milk per producer is very low, processing can be done economically only by pooling resources of producers for the establishment of a processing plant through cooperative effort. This thesis involves an inquiry into the feasibility of organizing such a cooperative enterprise in Trichur (Kerala State, India) through which producers can find an uninterrupted market for their milk and thus a continuous income besides sharing the profits of the organization, ^ the analysis of costs involved in processing and distribution, as well as by the analysis of prospective demand for milk, the study is expected to reveal the following: 1. The changes in cost associated with changing daily volumes of milk receipts in a plant of size appropriate to the local milk supply and demand situations. 2. The costs associated with distribution of milk from this plant to consumers in Trichur. 3. Minimum amounts of milk required to be sold per day to break even on processing and distribution costs from the plant. 4. The anticipated demand for milk as affected by changes in population, per capita income, and social and educational levels in the Trichur area. 5. The supply trends and rate of increase in production of milk necessary to meet the demand. The problem is of importance to the milk producers and consumers of the district. Many producers might commercialize their milk production and so increase their output and gain full-time employment if proper incentives are present. Through cooperative effort many producers can be helped financially and otherwise in producing more high quality milk. The organization not only will act as a marketing institution, but also as a source of information to producers on various technical subjects connected with the production of milk. Consumers, on the other hand,are assured of the availability of pure and wholesome milk. Those consumers in the urban areas of Trichur who at present keep cows (mostly uneconomically) for milk will be encouraged to give up production of milk. This will reduce the number of producers operating uneconomically while producers commercializing production will expand output. Initially the plant might confine its activities to pasteurization and distribution of milk in the Trichur town area only. Later, as demand develops and supply expands, the amount of milk received, at the plant may be increased and activities extended to the production of such products as butter and cheese as well as service to a wider market area.

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