Indian J. Dairy Sci.

67(6), 2014

RESEARCH ARTICLE

SWOT analysis of Jammu and Kashmir milk

producer's co-operative limited

Sajad Ahmed Wani, Gopal Sankhala, Amit Singh

and Nazir Ahmad Mir

Received : August 2014 / Accepted : November 2014

Abstract Dairy cooperatives have proved to be a Keywords : Dairying, milk cooperatives, SWOT and
boon for Indian dairy industry as these have played an JKMPCL
important role in providing employment to 14 million dairy
farmers in the country. A SWOT analysis of Jammu and
Kashmir Milk Producer's Co-operative Limited (JKMPCL) was Introduction
planned to check out the weak and strong points leading to
its challenges and opportunities. SWOT analysis was done Despite being one of the largest milk producing countries in
by focused group discussion and interview schedule with the world, India accounts for a negligible share in the
the selected participants. The major Strengths of JKMPCL worldwide dairy trade. The ever increasing rise in domestic
include"the regular and weekly milk payment system demand for dairy products and a large demand-supply gap
(81.95%)", "dairy as a source of livelihood (80.46%)" and could lead India to be a net importer of dairy products in the
"good commitment from the government for dairy industry near future. Currently, the Indian dairy market is growing at
(76.76%)". The top ranked weaknesses were "low productivity an annual rate of 7 per cent (Chand et al., 2010). Despite the
of animals and high cost of milk production (83.17%)", "lack increase in production, a demand supply gap has become
of structured and clear benefit packages (81.68%") and "low imminent in the dairy industry due to the changing consumption
price for milk as compared to other private competitors habits, dynamic demographic patterns, and the rapid
(80.12%)". The Opportunities offered to JKMPCL were "more urbanization of rural India. This means that there is an urgent
milk producerswere willing to join cooperative (82.23%)" need for the growth rate of the dairy sector to match the
which was ranked first, "scope for convergence with allied rapidly growing Indian economy (Chandet al., 2010). The annual
departments and substantial scope for modernization of the milk production of state of Jammu & Kashmir is 16.14 lakh
unit (80.15%)". The Threats faced by the JKMPCL were tones as against 1279.04 lakh tones of total milk production
rated and showed that "losing interest of farmers in dairying in the country in the year 2011-2012. The state is also importing
(85.70%)", "heavy competition from private units (82.43%)" a good quantity of milk from the neighbouring state of Punjab
and "high cost of credit for dairy farming (81.62%") were viz., 11000 liters of processed milk and 51000 liters of liquid
ranked as first, second and third threats; respectively. raw milk to fetch the demands of market and private milk
processing plants;respectively. The milk distribution system
of the state is traditional and exploitative in nature. The
organized sector is handling only 1.70 per cent of the total
liquid milk production which makes only 5 per cent of the
Sajad Ahmed Wani ( ), Gopal Sankhala, Amit Singh
and Nazir Ahmed Mir
marketed surplus of the milk in the state (Wani and Wani,
Dairy Extension Division, National Dairy Research Institute, Karnal- 2010). The concept of dairy co-operatives is very new in J&K.
132001, Haryana The Jammu & Kashmir Milk Producers Co-operative Limited
Animal Physiology Division, National Dairy Research Institute, (JKMPCL) was set up in 2004, which is currently having a
Karnal-132001, Haryana
membership of 5372 and only 354 dairy cooperative societies,
Sajad Ahmed Wani which are not spread through length and breadth of the state
Dairy Extension Division, and are restricted only in the adjoining districts of two milk
National Dairy Research Institute, Karnal-132001, Haryana plants based in Jammu and Kashmir districts. JKMPCL is
E-mail: [email protected]

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Indian J. Dairy Sci. 67(6), 2014

functioning with the objectives of increasing the milk and strongly disagree were given scores of 5, 4, 3, 2 and 1;
production besides providing remunerative price to the respectively. The collected data were tabulated for statistical
producers and supplying quality milk and milk products at analysis, to draw the meaningful conclusions to suggest
reasonable prices to the consumers. The present study was suitable strategies for improvement of JKMPCL.
undertaken to check out the weak and strong points leading
to its challenges and opportunities. It analyzed the internal Results and Discussion
strengths and weaknesses as well as the external opportunities
and threats of the organization. The result of the process is The results obtained after performing the SWOT analysis of
a 'plan of action'. After identifying the internal and external JKMPCL by using focused group discussion and interview
factors, relevant for the organizations development, were then schedule were then converted into mean percent scores (MPS)
prioritized and used for establishing strategies that would and are presented as under.
help in further improvement of the dairy co-operatives in Strengths of JKMPCL
Jammu and Kashmir.
Strengths are those factors that make an organization more
Methodology competitive than its market place peers. Strengths are what
the company has a distinctive advantage at doing or what
The present study was conducted among milk cooperative resources it has that is strategic to the competition. The
societies of Jammu & Kashmir state. A total of 16 societies, Strengths of JKMPCL as rated by the participants are
8 from Jammu zone and 8 from Kashmir zone were selected, presented in Table-1. The important strengths of JKMPCL
based on the criteria that they must have been functional were the "weekly milk payment system and regular payment
societies at least for the last three consecutive years. Strength, of bonus provided by the co-operatives (81.95%)", "Dairy as
Weaknesses, Opportunities and Threats (SWOT) analysis was a source of livelihood (80.46%)" and "good commitment from
done by using focused group discussion and resultant the government to ensure orderly growth of the dairy industry
interview schedule. To get the holistic understanding of the and Cooperatives (76.96%)".
co-operative organization, respondents for the study were
Apart from these the "well-educated board members", "Regular
selected at two levels i.e., society level and federation level.
and guaranteed supply of raw milk from the milk co-operative
At the society level, Secretary of each of the sixteen selected
societies (74.80%)" and "suitability with respect to ecological
co-operative societies were taken in the Jammu and Kashmir
conditions for dairy development (71.85%)" were ranked
zones of the state. The societies were selected by stratified
subsequently as the strength of the cooperatives. The above
random sampling technique. At the federation level, the heads
findings are further supported by the findings of Rathod et
of the four sections viz., production, procurement, processing
al., (2011), who reported that the strength of Gokul dairy
and marketing sections and route supervisors of each of the
cooperatives in Western Maharashtra was its weekly milk
four selected routes in each zone were taken purposively for
payment system and its well-educated and experienced board
the study. Thus, there were a total of thirty-two respondents
members in dairy sector. They also reported that efficient
from two zones of Jammu and Kashmir viz., four sectional
procurement and better marketing were other strengths of the
heads, four route supervisors and eight secretaries of selected
dairy cooperatives societies. Further Bindu et al., (2014) and
co-operative societies from each zone. The participants of the
Pandian et al,(2013) revealed that, dairy sector had strength
SWOT analysis were organized into group discussion. To
like effective network of animal husbandry department,
enable them to focus on issues, a list of key questions was
increasing consumption of milk, proven technologies, free
provided to them. The typical process of the analysis consisted
marketing system and regular income from sale of milk. The
of the researcher / facilitator telling the participants about the
strengths like "dairying being livelihood occupation of majority
importance and purpose of the exercise and explaining the
of rural population" and "suitability of the state with respect
key questions. On the basis of these key questions, the
to its ecological conditions for dairy development" could be
respondents had to explain their Strengths, Weaknesses,
utilized by the educated and experienced management with
Opportunities and Threats as the stake holders of JKMPCL.
the help of government support to improve the performance
Thereafter, the participants plotted action points to consolidate
and future prospects of JKMPCL. The JKMPCL should utilize
their strengths, overcome weaknesses, avail of opportunities
these strengths to procure more milk from the producers by
and guard against threats. The additional points that came to
giving them incentives and supply of inputs so that the dairy
light during the discussion with the participants were noted
farming profession should be strengthened to reduce the
down by the researcher. These points were consolidated to
dependency of neighbouring state for milk imports.
form schedule for undertaking SWOT analysis. These were
finally presented to participants for getting their valuable Weaknesses of JKMPCL
response. For the purpose of quantification of SWOT, a five
point continuum strongly agree, agree, not decided, disagree A weakness is a limitation, fault, or defect within the

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Table 1 Strengths of JKMPCL

S. No Strengths Score MPS
1 Weekly milk payment system and regular payment of bonus provided by the co-operatives 4.10 81.95
2 Dairy farming is a livelihood occupation of the majority of the rural population. 4.02 80.46
3 There is good commitment from the government to ensure orderly growth of the
dairy industry and Cooperatives. 3.85 76.96
4 Educated board members with diversified experience and knowledge in the dairy sector. 3.46 69.14
5 Regular and guaranteed supply of raw milk from the milk co-operative societies 3.74 74.80
6 Suitability with respect to ecological conditions for dairy development 3.59 71.85

organization that will keep it away from achieving its objectives; organization and the government support are of prime
it is what an organization does poorly or where it has inferior importance. Corroborative approach should be adopted with
capabilities or resources as compared to the competitors. the line departments of the state to strengthen the extension
Weaknesses of JKMPCL based on our study are presented services to the dairy farmers.
in Table-2. The major weakness which was ranked first,was"low
productivity of animals and high cost of milk production Opportunities in JKMPCL
(83.17%)". The next in the series of weaknesses includes
"lack of structured and clear benefit packages available to Opportunities include any favourable current prospective
keep up the motivation of member farmers (81.68 %.)" and situation in the organizations environment, such as a trend,
"low price for milk as compared to other private competitors market, change or overlooked need that supports the demand
(80.12 %)". for a product or service and permits the organization to
enhance its competitive position.
The result also reveals that "lack of support services like
Artificial Insemination (AI) and health services (79.82%)", The close look of the result presented in Table 3 showed that
"scattered milk shed area with less membership and members the important opportunities for the JKMPCL were that"large
producing small quantities of milk (78.75%)" and "milk number of milk producers were willing to join the cooperative
collection centres were not well equipped (78.12%)", "high societies in future (82.23%)", which was ranked first. "Scope
transport and marketing cost (73.15%)" and "limited market for convergence with allied departments and other agencies
coverage due to less procurement" were also referred as for funds (80.15%)" and "substantial scope for modernization
weakness by the participants. The above findings are of the unit (79.13%)" were ranked second and third by the
supported by the findings of Eshetu (2008) who reported the officials/participants.; respectively.
weaknesses of dairy cooperatives in central Ethopia which
included lack of well-structured and clear benefit packages The examination of this table revealed that there was bright
for motivation of dairy farmers to join cooperatives and lack prospect for the organization,as the demand of milk was
of proper and timely animal health services to the member growing in the state and the current infrastructure was in
farmers. He also reported insufficient advertisement and process of continuous upgradation like processing
promotional works to attract new farmers or potential equipment's, chilling centres and feed manufacturing units,
customers as other weaknesses. Further the work of Rathod which would overcome its weaknesses and would help in
et al., (2011) reported that low price of milk as compared to tapping the opportunities in way of JKMPCL. Rathod et al.,
other market players in the study area as other weakness of (2011) revealed that in Western Maharashtra, the dairy
the dairy cooperatives. Wani et al., (2013) reported that non cooperatives were harnessing the opportunities of the
remunerative price of milk, less membership and lack of increasing production and better market coverage by improving
adequate infrastructure facilities were the serious problems the quality of input services and by reducing the cost of milk
faced by the cooperatives societies under JKMPCL. From the production. Rajendran and Samarendu (2004) also concluded
observation of the weaknesses of JKMPL, it is clear that that the milk quality, product development, infrastructure
there is a good scope to turn the weaknesses into strengths support development, and global marketing were found to be
of the organization. The weaknesses like "low productivity of emphasized in India's milk marketing. Wani and Wani (2010)
animals and high cost of production", "lack of structured and revealed in their study based in J&K, that dairying offers a
clear benefit packages", "low price of milk" and "absence of vast potential for development in the state. Integration of
support services" could be improved upon by suitable policy dairying with processing/value addition had ample scope in
interventions. For that purpose dynamic leadership in the the state and can help to boost milk production, and increase

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Indian J. Dairy Sci. 67(6), 2014

Table 2 Weaknesses of JKMPCL

S. No Weaknesses Score MPS
1 Low productivity of animals and high cost of milk production 4.16 83.17
2 Lack of structured and clear benefit packages available to keep up the
motivation of member farmers 4.08 81.68
3 Low price for milk as compared to other private competitors. 4.01 80.12
4 Lack of support services viz., A.I. service and animal health services and farm
inputs like cattle feed or veterinary medicine. 3.99 79.82
5 Milk shed area is scattered with less membership and members
producing miniscule quantities. 3.94 78.75
6 Milk collection centres are not well equipped 3.91 78.12
7 Insufficient raw milk supply for milk processing plants 3.74 74.80
8 Low level of milk procurement 3.66 73.15
9 Limited market coverage due to less procurement as compared to private players. 3.64 72.80

Table 3 Opportunities in way of JKMPCL

S. No Opportunities Score MPS
1 More producers willing to join the cooperative societies 4.11 82.23
2 Scope for convergence with allied departments and other agencies for funds 4.01 80.15
3 Substantial scope for modernization of the unit and new product development 3.96 79.13
4 Growing milk demand and expandable market share 3.76 75.24
5 Developing infrastructure like processing equipment, bulk milk coolers, chilling
centres and feed manufacturing units 3.60 71.95

income and employment of producers and urban consumers JKMPCL respectively.

with regular supply of quality milk and its products at
reasonable prices. The producers willing to join the cooperative The Table-4 highlights the other threats like "lack of financial
societies, is the biggest opportunity for JKMPCL to extend its schemes (80.20%) "lack of appropriate policy for dairy secto
support and services to the milk producers to cover them rwith respect to animal feed policy and credit facility (78.53%)",
under the cooperative structure. The private players were "decline of grazing lands due to urbanization (77.44%), and
procuring the milk nearby cities where sufficient milk was increasing cost of basic inputs (72.50%) i.e., feed ingredients
available. But the remote villages and low production villages and veterinary medicines in dairy sectors faced by JKMPCL.
were untapped by these players. So JKMPCL should look From the observation it appears that these threats could be
into it and provide benefit to these areas also. minimized if not totally removed by proper tapping of strengths
and opportunities of JKMPCL. Rathod et al., (2011) also have
4. Threats faced by JKMPCL reported that lack of appropriate policy favouring the dairy
sector and challenge of waste disposal as the threats to dairy
A threat includes any unfavourable situation, trend or cooperatives. Milk vendors and other unorganized sector
impending change in an organizations environment that is players, occupying pride place in dairy sector today were
currently or potentially damaging or threateningto its ability mentioned as threats to organized sector of milk marketing in
to compete. It may be a barrier, or anything that might inflict Dairy India (1997). Further prohibitive banks policy for
problems,damages, harm or injury to the organization. The collateral requirement and unorganized and weak dairy related
threats faced by the JKMPCL were rated and presented in associations were also reported to be threats to the dairy
Table 4 which showed that "losing interest of farmers in cooperatives by Eshetu (2008), in his study in Ethopia. Singh
dairying owing to high cost of production and un-remunerative and Pundi (2002) also stated that the major threat to the dairy
price (85.70%)", "heavy competition from private units cooperative was unregulated competition from national and
(82.43%)" having better marketing channels with huge multinational private companies, unethical practices by
advertising budget and "high cost of credit for dairy farming unscrupulous private dairy operators; and inadequate public
(81.62%)" were ranked as first, second and third threats of

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Table 4 Threats faced by JKMPCL

S. No Threats Score MPS

1 Farmers losing interest in dairy farming 4.28 85.70

2 Existence of competition from other private units 4.12 82.43
3 The high cost of credit for dairy farmers 4.08 81.62
4 Lack of financial schemes for dairy enterprise 4.01 80.20
5 Lack of appropriate government policy favouring the dairy sector 3.93 78.53
6 Decline of grazing lands due to urbanization 3.87 77.44
7 Increasing cost of inputs 3.62 72.50

and private investment in modernisation of the sector. The 4. Extension programmes should be organized at village
management of JKMPCL should discuss about threats and level viz. dairy mela, calf rallies, field days, on campus and off
make a policy intervention with the help of government and campus training programmes, fodder demonstration, supply of
financial agencies in the collaborative schemes for overall inputs like fodder seeds and animal health programmes to
development of dairy sector in the state so that income and promote the commercial dairy farming culture and to motivate
employment may be generated among the milk producers and the farmers to join the dairy co-operative societies.
especially for young generation.
5. The milk plants need to be modernized and provided
The JKMPCL could capitalize on these strengths and with experienced and efficient staff to improve its product
opportunities to exploit the potentials and overcome threats. range and get larger share of market.
After considering the ground realities in the study area and
the above SWOT analysis, following strategies could be Conclusions
proposed to improve the performance of JKMPCL.
The study concluded that there was a prime need to mobilize
1. Due to the lack of support services in the study area the funds from the government apart from establishment of
among the cooperative members, collaboration of JKMPCL linkages with financial institutions to improve the infrastructure
with state Animal husbandry department for providing free, of the organization, both at society and federation levels. The
regular and timely animal health cover facilities and tie ups JKMPCL should also utilize funds for providing supplies and
with the state extension department to provide efficient services at subsidised rates to member farmers to keep alive
extension services to the members are suggested. their faith in cooperative societies. The JKMPCL should
approach the J&K state government and NABARD and frame
2. Appropriate government intervention favouring dairy a policy framework to utilize the strength and opportunities
co-operatives is the need of the hour. Government should for enhancing milk production in the state to provide and
frame suitable policies to make linking of co-operatives with enhance the employment and income of dairy farmers.
government feed factories and financial institutions. This will Measures, how to face the threats and remove the weaknesses
help in reducing the cost of production of milk by reducing of JKMPCL, should also be taken on priority basis with the
the investments in costly fodders and concentrates purchased concerned agencies and self-assessment by JKMPCL should
from market; and heavy interest rates. also be done to frame proper strategy to improve its viability.
Then we can say that it is really a welfare scheme/policy
3. There is a tremendous need for the infrastructural up which will be of great help for the farmers of J&K state in
gradation both at society and federation levels. Societies strengthening the dairy profession.
lacking fat estimation machines and other equipments should
be provided with them. At federation level more milk vans and References
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