Value chain finance to dairy sector - A case study of eastern Uttar Pradesh

The study has analyzed the value chain finance of dairying in eastern Uttar Pradesh based on the data collected from 64 milk producers in 8 villages, 3 inputs suppliers, 8 milk collectors/assemblers, 4 milk transporters, 1 milk processor and 12 distributers for the year 2019-20. The study observed that there is vast network of financing institutions. However, there are also several informal mechanism of value chain financing. The study found that financing agencies have identified the set of activities associated with milk value chain and determine the structure of finance accordingly, in order to minimize costs, to maximize efficiency and to reduce risk. The study has also inferred that among all the actors involved in milk value chains, the processor, producer and distributer have added greater value addition, and they need to be strengthened through the value chain finance approach for the better growth of the dairy industry.