DAIRY CO-OPERATIVES IN BHUTAN Understanding Potentials towards Co-operative Chain Development Thesis submitted to the University of Applied Sciences in partial fulfilment of the requirements for the Masters Degree on Agriculture Production Chain Management with specialization on Livestock Chains. Dawa L Sherpa September 2010 University of Applied Sciences Van Hall Larenstein The Netherlands The Netherlands © Copyright Dawa L Sherpa, 2010. All rights reserved. Dairy Co-operatives in Bhutan PERMISSION TO USE In presenting this research project in partial fulfilment of the requirement for a Postgraduate degree, I agree that the Library of this University may make it freely available for inspection. I further agree that permission for copying of this research project in any manner, in whole or in part, for scholarly purposes may be granted by Larenstein Director of Research. It is understood that any copying or publication or use of this research project or parts thereof for financial gain shall not be allowed without my written permission. It is also understood that due recognition shall be given to me and to the University in any scholarly use which may be made of any material in my research project. Request for permission to copy or make other use of material in this research project in whole or part should be addressed to: Director of Research University of Applied Sciences Van Hall Larenstein Part of Wageningen University P.O. Box 9001 6880 GB Velp The Netherlands Fax: 31 26 3615287 Contact: [email protected] i Dairy Co-operatives in Bhutan ACKNOWLEDGEMENT Many people have been instrumental in bringing this thesis to its present form. I would like to appreciate and credit each of them for their unfailing help, support and cooperation. Firstly, I would like to take this opportunity to thank the Netherland Fellowship Program (NFP) for the generous funding to pursue my MSc study at the University of Applied Sciences, Van Hall Larenstein, part of Wageningen University, the Netherlands. I am also thankful to the Ministry of Agriculture and Forests and Royal Civil Service Commission for approving my study and granting leave to pursue and complete my studies. I would also like to thank my supervisor, Mr. Johan Meinderts, Lecturer in the University of Applied Sciences for his excellent guidance, support and supervision. I also owe him my appreciation for his personal concern of my wellbeing during my stay in the Netherlands. I would like to acknowledge my gratitude to the Program Director, RNR-RDC, Jakar for rendering me with superb transport arrangement and a staff to assist despite the busy schedule. I would like to thank Mr. Prasad Bhujel, Research Assistant for assisting me during the entire field research. Without his help, I would not have completed my field research on time. I am also thankful to the District Livestock Officer for informing and arranging my fieldwork in spite of his busy schedule in his office. I would like to thank the Livestock Extension staff of Chokhor, Chumey and Tang geogs for their assistance in informing the farmers. I am also indebted to the dairy farmers of Chokhor, Chumey and Tang and the workers in the Milk Processing Units for their presence during the survey interview, their hospitality and cooperation. Last but not the least, I would like to acknowledge the lecturers and Management staff at Van Hall Larenstein who taught, supported and guided me during the entire period of my stay. I owe my special thanks to my fellow colleagues who have been very nice to me and made my stay enjoyable and memorable. I will cherish these memories throughout my life. Tashi Delek! ii Dairy Co-operatives in Bhutan DEDICATION I would like to thank my beloved mom Karkimo Sherpa, wife Lhakpa Deki, son Dodrup and twin daughters Chimi Eden and Chimi Selden for bearing with my absence. They have endured my absence a lot and in the process also learnt to cope with difficulty. I would like to dedicate this thesis to them and what good may come out of it. iii Dairy Co-operatives in Bhutan TABLE OF CONTENTS PERMISSION TO USE ............................................................................................................................................... I ACKNOWLEDGEMENT ............................................................................................................................................ II DEDICATION ............................................................................................................................................................. III TABLE OF CONTENTS ........................................................................................................................................... IV LIST OF TABLES ...................................................................................................................................................... VI LIST OF FIGURES .................................................................................................................................................. VII ACRONYMS ............................................................................................................................................................ VIII BHUTANESE TERMS ............................................................................................................................................... IX ABSTRACT .................................................................................................................................................................. X 1. INTRODUCTION ................................................................................................................................................ 1 1.1 INTRODUCTION TO THE TOPIC ..................................................................................................................... 1 1.2 BACKGROUND .............................................................................................................................................. 1 1.2.1 Country’s Background ...................................................................................................................... 1 1.2.2 Dairy Sub-sector’s Background ...................................................................................................... 2 1.3 PROBLEM STATEMENT ................................................................................................................................. 3 1.4 RESEARCH OBJECTIVES .............................................................................................................................. 3 1.5 RESEARCH QUESTIONS ............................................................................................................................... 3 2. METHODOLOGY ............................................................................................................................................... 5 2.1 RESEARCH FRAMEWORK ............................................................................................................................. 5 2.2 CONCEPTUAL FRAMEWORK ......................................................................................................................... 5 2.3 SELECTION OF THE STUDY AREA ................................................................................................................ 6 2.4 STUDY DESIGN ............................................................................................................................................. 7 2.5 LITERATURE REVIEW ................................................................................................................................... 7 2.6 DATA COLLECTIONS AND SAMPLING ........................................................................................................... 7 2.6.1 Field Study ......................................................................................................................................... 7 2.6.2 Sampling Techniques ....................................................................................................................... 8 2.6.3 Data collection techniques .............................................................................................................. 8 2.7 DATA ANALYSIS ........................................................................................................................................... 9 2.8 TOOLS USED ................................................................................................................................................ 9 2.8.1 Value Chain Analysis ....................................................................................................................... 9 2.8.2 SWOT Analysis ................................................................................................................................. 9 2.8.3 Force Field Analysis ......................................................................................................................... 9 3. LITERATURE REVIEWS ................................................................................................................................ 10 3.1 CO-OPERATIVES......................................................................................................................................... 10 3.1.1 Introduction ...................................................................................................................................... 10 3.1.2 Definitions .......................................................................................................................................