The Jharkhand government signed an agreement with the National Dairy Development Board (NDDB) under which NDDB will manage the State Cooperative Milk Producers' Federation Ltd for five years. The agreement was reached after a year-long effort by over 2,500 dairy farmers to bring NDDB to the state to boost milk production.

An earlier agreement between the Jharkhand government and NDDB in 2007 remained unsuccessful. Both sides had stated lack of cooperation and friction as the reason, and the dairy farmers had blamed the state dairy department for stalling progress and of misappropriating funds.

Jharkhand Dairy Milk Producers Association members said at present 20,000 litres per day were procured from the state's farmers while six lakh litres per day was bought from other states, especially Bihar.

Union Minister for Rural Development Jairam Ramesh who led the negotiations between the state government and the NDDB said increased dairy production could boost small and middle farmers income substantially. “Nearly 80 percent, a very high portion, of the retail price can go back to the dairy farmers as income, which is not possible in other sectors. At present Jharkhand spends nearly Rs 1 crore per day on paying other states for dairy, and nearly Rs 300 crores would go to state's small and middle farmers if milk production is boosted by NDDB's method of setting up cooperatives,” said Mr Ramesh at the signing of the MoU in Ranchi.

According to the MoU, NDDB will prepare a five year Dairy Development Plan, a business plan, run the exisiting plants and machinery, and market dairy products.

Jharkhand Animal Husbandry and Fisheries Minister Mannan Mallick, and NDDB's Managing Director Dilip Rath were also present.

“With NDDB managing the state federation, we are hopeful that cattle feed, equipment will be of better quality, and there will be better use of funds,” said Jharkhand Dairy Milk Producers Association Co-Secretary JP Jaiswal. Rozamat Ansari, a member of the association, a dairy farmer in Mandar block in Ranchi said dairy farmers expected monthly payments to farmers will be better streamlined under NDDB's management.