Dairy Development and Animal Husbandary Minister Madhukar Chavan said that the MoU would be modelled on the lines of the Jalgaon Milk Federation's tie up with NDDB, which resulted in the federation becoming a profit-making body.
Milk producers will sell the milk to NDDB, which has better infrastructure and investment for proper marketing and supply of the produce.
"District milk federations have to be willing to tie up with NDDB and there will be no force," he said.
At present, milk procurement is done by government and private dairies.
The total milk collection is 92 lakh litre daily, out of which, 1.59 lakh is by government dairies, 34 lakh litre by co-operatives and 56 lakh litre by private dairies.
A series of meetings on tie-up with NDDB have taken place between Chief Minister Prithviraj Chavan and Union Agriculture Minister Sharad Pawar so far.
The state government will have to part with government land to the NDDB to set up additional infrastructure. One of them being a dairy plant in Gove Bhiwandi area. "NDDB will procure and distribute 10 lakh litres milk from the plant," he added.