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India’s Dairy Industry |
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On BIG Growth Path
‘Operation Flood’, initiated by Dr V Kurien, brought about a major transformation
in India’s dairy industry, propelling India to become world’s No. 1 milk producer.
From 1/10th of the world production fifteen years go, India’s production now
accounts for 1/ 6th of total global milk output. Milk production in India is growing
at 4 per cent per annum, whereas in the rest of the world it grows at 2.1 per
cent. The current production in India is 116 million tonnes. But there are many
shortcomings that need to be corrected to take the industry further forward.
A major shortcoming is the low average per animal productivity. While the
milk output growth is high, the demand is increasing at even a higher pace.
Clearly, there is no room for complacency. Much needs to be done to boost
both production and productivity. This underscores the importance of time-tested
techniques like ‘progeny testing’ and artificial insemination. The country’s 12th
Plan would aim at taking the current milk output from 115-116 million tonnes
to 150 million tonnes or so by 2017. The plan strategy lays much emphasis on
productivity increase, one of the surest ways of keeping costs down.
Milk Prices
Cost is important since higher milk prices are a cause for concern for the
government trying to address inflation worries. Compared to countries like U S,
milk production in India is costly because land is expensive and interest rates
are higher. But India enjoys the advantage of having cheaper labour. Labour is
also easily available. But the cost of cattle feed is high due to exports and this
has also contributed to high cost of milk. . The challenge is how to enhance milk
output with limited resources and meet the growing demand, particularly in the
cities, while at the same time keeping rising milk prices in check.
Milk Production Outlook
India’s White Revolution has attracted world-wide attention and Indian
performance is expected to continue to play a major role in the future of the dairy
industry in the world in coming years. It is expected that the world milk production
will rise to 867 MMT by 26 per cent from current 714 MMT. However, as per
the current CAGR of 4 per cent and optimistic projection of 4.5 per cent, India's
milk production is estimated to touch 180 million MT by 2020. This will lead to
increase of India's share in the world milk production from the current 16 per cent
to 21 per cent in 2020.
The core of the dairy industry lies with the milk producing farmer, who gets
affected by many factors ranging from fuel and agricultural input prices to
government's foreign policy. Hence, the state of milk producing farmer is crucial
for the dairy industry. To sustain the milk production there has to be a right mix of
social, environmental and economic factors influencing the farmer.
National Policy
Against this backdrop, the national policy on dairy is critical for the growth
of dairy industry. Milk production in US has been growing at a very good pace as
a result of policies of the US government which nurture and protect cooperative
marketing by dairy farmers. Experts feel India should also continue its emphasis
on dairy development through cooperatives and private investments to ensure
long term growth and sustainability of the industry.
India has the largest bovine population in the world with a large processing
capacity of 98.3 million litres per day.
Figures show, milk producers in India enjoy highest percentage share of
consumers' rupee -- 70 to 86 per cent. This is more than double that in other
countries like US, European countries and New Zealand where the returns to
milk producers is less than 40 per cent of the consumers’ spending on milk.
Challenges
However, there are challenges to dairy in India, mostly in the form of rapid
urbanization, low interest of younger generation in dairy farming and increasing
real estate price that leads to loss of farm lands. Due to these factors, some
dairy regions may come under pressure. The preventive measures would be
to implement changes in the dairy production to make farming system more
competitive. In addition, there is a need to develop infrastructure to enhance
production, followed by investment at farm level and improving feeding methods.
More importantly, Government could consider giving relaxation in tax on farmer's
income from milk to encourage him to invest in dairy.
Rising consumption
India is not only the largest producer of milk but also the largest consumer of
milk. The policy approach should be to create growth path for the dairy industry.
Currently, milk constitutes 15 per cent of the average households’ expenditure on
food. However, with increasing urbanization and growing GDP, income rises are
leading to fall in share of food as percentage of total expenditure.
The Cooperatives
A big success story in India’s dairy development is of dairy cooperatives. In the
forefront is Gujarat Cooperative Milk Marketing Federation (CCMMF), the apex
body of farmers' milk cooperatives. It markets the milk products produced by its
member cooperatives under the brand name Amul and Sagar. Milk is sourced
from 15,301 village dairy cooperatives where more than three million farmers
collect their milk produce. Amul apart from being Asia's largest milk brand is a
vehicle for economic and social development through which farmers manage
their own resources. Amul has long been dedicated to providing best prices to its
member producers for their milk and at the same time providing value for money
to its consumers.
Amul is also developing wide range of products to meet future demand, including
calcium fortified milk, flavored yoghurt, frozen yoghurt, sugar free ice-cream and
pro-biotic products. In order to keep pace with the growing market and production
base, GCMMF has planned a total investment of $600 million for milk processing
and village level infrastructure enhancement in the next five years.
Sustained Growth
Undoubtedly, dairying has provided gainful employment to millions, primarily
women, in the villages. Investments under ‘Operation Flood’ have resulted in
sustained growth and self-sufficiency in dairy: Amul Model has demonstrated the
capacity of a single commodity to have multi dimensional effect on producers,
consumers as well as the economy of the country. This model has also
delineated the importance of commercial approach to development and nil
interference of government in commercial enterprise.
By the year 2020, India's GDP is targeted to cross that of UK and will be
ready for a steep rise till 2050. But it can be realized only by active government
support to vital sectors like dairying and implementation of well formulated ideas
provided by dairy scientists and experts.
Dairy Tech India 2013 Exhibition
To address all these issues and to promote interaction among various stakeholders of dairy industry, Media Today will organize Dairy Tech India 2013 (3rd edition) at Bangalore, India. It is India’s largest international exhibition on dairy products, processing and packaging machineries and related technologies. The highlights of the exhibition will be the presence of 175 national and international exhibitors; participation of over 40 companies from the Netherlands -- the partner country -- for joint venture opportunities and technical tie-ups; farmer delegations from over 22 states, presence of delegations from Sri Lanka, Nepal, Bangladesh, among others.
In last year’s event overseas participation came from countries like Holland, USA, Canada, Spain, Italy, China, UK, Czech Republic, turkey and Germany Thailand and Cyprus directly, apart from display of products of overseas companies through their agents in India.
The 3rd DairyTech India 2013 exhibition will held concurrently with 5th India FoodEx 2013, 2nd Poultry & Livestock Expo 2013 , 4th GrainTech India 2013 and 5th AgriTech India 2013. The event is actively supported, sponsored and guided by Union Ministry of Agriculture, National Meat & Poultry Processing Board, National Agricultural Cooperative Marketing Federation of India Ltd.(NAFED), Agricultural & Processed Food Products Export Development Authority (APEDA), National Small Industries Corporation (NSIC) and Food Processing and Packaging Machinery Industry Association (FPPMIA).
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