From a Drop to an Ocean: Past, Present, and Future of Dairying in India
The Indian Dairy Association is at the cusp of entering its 75th year of establishment and I feel tremendously grateful for having received the opportunity to address the community as the President. I would like to thank the IDA community for placing their faith in me to lead IDA, an institution with a proud past and an exciting future. I am honored to follow the lineup of stalwarts, including my mentor Dr. Verghese Kurien, who provided guidance for the institution in the past. Each of our past Presidents may have brought a different strategy but for the singular aim of making India a nation of world’s biggest and most efficient milk producers. At the very outset, I would also like to congratulate Dr. G.S. Rajorhia for his tenure as the President and I wish to acknowledge the dedication of his team in leading the organization in the most steady, assured, and pragmatic way. We hope to receive your input and support in the future as well. I wholeheartedly welcome the new CEC team members and I am sure all the members are as enthused as I am for taking this organization's legacy ahead.
Recently, India celebrated 75 years of its independence and the narrative of India’s growth would be incomplete without the mention of its dairy industry. To say that dairying in India has grown by leaps and bounds would be an understatement. It has grown from merely an occupation to a lifestyle in Bharat (rural India); from a means of financial gain to a vessel for empowerment.
The Indian economy has been witnessing steady growth in the last four to five decades. This has had a huge positive impact on critical sectors of the economy such as agriculture, manufacturing, and services. The world now recognizes India as a global force to reckon with. But the situation was starkly different in 1947. While the masses rejoiced on attaining freedom, we were yet to achieve true financial independence and selfsufficiency. Post-independence, our complete focus was on ensuring food security for the country’s growing population as India was surviving on food aid from various developed countries.
The doyen of Indian dairy industry Dr. Kurien ushered in a socio-economic revolution in Bharat with his “Billion litre idea” and Operation flood propelled India to its current position of eminence in the world dairy scenario.
Indian dairy and animal husbandry sector has become the primary source of income for 100 million rural families and has assumed the most important role in providing employment and sustainable livelihood, particularly for marginal and women farmers. Out of the agricultural economy around 30% i.e. INR 8.5 lakh crores (USD 120 billion) is contributed by dairying. Total value of milk production is more than the total value of all pulses and grains put together. The per capita availability of milk has increased from 110 g per day in 1970 to 427g per day in 2021-22. Today India brims with evident pride as it boasts its Aatmanirbharta in the dairy sector along with many other sectors, achieved through a selfcreated, indigenous business model.
The nationwide cooperative movement led to the elimination of middlemen from the system and ensured that farmers retained control over the entire value chain. The Indian dairy industry has worked primarily on 2 philosophies:
(a) Value for Many: Ensuring maximum remuneration to our farmers for the milk poured by them. Almost 70-80% of the consumer’s rupee flows back to the farmers, quite unlike countries like US or even Europe, where farmers get between 35% and 40% of consumer’s dollar; and
(b) Value for Money: The dairy sector has grown because of its ability to strike a chord with India’s lower middle class and middle class by providing quality products at a reasonable price. The average customer understands the importance of milk nutrition and the co-existence of both private and co-operative brands in the market ensures affordability for him.
The complementarity of co-operatives and private players in the Indian dairy market, guaranteed the fair offerings for both the producer and the consumer and saw the rise of Indian dairy industry as an exemplar of efficient supply chain management. The task of sourcing milk from cohorts of marginal dairy farmers from the remotest rural corners at a competitive price and bringing that produce to the market at affordable prices for the consumers, has been mastered by the Co-operative players of the dairy industry. At 75 years, we see the strength of cooperatives as a business model for economic development of small farmers, small entrepreneurs, small artisans, small producers, and small services providers for the development of ‘Bharat’ in India. Indian dairy industry has the world’s finest supply chain management and has also become the epitome of end-to-end technological integration of services; right from cow to consumer.
Apart from the monetary aspect, dairying in India has seen a 360-degree development. With a thrust on better productivity, reduced input cost and better-quality milk and milk products, the competitiveness and profitability in the dairy sector has enhanced, leading to increased demand of dairy products in domestic and international markets. The initiatives of the Indian government and the convergence of several schemes has incentivized further investment for increasing processing facilities in the dairy sector.
Milk production in India has increased from 17 million MTs to 209 million MTs, contributing to 23% of World production. As per projections in NITI Ayog’s report, milk production in India is likely to reach 330 million MT by 2033, contributing 31% of total world milk production by that year. Massive growth is projected in the organized dairy sector as well. The economy sees a creation of 6,000 new jobs for every 1,00,000 liters of milk processed through the organized sector. By that estimation, the organized dairy sector will lead to the creation of at least 13 million new jobs in the country, in the next 10 years.
Over the next couple of years, the task is to build on our strengths but also maneuver to new directions. Dairying and animal husbandry must be presented as a commercially viable sector for the next generation of dairy farmers in India. After all, the weight of this colossal sector will have to be shouldered by the youth of Bharat. As an institution we understand the vulnerabilities, the sensitivities and of course the potential of dairying in India. Henceforth, one of our primary objectives should be to sensitize the political leadership and the policy makers to the needs of the farmer producer members and get budgetary resources equivalent to dairy sector’s contribution to the country’s GDP. At the same time, we must collectively work to ensure food security for a population of 165 billion people by 2050 in India.
Like every industry, dairy industry also faces challenges such as the rising input prices that have impacted the cost effectiveness for dairy farmers in India, the imposition of GST on dairy products the consequential burden of which will have to be borne by the consumer and the reluctance of the next generation to join dairy farming, etc. Our aim is to draw the attention of policymakers towards these issues and urge the leadership for favorable regulations for Indian dairy industry. Simultaneously, we must explore new geographies where dairying and animal husbandry is still at a nascent stage and can be developed by replicating the successful business practices implemented in India.
We have a strategic priority to position India as a “Dairy to the world”. Be it the co-operative sector’s modus operandi, the execution of the model, professional experts or even for the latest manufacturing technologies; the world should look up to India as the go-to destination for dairying solutions. Our objective is to become the largest dairy nation in the entire world, ensuring health, nutrition, and wellness of people across India and the world, thereby ensuring continuous prosperity and remunerative livelihood for Indian dairy farmers.