Sustainability and the Dairy Industry

One of the most awaited events of the Indian dairy sector is finally here. In a couple of days, the Gujarat Chapter of IDA would be hosting the 49th Dairy Industry conference in Gandhinagar. This conference brings with it amazing opportunities for networking and exploring new avenues of business within the dairy sector. The whopping response received from attendees, speakers, exhibitors, and sponsors shows the excitement within the dairy industry to come together after a gap of 2 years. Delegates will get to hear from a range of speakers, addressing various topics from across the spectrum of dairy industry like – product innovations, upcoming dairy trends, digitalization, nutrition, sustainability, etc. - with farmer success stories thrown in the mix. I cordially invite the members of the dairy fraternity to be a part of the 49th DIC, as we demonstrate the best of the Indian Dairy Industry.

First, I would like to applaud the government for introducing some very healthy reforms in the latest union budget for promoting the co-operative sector in India. The establishment of a separate ministry last year was a welcome initiative, recognizing the contribution of the co-operative business model in India's growth story and the potential that is yet to be realized. The total outlay for the ministry of co-operation was increased and the introduction of new tax reliefs for the co-operatives were some key announcements that were made in the Union budget. A nationwide database grid is being prepared for the mapping of all small and big co-operative business units in India. Furthermore, the government announced an additional investment of Rs. 2516 cr to enable the computerization of 63,000 Primary Agricultural credit societies (PACS). These PACS have been formulated in a way that they can function as multipurpose societies assisting the small and marginal farmers. With this backdrop, the government has also announced setting up of a massive, decentralized storage capacity to help farmers store their produce and realize remunerative returns for the same. The overall allocation for the Animal Husbandry sector has been increased from 3000 cr to 4300 cr, with a separate agricultural sector fund of Rs. 20lakh cr for the upliftment of the India's rural economy. By extending support to the co-operative sector, the government is now headed towards more inclusive growth in the country.

FY 2022-23 is coming to an end and the last year saw a lot of volatility. The demand for milk and milk products kept soaring high with the supply of milk hitting several roadblocks. On the other hand, the consumers have been showing a shift in their demand for food products. Consumer preference started evolving with the onset of the pandemic. The normalcy that followed the lockdown era saw the waning impact of certain preferences on one hand and some trends growing stronger than ever on the other. One such trend that we saw among consumers was the increased awareness of the climate crisis. People, now more than ever, were cognizant of the deteriorating climatic conditions and wanted to contribute towards saving the environment. Consumers' growing awareness of the climate crisis is prompting them to re-evaluate their purchasing habits and seek out brands that are actively addressing sustainability issues.

In 2018, the World Meteorological Organization (WMO) issued a statement that read – "We are the first generation to completely understand climate change, and probably the last generation to be able to do something about it."

Dairying as an industry has always been at the receiving end of misconceived notions. The sector is always wrongly linked with environmental damage whereas the actual carbon footprint of dairy products is significantly lower than as compared to the common perception. The dairy co-operatives of India have been at the forefront of innovation and in promoting sustainable ways of operation. And when I use the word sustainability, I mean all-round sustainability – environmental, social, and economic.

The social and financial impact brought about by the co-operative business model is not unheard of. This model has been a means of bringing economic independence for women farmers, social upliftment of marginalized sections of the society and the business of milk especially has been a consistent as well as season agnostic source of income for more than 10 cr families in India.

The foundation stone of sustainability in any business is efficiency. Efficiency increases the throughput of production, at reduced costs and optimum utilization of resources. The objective is to analyze every operation keeping in mind the 3 fundamentals – Reduce, Recycle and Reuse. It is a well-established fact that the business of milk is one of the toughest businesses with respect to logistics and maintaining the quality of milk from cows to the final consumer. For the longest time, co-operative as well as private players have cracked the code of optimum logistics, right from identifying the potential of milk procurement in a particular area to demand estimation and finalizing the perfect product-mix to minimize the energy, manufacturing and logistic costs. At the level of milk procurement many village cooperative societies are now opting for solar panel installations for the BMCs. The solar panels not only fulfil the demand of electricity at the district collection centers but also benefits from the surplus electricity that is sold to the grid. Another major initiative undertaken by the manufacturing plants is the development of bio-gas plant as a source of renewable energy.

Apart from processing, transportation of milk and finished milk products accounts for a significant share in fuel consumption, optimum capacity utilization of the tankers along with effective route optimization for all the vehicles has already led to considerable reduction in CO2 emissions. Water conservation is another area where the dairying as an industry has taken noteworthy measures. Most dairy manufacturing plants are now working towards a “Zero discharge” policy wherein the water utilized in processing is recycled and reused within the plant itself. Dairies are now investing in in-house RO water treatment plants to gain long term incidental benefits from treated water, thereby resulting in increased energy and hydraulic efficiency.

Technology plays a vital role in increasing the sustainability of any business. Strong and accurate management of data is becoming more important than ever as organizations rely on intangible assets to create value. Dairies are now moving towards end to end digitization from traditional methods of operations. There are now less manual intervention at every level of operation resulting in reduction in the use of paper and finally reducing the carbon dioxide emissions. Dairies are now more focused on capturing data for livestock management from each level of operation in the field to analyze the macro picture and plan for the upcoming years. For the past couple of years, many dairies have introduced path breaking technological interventions for capturing livestock data that has helped in providing timely farmer support in the present, planning for the future and also helped in anticipating and mitigating disastrous outbreak of diseases among livestock.

Dairying in India has been contributing immensely towards the food security in India and has been a source of affordable nutrition for millions of consumers. All round sustainability is the mantra to ensure that the sector serves a larger customer base and empowers many more producers. With these and many other initiatives, the Indian dairy industry is now moving towards appropriate strategies of creating a long lasting, truly incentivizing and an environment friendly sector in India.