Dairy Development

Dairying has become an important secondary source of income for millions of rural families and has assumed a most important role in providing employment and income generating opportunity. Indian Dairying is unique in more than one ways. It ranks first with its 185.2 million cattle & 97.9 million buffaloes accounting for about 51 percent of Asia ’s and about 19 per cent of world’s bovine population. It also ranks first in milk production with a production of 100.9 million tones in 2006-07.

Contributing about 5.3 per cent to India ’s agricultural GDP, milk is a leading agricultural produce. The value output from milk at current prices during 2006-07 has been over Rs.144386 crores which is higher than the output from paddy (Rs.85032 crore) alone and is also higher than the value output from Wheat (Rs.66721 crore) and sugarcane (Rs.28488 crore), put together. The unique feature of the system is that about 120 million rural families are engaged in milk production activities as against big specialized dairy farmers in the west.

During the post independence period, progress made in dairy sector has been spectacular. Milk production has increased more than four folds from a mere 17 million tones during 1950-51 to 104.8 million tones in 2007-08. However, the country’s per capita availability is still lower than the world’s daily average of about 285 gms though it has doubled from 124 gms in 1950-51 to 256gms per day in 2007-08. This impressive growth effort speaks volume about the co-coordinated efforts of large number of milk producing farmers, scientists, planners, NGO’s and industry in achieving self-sufficiency in milk production.

Another notable feature of Indian dairying sector is that buffaloes contribute more than 53 per cent of the country’s total milk production. Buffaloes are known for their efficiency as converter of coarse feeds into rich milk. Similarly about 45% of total cow milk produced is contributed by crossbred cows.

In spite of India ’s position as highest producer of milk, productivity per animal is very poor. It is only about 987 kg/lactation as against world average of 2,038 kg/lactation. This low productivity is due to the gradual genetic deterioration and general neglect of animals over the centuries and consequent to the rise in the population of non-descript cows (80%) and buffaloes (50%). Other factors contributing to low productivity include continuing draughts in some parts of the country, chronic shortages of feed & fodder coupled with their poor nutritive value and poor fertility of dairy animals. Hence we have to face a twin challenge: increase milk productivity of animals with the limited resources on one hand and make best use of the available milk by processing it into hygienic packaged milk and milk products of high quality.

OPERATION FLOOD

Government is actively supporting the dairy sector by implementing various schemes. It all started with the White Revolution under the title Operation Flood (OF) Programme launched in 1970. By promoting Anand Pattern of dairy cooperatives, OF envisaged sustained increase in resource productivity culminating in improved quality of life of milk producers and assured supply of quality of milk and other dairy products to consumers at reasonable price in a free market environment. Following the cooperative path, market oriented milk production and modernization of dairying, milk production, processing and marketing progressed significantly. The bedrock of Operation Flood has been village milk producers’ cooperatives, which procure milk and provide inputs and services making modern management and technology availale to members.

The objectives of Operation Flood included:

• Increased milk production ("a flood of milk")
• Augmenting rural incomes
• Ensuring fair prices for consumers

The programme was implemented with the assistance of World Bank and Food Aid from the European Economic Community (EEC). The commodities assistance was also provided from the World Food Programme in the form of milk powder and butter oil. In all, an amount of approximately Rs. 1750 crore was invested in the dairy cooperative sector. This amount was disbursed as 30% grant and 70% loan. The milk processing capacity established was 200 lakh litres per day and average rural milk procurement was 137 lakh litres per day. The programme was implemented between 1970-1996 and covered 170 milk sheds falling under 22 State Cooperative Federations.

In OF areas, the country has more than 1 lakh organized primary village dairy cooperatives at present with an agreegate membership of 1.1 crore producers. These primaries are federated into 170 district cooperative milk unions and further to state cooperative dairy federations. The dairy cooperative network is estimated t have collected close to 229 lakh kilograms per day in 2007-08 resulting in the payment of an aggregate amount exceeding Rs.7000 crores to the milk producers during the year. The average milk marketing and procurement by cooperatives during the last four years is given below:-

It is observed that 14 major dairying States viz. Uttar Pradesh, Punjab, Andhra Pradesh, Gujarat, Maharashtra, Madhya Pradesh, Karnataka, Haryana, Tamil Nadu, West Bangal, Bihar, Kearala and Orissa accounts for 92% of India’s milk production, 93% of the rural marketable surplus (i.e. the milk that flows from rural to urban areas, estimated by deducting rural consumption from rural milk production).

SCHEMES FOR DAIRY DEVELOPMENT FROM GOI

Following Operation Flood, the Government of India had been implementing various dairy development schemes since 1993-94 and is presently implementing Centrally Sponsored schemes "Intensive Dairy Development Programme", "Strengthening Infrastructure of Quality & Clean Milk Production", Central Sector schemes "Assistance to Cooperatives" & "Dairy/Poultry Venture Capital Fund" with focused objectives. Apart form these, Government is also envisaging implementing a scheme "National Project for Cattle and Buffalo Breeding" for genetic improvement of cattle and buffalo to increase the productivity. Government is also examining launching of a National Dairy Plan with an outlay of more than Rs 17000 crores spread for over a period of 15 years to enhance average incremental production of milk from 2.5 million tones to 5 million tones annually. This is being envisaged through increasing productivity, expanding infrastructure for procurement, processing, marketing and quality assurance. Simultaneously the Government has launched a new scheme called Rashtriya Krishi Vikas Yojana (RKVY) with a massive investment of Rs 25,000 crore for the next 4 to 5 years to promote agriculture and allied sectors. All these activities are expected to help India emerge as a major player in the world dairy sector.

INTERNATIONAL TRADE

The international dairy industry is highly protected through domestic support and export subsidies and does not provide an easy market access. A number of nontariff trade barriers (NTBs) are applied to deprive the developing countries from sharing the markets of developed nations

In addition, there are issues of concern with the importing countries, related to acceptance of Indian products, harmonization of standards, transparency, retest and appeal provisions, technical assistance and data on reasons for rejections.

The export of milk products from India has increased from Rs.2.49 crores in 1990-91 to Rs.1018.63 crores during 2007-08 despite the fact that there are no special incentives for export except those that are generally available to all exports. Skimmed Milk Powder, Ghee and Cheese are the major products being exported from India . The major destinations of exports during 2007-08 were Bangladesh , USA , UAE, Egypt , China , Algeria , Morocco , Thailand , Philippines , Nepal , Seria , Singapore , Oman , Yemen and Saudi Arabia . The European Union, New Zealand , Australia and US are the four major players in the export market, which account for nearly 85% of the world’s total exports. Russia , African countries besides the SAARC countries are emerging markets for Indian dairy products.

As far as imports are concerned, the volume of milk products imported into India has not been of a level so as to significantly affect the competitiveness and interests of the domestic dairy industry. The comparative statement of export and import of milk and milk products including casein in value and quantity terms for India is given at as follows: -

Export & Import of Milk and Milk products including casein in quantity and value terms for India

National Dairy Plan 2007-08 To 2021-22