Strength, Weakness, Opportunities and Threats (SWOT) are the greatest parameters that define the effectiveness and potential of any business, industry or venture. As far as Indian Milk Industry is concerned, it is having the cultural and heritage strength of a great number of bovine and poultry cattle. This results in a great deal of milk production, undoubtedly making India the greatest milk producing nation in the world. But the weakness lies in the fact that a great deal of the milk production is being handled by the unorganized sector.
But just a strong and one weak point can never define the potential of an entire industry of large scale. Therefore, in order to have a closer overview of the same, a proper SWOT analysis is required. This article focuses on all those points which would sufficiently be able to highlight various unique points related to the benefits and growth of the Indian Milk Industry.
STRENGTHS of the Indian Milk Industry
- Dairy farming in India employs a large number of small and marginal farmers.
- A successful marketing channel is already active to help meet the dairy needs of city dwellers.
- There are a lot of animals and a lot of scope to develop productivity.
- Self-sufficiency in medicine production results in the reduction of the need for imports.
Based on these above strengths, few implementations like the following can boost the productivity of the Milk Industry in India –
- Increase the economic viability of dairy farms by initiating input-side interventions and ensuring more reasonable farmer prices.
- Strengthen the links that bind rural production areas to urban markets.
- To help significantly improve productivity, emphasis is needed on improving the indigenous breed.
- Strengthen the regulatory system for quality to ensure the availability of high-quality medicines.
WEAKNESS of the Indian Milk Industry
- A significant portion of the marketable surplus of milk (70–85 percent) is sold through an informal channel, where quality is a major concern.
- In the formal channel, too, consistency can be a problem.
- Cooperatives face little competition since the private sector was not permitted to participate until recently.
- Because of weak cooperative governance, farmers are excluded from the benefits of high demand.
- Milk production is distributed among a large number of farmers who produce small amounts.
- Milk is only accessible in urban and peri-urban areas.
- Low milk prices as a result of cooperatives declaring lower prices, resulting in low milk prices charged by all participants.
- Export bans and ad hoc export strategies.
- The quality of milk and milk products, especially in the EU and the United States, is a barrier to entry into the export market.
- There is a lack of emphasis on improving indigenous breeds in policy.
- Extension services are non-existent.
- Farmers’ prices are not calculated by fat calculation, which has an effect on their earnings.
- Farmers are unable to grow their herds due to a lack of credit and risk-taking capacity.
A lot more efficiency in the productivity of the Indian Dairy Industry can be expected if the mentioned weaknesses are dealt with in the following way –
- By educating traders and implementing food quality regulations, focus on quality issues is possible even in the informal channel.
- Infrastructure and training for clean milk production should have provisions.
- Encourage the private sector to operate on a level playing field.
- Make improvements to cooperatives so that they are real agents of farmers rather than parastatals.
- Support for dairying to facilitate commercial dairy farming and increase production and productivity through breed growth and extension.
- Increase the supply of packaged milk in more places.
- Boost dairy farmer cooperatives so that farmers can get a decent price for their milk.
- Establish a fair export policy that allows farmers to benefit from higher prices.
- Implementation of strict quality standards and facilities are mandatory.
- Increase the efficacy of breed improvement initiatives.
- Extension services should be improved.
- Make policy legislation requiring mandatory testing as a basis for deciding milk prices.
- Increase credit availability by dairy farmer associations and other organizations.
OPPORTUNITIES in the Indian Milk Industry
- Farmer income increased as a result of the strong demand.
- Market maturity and knowledge of the value of receiving high-quality packaged goods has increased (though slowly).
- Large companies are joining the retail market, which could lead to increased investment.
- There is a lot of space to strengthen dairy farmer organizations’ governance and thus allow dairy farmers to demand better prices.
- Because of the low cost of production, there is scope for exports.
- Overall, the economy is doing well, encouraging the government to invest in infrastructure.
Opportunities are there but to avail benefits from them, the following initiatives are needed to be taken –
- Establish policies and activities aimed at improving dairy farming activity by increasing production, efficiency, and ensuring a fair milk price for farmers.
- Build a policy climate that promotes investment.
- Build policy support to help producer companies strengthen their governance.
- Concentrate on quality problems that are stopping exports.
- Encourage the private sector to invest more in dairying.
THREATS for the Indian Milk Industry
- A significant portion of the population is ignorant about milk quality problems.
- People are reluctant to pay for quality because of the high price sensitivity of dairy products.
- Feed prices will rise significantly if maize prices rise considerably.
- Farmers have constraints of massive informal credit markets.
- Low productivity and distribution result in high transportation costs.
- Maintaining comparatively lower milk prices by concentrating on milk fat rather than SNF quality.
It is very clear that the above threats are having enough potential to cast adverse effects on the entire Indian Milk Industry with respect to market, consumers, quality, delivery and inputs. Hence, the following initiatives can avert such threats –
- Start informing consumers about the harmful health effects of unpackaged foods.
- Creating small-scale packaging to meet the needs of the poor.
- Increasing the price of milk in line with the price of feed.
- Encouraging the development of dairy farmer organizations.
- Boosting efficiency by extending and developing breeds.
- By promoting the production of cow milk, set milk prices based on fat and SNF content.
This was a comprehensive SWOT Analysis of the Indian Milk Industry to provide a pool of information on the positive and negative market forces enforcing the industry to take its current shape. Keep visiting our website to get more information and updates on the Indian Milk Industry.
