Ever since the initiation of Operation Flood in 1970 by Verghese Kurien, founder and chairman of AMUL, India has been a fast-paced and steadily growing market in the field of Milk Production. Also known as White Revolution, Operation Flood developed India from a milk deficient nation to the largest milk producer in the world within few decades.
Throughout the course of the White Revolution, the major focus has always been on boosting the production of milk. But as time passed by, a challenge started growing bigger which was Demand Management. In 2021, demand management is still the greatest challenge to be faced by the milk industry.
Although the white revolution ended in 1996 generating 73300 dairy cooperatives and 9.4 million farmer labourers. Yet, the objective of the movement is still passively borne by the dairy industry. The major players of the dairy industry are focused on increasing their production and engaged in practices ensuring long term business sustainability. Let us go through few statistics –
- 23% of agricultural households of India are dependent on milk as their primary source of income
- Per capita availability of milk in India is 394 grams per day
- 48% of milk produced is consumed at producer-level or sold to non-producing consumers in rural areas
- The remaining 52% of the produced milk is sold to consumers in urban areas
- 40% of milk sold in the urban areas is operated by organized bodies like cooperatives or dairies
- Remaining 60% is sold by unorganized sectors
This signifies that the major part of the milk distribution process is handled by unorganized sectors. Therefore, it is can be a great challenge in monitoring the actual purpose or reason of customers purchasing milk in urban areas. This is one of the major reasons for the rise in demand management challenge. The rural areas are able to sustain themselves as milk is their home production, but when it comes to the urban regions, it is tough to predict the market route of a sample unit of milk.
Therefore in 2021, the major challenges which will be faced by the Indian Dairy Industry can be enumerated as –
- Shortage of organized dairy producers, marketers and consumers
- Lack of organized production activity might decrease the fertility of cattle
- New technological advancements in milk production and processing can impose restrictions on the standards of milk distribution
- Inadequacy in milk marketing strategies and methods
- Uncertainties in milk prices due to unorganized methods of milk production, distribution and consumption
To address the above challenges, NITI Aayog declared few points in the “Strategy for New India @ 75” which if paid heed to, can surely bring in positive transformations in the Indian Milk Industry. The major developmental points in the newly declared strategy for the Indian milk industry can be highlighted as –
- Breeding of indigenous cattle with exotic breeds to address the issue of inbreeding
- Promote gene coverage and diversification with reduced diseases and greater resilience to climate change for cattle
- Promote and develop “Bull Mother Farms” to employ multiple ovulation and embryo transfer technologies
- “Village Level Procurement Systems” to target installing bulk milk chillers, and facilities for high value conversion of milk needed to promote dairy in states
- The private sector should be incentivized to create a value chain for dairy products at the village level
The above initiatives will bring a majority of unorganized milk production, marketing and distribution units under the scanner of the Government and concerned officials. As the Strategy of New India @ 75 committing to provide and promote special measures in breeding and rearing of cattle, hence, to avail these benefits, all cattle rearing units or the milk production units need to come under the affiliation of the government officials.
The announcement also declared about incentivizing the private sector which can also create an organized mould for the marketing and distribution of milk. Hence, the NITI Aayog strategy is addressing the major portion of the challenges which existed due to unorganized methods adopted in the dairy industry.
Owing to the success and potential of the dairy sector so far, the government has initiated various dairy development schemes, namely, National Programme for Dairy Development(NPDD), National Dairy Plan (Phase-I), Dairy Entrepreneurship Development Scheme(DEDS), Dairy Processing and Infrastructure Development Fund (DIDF). The budget of 2020-21 has advanced existing provisions to facilitate the doubling of India’s annual milk processing capacity from 53.5 million tonnes (mt) to 108 mt by 2025.
Other provisions include Kisan Rail through Public-Private Partnership (PPP) arrangements. There shall be refrigerated freight trains as well. The government is also looking to eliminate “Foot and Mouth” disease, brucellosis bacteria in cattle and also “peste des petits ruminants” (PPR) in sheep and goats by 2025. There is also an increase in the coverage of artificial insemination from the present 30% to 70%.
Therefore, the White Revolution in the Indian Milk Industry in 2021 will be primarily led by the Indian Government. Milk producers, distributors and leading dairy brands will be playing key roles to achieve the objectives and goals of the strategy, yet, they will be doing so in an organized way. An organized way of production and circulation can surely help the Indian Milk Industry come out of the Demand Management crisis in 2021.
