| Livestock has been the mainstay for Indian farmers facing frequent crop failures. Its role in the rural economy has grown further, and acquired a commercial hue, in the past few decades, thanks to the emergence of a unique milk collection system from the small producers to feed large dairy plants and urban centres. With this, animal husbandry is now deemed to hold the key to alleviate farmers' distress. |
| A steady over-4 per cent annual growth in milk production, unmatched by any other farm produce, has made India the world's largest milk producer. The dairy industry has also grown substantially. But the basic character of milk production system has remained unchanged, with 98 per cent of the output coming from the small farmers, each owning two to three animals reared largely on crop residues and grasses growing on common lands. As such, the milk production cost in India is the lowest in the world, making it globally price competitive without any subsidy. |
| Significantly, the Indian system of milk marketing through collection from villages is highly farmer-friendly as it allows the milk producer to have a relatively larger share (over 60 per cent) of the consumer price, against less than 20 per cent in the case of most other farm products. The private sector dairy industry, which now has the same market share (9 per cent) as the cooperative sector, is also following the same model of milk collection. |
| Dairy India 2007, the most comprehensive and reliable compendium and data-storehouse of the country's dairy sector, was released last week. It reckons the size of the this sector at a whopping Rs 2,27,340 crore (at 2005 production and prices). And, significantly, this is projected to more than double by 2011 to Rs 5,20,780 crore. |
| The details of the dairy sector and the growth projections outlined in Dairy India 2007 present a revealing picture that can serve as a guide for policymakers as well as the industry. It foresees the private sector's share to grow tremendously, overtaking the co-operative sector. At present, only 18 per cent of the total milk output is handled by the organised sector, with the private and co-operative sectors accounting for 9 per cent each. But by 2011, the organised sector is estimated to account for about 30 per cent of the milk with private dairies accounting for 20 per cent, against the co-operative sector's 10 per cent. |
| As pointed out in this publication, India enjoys the distinction of having the world's largest and most productive population of milch buffaloes, which are virtual milk machines. Though they constitute less than 50 per cent of the total bovine population, their contribution to milk production is 55 per cent. |
| Buffalo milk contains 7 per cent fat, double that of cow milk, and excels in calcium, iron and phosphorous contents. Significantly, its lower cholesterol content (half of cow's milk) and white colour of fat makes this milk suitable for manufacturing several types of creams, dried ice cream mixes, dairy whiteners, edible caseins and many other products for domestic and export markets. |
| Indeed, what noted dairy experts writing in Dairy India 2007 have pointed out "" and which industry captains and the government should pay heed to "" is that the country is likely to remain surplus in milk. This needs to be managed well. This will require expanding the domestic market, especially of Indian milk products, and tapping the export market. |
| For both these, quality improvement will be critical. The government, on its part, will have to ensure an export-friendly policy regime. It also needs to keep up pressure in the World Trade Organisation negotiations to seek reduction in dairy subsidies in other countries to enable Indian products to get a firm foothold in the global dairy bazaar. |
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