Important sources
In fact, India ranks first in the world contributing about 14.73% of the total milk produced globally. Milk and milk products are emerging as important sources for improving nutritional security, providing 9.0% protein intake in rural areas and 12.5% in urban areas. Growing demand for milk products presents a great opportunity for the Indian dairy industry to modernise and scale up the production of both the indigenous and exotic products.
Milk output has increased by 21% over a decade mostly in developing areas (while global population grew by 12%)
Asia+60% (160 MM ton)
Africa +50% (30 MM ton)
South Am. +35% (80 MM ton)
North Am.+15% (95 MM ton)
Oceania+10% (26 MM ton)
Europe-1% (210 MM ton)
Rapid strides
The Indian dairy industry has taken rapid strides during the past two decades. The milk production has registered a quantum jump from about 17 million tonnes in 1950 to 122 million tonnes in 2011. The quantity of milk handled by the organised sector has gone up to 81 million litres per day as against approximately 6 million litres per day during the 70s. Increasing urbanisation, general health awareness and growing purchasing power of middle- class have led to the rapid changes in consumption pattern for dairy products all over the country. There is growing demand for safe, nutritious, and health-promoting convenience milk products calling for value addition, product diversification and complete quality assurance. This emerging scenario has necessitated the realignment of the priorities and fine focussing of research agenda in the form of revised perspective plan through a fresh look at strengths, weaknesses, threats and opportunities that dairy sector offers. An important role now is to strengthen the dairy industry through technology and human resource development in the years ahead.
This picture depicts how India falls in the consumption pattern along with China and Latin America. With increased incomes, it is bound to move up the value chain and milk consumption is only expected to rise. To meet the ever increasing needs of the consumer, it is essential to create a roadmap of well-structured research projects to be taken up in basic, strategic and anticipatory mode. Some of the things are being addressed in the National Dairy Plan (NDP) with an outlay of about US$3.0 billion in the next five years and will be executed by the National Dairy Development Board (NDDB).
Interventions needed
● Promoting dairy enterprise through transfer of technologies, improved farm financing, supply chain management, and better market access
● Encouraging nutraceuticals from milk, functional foods with prebiotics, probiotics, micronutrients and other bioactive compounds for improved human health
● Value addition to traditional milk products through application of new processes, packaging and mechanised manufacturing systems
● Clean milk production with a focus on emerging health concerns
Raising productivity of dairy animals through improved feeding strategies, efficient nutrient utilisation and use of non-conventional feed resources
● Development of state-of-the-art dairy production systems using better housing, fertility management practices and better germplasm
The expanding dairy industry, privatisation of enterprise and globalisation of the economy will result in an increased demand for people trained in specific areas of dairying. It is imperative for the country to improve allocations to meet the growing demand of the human resources and also involve the industry in the research projects.
What next?
The world population is still hungry: more food is required to meet the growing needs. Developing countries are hugely investing in farming (China, India, Pakistan, Russia, Ukraine, Brazil) while the developed countries can hardly afford structural investments in farming. It is an opportunity that cannot be missed or neglected.
The high investment intensity will need to go into dairy farming and it will be necessary to increase the productivity of the animals as well as increase the farm size to make it viable for the farmer and also change the state of mind to make dairying as a profession of subsistence.
We need to create a footprint regulation in the farming sector as was done in the processing sector with the Food Safety and Standards Authority of India (FSSAI).
The increasing price volatility has been preventing long-term investments in the sector and that needs to be addressed by according better incentives and subsidies in the dairy sector. Dairy products are getting more and more commoditised. Milk has become part of the food basket in the Indian economy. It is important in a country like India to alienate milk and dairy farming from agriculture and create a separate ministry for animal husbandry.
Is a future market possible?
Yes, the world market prices are purely driven by demand/supply balance with increasing degree of price volatility. The demand is influenced by population dynamic, welfare / GDP and the oil price.
Whereas the supply is influenced by milk output seasonality, weather conditions /animal health, farm gate milk price (un-elastic), and political regulation - Under such conditions the EU competitiveness is highly influenced by political protection. The demand to reduce support system costs, agri-policy progressively has reformed towards “open market rules and the production quota system has to stop by 2015. Average world milk price increases are making farming more attractive in low-cost countries and India should take advantage of this. To do this and to quickly gain competitiveness, higher efficiency / effectiveness, added value product proposition, niche markets development are the key for the success of the Indian dairy industry.
