Editorial Analysis for UPSC - DAIRY SECTOR OF INDIA


About India’s Dairy Industry:

  • Dairy is one of India’s most important agribusinesses and a substantial contributor to the country’s economy.
  • With a 4% share of the economy, it is the most important agricultural commodity.
  • With an output of 188 million MT in 2019-20, India is the world’s largest milk producer. It generates more than a quarter of the world’s milk.
  • Amul, Mother Dairy, Kwality Limited, and other companies have been instrumental in increasing production. Amul now has over 3.6 million milk producers across the country.
  • Furthermore, private dairy firms have proliferated to the point where they currently account for more than 60% of the country’s dairy processing capacity.
  • In 2019-20, the livestock sector contributed 28 percent of agriculture’s Gross Value Added (GVA). In addition, milk production in India is increasing at a rate of 6% per year.
  • The dairy industry also caters to a wide range of consumer needs, from protein supplements and health foods to treats like yogurt and ice cream.

The Dairy Sector’s Importance in India:

Taking on the challenges of agriculture: For a living, farmers keep 2-5 milk animals. They are quite helpful to them, especially during times of drought and flooding. Furthermore, unlike agriculture, dairying is not a seasonal occupation.

Nutritional Assistance: Milk and related products have made a significant contribution to India’s reduction of malnutrition and undernourishment. As a result, the dairy industry is critical to providing the nutritional needs of the country’s growing population.

Generation of Jobs: Dairying is a significant source of income for farmers, with approximately 70 million farmers directly involved.

Reduces Import Bill: India went from being a milk importer to being the world’s largest producer thanks to Operation Flood (also known as the White Revolution).

  • The initiative began in 1970 and followed a multi-pronged strategy. Tax incentives, food quality regulations, input subsidies, and infrastructure provisions such as cold chain and electrification were all included.
  • All of this contributed to India becoming an exporter by lowering import costs. In 2019-20, the country exported dairy products worth $187 million.

Empowerment of Women: Around 69 percent of the workforce in this industry is made up of women. They rely on the industry for their living. As a result, the growth of the dairy industry inevitably boosts women’s empowerment.

Boosting other industries: Cow dung is provided by the dairy industry and is utilized as an organic manure in agriculture. In addition, the sector produces raw ingredients for the production of processed goods.

  • Whey protein powder, for example, is derived from the watery component of milk that separates from the curds during the cheese-making process.

How did the epidemic affect India’s dairy industry:

  • Agriculture and related industries performed admirably in the first wave. In 2020-21, it grew at a rate of 3.4 percent a year, while the economy shrank by (-)7.2 percent.
  • The dairy industry, on the other hand, was unable to repeat its success in the second wave.

The Challenges of a Sector Fragmented Supply Chain include the following: 

  • The primary issue in the dairy industry is to maintain quality and quantity while working with a diverse supply base. Dairy requires more complex supply chain operations and logistics to ensure freshness and safety due to its perishable nature.
  • Adulteration and the abuse of antibiotics to promote production are also common in this industry.

Price Sensitivity: Milk farmers are extremely vulnerable to even modest price fluctuations. Small changes in consumer employment and income, for example, can have a big impact on milk demand.

Unorganized Nature: Unlike sugarcane, wheat, and rice farmers, the bulk of cattle ranchers are unorganized. 

  • This prevents them from gaining political clout to campaign for their rights.

Deficiency of data: There is no official and timely assessment of the cost of producing milk. Despite the fact that the value of milk produced in India exceeds the total value of wheat and rice output.

Poor returns: Unlike 24 other key agricultural commodities in the country, such as wheat and rice, milk has no MSP (Minimum Support Price). Dairy cooperatives are also not the best option for landless or small producers.

  • The cooperatives use a fat-based pricing mechanism, which is 20 to 30% lower than the open market price.
  • Furthermore, dairy cooperatives purchase more than 75% of milk in the lowest price range.

Alternatives’ competition: Some consumers prefer more environmentally friendly alternatives such as ‘Soy Milk’ or ‘Almond Milk’ to traditional cow and buffalo milk. 

  • They believe that plant-based milk products have a lower carbon footprint than traditional dairy products.

Pandemic’s Effects:

  • First, the threat of disease has limited the sale of liquid milk to households through door-to-door sales. 
  • Farmers have been obliged to sell their entire crop to dairy cooperatives at a substantially lower price as a result of this.
  • Second, the lockdown had resulted in shop closures. 
  • As a result, demand for milk and milk products has decreased.
  • Third, the severe scarcity of fodder and cattle feed has increased the cost of inputs.
  • Fourth, because to Covid-19, private veterinarian services are nearly non-existent. Milch animals have died as a result of this.

India’s Government Initiatives for the Dairy Industry:

  • India’s dairy industry has benefited from a number of government initiatives. as an example,

The National Programme for Bovine Breeding and Dairy Development launched the Rashtriya Gokul Mission in 2014.


  • Indigenous breeds development and conservation
  • Indigenous cattle breeds are undergoing a breeding effort to strengthen their genetic makeup and stock numbers.
  • Milk output and productivity are being improved.
  • Nondescript cattle are upgraded using superior indigenous breeds such as Gir, Sahiwal, Rathi, Deoni, Tharparkar, Red Sindhi, and others.
  • For natural service, distribution of disease-free high genetic quality bulls.

A nationwide AI (artificial insemination) initiative has been initiated by the government. 

  • Upon completion, it aims to increase annual milk productivity from 1,860 kg/per animal to 3,000 kg/per animal.
  • In 2014-15, the government launched the National Livestock Mission. 
  • It encompasses all efforts necessary to ensure quantitative and qualitative improvements in livestock production systems, as well as the development of all stakeholders’ capacity. 
  • The mission’s main goals are to close the gap between supply and demand for feed and fodder.

Way Forward:

  • Breed improvement and conservation of indigenous breeds
  • Ensure increased productivity and output while remaining ecologically conscious.
  • Increase awareness and improve livelihood opportunities
  • In 2017, the government created the Dairy Processing and Infrastructure Development Fund (DIDF). 
  • Its goal is to update milk processing plants and provide extra infrastructure so that more milk can be processed.
  • The Kisan Credit Card (KCC) program has been extended to dairy farmers. 
  • It offers farmers with enough and timely credit support from the banking system for their farming and other needs.
  • Similarly, dairying was included in the MGNREGA to compensate farmers for the loss of income caused by Covid-19.
  • The government should assist start-ups that use a problem-solving strategy.
  • Country Delight, for example, is a dairy-tech firm established in Haryana that delivers high-quality milk to customers’ homes.
  • Milk is subjected to 26 quality tests before being delivered directly to farmers. 
  • This guarantees high quality and competitive cost.
  • Producers should be provided the support they need to enter value-added markets including ice cream, yogurt, cheese, and whey. 
  • These categories have profit margins over 20%, which is far greater than the 3-5% margins seen in ordinary milk produce.
  • Dairy producers must be provided with a stable market and a fair price for their milk. 
  • The quantity of milk should be given more weight than its fat content when determining the price.
  • The government should concentrate on a hub-and-spoke system. The main farm (hub) should contain all integrated milking, feed production, and milk processing capabilities.
  • A minimal infrastructure for milking and livestock management should be present on the connected farms (spokes). For inclusive development, the hub should also provide technical, veterinary, and training support to their spokes.


  • The current condition necessitates the dairy industry’s long-term development. 
  • This growth should be in keeping with the country’s environmental, nutritional, and socioeconomic needs. 
  • The government should take decisive action to increase the profitability of dairy production for small and marginalized farmers.

Source: THE HINDU.