India’s Dairy Sector Needs a Structural Shift
Why in the news?
The Centre has reportedly been considering import of butter and ghee as the country is facing with a milk shortage.
What is the significance of milk and dairy products?
- Milk and milk products are rich in protein.
- They are a key source of calcium, vitamins and protein for a large vegetarian population in India.
- Dairy industry strengthens the rural economy.
It acts as a source of income for farmers and potential for women empowerment. What is the present status of dairy sector in India?
- According to Food and Agriculture Organization Corporate Statistical Database (FAOSTAT), India is the highest milk producer in the world contributing 24% of global milk production.
- Top milk-producing states – Rajasthan (15.05%), Uttar Pradesh (14.93%) and Madhya Pradesh (8.6%).
- Indian dairy sector has an annual growth trend of 5-6 %.
- In 2022, there was 39% jump in exports of dairy products.
- Key export destinations – Bangladesh, UAE, Bahrain, Malaysia, Saudi Arabia and Qatar.
What are the challenges in dairy sector?
- COVID – It led to a crash in prices and demand destruction which led to the inability of dairy farmers to invest in their cattle.
- Lumpy skin disease (LSD) has led to a death count of 1.9 lakh cattle which made capital losses for dairy farmers.
- Fodder inflation – According to ICAR scientists, fodder and feed account for 70 % of the cost of milk.
- Fodder inflation at 30% has been a critical factor for soaring milk prices.
- Milk shortage – Dairy products demand is growing rapidly with rising population, incomes, urbanization and changing diets.
- Investment – There is a need for investment in supply chains in this capital intensive business.
- Cooperatives – They revolutionized dairying, but due to a variety of factors their success has not gone beyond Gujarat and Karnataka.
What efforts were taken by the government to boost dairy sector?
- National Dairy Development Board (NDDB) – It is monitoring the supply-demand gap in dairy products along with the Central government.
- Operation Flood – It was launched in 1970 by National Dairy Development Board (NDDB).
- It transformed India from a milk-deficient into the world’s largest milk producer.
- Dr Verghese Kurien was the architect of Operation Flood.
- Rashtriya Gokul Mission – It aims to genetically improve the cattle population and promote and conserve indigenous cattle breeds.
- National Programme for Dairy Development (NPDD) – It aims to strengthen infrastructure for the production of high-quality milk as well as for the procurement, processing, and marketing of milk and milk products.
- Dairy Entrepreneurship Development Scheme (DEDS) – It aims to create self-employment opportunities in the dairy industry.
- The National Bank for Agriculture and Rural Development (NABARD) is carrying out the programme.