India’s Dairy Sector

First of all, Milk is an unusual industry for several reason. It is one industry in which India is no.1 in the world. Many have tried to dislodge India, but it is unlikely to happen unless Government Introduces some wrong policy and Government can do that. Twice or thrice, it tried to do that, but the Milk lobby got together and managed to convince the Government against it. Milk is an Important and sensitive Industry.

Competitive Advantage of Indian Milk Industry-:

The staple food for Indians is rice and wheat. Without rice and wheat , no Government will survive. The Government will ensure that there is abundant supply of rice and wheat. But the beauty of rice and wheat is that for every kilo of rice and wheat, 4 kilos of chaff has to be thrown away and can be used as cattle feed .Because of this we do not have to grow food separately for cattle. This can be charged but since we do not grow cattle feed separately and is available to us as a byproduct, unlike the rest of the world which does have to grow cattle feed separately , the cost of cattle feed is lower and India remains the cheapest and Largest milk producer in the world. It is all about encouraging the milk farmers to produce more and more milk by passing a higher price to the farmers. The government has to make sure that it does not import milk to seize this advantage. When India imports milk , the price passed to the farmer falls, and our industry weakens.

Why Milk is God’s Gift to India and Why China cannot compete with India in Milk Industry?

Chinese also consume rice and also have the same advantage of India but they do not consume milk in large quantities. They cannot digest milk proteins and hence Milk is God’s Gift to India. Without strong domestic consumer Market a Country cannot be a strong exporter , producer and become no.1 in a particular Industry.

The Making of Kurien , Amul , Cooperatives- model and The Milk Revolution

The Milk cooperatives model has its root in the 1940’s. it was towards the end of 1930’s that Verghese kurien was given a job as a clerk in Anand, the heartland of Indian Milk Industry. His role was to to document the details of milk procured by the British Barrack in Mumbai through a parsi gentleman called Polsan (Polsan was a very popular brand during that time, it produced butter. But after rise of Amul, it was wiped out from Market) from the farmers and send a report to the British Govt.The milk was consumed by soldiers participating in World war -2.

At that time , the Milk farmers used to get a very little money. So to negotiate for better income they went to Local Seth at that time in Anand, who was Trimovan Seth. He guided them to Morarji Desai, George Fernandes and Ultimately to Sardar Patel. The idea of Cooperatives came from Sardar Patel and Trimovan Seth .They advised them to protest and fight with the British and keep on doing till they give permission to form a cooperative and give better return .

Farmer’s Protest

The farmers followed suit and protested. When Mr. Polsan came to collect milk, the farmers protested by emptying the milk can and pouring milk all over the streets. Kurien sent a report accordingly to the British Govt. about the non-availability of milk due to farmers protest. The Britishers got angry and the British head of the barracks came to Anand to arrest the farmers but Mr. Polsan advised them not to do, as there was an Independence movement that was raging against them. Arresting the farmers would make the people more angry and no milk would be available for them. It was thought that, farmers are illiterate and could not run cooperatives and reluctantly agreed to farmer’s demands.

The Making of Milk Cooperative and Pasteurization Plant

After the permission, the farmers went back to Trimovan Seth asking for ideas of how can they built a cooperative. Trimovan Seth suggested Kurien’s name and this is how the responsibility of building cooperatives fell on Kurien’s shoulder. He was learned, educated with a PHD in Nuclear physics from abroad. The co-operative was formed and the farmers started getting better prices .Then he realized that for better storage purpose , he needs to build a pasteurizer plant to increase the shelf life of milk. He and his farmers approached various multi-nationals like Nestle for help, but he was ridiculed , called as monkeys .He was very much offended by these comments and become angry. He decided to take matter in his own hands, and built the pasteurizer plant by using his knowledge of Nuclear Physics. Initially he borrowed little money from Trimovan Seth. But eventually, the farmers who were the beneficiaries of the co-operative moment, with higher income little by little they gave money for this plant. In short, the money for the plant, was not given by the Government but by the farmers themselves. This was just the beginning.

The making of Milk revolution and Role of Shastri

The Major turning point came towards the 1960’s when Lal bahadur Shastri transferred NDDB to Kurien. Lal bahadur Shastri heard the name of kurien and visited Anand , stayed there for 2 days , and after overseeing the entire operations realized this to be the future of India. He asked Kurien, if he has any demands. Kurien replied him by saying that if Shastri wishes to see India Being No 1 in the Milk Industry, he should transfer NDDB to him. Shastri thus transferred NDDB to him. Untill that time, NDDB was one of the many Govt. institutions that Nehru has built but had forgotten about it.

Operation Flood

Having built the cooperative, the next stage was to make it stronger. Under NDDB at his disposal, he started operation flood , through which extra milk during flush season is converted to powder and again reconstituted back into milk during lean summer season. This ensured that prices did not fluctuate and it remained the same throughout the year. Also there were years, when there was abundant supply of milk and Kurian had to store the milk powder for more than a year.

The Second part to it, was that India was given lot of donation as Milk from foreign countries as India was considered very poor. Kurien ensured that he did not release the imported milk directly, but preserved it and gradually released it into the market slowly at market prices. This ensured that Milk prices never dropped. The profit that NDDB made was used to make the co-operative stronger and stronger time after time and made the cooperative function as a self financing organization.

The Growth Of Indian Milk Industry

At one time USA was big, but India overtook in 1990’s .The EU milk production also was very big and was leading milk production till 2015.But India overtook it. India overtook all the countries in EU put together.

Dairy sector: % share of total Agri sector

India is one of the countries where milk contributes the largest to the agriculture sector

Size of cattle holding

India is the largest holder of cattle’s -cows and buffalo in the world.

Average farm household income (monthly)

If we look at the nos. , cultivation provides only Rs 3078.Wages and salary provides Rs 2069. Livestock produces Rs 765.Milk even from few cattle’s provides Rs 100 approximately per day. If we look at 30 days it provides Rs 3000.But there are livestock that whose milk do not generate income like camels, pigs which lowers down the average. This table clearly shows that Indian farmers earns very little from from cultivation and hence he has to augment it by working in other fields, working as a laborer.

India has the world’s largest bovine population – 300 million

India owns the largest cattle population. But even though it owns 200 million cattle’s, it produces only 45% of the milk. The rest of the world own 100 million cattle’s but produce more milk around 55% of the global milk more than India. This means the output of milk per cow, per buffalo has to go up in India. Lot of research is going on how to increase the yield of Indian cattle.

Why Milk is the Backbone of Indian Agriculture ?

10 crores rural Households in India depend on dairying for livelihood .Around 77% Milk Production is carried out by small, marginal and landless farmers . Most of the farmer have one or two cows in the backyard. There are cows that have 50 cows, 100 cows. But they are a small minority .That is why Verghese Kurien described India’s dairy system as “Production by the masses; not mass production” .It is through milk, india’s 50% population get better nutrition, earn better money and hence Milk became the backbone of Indian Agriculture. Without Milk , Indian agriculture would have remained far more impoverished, far more distressed than it is today. Because of the milk we Indians have a better nutrition even though it is 1/3rd of the world average , but it would have been even worse maybe 1/10th if milk would not have been what it is today.

Milk Production: Total & Per Capita

If we look at the per capita, milk production in India. Because of the per-capita production of milk kept on increasing, and because the prices a\were reasonably low and affordable the demand has kept on growing and growing year after year. The Global milk production growth is CAGR 2% whereas India’s milk production growth is at 4.5% .

Kurien changed the way the dairy system works

Kurien changed the way of Milk business in World. In the world 30% of the market price goes to the farmer, 30% of the market price goes to the processor who converts the milk to powder, to cheese, and the remaining 33% goes to the distributor and the retail network. Kurien objected to this model. Kurien said who is more important the processor or the farmer. If farmer is more important than he should get more return. Right in 1940’s he made the rule that farmer should get at least 50%.When he started giving 50%, the processor and the distributor said we don’t like it and protested. He took up processing , distribution and today the farmer in Gujrat gets 80%, 85% of the price. The entire marketing, collection and distribution is done in 15%-20%.Kurien showed the world that farmer is more important and hence even today farmers in Gujrat believe that Kurian was God.

Imports can cripple the dairy industry

Milk Industry can be strong as long as Import do not take place. In 2012-2013 Government decided to import clarified ghee , Skimmed milk powder. This caused market prices to drop. In Gujrat, the farmer were not affected because the cooperative took care of the pricing but in Uttar Pradesh , where Middlemen takes a larger share, the prices dropped the price of farmer from Rs 20 to Rs 14. The farmers were furious and did what Kurien’s farmers did in 1940’s, they came out on the streets and started pouring out the milk on streets. This alarmed the Government and decided for no more imports from now on. India generally imports fancy stuffs like cheese but now it makes sure that the import duty is very high so that the farmer’s are not affected.

Why Imports are dangerous ?

Till 1960’s , India was importing 20% of the oil and was producing 80% of the oil. But to keep consumers happy, the Government reduced import duty and as a result till 2 years back India was producing 20% oil and importing 80% of the oil. Because the Oil was imported farmers got discouraged from producing more oil, as it was not profitable for them. But the good news is that, last year Government has reduced import duty and the oilseeds have become profitable again for farmers. From last year onwards NDDB and Amul have ventured into oil to take care of oil business.

Oct 2019: India’s dairy sector under threat: Why RCEP Negotiations was bad for India?

In Oct 2019, Piyush Goyal was the commerce Minister and was engaged in The Regional Comprehensive Economic Partnership (RCEP) .Here all the countries in the Asia pacific said that we must reduce our import duty and allow import of Asian goods in India. New-Zealand had its eyes on the Milk sector because New -Zealand produces huge amounts of Milk and its population is very small. New-Zealand said we will take only 5 percentage of exports in the country. To this proposal our bureaucrats and minister almost agreed and said Yes. But when the milk community of Gujrat and UP came to know about this, they vehemently protested and threatened for a massive scale protest if the agreement is not withdrawn.

We need to look at what other countries do to protect their farmer’s Interest.

1. Canada: Government imposed duty of 250% for all dairy products.
2. EU: Non Tariff barrier with high residual and pesticides limit.
3. Australia: Doesn’t permit of Non-retorted dairy products from India.
4. USA: High import duty and removed MFN status for dairy
5. South Africa/Mexico/Venezuela/Chille: Doesn’t permit import of dairy products from India
6. New Zealand: Demand specialize veterinary certificate

There are countries in the world that have import duty more than Indian Import duty of 250%.For example canada.EU imposes a lot of conditions. But why India is being pressurized? The government had no answer to this question and at the last moment backed out.

Achievements of Indian Milk Industry

1. India regularly exports to USA, Australia, New Zealand, Singapore, UAE, Saudi Arabia, Egypt, Oman, Bahrain
2. India exported dairy products worth US$ 356 million (Amul = US$ 117 million) in 2018-19 to about 105 countries
3. 43% of the incremental milk produced in the world from now till 2025 will be from India.
4. Indian Milk production growing at better pace than World

Impact of lower import Duties and all achievements will turn vain-:

If India reduces import duties, dairy product price will fall. Farmgate price will also reduced by 50% and there will be a loss of about Rs. 3.5 lakh crore to farmers .

As mentioned above India is already a net exporter in the world. By importing the industry will be destroyed.

In Milk Industry, whenever there is surplus milk, it is converted to powder. When that surplus milk is more, it gets converted to cheese, khoya, mawa ,sweets to other products that have a bigger market , so that they can be sold in the market and have a bigger shelf life. If India starts importing milk, then the surplus milk cannot be converted to value other products to ice-cream, sweets and Indian milk prices will fall down. The farmer will not get enough money and he will be discouraged from producing milk.

Thanks to presence of mind of Indian farmers, they threatened the Government and Government had to withdraw from the RCEP talks. Today the Milk Industry is an formidable lobby in the entire agriculture and which is why politicians do not like it. In Kurian’s days, kurien did not like the politician because he knew the politician is interested in his own interests not in the interest of Agriculture and similarly, the politicians also did not like Kurien.

If we look at Numbers then ,though the export of New Zealand is only as small as 5%, it is approximately 28.2% of India’s Market size.

Why farmers in Maharashtra are protesting?

Thy do not get the same price of milk as Gujrat farmers get. Maharastra’s co-operative owners who are politician’s mostly, say that we do not have money. This is unbelievable. All the profitable businesses in Maharashtra are private owned by Politicians like Liquor, distillery manufacture. The profit generated by these businesses are not given back to farmers. The farmers was supposed to be the owner of co-operatives but In Maharashtra , the politicians are owner of the cooperatives.

In Gujrat , there is one brand Amul. In Maharashtra, there are 30 brands, 30 different distribution channel, 30 marketing schemes and no cooperatives likes to pay more. The farmers were paid Rs 20-22 .But after NDDB set up its plant in the Nagpur region, after signing a MOU with the Government of Maharashtra and then in Nagpur area prices of Milk rises to Rs 26.

Politics of Subsidy

When NDDB made the prices of milk to increase, the cooperatives said that we cannot afford Rs 26.So, the State Government gave a grant, a subsidy of Rs 5 per lire. Gujrat manages without subsidy, then why does Maharashtra needs subsidy? Isn’t it a case of one politician rubbing the back of another. Following Maharashtra, Karnataka also started giving subsidy. In Maharashtra, the NCP-Congress Govt. is in power and also they own the cooperatives .The subsidy will make the cooperatives richer and the farmer can be kept Intentionally poorer.

Milk during Covid Times-:

There was a slowdown of demand in Milk before pandemic. Amul and NDDB were worried about that. But there has been a resumption of demand since the pandemic. In the initial phase, there was a increase in demand as there was hoarding of milk, but then it fell down. Seeing this NDDB and Amul , approached Government and requested the Government to treat it as Essential commodity so trucks kept on moving and milk was available in every city, every village in India.

When there is a crisis, people trust the brand more. So here also, people paid extra money to consume milk from a branded product rather than consume from local Bhaiya. To add to the woes , the private players were not hygienic also.

Because of the above reasons, the market demand switched from unorganized market to organized market. Amul completely swept the market and also released new products like how to build immunity ?

Need for a Second Milk revolution?

This is important because, the unorganized sector is very high at 80%. We need another revolution to increase the supply of packaged milk. We need to increase the percentage of Organized sector. This will ensure that consumers pay less. For this to happen, collection centers need to be built .FPO needs to be strengthened. If this happens, the middlemen will go away, consumer will pay less.

After Kurian showed the way, one enlightened Private player Hatsun joined the fray. Chandramogun is the owner of Hatsun. It is india’s largest dairy in the private sector with a turnover of 2000 crore. He followed the same path followed by NDDB and Amul, and gives the same return to farmers. He gives them semen to cows for getting a better yield ,he puts chillers, prepares cattle feed does exactly the same way NDDB and Amul do to takes care of the farmers .

Profile of Indian Dairy

Milk is an agriculture crop and comes under Diary Sector. Milk is the largest ‘Agricultural Crop’ of India (INR 7 Lakh crores per year) .Dairy is a supplementary source of income for >100 million families . Livestock sector-Largest contributor to Agriculture GDP ( ~ 30%) .Diary is no doubt the backbone of Indian agriculture. But it can be made an engine to growth in agriculture. Today the India Dairy industry has 7.7 billion consumers . It provides livelihood to 1 billion through Dairy Farming . Projected Milk Production in Current Yr is 830 Million Metric Tonne/year and 390 billion liters of milk is processed across the globe. When we look at agriculture, we look at traditional crops of Rabi and Kharif, to understand what are the prospects in agriculture. This needs to change and the diary farming is kind of always looked as a supplementary activity .The numbers of diary sector is very large in terms of production.

To understand the numbers we have to start with Anand. Anand is kashi, Vatican, mecca of dairy in India.199 million Tone of milk is produced in India. Out of that, just 20% is in organized sector(In world, the global average is 46%.India needs to catch up here)The organized sector covers both private sector and co-operative sector. India ranks first Globally in milk production . Younger generation must be knowing some of the brands. Brands like West India -Amul, Mahananda ,North India-Verka and Milkfed, South India-Aavin, Nandini, Vijaya East-Medha or Sudha.

Structure of Milk Cooperatives

Particular structure has gone behind this particular brands. Every state has a particular federation, under that district unions under that-operative dairy socities.37 million liters of liquid sales is carried out by the co-operatives daily. The organized co-operatives cover around 15,000 villages, 6 lakh members, cover 15 other states through new farmer producer companies. It is not only co-operatives, but also includes producer owned corporates as well. It is co-operatives and companies both. Out of that Amul is the largest known food brand in the country .

How Diary and Micro-finance have done service to Indian women ?

There are two-institutions in India in the last 20-30 years which are doing things that is unheard in India’s history as well as internationally. Two sectors-: one is microfinance and another one is diary. They have harnessed the potential of woman. NDDB ran the national diary program which just concluded last year .Studies were done to look at the impact of the national diary programme.85% of the work in dairying is done by women. Diary sector has done justice to the gender issues in the country. Both microfinance and diary have become economic force multipliers. Microfinance is linked to dairying as 40% of the micro-finance customer buy cow or buffalo. They have become the largest employer of women workforce in India.

How Milk is adding Value ?

The awesome part of dairying is the value added food products. We are the largest converter of milk into value added products, which adds to the shelf life. The normal shelf life of milk is 24 hrs., max 36 hours not beyond that. If we convert it, into a value added product by adding certain things , the economic life of milk goes up to 12-18 months. For Ex-: The skimmed milk powder or butter. People can conserve these commodities , reuse this and then the milk can be re-constituted over a period of time. In a buffalo milk scenario, there are two cycles lean and flush. In winter there is more milk and in summer there is less milk. The excess milk in winter is converted into products which can then be used in summer. Automatically the market is stabilized. The prices do not go up in summer or they do not come down in winter. Producers and consumers do not suffer because of the conversion part of it. Value of output from milk and value added products from milk put together they exceed the value of paddy and wheat in the country. Milk is the largest Agri-commodity contributor in the economic terms.

Growth Outlook of Milk

There is a lot of hope in milk. The total scenario in terms of consumption gives us hope. The global average consumption of milk is 415 gms per day in India. But that is little bit skewed in terms of geography. Punjab and Haryana is much higher as compared to the national average. Other places in east like Odisha, West Bengal is lower. In Maharashtra , it is at par with the national average. If we increase the Consumption in states which are backward, there will be demand for milk , more economic activities that milk will generate .As of today 6% of Agriculture income comes from dairying , 6% of total rural employment also comes from dairying ,but that is likely to go up once states that are backward in terms of use of dairy production catch up with the national average.

Diary Supply chain is one of the cleanest In India

When we are looking at the value chain and supply chain both of milk, we find that this is one of the most transparent supply chain. If we look at the finished product in Mumbai, either a buttermilk or ice-cream, if the price is 100 rupees, then around Rs 70- 80 goes to the primary producer, who produces the milk. So in terms of the economic return to the primary producer, co-operative diary have done a wonderful service to the country. It is the 15-20% only that goes to the whole supply chain of diary. Diary has lot to do with the rural prosperity that is seen .

Increasing the Milk Output-:

As pointed out earlier, the numbers related to consumption of milk, there is potential to increase the consumption in states where the intake is lower than the national average. But we should not get restrained to domestic market alone, but also look at International market where there is lot of scope to explore. The overall idea is to how can I increase the production of milk and milk products to increase the income of farmers and improve the standing of India in the world to better than what it is today.

Need of better Cold storage, transportation and logistics facilities

1. There is tremendous scope in increasing the production and developing proper cold storage, transport and infrastructure and logistics
2. First after milk is produced , it needs to be transported. The shelf life of milk is 24 hrs. , which means that we need adequate storage capacity. This means there is a secondary opportunity that comes in terms of logistics of handling milk. We have MFI’s and banks for that . In earlier days we have IRDB program, which helped people to buy cows, buffaloes have supplementary income by rearing cattle.
3. Finally , there is another way of getting into this business is, that I may not be a farmer , but I want to convert an unorganized sector to organized sector, and I need to make sure that the logistics is much firmer. In this case I have to make surer how milk produced in one geography is transported to neighboring geography. In this way I can have a wider cross-section of people who can consume milk. This requires a strong cold storage facilities and currently it is very much underdeveloped in India. In India whatever cold storage we have is for potatoes and onions. But still it is less. Private sectors have cold storage but it is for their own products.

Need for better Marketing strategies and Imperfect Market In Diary Sector

There is a need for Marketing the diary sector in a better manner. We Need to have more value added products. There is a Fairly large market in Indian context and Organized sector is showing more interest into it. If the opportunities are utilized then there is a scope of very high margin. There are some very good examples. Especially more for college going students, if you would have gone to a diary and picked up a curd. Compare the price of that curd with that of the nestle curd that we get in kerana shop. This is applicable to similar wide ranging products like chaas, srikhand, paneer. One can clearly observe the difference in prices when he/she buys from a private sector and similar products when he buys from a normal diary. Maybe this is happening because someone is overcharging, someone getting a lower price, so lot of scope for new entrants in the private sector to aim for better marketing strategies to give consumer these products at a fair price with a fairly high return to producers.

How pricing of Milk is different to pricing of Other Agri-commodities?

1. Milk is the only commodity , if you look from the point of consumer , it is paying a higher price every year. Obviously, there are issues from the producer side as well, issues of excess supply , with Maharashtra diary farmers protesting for better price realization for them. In 1987, the price of milk was Rs 2 for every litre of milk. It has been steadily going up by 4-5% every year. It is not suddenly jumping up like petrol or diesel which are hotly debated in the parliament .
2. But the prices have gone up gradually if you look from the consumer side like CPI , PPI, there is a moderate increase, but there is an increase for sure every year. This itself can give a potential to say that as far as producer is concerned . lets leave out a situation because of the unorganized sector that is there, people are not able to harness this kind of output that we are getting. It is possible to think of a situation wherein I can have a higher output, higher income without there any problem of prices going up.
3. Today we can observe that if the prices of tomatoes goes up, prices of onions goes up, governments can get toppled because of it. The prices of milk does not jump 20-30% suddenly .The prices of milk neither jumps up suddenly but neither doers it fall back also .It keeps on increasing steadily

Need for Commercializing Milk

1. Milk is a non controversial kind of product. If anyone is looking at the market saying I want to get into this business, then he/she must observe that plain elementary thing like milk , forget about value added products, is very very imperfect . We must have experienced that in our neighborhoods three different locations having three different prices of paneer and then we kind of scout for it and select the cheapest one. There is lot of scope in unorganized market for anyone interested in doing business. Mostly, it is a case of commercializing what is already there.
2. Today if we are talking about unorganized sector. It is like I am producing certain amount of liter’s of milk. I will sell it in my neighborhood and then exit. There might be a lot of wastage in the milk Industry. The wastage in milk will also will be quite high , as it is for all other agriculture products. There is a distress sale to at least get some income rather than get nothing, as you cannot store a product.
3. For example the farmers who produces fruits and vegetables, does not have the possibility of storing it. Similarly, this happens for milk as well as individual farmer may not have the ware withal of storing the milk, considering it has such a low shelf life. There is lot of potential here as discussed, and lot private entrepreneurs coming in. It should not be seen as a low class , business for uneducated people and there is a high possibility of high returns.

Developing a Strong Export Market for Milk

India is the largest producer, but that is due to the fact that we have a larger population, larger population engaged in farming and consequently larger amount of production of milk. The next step is to commercialize it and export to international market. There are lots of countries which do not have even regular supply of milk and import all of its products from outside. It cannot be done by co-operatives and needs to be done by farmers . Dairy farming should be seen as an Industry rather than in the traditional way. This is the problem with our overall agriculture. We tend to think of only the primary produce, we do not think of how can we increase the value and get much higher return in the market. We do it for rudimentary products like wheat. Wheat becomes spread becomes biscuit. But in milk , there is not much happening. There is a lot of scope of private sector coming in .

Limitations to the Diary Sector

Concept of veganism is developing. Globally we have seen movements where people are becoming more health conscious , avoiding any animal products thus effectively banning diary products. The elite section of Indian has also got into this. Currently it is not much of a threat as people less than 1% of population are into this. And also there is some health concerns of high cholesterol in paneer, or let say concerns of high sugar content raised by diabetic patients in ice-cream. These concerns are not that severe today, but growing forward they will act as limiting factors.

Disposing animals who do not produce Milk

Finally disposing animals who no longer give milk. This has become a big concern since the NDA Government has come to power. There is one thing to say I have more cows , more buffalos, more production coming in but we have to find a way of using Earlier, there was a major meat market , major export of meat .Lot of restrictions have come up and this is affecting the market. There is a need for end to end solution on how to dispose animals as and when required.

Need for a Comprehensive Dairy Program

The numbers are large on multiple fronts in terms of physical production , value of production and farmers employed. As pointed out earlier, there is 80% unorganized sector , so there is a lot of potential to convert the unorganized sector to organized sector. There are reforms which were announced and diary sector needs to be included and should be one of the focal points on how can we increase the income of producers. It is because of such reasons , diary should be given a higher priority by the Government to sustain the increase in income by the farming community. Government has to raise to the occasion and come up with a comprehensive plan on how to increase production, income of farmers, make sure India is not only self-sufficient but also a major Global player in exports.

How Dairying acts as an Insurance against Crop failure ?

As pointed out earlier ,Milk production in India is by masses, it is not mass production. In America 2-3% of population is involved in Dairy , but in India much larger chunk of population is involved treating it as a business. The wastage here is much much limited compared to other sectors of Agriculture like fruits, vegetables . Poultry and Milk are the two sectors which are giving insurance against the vagaries of Nature. A Dairy farmer today, every 10 day, he gets payment for his milk. Assured income comes every 10 days. Cash comes in hand of farmers, gets credited to the bank account. This is unlike agriculture, where he gets money once in 4-5 months when the harvest season comes. This is an insurance against poverty, insurance against any shortages he might face. In case there is a crop failure dairying supports the farmers and the whole of rural economy. What you require for dairying, suppose the crop fails ,the failed crop supports the dairying industry. It becomes the fodder for cattle’s.

Why Milk-cooperatives is successful unlike other Cooperatives ?

We have to be thankful to Dr. Kurian for this structure. He ensured that the co-operatives are run in real democratic sense. There is hardly any politics compared to failed co-operatives from other states like textile Co-operatives, Cotton-co-operative Sugar co-operatives. The structure is very transparent, people right from the dairy consumer to diary producer know what is happening. The Whole supply chain and whole value chain is very transparent.

How Dairy is helping India to meet the United Nations Sustainable Goals ?

1. There is zero hunger because of milk in India , which is one of the UN’s Sustainable Development Goals.
2. There is no poverty because of the simple reason, that poverty alleviation in terms of regular income is being taken care of dairying. Even a small farmer who has 2-3 animals ,and at least 2 of them are milking, he is assured daily income. These helps them to overcome the difficulties of their day to day life and helps them in generating Income.
3. UN SDG’s talk about affordable and Clean Energy. Here we should little bit look into the future. The experiment that NDDB and AMUL is doing together in Jagariapur which is very close to Anand. We will have the country’s first solar co-operatives in the village called Jagariapur. Around 40 odd farmers have come together and have put solar panels in their farms. They are producing electricity not only for their own needs but also selling it to Gujrat Electricity board.

How Bio-Gas and Manure is trying to address the issue of Dry Animals after Government stance Against “GAUHATYA” ?

1. NDDB has taken bio-gas to the next level.368 farmer families in Jagariapur village are involved in a experimental project. Here every single family has a bio-gas plant in their own backyard, as Every family in that village is a dairy farmer. This not only takes care of fuel needs, but whatever is being left out called as slurry is being used in farms and the excess slurry is being branded as “Sudhan” and sold as Organic Manures. These operation is being run by Women’s Cooperatives. This is an additional income for farmers that is coming out of dung, which is an absolute waste of animal which is being used for producing Value added products.
2. In Maharastra , Nagpur there is a small experiment going on in a village on dry animals. By dry I mean, the animals which do not produce milk. Can they be economic still? This whole slurry, biogas and sudhan is a right direction in that. Even after the animals stop milking, the farmers can fend for themselves and feed these cattle. This is in a pilot mode, but once successful it will be implemented all over the country.

Diary has reduced the overall Inequality in Villages

The Dairy and cooperatives have removed all inequalities in villages in terms of caste, economic and gender. The cooperatives or the producer owned organization have enabled the removal of both kinds of inequalities. Once women gets empowered, she starts earning. When she starts to earn , she has a better say in the family, like children’s education , take family business decisions. In addition to that smaller farmer in a demographic set up have started earning and also a part of cooperatives where they are heard.

Dairy has improved the nutrient intake of masses in India

Milk takes care of about whole well being and good health of Masses in India. As earlier pointed out there is a whole vegan movement going on, different types of milk are being introduced like Synthetic milk, Oat Milk, Soya milk .But in a country, where we are still short of milk, what milk and darying is done is that ensuring that problem of malnutrition is eliminated. Whether it be the Mid-day meal scheme in the naxal affected districts like Chandrapur or the slums, milk is one of the best nutrient givers to the country, especially when a lot of the population is vegetarian and they cannot have non-veg proteins.

Can Milk model be extended to fruits, vegetables and the problem of Subsidy ?

Milk has empowered rural community in such a way, 80% of price goes back to the farmers. Should it be done with every agriculture produce. Vegetable owners only gets 10%, which is very frightening. Kurian was successful because he kept the Government out of dairy, but the Government found out a way to sneak back to the milk Industry by paying subsidy. Kurian created an entire Industry without subsidy. He believed that Farmer should be actually “Atmanirbhar”. By giving subsidy, you make the farmer dependent on doles, but the most dangerous thing is that you are skewing the market place by letting the inefficient survive and destroy the efficient.

The reason milk is doing well because of cooperate movement and there was no Government interference. This model should be tried for other agriculture products. It should be done, but since it is not being done by private players, or entrepreneurs , or farmers producers organization, we have to go back to the Government asking for some support. If we look at the government scheme of MSP,SMP,FRP which has completely distorted the sugarcane market and cereals market. Actually, the moment Government gives subsidies , one moves away from market dynamics and everybody survives. If we take the example of rice and wheat , most of the farmers like to produce the basic quality and do not want to go for a high variety, simply because there is a MSP program and I am assured of the price. If the farmer is from Punjab and Haryana, he knows that he can grow rice and wheats of lower quality and still get price of the highest quality. But the issue of horticulture crops is that, there are a no. of crops like potatoes, onion , different fruits which are sown at different seasons and unlike milk in not homogenous. But there are examples of NDDB in case of frozen peas and frozen corns , which can be sold throughout the year and the prices are not getting affected.

Need for govt to make FPO’s as mini NDDB

NDDB is already doing its bit with fruits and vegetables through SAFAL and also working on oilseeds . For all vegetable and fruits, the Government has introduced the concept called FPO’s. The only question is can it empower it to become a mini NDDB, a market maker , an aggregator .Aggregator is important without which we cannot succeed especially in case of food processing . The Million Dollar question is can GOI allow FPO to become as independent , as self-financing as NDDB?

Govt. needs to build structures other than APMC

First of all there is this very obsolete APMC acts. Although the recent farm bills have removed them it will take a quite a long time to build a similar kind of aggregator. We need to make a seamless kind of structure, which allows other players to come and participate. When kurien started , the business environment was definitely much better and APMC laws do not apply on milk. That made things easier.

Fortunately in case of Dairy sector, Government is playing a very constructive role along with private sector. GOI has come up with a couple of schemes recently where subsidized financing is available for creating infrastructure for Dairying.

Failure of Jipe

As pointed out earlier, that we cannot apply the milk model for vegetable and fruits because firstly, milk is homogenous unlike fruits and vegetables and secondly, the fruits and vegetables have different sowing , harvesting season. So we should take up individual fruits and vegetables and try to build co-operative models on it. But there is history of failure there as well.

There was a product called jipe. This was the first PPP in kerala where the Kerala Government and Private players got together and brought some machineries from Italy. They were producing the pineapple juice, which was supplied in Erstwhile Indian Airlines. The quality was good and was packaged attractively in tetra packs, but ultimately the product died. It could not be marketed properly.

How Private sector is also applying the same cooperative model in dairy sector ?

The cooperatives have ensured that when the private players come to the scene, they also give the same remurative prices to the producers as cooperatives. One of the best examples is Hatsun in South India. If we look at the prices , in which they are procuring and how much they are passing it on to producers, they are almost near the diaries. They are good example. This is what competition does even to a private player. Hatsun is squeezing out their margins for the benefit of farmers. Since, the organized dairy sector is dominated by cooperatives, they ensure that private players also play by the same rules.