Indian Dairy Industry

India is the highest milk producer in the entire globe????

But hundred thousand of people, specially children always suffering with hunger…

Objectives of the Study

• Carry out a brief study on Indian Dairy Industry.• Identify the Indians’ strategies

which were used to become successful in dairy Industry.• Find whether those strategies are

applicable to Sri Lanka or not.

Indian Dairy Industry• World largest milk producing nation.• contributes about 15 % to the total milk production of the

world • Indian dairy industry stands at a mammoth size of US$ 70

billion.• Gross output of 103 million tons of milk in 2009. (Growing 5

% per annum)• 57 millions of cattle population and 39 millions of buffaloes.

(1997)• More than 10 million dairy farmers belong to 96,000 local

dairy cooperatives, who sell their products to one of 170 milk producers’ cooperative unions who in turn are supported by 15 state cooperative milk marketing federations.

• Indian Dairy Industry has achieved this strength of a producer-owned and professionally-managed cooperative system, despite the facts that a majority of dairy farmers are illiterate and run small, marginal operations and for many farmers, selling milk is their sole source of income.

• In India dairy industry has been practiced as a rural cottage industry over the years. Semi commercial dairy industry stated with establishment of military dairy farmers and co-operative milk unions in 19th century.

• The growth of Indian dairy Industry during last three decades has been impressive, at more than 5% per annum; and in late 1990-2001 the country has emerged as the largest producer of milk.

• The existence of restrictive trade policy milk in the Diary Industry and the emergence of Amul type cooperatives have changed the dairy farming practices in the country.

• Farmers have gained the favorable price for their milk and for their production which was essentially a self-reliant one is which is now being transformed into a commercial proposition.

• India as nation stands first in its share of dairy production in the international scenario. The industry contributes about Rs 1,15,970 to the national economy.

• The Indian Dairy Industry specializes in the procurement, production, processing, storage and distribution of dairy products.

Indian dairy association

• Indian Dairy Association (IDA) is the apex body of the dairy industry in India. The members are from the cooperatives, MNCs, corporate bodies, private institutions, educational institutions, government and public sector units.

• IDA functions very closely with the dairy producers, professionals & planners, scientists & educationists, institutions and organizations associated with the development of dairying in India.

• The objective of the Association shall be the advancement of dairy science and industry, farming, animal husbandry, animal sciences and its branches including dairy farming & research on breeding, and management of dairy livestock

• The IDA organizes seminars, symposia and exhibitions on a wide range of topics catering to various segments of professionals, scientists, institutions and organizations associated with the development of dairying in India.

How India became the “No. 01 Milk producer” of the global dairy industry?

• India is the highest milk producer in the entire globe.• India is well known as the “oyster” of the global dairy

industry, with opportunities galore for the entrepreneurs globally.

• The main objective of the Indian Dairy industry is to manage the national resources in a manner to enhance milk production and upgrade milk processing using innovative technologies.

• Lets study the Indian dairy industry on 5 dimensions to find out how they become no. 1 milk producer of the world.

Successfulness of

Indian Dairy

industry

Processing & value adding

ManagementNational policies

Animal/ Breeds

Marketing

(01).National Policies regard with dairy industry

• India’s national policies with regards to economy, Agriculture, rural development and dairy and milk industry are the major secrets for their successfulness in dairy industry.

• In India people who are involving with policy making are well educated people and they have both theoretical and practical knowledge about the dairy industry.

• When making the policies regard with dairy industry they have taken most suitable decisions before 2, 3 decades.

• These policies are clearly defined and they were prepared as suitable for forecasted future needs.

• Therefore these policies do not change with time to time when governments change.

• Basic thing is politicians could not change them according to their political agendas.

• They have linkages among different policies such as economy, Agriculture, rural development and dairy and milk industry policies. Also they make policies as cooperatively each other.

• Their policies are well focused on long term goals.

• They define most suitable strategies for achievement of them.

(02). Animal/Breeds

• 57 millions of cattle population (1997)• 39 millions of buffaloes. (1997)• 27 acknowledged indigenous breeds of cattle.• Seven breeds of buffaloes.

Indigenous cattle breeds- 40%Buffaloes - 50%Cross bred cows - 10%

• One of the strategy use in Indian dairy industry is they do not highly depend on cross breeds.

• They have understood that indigenous cattle and buffaloes are the best adaptable animals for the country.

• Therefore special efforts are also made to protect and preserve the indigenous cattle and buffaloes in their native tract.

• There is a national project for cattle and buffaloes breeding.• A Central Herd Registration for identification and location of

superior germ plasm of cattle and buffaloes, propagation of superior germ stock, regulating the sale and purchase, help in formation of breeder's society and to meet requirements of superior bulls in different parts of the country is also being implemented. The Government of India has established Central Herd Registration Unit in four breeding tracts

• The seven Central cattle breeding farms at Suratgarh (Rajasthan), Chiplima and Semiliguda (Orissa), Dhamrod (Gujarat), Hessarghatta (Karnataka), Alamadi (Tamil Nadu) and Andeshnagar (Uttar Pradesh) are engaged in scientific breeding programmes of cattle and buffaloes and production of high pedigreed bulls for National Project for Cattle/Buffaio Breeding Programme besides providing training to farmers and breeders.

• The Central Frozen Semen Production and Training Institute (CFSP&TI) located at Hessarghatta (Bangaluru) is producing frozen semen doses of indigenous, exotic and crossbreed cattle and Murrah buffalo bulls for use in artificial insemination (A1). The Institute also provides training in semen technology to technical officers of the State Governments and acts as a Centre for testing the indigenously manufactured frozen semen and Al Equipments.

Popular cattle breeds in IndiaBreed Average milk production- kg per lactation

Red Sindhi 2500-3000

Sahival 1000-3000

Gir 1590

Tharparkar 1135-1980

Hariyana 1400-2300

Ongole

These Indian cattle are small animals and their average body weight is not higher than 600 kg. Also their average milk yield is in between 1500-2500kg. When we compare them with European breeds it shows some what low milk yield of them. But their body weight is small and therefore feed requirements are low. Also they are well adaptable to the harsh climate in India.

Buffaloes in IndiaBreed Average milk production- kg per lactation

Murrah 1400-2100

Surti 1570

Nili-Ravi 1500

Jaffarabadi/ Zaffarabadi 1800-2700

•Buffaloes also have small body sizes•Easy to manage them with free grazing systems•High tolerance to pest and diseases•Well adoptable to harsh climatic conditions

(03). Management Strategies

Management of Indian dairy industry is done by 2 different parties.

Private dairy managementCooperative management –MACS, State

Private dairy management

• Company Agent in village for milk procurement• Companies has not direct involvements with farmers• Company has negotiated with agent for price, but it is not the

price farmer gets.(slightly above co-op)• Agent gives loans to farmer to maintain loyalty.• They select special areas in which district co-ops is less active

and areas with high milk density. • Ex- Andra pradesh private dairy management initiated in 1992

and it is collecting milk about 7 lakh liters per day among 3500 villagers. It is leading well recognized brand and have own super markets.

Cooperative management

• Dairy cooperative management is the one of successful strategy applied by Indians towards the success of the dairy industry.

• This cooperatives help to collect, store and marketing their perishable products safely.

• Profit maximization and easy accessibility to the bank finance.• It gives fixed price for their milk.• While day today functioning of cooperatives is managed by full

time salaried employees, the committee or board of the cooperatives, consisting of only elected members, make the decisions of the cooperatives.

• Most dairy cooperatives adopt either two pr three tier systems.

• A group of primary level cooperatives forms a union which can be for a district, region or milk shed area. This is the 2nd tier.

• The third tier is the unions joining up to form a federation at state level or national.

• The federation has the power to act on such issues as pricing, policies, extension, training, control of milk products imports, subsidies and credit.

• There are two types of Cooperative bodies in India.– Mutually aided co-operative societies.(MACS)– State Co-operatives

Mutually aided co-operative societies.(MACS)• MACS has two tire system.• Village or union level and district level.• Accountability and ownerships at the village and district

levels.• It has democracy in village or union level and freedom to

setting prices.• No government control in administration.• Members were elected annually.• They are registered as separate MACS society and has the

freedom to use its own profit.

State Co-operatives• 3 tire system• Its contain village level, district level and state level.• Village level managed by village society president.• District levels managed by professionals.• State level managed by bureaucrat. • Normally they gives low prices.• They are registered under cooperative society act.

• When we compare these management systems, private dairy management and MACS show a higher successfulness than state cooperatives.

Anand Milk Union Limited

• Amul is based in Anand, Gujarat and has been an example of a co-operative organization's success in the long term.

• The Amul Pattern has established itself as a uniquely appropriate model for rural development.

• Amul has spurred the White Revolution of India, which has made India the largest producer of milk and milk products in the world

• The Amul Model is a three-tier cooperative structure. This structure consists of a Dairy Cooperative Society at the village level affiliated to a Milk Union at the District level which in turn is further federated into a Milk Federation at the State level.

• milk collection is done at the Village Dairy Society, Milk Procurement & Processing at the District Milk Union and Milk & Milk Products Marketing at the State Milk Federation.

(04).Milk Processing and Value adding

• This is an another strategy used by Indians towards the successfulness of the dairy industry.

• They produce several kinds of value added milk products and that will prevent the perishable condition of fresh milk.

• Also it will help to find a better market.

Fluid Milk 46.0%

Ghee 27.5%

Butter 6.5%

Curd 7.0%

Khoa (Partially Dehydrated Condensed Milk) 6.5%

Milk Powders, including IMF 3.5%

Paneer & Chhana (Cottage Cheese) 2.0%

Others, including Cream, Ice Cream 1.0%

(05). Marketing of milk products in India

• Marketing is basically doing by big companies , well established cooperatives and state cooperatives.

• Therefore marketing is done well with popular brand names and images of companies and co-ops.

• Also they can keep quality and maintain standards which are expected by national and international market.

• Specially village level farmers are not engaging with marketing of milk in India.

• For an example dairy cooperation's like AMUl maintained a good quality of products under the brand name of “AMUl”. Beside the India Amul has entered to the overseas markets such as Mauritius, UAE, USA, Bangladesh, Australia, China, Singapore, Hong Kong, and few south African markets.

As Sri Lankans what we can learn from India?

• We can find out several strategies of India which are also applicable to Sri Lanka.– The basic strategy is we should have a clear policy for development of dairy industry

in Sri Lanka. As Indians policies it should contain long term goal with strong methodologies which cannot be change by time to time.

– Formulating of policy should be done with competent persons, not politicians.– We should develop and save our indigenous cattle breeds. Even though they give

low yield it is easy to mange them with local conditions. In India cross breeds represent only 10% of cattle population. Still we highly depend on European context and they are not suitable to dry and intermediate zones of Sri Lanka.

– Also we should pay more attention to develop buffalos raring in Sri Lanka. They can adopt easily to our climate. Also their tolerance is high. Indians get more than 50 % of their milk production with buffaloes.

– As we think cooperative dairy associations are also Suitable to Sri Lanka. We can start them on village level under the guidance of National Livestock Board.

– There should be proper system to value adding for milk products and marketing them. We can get the help of private sector on that case.

References

• http://www.aavinmilk.com/dairyprofile.html• http://www.fao.org/docrep/T3080T/t3080T0a

.htm• http://www.ijtef.org/papers/92-F502.pdf• http://www.technopak.com/resources/Food/P

PP%20in%20Indian%20Dairy%20Industry_Technopak_CII_Background%20Paper_May08,2010%20pdf%20ver.pdf

•Thank you.