Dairy Industry

Published on 12 Mar 2025

The dairy industry in India is a cornerstone of the economy, being the world's largest milk producer and contributing significantly to rural livelihoods and nutritional security. It supports millions of small and marginal farmers, contributing around 4% to the country's GDP.

Significance of the Dairy Industry:

• World's Largest Milk Producer: India is the largest milk producer globally, contributing about 23% of total world milk production, with over 220 million metric tons produced annually (as of 2022).

• Economic Contribution: The dairy industry is a critical part of the Indian economy, accounting for around 4% of the country’s GDP. It provides livelihood to approximately 70 million rural households, making it a significant source of income, especially for small and marginal farmers.

• Nutritional Security: Milk and dairy products are vital for nutritional security in India, providing essential nutrients such as calcium, protein, and vitamins, especially to children and vulnerable populations.

• Employment Generation: The industry generates substantial employment across the value chain, from milk production and processing to distribution and retail, supporting millions of jobs in rural and urban areas.

Challenges faced by Diary Industry

• Low Productivity:

• Low Milk Yield: India's average milk yield per animal is significantly lower than in many developed countries. This low productivity is primarily due to factors such as poor genetics and inadequate nutrition.

• Example: According to the National Dairy Development Board (NDDB), the average milk yield per cow in India in 2021-22 was around 7,000 kg per year, compared to 8,000 kg per year in the United States and 10,000 kg per year in Israel. 

• Inefficient Production Systems: Traditional farming practices and a lack of modern technology can lead to inefficiencies in production, resulting in lower yields and higher costs.

• Feed and Fodder Shortages:

• Limited Availability: The availability of quality feed and fodder is often constrained, especially during dry seasons or in drought-prone regions.

• High Costs: The cost of feed and fodder can be a significant burden on dairy farmers, reducing their profitability. 

• Example: The cost of feed and fodder accounted for 60-65% of the total cost of milk production in India in 2021-22.

• Disease Outbreaks:

• Contagious Diseases: Dairy animals are susceptible to various contagious diseases, such as foot-and-mouth disease, mastitis, and tuberculosis, which can lead to significant losses.

• Lack of Disease Control: Inadequate disease prevention and control measures can exacerbate the impact of outbreaks.

• Infrastructure Deficiencies:

• Limited Processing Facilities: A lack of modern processing facilities, such as milk chilling units and pasteurization plants, can lead to post-harvest losses and hinder value addition.

• Poor Storage and Transportation: Inefficient storage and transportation infrastructure can result in spoilage and quality degradation of dairy products.

• Market Fluctuations:

• Price Volatility: Prices for milk and dairy products can be volatile, affecting the income of dairy farmers. 

• Example: The price of milk in India fluctuated significantly between 2019 and 2022, with prices rising sharply in some periods and falling in others.

• Lack of Market Access: Limited access to markets, particularly for value-added dairy products, can hinder the growth of the industry.

• Climate Change:

• Impact on Feed Availability: Climate change can affect the availability and quality of feed and fodder. 

• Example: Rising temperatures and changes in rainfall patterns can lead to reduced crop yields and increased water scarcity.

• Heat Stress: Extreme temperatures can adversely impact animal health and productivity.

Measures to improve the Diary Industry

• Rashtriya Gokul Mission: Key Measures for Dairy Sector Development

• The Rashtriya Gokul Mission (RGM) is a comprehensive initiative aimed at improving the genetics of the nondescript bovine population in India and promoting the development and conservation of indigenous breeds. 

• It has implemented several key measures to address the challenges faced by the dairy sector and enhance its overall development.

• National Program for Bovine Breeding (NPBB):

• Selective Breeding: Focuses on selective breeding to improve the genetic merit of indigenous breeds.

• Disease-Free Bulls: Distributes disease-free, high genetic merit bulls for natural service.

• Artificial Insemination: Arranges for quality artificial insemination (AI) services to be provided at farmers' doorsteps.

• National Mission on Bovine Productivity (NMBP):

• Productivity Enhancement: Aims to enhance the milk production and productivity of the bovine population.

• Disease Control: Prioritizes the control and prevention of diseases to ensure the health and well-being of livestock.

• Gokul Grams:

• Integrated Cattle Development Centres: Establishes "Gokul Grams" to promote indigenous breeds and provide comprehensive support to dairy farmers.

• Pashu Sanjivni:

• Animal Wellness Program: Implements an animal wellness program that includes health cards, UID identification, and a national database.

• Advanced Reproductive Technology:

• Disease-Free Females: Utilizes assisted reproductive techniques like In Vitro Fertilization (IVF), Multiple Ovulation and Embryo Transfer (MOET), and sex sorting to increase the supply of disease-free female cattle.

• Other Measures:

• Veterinary Services: Creates veterinarian service facilities to improve the effectiveness of the artificial insemination program and provide affordable veterinary care.

• Feed Quality: Enhances the quality and availability of manufactured feed through cooperative sector initiatives.

• Subsidized Credit: Provides subsidized credit for calf rearing and feeding cattle during dry seasons, particularly to vulnerable groups.

• Rural Market Development: Reorganizes and develops the rural market for milk to reduce the exploitation of dairy farmers by middlemen.

• Value-Added Products: Encourages the production of value-added dairy products like ice cream, yogurt, cheese, and whey to increase profitability.

Tags:
Economy

Keywords:
Allied sector of agriculture Dairy Industry Milk production Rashtriya Gokul mission

Syllabus:
General Studies Paper 3

Topics:
Agriculture and Food Security