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COMMERCIAL OUTLOOK OF DAIRY FARMING PERSPECTIVES AND KEY DRIVERS

Milk for every moment of every day, from morning to night and from birth to old age.

Sustainable Livestock Development and Dairy Management on 9thNovember, 2016 at Federation House, FTAPCCI, Hyderabad

VIVEKANAND NALLAIDD,BA, PGDRD , LLB, MBA, M , sc, M, Phil, PHDDODLA DAIRY LTD

Philosophy of Indian Dairying farming Mass production is production by masses -- Mahatma Gandhi Present scenario need to enhance the systemSustainable production is production by progressive communities.

Need for this study India is almost reached 156 Million MT , and following ahead with reaching towards 220 Millions MT by 2020, By sharing of world 17 % milk production . Annual Production growth increasing at the rate 5 % , Market annual growth increasing at the rate of 7 9 % in packaged food .Telangana and Hyderabad is major shortage of milk production compared with demand and supply , which supplied by the neighbor states .Commercial dairy farm with cross breed and farm atomization will attractive and more hygiene quality farm milk price is high and suitable for value added products and exports.

Major challenges Procurement /processing/marketing Factors influencing the quality The quality milk and milk products is influenced from cow udder to consumer mouth the manner which the raw material handling quality effects in different ways from collecting agents , transporter , CC/BMC, tanker , processing , post production handling storage , consumer reaching .

Raw milk quality challenges in system Organoleptic quality assessment:Off- flavor, odors, taste, texture, and colorNutritional or compositional quality:Fat , Solids not fat (SNF)- proteins, lactose, minerals and vitamins

Various Milk contaminant sources:Farm level:Microorganisms , somatic cells , pathogens, antibiotics, aflatoxins , pesticides, Dioxins, breed, feed, medicine , health and other farm handling practices. Environmental contaminants:Physical- extraneous matterChemical-contaminants, residues, toxins, chemicals, preservatives, Detergents, radionuclide's Heavy metals Micro biological contaminates : Pathogens, flies , insects , Bacterial , and SPC count etcOther Adulterations:Water, sugar, salt, detergents, urea, vegetables and mineral oils,, foreign fat, skim milk powder, preservatives, formalin , H2O2 and all

Good practices makes effective quality production but opportunity for many adulterations chances make deterioration in quality , high bacteria count , and increasing toxins and acids effects on human health and life.

Emerging need to improve the clean milk quality system for future Dairy trend:Any value added milk product manufacture need wholesomeness and taste that can come from quality milk. Other wise : acids, metabolites causing off-flavors, taste ,etcPeptides, amino acids formed due to higher microbial affects products quality.Unless dairy industry under FSSAI clutches are making strong regulatory implementation system impact on industry and consumers .Present on going procurement system may put industry in great risk in future for consumers and exporting of dairy products .

So there is an urgent need for the Indian dairy industry to improve the quality of milk and milk products by adopting better handling practices from procurement to promotion of product . By putting advance technologies and testing facilities at different stages to until consumer reach. By ensuring pure safe healthy hygiene milk for consumers and export of products.

Future integrated farms Fresh Farm milk is a new category in the making in a country consuming 50 % of its milk production as milk only. Fresh farm milk is not market milk. It is a value added product and subscription by invitation only.

Enhancement of present procurement with modern system: India is having mass production by mass people , so we can not avoid present mass production system , procurement system may be alter in to improvement the system .community dairy farming system :All the closed village cattle is to brought in to BMC /CC collection point , where AMCU milking by automatic milking machines by immediate cooling , then immediate tanker transport to process and packing. 2. Extending commercial dairy farming system : Because of rural youth are not interest to continue the dairy profession , need full professionals .3. Future Perspectives on farm structure Short term : Dairy extension through National Dairy Plan at small and marginal farmer levels Promoting mini sized farm from 25-100. Medium Term : Promoting mid size farm from 100-250 .Long term : promoting large sized dairy farms from 250-1000+In this junction there is urgent need for organized & modernized dairy farming. Commercial dairy farming is much different from villagers who rear few cows. Later does not employ labor, cultivates most of the green fodder needs on his own land with own labor, does not have to pay bank interest and above all invest too low in infrastructure facilities.

Cow MilkCow CurdCow GheeCow UrineCow DungBullocksHealth & NutritionPanchgavyaMedicinesFertility for soilBio GasBio PowerBio PesticidesDraught PowerPoverty AlleviationSelf EmploymentRural DevelopmentEnvironment ProtectionSustainable Agriculture

Contribution of cow wealth and health to the cosmos

All basic necessities of life were woven around pivotal CowCow

Housing

Transport

Fuel

Health

Food

Defense

Fodder

Farming

Benefits of commercial dairy farmingOrganized & well planned project for long life based. Well planed management and operations of project. Environment and climate control.Cost effective to avoid all procurement establishment cost .Healthy and happy animals . More production, better hygiene.Better return to investment and profits.Opportunity for export of milk and milk products. Free antibiotics milk which is suitable for infants to elderly people. Health and hygiene of milk will increase the shelf life of milk.

Advantages of the system Hygiene and safe milk for consumers. Reducing extension and establishment work at rural level to plant. (Transport and other infrastructure work )Establishment of agent wise AMCU system. Accurate in quality and pricing justice for producer. Avoid middle man play in quality and safety .Control of quality contaminants .Hazard control cost reduction .Frauds control in present procurement system.Low production cost compare with other countries

Major obstacles for commercial dairy farming Limitations of small and marginal farmers to improve milk production in both quantity and quality Limited land availability around consumption areas Lack of interest of upcoming generation in dairying at village levels Skill set for farm management Lack of pedigree animals Under capacity cattle feed production Poor supply/cold chain infrastructure Major hurdles for commercial dairy in India Inability of middle man to invest back in value chain Demand for quality milk Government policy support biased to mass production and employment Lack of community based farmingLow quality and hygiene standardsLack of experience information Limited surplus for exports which is facing quality issuesFuture integrated dairy farmsFresh Farm milk is a new category in the making in a country consuming 50 % of its milk production as milk only Fresh farm milk is not market milk. It is a value added product and subscription by invitation only. EX : In Dubai petrol selling to milk selling farm is with 180000 animals.Focus and challenge areas: Dairy policy framework Dairy Value chain Major hurdles Critical Success factors Protocol for bovine and bovine products imports

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Good dairy farming practices for quality milkMain Objective of dairy farmingSafe, quality milk is produced from healthy animals using management practices that are sustainable from an animal welfare, social, economic and environmental perspectiveGood practices of dairy farming Animal HealthMilkingHygieneNutrition(Feed & Water)AnimalWelfareEnvironmentSocioeconomicmanagementUniqueness management system:Animals that produce milk need to be healthy and an effective health care programme should be in placeMilk will be harvested and stored under hygienic conditions Equipment used to harvest and store milk will be well maintainedAnimals need to be provided with feed and water of suitable quantity and qualityAnimals will be kept according to the following principles:1. Freedom from hunger and thirst2. Freedom from discomfort3. Freedom from pain, injury and disease4. Freedom from fearFreedom to engage in relatively normal patterns of animal behaviourMilk production should be environmentally sustainable and cause minimal damage to the surrounding environmentHuman resource and financial management ensures the sustainability of the enterpriseAnimal waste management system development (Urine , dung , water and etc, Animal history management record , Technical application is required in applicable areas Ex: Milking , chilling and etc

Hi tech ShedFeed stall with integrated sitting platform

Systematic feed stall with auto water level for safe and clean management

Large centre path and tall structure with air circulation fans for better climate managementDairy Farming practicesCapabilities & extensionProductivity improvementGaps (feeding, calf rearing, breeding, milking hygiene, health, management)Inputs (on-farm, quality, cost)Quality & competitiveness

Ideal design & matting for cow sitting & idling area... Slope and grid pattern for ideal drainage and cleaning of cow urine and cow dung...

Solar power for clean and green power source...

Dairy feed and fodder silo and systematic storage and management

Open area for cow resting

Cow maternity and Special facility for maternity and treatment of sick cowsclinic

Hi pressure disinfected water spraying machine for cleaning shade, floor, and cows...

Automized Milking & Rotary parlour

Automatic In-line milkingIn-Line milking

Milk Processing... & packaging.Automatic storage and chilling

Automized Cow Brushing... Ideal for cow health and happiness...

Indian Small farmer

Traditional Commercial dairy farm

Expected demand and production vision

Demand supply and deficit

Telangana and Hyderabad dairy challenges and opportunities :Dairy requirement of about 4.5 crore population not catered sufficiently, because of scarcity of production. Organized sector supplying only 10 %. Balance supplied by vendor milk. Telangana is facing more adulteration milk in rural and urban. Vendor milk which causes more adulteration, which cause harmful and un healthy milk to consumers. So more entrepreneurship opportunities in dairy farming industry .

Entrepreneurship opportunities in dairy industry Dairy farming , heifers farming, , Male calf farming , feed industry , BMC, Milk cooling , Milk collection AMCU, farm equipment, vermin compost units, Biogas plants, cow urine and other medicinal , Traditional breed conservation , AI and semen stations

NDDB FOCUSING:National dairy plan is emphasizing on feeding breeding and health in order to almost double the milk production in the next decade , in other hand improvement in milk quality, nutrition , health, hygiene , high yielding animals and better disease control measures , prospectus for dairy industry having good in future scope.

Target groupsEducated un employed youth, Woman SHG s , professional farmers and small agri land holding farmers .

Increasing prices for farm fresh milk

Farm fresh milk with innovative packing

Cow waste economics

Cow waste makes wealthy and healthy livingPERSONAL CAREPanch-gavya SoapHair ShampooAfter ShaveFace CreamLiquid SoapTooth PowderHOME CARE Phenyl Mosquito Coil Utensil Cleaner Cloth Whitener Glass Cleaner Toilet CleanerPOOJAN Dhoop Sticks Samidha Hawan Samigri Pure Ghee Cow UrinePoojan LepNUTRITION & HEALTH Cow Ark Panchgavya GhritamGomutra Asava Arjun Herbal TeaChavan Parash MEDICINE-1 Ghanvati - Piles Skin OintmentMedhor- ObesityMadhumeh ChuranNari PriyadarshiniRasamritaMEDICINE-2 Pain Reliever Oil Pachanamrita Balm Massage Oil Netra Jyoti Nasal/ Ear DropHealth & Nutrition Panch-gavya MedicineFertility of soil Bio Gas Bio Power Bio Pesticides Draught Power

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Technical support through a team of Field professionals with relevant operational background: animal husbandry, veterinary sciences, agronomyAssortment of improvement programs aiming at increasing long-term sustainability performance of dairy Cooperatives & dairy farmers.

MILK PROCUREMENTFocus: milk collection operational set-upObjective: fresh milk qualityImproving operational standardsQuality based payment systemInvestment programs (credits)Regular supplier operation auditsFacilitate import of critical equipment (cooling tanks)Suppliers yearly competition DAIRY DEVELOPMENTFocus: sustainability lively hood dairy farming , community dairy farming , commercial dairy farming Objective: cow productivityFeed & fodder: cultivation of improved fodder; silage; cattle feed formulationAnimal health: mastitis prevention; de-wormingHerd management: recording (to keep track of performance of dairy cattle population); water availabilityCompetitiveness: establish a network of dairy farmers for monitoring of cost of production (supporting pricing decision making process) ENVIRONMENTFocus: water protection & renewable energyObjective: biogas , power , urine etc ,,

Promotion of biogas ,power plantsImprovement of cattle shedsInvestment programs

Focus areas for long-term dairy development

Attractive Policies for Tax benefits , Investment, Incentives for commercial/Corporate Farming:Taxation benefits: Dairy Farm income should be exempted from Income tax under section 10(1) of the Income Tax Act.Excise duty on molasses used in animal feed should be exempted.So loans for big farms and its implements may be available. It is important to have a more conducive financial environment.Exemption on custom duty for import of imported genetic material as well as farm Equipment.Standardization of HS code and creating an 8 digit tariff line. Special lower rate under GST for dairy products and exemption of milk and fresh Category dairy productsLiberal Investment Policy:CAF declared as an industry 100% foreign equity allowedNo minimum foreign investmentRemittance of capital, profits, dividends allowedCAF will enjoy credit & other facilitiesNo ceiling on land holdingState land can be purchased, or leased for 50 years, and extendable for another 49 yearsAll banks and financial institutions will earmark separate credit share.Attractive Fiscal Incentives:0% customs duty on import of agricultural machinery, equipment and implements (not manufactured locally) New or used.Exemption of duty on transfer of land for CAFDividends from corporate agricultural farms (for non industrial activities) not subject to taxFarm income given more favourable treatment than non farm Corporate incomes because of the risk/uncertainty associated with farming.Existing definitions of farming activity, as distinct from processing/industrial activity, continue to be maintained

Investment Opportunities:Land development/reclamation of barren, desert and hilly land for agriculture, dairy farming, Production of quality seeds, A.I stations, breeding stations, veterinary drugs, feeding plants, and crops farming etc.Modernization and development of irrigation facilities and waste water management plantation, utilization of advance technology.Forestry, Horticulture, Dairy Farming, Livestock farming, breedingMarketing/Export of Dairy- Agri-produce (separate package)Cold Chains (Separate package)

Advantages of the system Hygiene and safe milk for consumersFrauds in procurement Reducing primary transport riskEstablishment of agent wise AMCU system Accurate in quality and pricing justice for producer Avoid middle man play in quality and safety Hazard Control of quality contaminants

Cow waste makes many economic benefits in present trend:Health & Nutrition / Panch-gavya / Medicine / Fertility of soil / Bio Gas plantBio Power plant / Bio Pesticides / Draught Power

Integration of systemIntegrating all the relevant actors for completing the value chains at cluster/state/regional level so as to develop a critical mass necessary for sustainability at people, profit and planet level for the dairy sector .Institutionalization of systemIt is high time for the industry to be patronised and run through highly fragmented institutions with very low level of alignment with the National dairy growth goal. Except for National dairy plan which has taken an integrated holistic approach, there is no other such scheme or networked program currently running in the country.We need to have a separate ministry for dairy development in the country .The ministry must control the dairy development through clear cut policies on milk production, breeding, fodder, vaccination programs, bio security, germ plasm/progeny protection, milk collection, food safety, certification and capacity building for dairy extension.The current size of the sector will not be possible by handling these issue at state and central level separately. It is high time and an alarming state of affairs as stated earlier in the report. The ministry should also look into ethics and governance in this sector.

Investments opportunities The huge investment need to develop industrial structure and necessary infrastructure for clean milk production, chilling, transportation, processing, fodder, breeding programs, feed and fodder.A large number of global MNCs are looking forward for FDI in Indian dairy sector but due to ethics and governance related issues they are still holding back.Cess could be introduced on milk processing; cattle feed production, imported semen suppliers, dairy technology suppliers and all other relevant value added service provider to the industry.Direct subsidies at state level to farmers create an imbalance in the local dairy eco system. This populist measure could bring in interim relief to the farmers but not sustainability to the industry.

Conclusions

Commercial and small scale dairy farming in India is no doubt playing an important role in the total milk production and economy of our country. And almost all regions of India are suitable for setting up dairy farming business. Most of the dairy farmers in India are raising animals in small scale traditional methods. They are not aware about the modern farming methods and improved techniques for dairy farming. As a result, some farmers are losing their investment instead of being benefited. Proper business plan, well management and care can ensure maximum production and profit from dairy farming business.

The best approach is to create and run a sustainable dairy farm that gives maximum profits to the firm and also takes care of the effects of dairy farms on environments and animals for a longer period.

Thank you one and all for giving me this opportunity