Indian Dairy Industry - prepared by Krishna Rathod (PG Institute of Agri-bussiness Management...
-
Upload
krishna-rathod -
Category
Business
-
view
206 -
download
0
Transcript of Indian Dairy Industry - prepared by Krishna Rathod (PG Institute of Agri-bussiness Management...
1
Seminar script
On
“CURRENT STATUS, OPPORTUNITIES AND
CONSTRAINTS OF INDIAN DAIRY INDUSTRY”
Course no. : ABM-591
Speaker:
Rathod Krishna
(MBA in Agri-Business student)
(Reg. No. – J4-01320-2014)
Adviser:
Prof. H. Y. Maheta
(Assistant Professor)
Submitted to:
Prof. H. Y. Maheta
(Seminar convener, PGIABM)
P.G. Institute of Agri-Business Management
Junagadh Agricultural University,
Junagadh-362001
2
Table of contents
No. Particulars Page No.
1. Introduction 3
2. History 3
3. Structure of Indian dairy industry 7
4. Distribution of milk in India 8
5. Supply chain of milk 8
6. Categorization of the dairy products 9
7. Current status of Indian dairy industry 11
8. Opportunities of Indian dairy industry 15
9. Constraints of Indian dairy industry 18
10. Solutions for constraints 21
11. SWOT analysis of Indian dairy industry 25
12. Conclusion 26
13. References 27
3
CURRENT STATUS, OPPORTUNITIES AND CONSTRAINTS OF INDIAN
DAIRY INDUSTRY
INTRODUCTION
The Indian dairy industry has been through an evaluation right from the British era till
today. It has come a long way over the years from a milk production volume of 55.7 million tons
in 1991-1991-92 to 127.3 million tons in 2012. Today, the Indian Dairy industry stands at the top
of dairy industry in the world. The operation flood program promoted and implemented by the
National Dairy Development Board (NDDB) has been instrumental in bringing about a white
revolution in India. Changing lifestyle, feeding habits and urban culture has somewhat effected
the transition of the Indian dairy Industry into a more of a demand driven, highly diversified and
exciting business proposition. The country accounts for more than 15 per cent of world’s total
milk production and is also the world’s largest consumer base of dairy products, consuming
almost all of its own milk production. Dairying has been regarded as one of the activities that
could contribute to alleviating the poverty and unemployment especially in the drought‐prone
and rain‐fed areas. In India, about three‐fourth of the population live in rural areas and about 38
per cent of them are poor. Therefore among these people, as well as the large vegetarian segment
of the country’s population, dairy products provide a critical source of nutrition and animal
protein to millions of people in India. Despite the increase in production, a demand supply gap
has become imminent in the dairy industry due to the changing consumption habits, dynamic
demographic patterns, and the rapid urbanization of rural India. This means that there is an
urgent need for the growth rate of the dairy sector to match the rapidly growing Indian economy.
(Kumar and Prabhakar,2011).
HISTORY
In India dairy business has been practiced as rural cottage industry over the years. Semi-
commercial dairy started with the establishment of military dairy farms and co-operative milk
unions throughout the country towards the end of the 19th century. Since Independence this
Industry has made rapid progress. A large number of modern milk and milk product factories
have since been established. The organized dairies in India have been successfully engaged in
the routine commercial production of pasteurized bottled milk for Indian dairy products. The
Operation Flood which is the successful Indian dairy development programmed has analyzed
that how food aid can be utilized as an investment in building the type of institutional
infrastructure that can bring about national dairy development. Programs like this, with similar
policy orientations, may prove to be appropriate to dairy development in India. India in the early
1950's was commercially importing around 55000 tons of milk powder annually to meet the
4
urban milk demand. Most of the significant developments in dairying have taken place in India
in this century only.
Operation Flood
It is one of the world's largest rural development programmes. It is launched in 1970.
Operation Flood has helped dairy farmers direct their own development, placing control of the
resources they create in their own hands. A National Milk Grid links milk producers throughout
India with consumers in over 700 towns and cities, reducing seasonal and regional price
variations while ensuring that the producer gets fair market prices in a transparent manner on a
regular basis. The bedrock of Operation Flood has been village milk producers' cooperatives,
which procure milk and provide inputs and services, making modern management and
technology available to members. Increase in milk production, augment rural incomes,
reasonable prices for consumer is the main objectives of operation flood program.
Program Implementation of operation flood
Operation Flood was implemented in three phases.
Phase I (1970-1980)
Phase II (1981-1985)
Phase III (1985-1996)
Phase I: Phase I (1970-80) was financed by the sale of skimmed milk powder and butter oil
gifted by the European Union then EEC through the World Food Program. NDDB
planned the program and negotiated the details of EEC assistance. During its first
phase, Operation Flood linked 18 of India's premier milk sheds with consumers in
India's four major metropolitan cities: Delhi, Mumbai, Kolkata and Chennai.
Phase II: Operation Flood's Phase II (1981-85) increased the milk sheds from 18 to 136; 290
urban markets expanded the outlets for milk. By the end of 1985, a self-sustaining
system of 43,000 village cooperatives covering 4.25 million milk producers had
become a reality. Domestic milk powder production increased from 22,000 tons in the
pre-project year to 140,000 tons by 1989, all of the increase coming from dairies set
up under Operation Flood. In this way EEC gifts and World Bank loan helped to
promote self-reliance. Direct marketing of milk by producers' cooperatives increased
by several million liters in a day.
Phase III: Phase III (1985-96) enabled dairy cooperatives to expand and strengthen the
infrastructure required to procure and market increasing volumes of milk. Veterinary
first aid health care services, feed and artificial insemination services for cooperative
members were extended, along with intensified member education.
Operation Flood's Phase III consolidated India's dairy cooperative movement, adding 30,000 new
dairy cooperatives to the 42,000 existing societies organized during Phase II. Milk sheds peaked
to 173 in 198889 with the numbers of women members and Women's Dairy Cooperative
Societies increasing significantly. Phase III gave increased emphasis to research and
development in animal health and animal nutrition. Innovations like vaccine for Theileriosis,
bypass protein feed and urea-molasses mineral blocks, all contributed to the enhanced
productivity of milch animals. From the outset, Operation Flood was conceived and implemented
5
as much more than a dairy program. Rather, dairying was seen as an instrument of development,
generating employment and regular incomes for millions of rural people. "Operation Flood can
be viewed as a twenty year experiment confirming the Rural Development Vision"
Top 10 countries in livestock production (million stock)
Country Cattle Buffalo Goat
Brazil 202 - -
India 175 105 126
U.S.A. 96 - -
China 83 23 149
Argentina 51 - -
Ethiopia 49 - 22
Sudan 41 - 43
Mexico 33 - -
Pakistan 32 29 57
Australia 27 - -
Nepal - 4.5 -
Source: Anonymous, 2009
In 2009 India was leading in buffalo production. India had second rank in cattle
production after Brazil and also in second position in production of goat after china. India had
more population of cattle, buffalo and goat which is beneficial and profitable for India. But the
overall production of livestock was very low in all over the world.
Trend of total livestock population in India
Year 1992 1997 2003 2007 2012
Number of animals in („000) 4,70,860 4,85,385 4,85,002 5,29,698 5,12,057
Source: Das, 2014
In 1992 the number of animals in India was no.4,70,860. In the year of 2012 it is raised
up to no. 5,12,057. That means it is raised by no. 41,197. In the time duration between 1992-
1997 it was increase by 14,525 no. Between 1997-2003 it was decrease by no. 383. In between
2003-2007 it is increase by no. 44,696.
Total livestock in India in 2007 and 2012
All India livestock census
Year Cattle Buffalo Goat
2007 1,99,075 1,05,342 1,40,537
2012 1,90,904 1,08,702 1,35,173
Source: Das, 2014
Country Cattle Buffalo Goat
Egypt - 4.1 -
Philippines - 3.3 -
Myanmar - 2.9 -
Vietnam - 2.9 -
Indonesia - 1.9 15
Thailand - 1.7 -
Bangladesh - - 56
Nigeria - - 54
Iran - - 25
Mongolia - - 20
6
In 2007 the population of cattle in India was no. 1,99,075. In 2012 it is reached up to no.
1,90,904. The population of buffalo was no. 1,05,342 in the year 2007 which is reached up to no.
1,08,702 in 2012. And in 2007 the population of gat was no. 1,40,537. It is reached up to no.
1,35,173 in 2012.
State-wise livestock population (% share)
State Cattle Buffalo Goat
M. P. 10.27 7.53 5.93
U. P. 10.24 28.17 11.53
West Bengal 8.65 - 8.51
Maharashtra 8.11 5.15 6.24
Rajasthan 6.98 11.94 16.03
Bihar 6.41 6.96 8.99
Odisha 6.09 4.82 4.82
Assam 5.4 4.56 4.56
Gujarat 5.23 9.55 3.67
Chhattisgarh 5.14 - 2.39
Andhra Pradesh 5.03 9.77 6.71
Tamilnadu 4.62 - 6.02
Jharkhand 4.57 - 4.87
Karnataka 4.98 3.19 3.55
Haryana - 5.6 -
Punjab - 4.75 -
other state 8.28 7.38 6.18
Source: Das, 2014
In 2014 the population of cattle is more in M.P., U.P., West Bengal and Maharashtra as
compared to other states. While lowest in Tamilnadu, Jarkhand and Karnataka. The population of
buffalo is highest in U.P., Rajasthan, Gujarat and Andra Pradesh respectively and lowest in
Karnataka, Punjab, Assam and Odisha. Rajasthan, U.P. and West Bengal have more goat
population as compared to other states. Chhatish grah, Karnataka, Gujarat, Assam, Odisha and
Jharkhand have lowest population of goat.
Dairy co-operative societies in India
Year 1980-81 1990-91 2000-01 2011-12 2012-13
Number of dairy cooperatives 13,284 63,415 96,206 1,48,965 1,55,634
Source: NDDB annual report, 2013
In the year 1980-81 the number of dairy co-operative society in India was 13,284. Which
is reached up to no. 1,55,634 in year 2012-13. In between 1980-81 to 1990-91 it was increased
7
by no. 50,131. During 1990-91 to 2000-01 it was increased by no. 32,791. Between the year
2001-01 to 2011-12 it was increased by no. 52,759.
Spread of dairy co-operative societies in India (in numbers)
Direction 1980-81 1990-91 2000-01 2011-12 2012-13
North 2,676 22,126 31,977 54,692 54,802
East 702 4,364 7,113 18,176 21,834
West 5,957 18,580 32,446 43,978 44,970
South 3,949 18,345 24,670 32,119 34,028
Source: NDDB annual report, 2014
In the year 1980-81 the spread of dairy industry in north, east, west, south was no.2,676,
no.702, no. 5,957, no. 3,949 respectively. This is reached up to no. 54,802, no. 21,834, no.
44,970, no. 34,028 respectively in year 2012-13. The development of dairy co-operatives is in
increase day by day. There is much progressive growth in north and west side of India as
compared to south and north side of India.
Structure of Indian dairy industry
Indian dairy industry has two sectors. One is organized sector and other is unorganized
sector. The portion of unorganized sector is more than he organized sector. The portion of
organized sector is 20 percent. And the portion of unorganized sector is 80 percent. The private
dairies, co-operatives are examples of organized sector. Milk vendor is the example of
unorganized sector.
Local dairy cooperatives
Local dairy cooperatives State
Amul Gujarat
Warana Maharashtra
Verka Punjab
Vijaya Andhra Pradesh
Aavin Tamilnadu
Milma Kerala
Saras Rajasthan
parag Utter Pradesh
Source: Anonymous, 2013
Amul is the leading co-operative in Gujarat. There are other co-operatives like Amul that
is Milma in Kerala, Aavin in Tamilnadu, Parag in U.P., Warana in Maharashtra, Saras in
Rajasthan, Verka in Panjab, Vijaya in Andhra Pradesh.
8
Distribution of milk in India
The total milk which are producing in villages are divided into two part. First part is
consumed in village itself and the portion of it is 48 percent. And the remaining 52 percent are
sold in urban areas out of 70 percent of that is handled by unorganized sector, 16 percent is
handled by co-operative sector and remaining 14 percent is handled by organized sector.
Supply chain in India
The supply chain of milk and dairy products is very much complex. Farmers directly sold
the milk to milk co-operatives, private dairies, urban vendors or private traders. These four
directly sold it to urban consumers or directly sold it for business consumption to hotels.
Milk produced in villages
Milk consumed in villages (48%)
Surplus milk flowing into urban areas (52%)
Handled by unorganized sector(70%)
Handled by cooperative sector(16%)
Handled by private organized
sector(14%)
9
Key players of Indian dairy industry
Key players Brand Turnover rs. crore(2009-10)
GCMMF Amul 8,007
Nestle, India Nestle 1,641
Panjab state cooperatives Verka 1,150
Hatsun agro Anun, Komatha, Hatsun curd 1,141
Kwality Kwality Walls 1,054
Parag milk food Parag 550
Modern dairy Modern dairy 445
Rajasthan state co-operaive Saras 300
Vadilal industries Vadilal 189
Himalaya international Himalaya fresh (Paneer) 69
Source: Anonymous, 2013
The table shows some players of Indian dairy industry in which Amul holds first rank
with around 8000 rs. Crore turnover in the year 2009-10. The lowest holder of turnover is
Himalaya international with the turnover of 69 rs. Crore in 2009-10. Nestle, Panjab state co-
operatives, Hatsun Agro, Kwality also has progressive growth around 1,000 to 1500 rs. Crore as
compared to Parag milk food, Modern dairy, Rajasthan state-cooperatives and Vadilal industries
whose turnover is less than 1,000 rs. Crore.
Categorization of the dairy products
There are two categories of dairy products. From raw milk we are producing liquid milk
and value added products. Skim milk, toned milk, UHT milk, low milk, whole milk are included
in liquid milk. Value added items divided into two categories, first is traditional items and
second is non-traditional items. Variety of milk in different flavor like chocolate, venila,
strawberry, pistaflavour is examples of flavored milk. Examples of traditional value added items
are Ghee, Butter, Yogurt, Basundi, Burfi etc.
10
Market share of milk and milk products
Source: Anonymous, 2013
Liquid milk covers highest market share. It covers 73 percent of total market share. While
curd, cheese, Flavored milk, Panner covers 1 percent each market share. Milk powder and Ghee
have 8 percent each proportion of total market share. And the remaining 4 percent and 3 percent
is covered by Ice-cream and Butter.
Demand condition
Market size and growth of Indian dairy industry is increase due to increase in per capita
consumption of milk and milk products.
Consumption pattern of urban consumers are changed. Most of the urban consumer
prefers packaged goods and processed food items. But there are also some people who
give priority to freshness of milk and they prefer fresh and unpackaged milk.
The awareness on the quality of products is increasing but in very small proportion of
population.
Urban consumers easily purchase new products as compared to rural consumers.
Now, consumers have variety of dairy products so it affects the demand of dairy industry
of India.
73%8%
8%
4% 3%1%
1%
1%
1%
LIQUID MILK
MILK POWDER
GHEE
ICE-CREAM
BUTTER
CURD
CHEESE
FLAVOURED MILK
PANEER
11
CURRENT STATUS OF INDIAN DAIRY INDUSTRY
Top ten countries in milk production (2011)
Sr. no. Country Milk production (MT)
1 European Union-27 140.62
2 India 121.30
3 United States 88.77
4 China 31.78
5 Russian Federation 31.20
6 Brazil 30.85
7 New Zealand 18.05
8 Mexico 11.23
9 Argentina 11.07
10 Ukraine 10.81
In 2011 India holds second rank in milk production with 121.30 MT. The European
Union-27 holds first rank in the milk production with 140.62 MT and Ukraine holds 10th
rank
with 10.81 MT. The United States, china, Russian Federation, Brazil, New Zealand, Mexico,
Argentina holds 3rd
, 4th
, 5th
, 6th
, 7th
, 8th
, and 9th
rank respectively. But currently India is at the first
position in milk production.
Milk production in India
Year 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Production (MT) 97.1 102.6 107.9 112.2 116.4 121.8 127.9 132.4
Per capita
availability (gm/day)
241 251 260 266 273 281 290 301
In 2005-06 milk production was 97.1 MT and the per capita availability is 241 gm per
day. In 2013-14 the production is reached up to 132.4 MT and the per capita availability is
reached up to 301 gm per day. The production and per capita availability is in increasing rate.
12
Top 7 states in milk production
Source: Sanjay, 2012
In 2012 the Uttar Pradesh is the highest milk producing state after Andhra Pradesh and
Rajasthan which holds 2nd
rank. Punjab and Gujarat holds 3rd
rank, while Maharashtra and
Madhya Pradesh holds 4th
and 5th
rank respectively. These all states contribute more than 65
percent of milk production in 2012.
State wise Estimates of milk production („000 tons)
State 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
U.P. 17356 18094 18861 19537 20203 21031 22556 23330
Rajasthan 8713 10309 11377 11931 12330 13234 13512 13946
Andhra Pradesh 7624 7938 8925 9570 10429 11203 12088 12762
Gujarat 6960 7533 7911 8386 8844 9321 9817 10315
Punjab 8909 9168 9282 9387 9389 9423 9551 9714
Maharashtra 6769 6978 7210 7455 7679 8044 8469 8734
Madhya Pradesh 6283 6374 6572 6855 7167 7514 8149 8838
All India 97066 102580 107934 112183 116425 121848 127904 132431
This table shows milk production of top 7 states of India. The milk production in U.P.
was 17,356 tons, which is increasing till 2012-13 around 23,330 tons. In 2005-06 the production
of milk of Rajasthan is around 8,734 tons, it is reached up to 13,946 tons in 2012-13. Madhya
Pradesh was producing 6,283 tons milk, which is increasing till 2012-13 around 8,838 tons. And
13
the total milk production of India in 2005-06 is 97,066 tons, which is reached up to 1,32,431 tons
in the year 2012-13.
Total dairy export from India („000 tons)
Product 2006 2007 2008 2009 2010 2011
Cheese 1526 1603 1552 1692 1881 1954
Butter 819 781 725 803 762 742
SMP 1093 1060 1114 1208 1377 1618
WMP 1638 1519 1699 1819 1912 2044
In 2006 the export of cheese is 1,526 tons which has been increase in 2011 at 1,954 tons.
In 2006 the export of butter is 819 tons which has been increase in 2011 at 742 tons. In 2006 the
export of whole milk powder is 1,093 tons which has been increase in 2011 at 1,618 tons. In
2006 the export of whole milk powder is 1,638 tons which has been increase in 2011 at 2,044
tons. The export of whole milk powder is more than the other items and the export of butter is
lowest than other items.
Indian dairy exports in International market
Sr. no. Country 2013-2014
Quantity Value
1 Bangladesh 31,482.15 63,742.17
2 Egypt 14,002.28 30,795.07
3 U.A.E. 12,713.20 30,566.25
4 Algeria 10,242.75 20,263.97
5 Yemen Republic 8,959.52 20,181.41
6 Pakistan 9,565.56 20,130.79
7 Saudi Arabia 8,458.73 18,685.65
8 Malaysia 7,120.11 15,466.56
9 Syria 5,276.50 11,739.79
10 Singapore 6,151.70 8,973.54
total 1,13,972.50 2,40,545.20
India’s major market for export of dairy products are Bangladesh, Egypt, U.A.E.,
Algeria, Yemen Republic, Pakistan, Saudi Arabia, Malaysia, Syria, and Singapore. In 2013-14
the total value of export to Bangladesh is rs. 63,742.17. the total value of export to Egypt is rs.
30,795.07. the total value of export to U.A.E is rs. 30,566.25. the total value of export to Algeria
is rs. 20,263.97. the total value of export to Yemen Republic is rs. 20,181.41. the total value of
export to Pakistan is rs. 20,130.79. the total value of export to Saudi Arabia is rs. 18,685.65. the
14
total value of export to Malaysia is rs. 15,466.56. the total value of export to Syria is rs.
11,739.79. the total value of export to Singapore is rs. 8,973.54.
International market for Indian dairy exports
Sr.
no.
Country 2010-11 2011-12 2012-13
Qty(MT) Value(lakh) Qty(MT) Value(lakh) Qty(MT) Value(lakh)
1 Bangladesh 4,979.66 6,492.05 68.21 17,869.63 17,869.63 25,910.72
2 Egypt Arab Republic 3,647.35 6,643.98 807.34 11,260.74 11,260.74 17,906.48
3 United Arab Emirates 5,845.35 9,479.37 4,036.08 7,026.47 7,026.47 14,281.75
4 Singapore 2,560.66 1,969.75 2,597.16 5,682.56 5,682.56 6,930.47
5 Iran 48.16 58.05 0.00 3,965.09 3,965.09 6,789.28
6 Pakistan 1,444.48 2,145.33 0.00 4,247.76 4,247.76 6,644.10
7 Other Countries 16,445.48 24,555.13 14,000.80 20,649.25 20,649.25 35,036.92
The total value of export to Bangladesh is rs. 6,492.05, Which is reached up to rs.
25,910.72 in the year 2012-13. The total value of export to Egypt Arab Republic is rs. 6,643.98,
Which is reached up to rs. 17,906.48 in the year 2012-13. The total value of export to United
Arab Emirates is rs. 9,479.37, Which is reached up to rs. 14,281.75 in the year 2012-13. The
total value of export to Singapore is rs. 1,969.75, Which is reached up to rs. 6,930.47 in the year
2012-13. The total value of export to Iran is rs. 58.05, Which is reached up to rs. 6,789.28 in the
year 2012-13. The total value of export to Pakistan is rs. 2,145.33, Which is reached up to rs.
35,036.92 in the year 2012-13.
Countries for sourcing India‟s dairy imports
Sr.
no.
Country 2010-11 2011-12 2012-13
Qty(MT) Value(lakh) Qty(MT) Value(lakh) Qty(MT) Value(lakh)
1 New Zealand 30,570.07 51,722.35 21,059.48 41,297.72 771.15 2,793.70
2 France 1,737.71 1,927.01 13,973.85 23,258.70 1,869.79 2,487.64
3 Denmark 751.92 1,572.91 762.34 1,699.60 832.88 1,990.45
4 U.S.A. 669.07 1,111.21 1,143.45 2,246.60 449.01 1,983.88
5 Italy 165.23 694.51 1,077.91 2,326.26 294.29 1,452.00
6 Netherland 448.51 1,063.43 422.95 1,352.84 320.79 1,401.60
7 U.K. 1,986.49 1,251.52 2,094.69 1,511.28 921.80 1,074.24
8 Nepal 697.81 887.79 590.70 1,000.86 402.96 818.61
9 Spain 78.00 78..28 324.26 618.56 149.08 521.87
10 China 52.10 89.06 2,367.78 4,221.18 256.60 432.00
11 Other Countries 17,147.69 21,842.46 26,882.50 40,859.54 1,151.08 1,700.18
Total 54,334.60
82,240.53 70,699.91 1,20,393.14 7,419.43 16,656.17
15
The total value of import from Bangladesh is rs. 6,492.05 and rs. 25,910.72 in the year
2012-13. The total value of import form France is rs. 1,927.01 and rs. 2,487.64 in the year 2012-
13. And the lowest value of import in 2010-11 and 2012-13 is from China.
OPPORTUNITIES OF INDIAN DAIRY INDUSTRY
Large market and investment opportunities:
India has large market and investment opportunity in dairy industry which is still
not competitive and has enough possibilities for higher profit on investment. The
private sector investment is less than the cooperative and government investment
in milk processing and distribution. The food processing segment has shown
highly positive performance for all food processing companies. This sector has
minimal effect of economic slowdown.
Increasing quality of available milk for processing:
The milk production in India has currently been growing with more than 7%
annual growth rate. The dairy industry data demonstrate that the pattern will be
continuing in future as well. It has provided more surplus milk with farmer for
processing and manufacturing diversified dairy product mix. Less than one-fifth
of the milk produced is processed in India, compared with a world average of
over 50 percent. Investors and consumers have more opportunities to make
investment for their interests. An NDDB road map group developed a plan under
which India’s milk production is projected to rise 170MT per year by 2022.
Increasing income level of consumer:
Consumer demand will also shift with rising incomes and changing tastes, the
market for milk products, for instance, is now growing rapidly. The per capita
income has treble in India during last one decade. The growth has not been
restricted to urban India, as the per capita income in rural India has grown by 50
percent in past 10 years. This phenomenal growth has provided a great
opportunity for dairy industry. This trend is likely to continue in future as well.
Therefore, dairy industry would explore this opportunity for its own phenomenal
growth.
Changing life style and preference for milk and milk products:
Fast changing life style in India has created new interest in milk and milk
products. India is largest milk and milk products consumer in the world. India has
large numbers of vegetarian consumers who find milk and milk products as major
sources of protein. An estimated demand for milk would likely to be
approximately 180 million tons in 2021-22.
16
Increasing number of adult consumers:
The adult proportion of Indian population is likely to rise at approximately 20
percent decadal growth rate during coming decade. Therefore, relative numbers of
adult milk and milk products consumers are projected to increase by 2020. The
population below 15 years of age (currently 35 percent) is projected to decline to
28 percent by 2016 as shown in table 3.6. The population in the age group 15 -59
years (currently 58 percent) is projected to increase to nearly 64 percent by 2016.
The age group of 60 plus years is projected to increase from the current levels of 7
percent to nearly 9 percent by 2016.
Untapped indigenous milk products market:
Dairy industry has been unable to tap the full potential of Indian dairy products
market. Indigenous milk products segment presents numerous opportunities for
innovation and marketing. There are certain products like Chhach, Lassi and
Dahi, which were never marketed products in India. However, they were part of
culture and every house hold practices. The last one decade has revolutionized
this sector. Therefore, the sector presents open opportunities.
Low cost manpower and employment generation:
Employment is major issue for each economy in the world when economic
recession and slow down has affected almost each of them. However, India
provides very low cost efficient human resource that is an opportunity for the
sector. Food processing m dairy sector leads to significant employment
generation, not only directly but across the supply chain in production of raw
milk, storage milk and milk products, and distribution and sale of the dairy
products to consumers.
Greater awareness to explore to global trends:
India has more grater market possibilities in export of dairy products. India can
explore its global trends by adding new items like whole milk powder, skimmed
milk powder, cheese, butter, etc.
Availability of raw material:
India is the highest milk producer in all over the world. Population of milch
animals like cow and buffalo is also high. India ranks first in stock of buffalo and
second in cow and goat. And because of this the raw milk is easily available in
large quantity.
Employment opportunities:
Dairy Scientists: The main job of the dairy scientists is to deal with collection of
milk and taking care of the high yielding variety of animals.
Dairy Technologists: The work of Dairy technology requires procurement
officers who take the responsibility of collecting milk from
farmers, milk booths ad cattle-rearers. This particular
procurement officer should well understand the latest technology
17
that is applicable in maintaining the quality of milk of the
process of transporting it to the desired location.
Dairy Engineers: Dairy engineers are usually appointed is to set up and maintain
dairy plants.
Marketing Personnel: These individuals deal with the sale and marketing of
milk together with milk products.
Milk received from oilseed crops:
Some food crops are used for production of milk. In India Coconut, groundnut
and soybean are mostly use in production of milk after milch animals. The market
of soybean milk is more than coconut milk and groundnut milk. The process of
milk production of soybean and groundnut are same. Generally five to six steps
for making these type of milk
Process of soybean milk: six steps for making soybean milk
Step 1- ingredients: you need about 125 g whole soya beans to make 1
liter of soymilk.
Step 2- soaking and dehulling: clean soybeans and soak them in water
for 10-16 hours. And removing hulls.
Step 3- heating: heating the soybeans will destroy enzymes which are
responsible for the development of beany flavor.
Step 4- grinding: grind the soked soybeans and one liter water in a
blender. Sieve the mixture through a cheese cloth and recover the
soymilk.
Step 5- boiling: heat soymilk for five to ten minutes. After cooling,
soymilk is ready and can kept in the fridge for another 3 days.
Step 6- flavoring: the soymilk can be drunk as such but can be
improved by adding some salt.
The process of groundnut milk is as same as soybean milk. But in coconut, no
need for soaking of coconut pieces and the remaining process are same. The cost
of coconut milk is high than groundnut milk and soybean milk respectively.
Because the process of making coconut milk is more harder than groundnut milk
and soybean milk.
18
CONSTRAINTS OF INDIAN DAIRY INDUSTRY
Situational constraints:
Shortage of green fodder area
The three major sources of fodder supply are crop residues, cultivated
fodder and fodder from common property resources like forests,
permanent pastures and grazing lands.
The area of forest is decreasing due to deforestation. Because of
deforestation the fodder source for animal is reducing.
Due to increase in population, basic need of house is increasing and
because of this the area of green fodder reduces day by day.
Lack of clean water for management activities of animal
Dairy farmers not use clean water for management activities of animal and
because of this the chance of disease in animal is increase which is badly
affecting the quality of milk.
Lack of preservation facility for milk
Lack of preservation facilities for milk at village level reduces the quality
of milk. The quality of dairy products also reduces and not able to
compete in international market.
Technological constraints:
Milking issues
Labourers or technicians in dairy farms and industries are working with
poor technical knowhow on dairying and processing. Mostly they are
uneducated and due to this they are poorly paid.
Poor quality of products is obtained due to more labour involvement in the
processing.
The equipments available are heavy in weight and thereby ergonomic
problem arises.
As the milking is drudgery oriented, milking machine is need of the hour
for better quality.
Milking in the rural is scattered and therefore milk collection to a common
place for processing and distribution are not easy because of poor
transport facility.
Milk handling issues
During the milking direct contact of fingers, hands etc., with leads to
artificial contamination of milk at the milking place itself.
Improper cleaning of milk cans due to lack of knowledge on the quality
adversely affect the milk quality.
Using public transport for milk handling also affect the milk quality
because of uncertainty.
19
Inadequate bulk milk coolers available in the milking area leads to
spoilage of milk.
Frequent power cut also disturb the efficiency of bulk milk coolers even if
it is available in the milking area.
Issues in dairy plants
Electricity problems very often affect the efficiency of the equipment
Depleting fossil fuel is always a threat to the dairy industry
Poor technical knowhow leads to inefficient use of equipments and
machines
Energy inefficiency is caused due to leakages in steam lines and improper
use of steam.
The heat wasted through exhaust in the boilers affect the efficiency of
boiler.
Constraints in promoting exports of dairy products from India:
Despite a phenomenal growth in milk production, dairy exports from India face a
number of challenges that may be summarized as follows:
Low productivity
Despite being the largest milk producer in terms of absolute quantity,
India’s average milk yield per cattle remains much lower compared to
developing and even many developed countries.
Lack of modern technologies
The small size of milch animal holding in India makes it difficult to adopt
mechanized system of milking, cooling and chilled-storage which hampers
the efforts to improve quality at the farm production stage.
Lack of necessary physical infrastructure like, connectivity,
communication, testing, and certifying labs, cold chain facilities, absence
of international standard is also acting as a deterrent in export of dairy
products.
Improper management of dairy animal management practices
Breeding, husbandry, housing, feeding, health, record keeping is most
important national dairy code which support the sustainable dairy
development. If it is not properly maintain than production and quality of
milk will be decreased.
Foot and mouth disease outbreaks in India are a major concern for
developed countries which prevents exports of dairy products from India
to these countries.
Unawareness of GMP and GLP
Milk production in the country is scattered and carried out in villages in
unhygienic conditions which is a major bottleneck for the export of dairy
products. Livestock farmer do not know good manufacturing practices and
20
processing industries are not strictly adhering to good laboratory practices
which needs to be corrected for the benefit of farming communality.
Due to the small scale of production units, the farmers are not able to
implement the GMP and GLP practices apart from losing the economics
of scale which normally happens as the scale of production.
Constraints in providing dairy extension services:
The major constraints faced by most of the public extension agencies in providing
the dairy extension services are given below
Lack of adequate extension specialists who providing breeding and health care
services.
Lack of separate cadre of extension personnel for “education” activities.
Lack of adequate Para-extension personnel at field level.
Changing farming system coupled with lack of germane technologies.
Shortage of convincible, appropriate field oriented problem solving technology.
Less skill development of field extension functionaries in technology transfer.
Lack of institutional coordination among developmental organizations for dairy
development.
Lack of priority, adequate policy, financial support and infrastructure
development.
Constraints of market structure:
Competitive structure
The demand for quality dairy products is rising and production is also
increasing in many developing countries. But a country like India that is
striving with several problems is hardly able to meet these demands due to
high cost of production, The countries which are expected to benefit most
from any increase in world demand for dairy products are those which
have low cost of production.
Lack of good Governance
There is no specific minimum support price of the milk in the system,
which makes it unremunerated for the farmers. In turn, the farmers not
being able to get fair and remunerative prices for the milk often tend to
give adulterated milk at the collection centers harming the society as a
whole.
Lack of standardization for dairy products, Marketing chain capacity and
efficiency, Distribution channels, how market signals are conveyed or distorted
are one of the constraints of Indian dairy industry.
21
SOLUTION FOR CONSTRAINTS
Sustainable dairy development:
For sustainable dairy development in the future three major elements are
highly critical, viz, animal husbandry and veterinary services, fodder and feed
resources development and dairy entrepreneurship development through milk
processing. The livestock and veterinary extension system focus on “dairy
production” where as dairy processing aspects of grossly neglected. The
veterinary universities and ICAR institutes, KVKs needs to focus on skill
development of field extension functionaries for effective dairy service at the field
level. The feed and fodder resources need to be developed in a more systematic
manner in collaboration with the state agriculture departments.
Complaint Redressal System:
Objectives:
Provide essential inputs to enhance milk production, feed and fodder
production, cross breeding programs, veterinary aid and take up dairy
development programs to help them manage their own 9,200 cooperatives.
Development of infrastructure for processing of milk and manufacture of
dairy products and quality milk and milk productions.
Integrate dairy development with overall rural development efforts and
provide greater employment to the rural poor.
Process of complaint Redressal system:
1. Receiving the complaints and maintaining a database
There are four resources for the customers to complain about their
problem with Vijaya milk or milk product. Which are as under…
Managing director’s number
Office number of AAPDDCF
Online submission of complaints
Toll-free number 1100
General flow of complaint Redressal system
Apart from all these source, 18 zonal inspectors are distributed in the
twin cities, working under five area manager.
All the complaints received through different channels are maintained
as a spreadsheet in the Managing Director’s mail id.
2. Resolving the complaint in 24 hours
The complaint received from the above sources will be informed
by the marketing department to the concerned departmental heads for
attending the complaint. And in turn the departmental head will inform the
marketing department about the action taken by them.
22
3. Collecting feedback from the complainant within 24 hours
Marketing director personally visits the field twice a week early in the
morning along with department heads of production, quality control and
marketing.
He randomly verifies the complaints by interacting directly with the
customers and vendors. Further he also assesses the possibility of
increasing the market share of Vijaya during his visit and takes
appropriate steps.
Benefit of complaint Redressal system:
Direct feedback from the customers
Identification of recurring problems about Vijaya milk
Building accountability and enduring transparency in the organization
Building confidence among the customers
Establishment of Community Cattle Care Centre wherein dairy animals can be
grouped in one place, proper animal health care including artificial insemination can also
be ensured. Milking machines, bulk milk cooler can also be installed and large quantity
of milk can be handled. Mechanized dairy farm is also possible.
Increase in number of milking machines at farm. So the milking process becomes
speedier. It takes less time as compared to hand operation. Milking machine takes hardly
5 to 10 minutes for milking of 25 liter milk. So it is beneficial to farmer.
Recruiting skilled person: Exploring the possibilities of producing and recruiting the
skilled person can solve labour oriented problems.
Improving efficiency of can: exploring possibilities of designing double jacketed milk
cans to have coolant inside can improve efficiency of can. If milking is done using
milking machine then the pasteurization can be avoided through this.
Development of dairy processing equipments: development of efficient coolant
through nanotechnology can retain the lower temperature. A small quantity of coolant
may be sufficient to keep the milk below 4’c.
Development of energy efficient devices in the dairy industry through nanotechnology
can save lot of energy used at present. Exploring the possibility of using solar water
heater for preheating in the boiler. The sensible heat required for heating the water upto
100’c can be obtained through the solar water heater system. Thereby the energy spent in
this area can be saved.
Exploring possibility of using retort pouches for UHT milk.
Retrospective management of dairy herd:
Optimum milk production is achieved when the general health, particularly the
reproductive performance of dairy animals, is good.
Sound knowledge of reproductive system ensures proper fertility and lesser
calving interval, thereby enhancing productivity.
23
The active collaboration of herd manager, farm owner and veterinarian is required
for managing fertility to optimum level.
The role of veterinary gynecologist is especially important as she/he takes care of
the welfare and treatment of animal’s reproductive system leading to greater
reproductive efficiency.
Fodder development program:
Green fodder is an economic source of nutrients. The use of truthfully labeled
fodder seeds can enhance green fodder production by 50%.
Dry fodder: Despite perennial deficiency of dry fodder in certain areas, crop
residues are wasted in surplus areas. This valuable biomass can be secured,
enriched and densified for use in fodder deficit areas.
The above changes can be brought about by providing the following measures:
Support to farmers engaged in fodder seed production by arranging supply of
breeders seed.
Setting up seed processing plants for production of truthfully labeled fodder seeds
Silage making demonstrations
Demonstration of mowers for securing crop residues
Setting up straw densification plants after enrichment with deficient nutrients
Strengthening and expanding milk production system at village level
It is important to expand coverage to enable milk producers to have greater
market access by creating village level infrastructure for milk collection.
Bulk milk coolers, AMUCUs, DPMCUs, milk cans, weighting and testing
equipments should be brought in order to provide greater market access, there
should be introduction of transparent and fair operations using IT-based solutions.
Attention is required to be put on inclusive growth with focus on women and
small holders. Training and capacity building of stakeholders is also desired.
Training and capacity building under NDP-1
About 20lakh milk producer, village level functionaries and officials will be
trained/ oriented in 14 states.
NDDB has training facilities at Anand and regional training centers at Anand and
regional training centers at Siliguri, Jalandhar and Erode. Offices of NDDB at
Mumbai, Kolkata and Bangaluru are being equipped to undertake training
programs.
Training programs are also conducted at village and union level as per
requirement.
Selected persons from EIAs will also be provided training/exposure abroad in the
field of animal breeding and animal nutrition.
24
Governments efforts and initiatives for upgrading dairy industry in India
National Dairy Development Plans:
The National Dairy Plan was approved in February 2012 with a financial
outlay of 416 million dollars (more than 20 billion rupees), and implementation
period of six years from 2011-17 to meet the projected national demand of 150
million tons of milk from domestic production. The first phase of the plan was
focused on 14 major milk producing states: Andhra Pradesh, Bihar, Gujarat,
Haryana, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Odisha, Punjab,
Rajasthan, Tamil Nadu, Uttar Pradesh and West Bengal. In India, these states
account for over 90 percent of total milk production, 87 percent of the total
buffalo population, and 98 percent of total forage production.
Its initiatives include:
Increasing productivity through scientific breeding and nutrition
Strengthening village based milk procurement systems
Project management and learning
Intensive dairy development program:
IDDP program is implemented by the state dairy federations/district milk unions
with the following six objectives:
Increase milk production by providing technical inputs services
Procurement, processing and marketing of milk in a cost effective manner
Ensure remunerative prices to milk producers
Generate additional employment opportunities
Improve the social, nutritional and economic status of residents of
comparatively more disadvantaged areas.
Strengthening of infrastructure:
Strengthening of infrastructure is one of the basic requirements for quality
& clean milk production. This program is being implemented through the state
government by district cooperative milk unions/state level milk federations. The
objectives of the program can be summed up as under:
Build infrastructure to ensure milk quality from producer to consumer
Improve milking practices at the farmer level
Build awareness on the importance of clean milk production amongst
producers
Assistant to cooperatives:
The GOI seeks to revitalize underperforming dairy cooperative unions at
the district level and cooperative federations at the State level. The program is
being implemented by the concerned district cooperative milk unions/state dairy
federations in this concern.
The national mission for protein supplements:
25
This mission was launched by GOI in Indian Financial Year 2011-12 with
an allocation of more than USD 65 million.
This mission undertakes activities to promote animal based protein
production through livestock development, dairy farming, piggeries, goat
rearing and fisheries in selected areas of the country. With the
announcement of the NDP, the mission was strengthened and continued in
Indian Financial Year 2013-14.
Thus the above paragraphs spread light on the several activities and program
undertaken by the GOI in order to make remarkable changes in the productivity of
the dairy sector of India. The significant achievements in the dairy sector of India are
the sustainable, systematic and intensive efforts made by the GoI. There is no doubt
that there is tremendous scope for the growth of the dairy industry in the coming
years to be witnessed
SWOT ANALYSIS OF INDIAN DAIRY INDUSTRY
Strengths:
Demand profile of Indian people is absolutely optimistic.
Margin on the milk and milk products are quite reasonable, even on packed liquid
milk.
Increasing availability of indigenously manufactured equipment.
New food safety and standard law
Product mix of dairy industry is flexible. Indian dairy industry can add new products
with balancing equipments
The raw material of dairy industry is easily available in India. Presently, more than
8o% of milk produced is flowing into the unorganized sector, which requires proper
channelization.
Weaknesses:
Milk is perishable item. Pasteurization has overcome this weakness partially. UHT
gives milk long life. Surely, many new processes will follow to improve milk quality
and extend its shelf life.
There is little control over milk yield.
Lack of good dairy practices.
Weak financial services.
Low dairy plant efficiency.
Low milk productivity and poor veterinary services.
Woes of bed roads and inadequate transportation facility make milk procurement
problematic.
Seasonal fluctuations in milk production pattern.
So many newcomers entering this industry, competition is being tougher day by day.
Opportunities:
26
There is a phenomenal scope for innovations in product development, packaging and
presentation.
Indian dairy industry can improve market potential area by introduce value-added
products like shrikhand, ice-creams, panner, flavored milk, dairy sweets, etc. addition
in cultured items like yoghurt and cheese.
Employment generation.
Large market investment opportunities.
Increase in the quality of available milk for processing.
Export potential increase tremendously.
Increase income level of consumer.
Changing lifestyle and preference for dairy products.
Increase the number of adult customers.
Milk received from different agriculture crops like soybean, peanut, coconut.
Threats:
practices by farmers at farm.
Uncontrolled use of antibiotics and medicines on milch animals.
Poor microbiological quality of milk.
Unfriendly WTO regime and imports from other countries.
Drought and flood.
More proportion of milk vendor, the un-organized sector.
CONCLUSION
There is no doubt that there is tremendous scope for the growth of the dairy
industry in the new millennium. The dairy industry in India has been on a steady path of
progression since Indian independence. It has grown from producing 17 million tons of milk
in 1951 to producing 127.3 million tons in 2012. Today, India is one of the largest milk
producing countries in the world. Currently, the Indian dairy market is growing at an annual
rate of 7 per cent and the Compound Annual Growth Rate (CAGR) is 16 percent, it is
anticipated to reach USD 118 billion in 2017. Strong demand for dairy products is
opportunity for India. The Indian dairy industry is all set to experience high growth rates in
the next five years. Further Indian Dairy Sector is now all set ready to invite foreign
investments as well by proving that India is a well set and established market for Dairy
business. So one can surely say, be it an investor, a researcher, or A businessman, Indian
Dairy Sector surely has something for everyone. Thus we can say that, we have done so far
and we can surely do better in coming future.
27
REFERANCES
Anonymous. (2014). Launch of First National Dairy Code to Improve Animal Welfare And Milk
Production. Available at <http://www.feedglobe.com>. Last accessed on 30th
March,
2015.
Anonymous. (2014). Milk Production of India. Available at <http://www.nddb.org>. Last
accessed on 15th
April, 2015.
Anonymous. (2014). State wise Estimates of Milk Production of India. Available at
<http://www.nddb.org>. Last accessed on 15th
April, 2015.
Anonymous. (2014). SWOT Analysis of Indian Dairy Industry. Available at
<http://www.IndiaDairy.com>. Last accessed on 30th
March, 2015.
Anonymous. (2013). Indian Mirror. Available at <http://www.indianmirror.com>. Last accessed
on 15th
March, 2015.
Anonymous. (2013). National Dairy Development Board Annual Report 2012-2013. pp.41-44.
Last accessed on 30th
March, 2015
Anonymous. (2013). Operation Flood. Available at < http://www.indianmirror.com>. Last
accessed on 15th
March, 2015.
Anonymous. (2009). Live stock Production Management. Available at
<http://www.faostate.org>. Last accessed on 1ST
June, 2015.
Chawla, A.; Chawla, N. and Pant, Y., 2009. Milk and Dairy Products in India- Production,
Consumption and Exports. 2nd
ed. Hindustan Studies and Service Ltd., Bhopal. pp.37-38.
Das, s. k. 2014. 19th
livestock census-2012 all India report. pp.13-25.
Dilip, R. 2014. National Dairy Plan Phase-1.Indian Dairyman.(1):79-80.
Kumar, R. and Prabhakar, R. K., 2013. Opportunities and Challenges in Indian Dairy Industry
Supply Chain. International Journal of Logistic and Supply Chain Management
Perspectives. (2)4: 791-793.
Prabu, M. 2014. Scope for Dairy Export from India. Indian Dairyman. (1):167-170.
Praveen P., 2012. Consumer Complaint Redressal System at APDDCF Ltd. Indian Dairyman.
(1):68-69.
Siddharth, M. 2014. Use of Dairy Processing Equipment for Quality Assurance and Efficacy
Enhancement. Indian Dairyman. (1): 152-153.
Subhash, s.; Devi M.C.A. and Dixit, p.k., 2014. Dairy Extension Services: Critical Isuues and
Strategies.Indian Dairyman. (1):174-177.