Dairy Scenario In India

Indian Dairy Is Emerging As Sunrise Industry. India Represent One Of The World Largest And Fast Growing Markets For Milk And Other Products Due To increasing Disposable Income Among 275 Million Middle Class. The Country Is Been Changed After The End Of 2000A.D . As The Worlds Number One In Milk Production. The Reason Being That It Is Rural Based, Land Saving And Gender Natural Composed To The Drop Production To Offers More Favorable Opportunities Of Employment. Dairy Farming Provides Substantial Source Of The Landless Labour As Well As Marginal Formers. During The Last 25 Years, We Have Moved From A Situation Of Sacristy And Rational Of Milk To Scenario In Which Milk Has Been Increasing At A Rate Faster Than The Rate Of Increasing Of Population. There Is Large And Rising Domestics Demand Both For Milk And Milk Products With An Expending Middle Income Group, There Exist A Market For Value Added Products, Especially In Cities And Towns. There Is Also The Possibility And Covering Surplus Into Conventional Milk Products Like Casein Is Not Only Import To Develop Contries. Modern Scientific Processing Technology And Managerial Incursion Are Opening Up Best Opportunities In Processing And Marketing Of Various Kind Of Value Assess Milk Flavored Milk, And Other Delicacies.The Emerging Consumption Patters Present New Challenges For The Dairy Industry. The Strategy Is Now Shifting From Distribution To Sales And Marketing Extreme Permissibilitys Of Milk And Possibilities Of Its Contamination Necessitate Rapid Movement Of Milk Difficult. Indian Dairy Market Is Multi Layered Shaped Like Pyramid With The Base Made Up Of Vast Market For Low Cost Milk. The Narrow Tip Is A Small But Affluent Market For Western Type Milk Products Presently, Rarely 782 Out Of 3700 Cities And Towns Are Severed By Its Milk Distribution Network Dispending Hygienically Packed Whole Some Quality Pasteurized Milk.Of The Three As Of Marketing ACCEPTIBILITY,

AVAILABILITY And AFFORDABILITY, Indian Dairy Is Already With First Two As. People In India Love To Drink Milk. Hence No Effort Are Needed To Make It Acceptable, Its Availability Is Not A Limitation Either Because Of Ample Production. It Leaves The Third Vital Marketing Factor Affordability. How Affordable For The Majority With Limited Purchasing Power. This Is Essence Of The Challenge

INDUSTRY PROFILE

The dairy industry in India is considered to be a category, which has been growing and profitable. This category is better organized amongst other categories of processed food industry in India. When the world production of fluid milk stands at around 613 million tonnes and is growing at a rate of only 1.1 percent Indias milk production stood at 91 million tonnes growing at around 4 per cent per annum. This means that 15 % of the worlds milk is produced in India and that too growing at a rate four times of global growth rate giving India the status of the largest milk producing nation in the world. There are two differences, namely, about 58 percent of this milk is from buffalo and despite being the highest milk producing nation in the world the per capita milk consumption in India is still lower (229 gm per day) than the world average (285 gm per day). Our milk production, processing and marketing channel as it exists is unique in nature. About 70 million rural

households are involved in cattle rearing and milk production, out of which only 11 million farmers are linked with the 0.1 million dairy cooperative societies generating about 18 million tonnes of the fluid milk daily. This milk from dairy cooperatives forms the major source of fluid milk supply to cities and towns across the country.

DAIRY PRODUCTS
The other dairy products include butter, ghee and milk powder. Of which, milk powder which is a Rs 25500 crores category is entirely with the organized sector. But in butter and ghee unorganized sector is the larger player. Butter is a Rs 6500 croes category of which organized sector represents only about Rs 500 crores and ghee is Rs 24500 crores of which organized sector is only Rs 3500 crores and the balance is with the unorganized sector. Small local brands have been able to create a niche and competing on price equation.

Value Addition in Dairy Products

In last one decade the processing scenario has changed. There are more players in the segment both Indian and overseas than before. Some of the private players and their brands also disappeared during this time as they could not play the new rules of the game. Local new players are not able to play the high pitch marketing game and therefore gradually reduced to become the subcontract manufacturers for the large players. Both Dabon International and Britannia are therefore, marketing the brands of cheese sourcing from Indian local players. In the cooperative sector Amul has overshadowed other state cooperatives. They have their success stories but not been able to grow beyond the regional level. The large part of the processed dairy products are still with the unorganized local and small players including halwais and dudhias who operate in small pockets using traditional methods of processing where large players cannot easily reach. The task in hand is thus how

we can integrate those unorganized players to upgrade them in the value chain? Can we help them to produce using better technology maintaining quality standard so that large organized players can market those at higher value through a franchised chain of outlets spread all over which can be owned by the same unorganized players so that they get higher value and at the same time play a larger role in the national interest? This is both technology as well logistic management task and we need to create a model for the success.

Future Vision 2020

India would like to emerge as the leading economic power by year 2020. According to the prediction of Goldman Sachs, India will become one of the three, along with China and America, leading economic super power by the year 2050 but we would like to achieve that status by 2020. In the next five years we will be delivering the same economic growth which we could achieve in last fifty years. This is possible if we grow at 7- 8 % in GDP terms year on year as projected. And if that is to happen agricultural sector has to deliver about 4 % growth year on year. Given a good rainfall this should be possible. Although, a pessimist will argue that in post liberalization, agricultural growth rate has reduced, it was 3- 4 % before 1990s. In the first three years of the 10th plan period (2002-2007) agricultural sector growth plummeted to near about 1% but the economy has the resilience to absorb that pressure and we still service sector. We need now another successful green revolution focusing on horticulture, floriculture and dairy sectors. By year 2020 our domestic demand for milk and milk products likely to reach a level of about 170 million tonnes and we can achieve this target provided we continue to maintain the current level of growth. In the global trade we have the products like butter & milk fat, cheese, condensed milk, whey casein etc. When paneer industry is organized and the volume picks up whey protein isolate, milk lactose will be produced and exported. Our products are based on buffalo milk whereas in global trade cow milk products are traded. Our surplus can marketed

globally in the processed form provided we can develop the market for those. For this purpose we need to forge global level collaboration. But the way market is developing for health related products including milk we will not have any difficulty in finding market for the increased milk output as projected in the domestic market itself.

OPERATION FLOOD Operation flood is an integrated programme for dairy development. Operation flood is designed to raise milk producers income by organizing them into co-operatives and eliminating middleman to increase milk production in rural areas and creating a flood of milk. The main objective of Operation Flood is to build a viable and self-sustaining national dairy industry on co-operative lines. The entire process of development in the increase of milk production, procurement, delivered the growth rate supported by the processing, marketing and production enhancement are to be b organizations owed and managed by farmers themselves. The origin of Operation Flood can be traced back to the last century, when organized dairies were set up to supply milk to British families and later to Indians. One of the largest of those privately owned dairies is situated in Kaira District of Western State of Gujarat. It produced milk from surrounding areas, pasteurized it and sent it by rail to Bombay, some 400 km to the south. But it was private traders middlemen, who bought the milk from villagers, many of whom had only a small amount to sell and were easily exploited. rought out through

In the late 1940s political leaders persuaded the producers of Kaira district to organize themselves into co-operatives. This was the inception of Anand Milk Union Ltd. in the small town of Anand abbreviation of Anand Milk Union Ltd. In the small town of Anand abbreviated as AMUL which means Priceless in Sanskrit. The New Delhi Government set up the National Dairy Development Board (NDDB) in Anand in 1965 to guide state governments in how to develop dairy projects along the line of Amul dairy. This project came to be known as Operation Flood. In 1950-51 milk production of India was as low as 17 million tones. By 1990-91 it reached a level of 54 million tones by 2000 A.D. The success of this can be attributed to the successful implementation of worlds largest development project Operation Flood Programme, which passed through three phases from 1970-1995. Operation Flood was result of an organized attempt directed towards the development of dairy industry in India. The programme has laid emphasis on setting up of Anand Pattern rural milk producers co-operative organizations to procure process and market milk and to provide some of the essential technical input services for increasing milk production. Launched in 1970, Operation Flood has helped dairy farmers direct their own development, placing control of the resources they create in their own hands. 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. Operation Flood's objectives included:

Increase milk production ("a flood of milk") Augment rural incomes Reasonable prices for consumers

Operation Flood was implemented in three phases.

Phase I Operation flood was launched in July 1970, following an agreement with the World Food Programme (WFP). This programme involved organizing dairy co-operatives at the village level, providing the physical and institutional infrastructure for milk procurement, processing, marketing and production enhancement services at the union level and establishment of city dairies. The overall objective of Operation Flood-1 was to lay the foundation of modern dairy industry in India, which would adequately meet the countrys need for milk and milk products. A total of 116.54 crore was invested in the implementation of the programme. By its end in 1981, about 13,300 dairy Co-operative societies (DSC) in 39 milk sheds were organized, enrolling about 18 lakh farmer members. It achieved a peak milk procurement of 34-lakh kg per day and marketing 28-lakh kg per day. Phase I (1970-1980) was financed by the sale of skimmed milk powder and butter oil gifted by the European Union then EEC through the World Food Programme. NDDB planned the programme and negotiated the details of EEC assistance. During its first phase, Operation Flood linked 18 of India's premier milksheds with consumers in Indias four major metropolitan cities: Delhi, Mumbai, Kolkata, Chennai. Phase II The background of the institutional frame work of Operation Flood-II (1981-85) essentially comprised the successful replication of the Anand Pattern. A 3-tier cooperative structure of society, unions and federations. The programme was approved by the government of India implementation during VIth plan period with an outlay of Rs.273 crore. About US $ 150 million was provided by the World Bank and balance by EEC. 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 a day. Phase III Phase III (1985-1996) 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. Phase III gave increased emphasis to research and development in animal health and animal nutrition. Innovations like vaccine for Theileriosis , bypass protein feed and ureamolasses mineral blocks, all contributed to the enhanced productivity of milch animals. In Operation Flood-III, the investments were focused on strengthens the institutional management aspect of dairy co-operative at various levels to establish financially strong farmer owned and managed organizations. The phase was funded by the World Bank to the extent of US $ 256 million, EEC food aid to the tune of Rs. 226.6 crore and National Dairy Development Boards own resources worth Rs. 207.7 crore. By its end 69600 dairy co-operatives in 170 milk sheds procured 116-lakh kg of milk per day and marketed about 94-lakh kg/day of liquid milk. Operation Flood major achievement is the National Milk Grid which has worked a lot by diminishing regional and seasonal imbalances which arises in the collection and distribution of milk. From the outset, Operation Flood was conceived and implemented as much more than a dairy programme. 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" (World Bank Report 1997c.)