By Dilip Rath, Chairman, National Dairy Development Board (NDDB)
India continues to be world’s largest milk producer with an estimated milk production of about 188 million tonnes in 2018-19, growing at about 6.5 per cent during last five years. India now accounts for over one-fifth of world milk production and its estimated per capita availability of milk at 394 grams is more than the world average of around 300 grams per day. Milk is now the single largest agricultural commodity surpassing even the total value of output of food grains in the country.
The share of agriculture & allied sectors in total Gross Value Added (GVA) was 17.2 per cent during 2017-18 at current prices and livestock contributing 28.4 per cent to agriculture & allied sector. Within livestock, milk group is an important economic activity accounting for about 67 per cent of the value of output in 2017-18.
Small holder dairy system
Milk production in India is primarily a small holder activity based on family labour contributed by women and crop residue with very little cultivated fodder. About 63 million of rural households are engaged in milk production, of which 90 per cent belong to the landless, marginal and small category owning about 85 per cent of the female bovines and 53 per cent of the farm land. About 80 per cent of these animal owners own about 1-3 animals.
Dairying can be an effective tool for poverty alleviation in the hinterlands, as animal assets are more equitably distributed than farm lands. According to the Situation Assessment of Farmers (NSSO, 2013) data and a study by the Institute of Economic Growth, 1 per cent increase in share of income from “cultivation” and “non-farm business” will lead to increase in income inequality by 2.7 per cent and 1.6 per cent respectively, whereas 1 per cent increase in share of income from “animal farming” will reduce income inequality by 1.2 per cent.
Dairying is considered as the most important subsidiary activity, which provides an occupation and steady source of income in all seasons, even when the cultivation fails due to vagaries of nature. It also contributes to the livelihood of the poor in many ways – income from products, insurance against drought, emergency cash requirements, household nutrition, fuel for cooking, manure for crops and draught power for farming, etc. Low capital investment, short operating cycle, steady returns make dairying a preferred livelihood activity among the small and marginal farmers.
Income from dairying
As per the report on Situation Assessment of Farmers, animal farming contributes 12 per cent to the rural income and 85 per cent of income from “animal farming” is reported from milk alone. It contributes significantly to the rural income of poorest farmers’ (farmers with less than 0.01 Ha of land holding) – about 26 per cent. Highest growth was registered in receipts from livestock from 4.3 per cent to 11.9 per cent between 2002-03 and 2012-13, while the contribution from both non-farm business and wages & salaries declined over this period. This was true, especially in states that showed overall higher real income growth.
Increased access to market through producer owned and controlled institutions helps in realizing better price by farmers for their milk. Dairy cooperatives are paying back about 70 per cent of consumer rupee to the dairy farmers – one of the highest across the world.
Reduction of Feed cost
Innovation across the supply chain would help in realizing more income from dairying. Feed cost is the major cost in dairying as it accounts for about 70 per cent of the total cost of production. NDDB is committed in reduction in cost of feed and improve the profitability of farmers. Feeding a balanced ration leads to an increase in daily net income in the range of Rs 15-25 per animal through reduced feed costs and increased milk-fat. Ethno Veterinary medicines have proved beneficial in reducing veterinary expenditure to great extent and thus improving realization in income from dairying. By providing direct market access to milk producers through farmer owned, managed and controlled institutions the gross receipt has increased by Rs 6 per in-milk animal per day – primarily due to relatively higher price paid in comparison to others.
Bovine Manure Management
NDDB has recently taken an initiative for bovine manure management using flexi-biogas technology to augment income of dairy farmers. Effective management of manure through collectives of women farmers owning biogas plants not only can save expenditure on cooking fuel, but the farmers also sell surplus gas to neighbouring households. Under two central sector schemes i.e. National Dairy Plan and New National Biogas & Organic Manure Program, 6,000 farmers are being covered for subsidized biogas plants for an additional income source from manure & output slurry from biogas plants.
Demand growth
Milk and milk products have one of the highest income elasticity of demand amongst food commodity groups and therefore the demand is likely to increase rapidly as the economy grows and incomes rises. The dairy farmers, especially affiliated to producer owned intuitions would benefit further, as they being major stakeholders in the organised supply chain, will have comparatively better bargaining power.
Three drivers of demand – growth in population, urbanization and income together are mainly contributing to rise in demand of milk and milk products. Further, factors such as consumers’ preference for high protein diets, increasing awareness, availability of dairy products through organised channels, etc. are also driving this growth.
Dairy Cooperatives
The Operation Flood (OF), the world’s largest dairy development programme implemented by NDDB demonstrated that a small holder dairy system linked to the Anand pattern cooperative network can help achieve self-sufficiency in milk production and augment farmers’ income.
Currently, there are over 1, 90,000 village dairy cooperative societies with about 169 lakh farmers affiliated to it in 480 districts spread over 28 states. These dairy cooperatives collectively procure about 510 lakh kg of milk per day and sell about 355 lakh litres of liquid milk daily.
Further, NDDB is implementing National Dairy Plan Phase I (NDP I), a scientifically planned multi-state initiative through End Implementing Agencies (EIAs) in 18 major milk producing states, which together account for more than 90 per cent of the country’s milk production. The major objectives of this plan are i) increasing productivity of milk animals to help increase milk production to meet the rapidly growing demand for milk; and ii) providing rural milk producers with greater access to the organised milk processing sector.
NDP-I has brought in a slew of production enhancement technologies which includes production of high genetic merit bulls, strengthening existing semen stations/starting new stations, improving nutrition of milk animals through ration balancing and fodder development programme and also setting up of pilot model for viable doorstep Artificial insemination (AI) delivery services, which contributes to the sustainable dairy development in the country. With these interventions, it will be possible to make our milk production system sustainable so that our country remains self-sufficient in milk and be enable to feed the world’s most populated country in the next two decades or so.
Livelihood opportunities
India’s growing demand for milk can help provide livelihood opportunities for millions of rural households. Income in the rural areas can further be enhanced by providing dairy farmers access to organised markets. It has been experienced that simply providing market access even in low milk potential areas induces milk production and surplus. While dairy has played and would continue to play a significant role in securing the food and nutritional security of millions of our countrymen, government policies providing an enabling environment along with government funded programmes and schemes would continue to help augmenting income of dairy farmers.
