New milk plants, ERP rollout, and higher procurement prices aim to boost infrastructure, efficiency, and farmer incomes across the state

The Himachal Pradesh government has entered into a strategic partnership with the National Dairy Development Board (NDDB), signing three key agreements aimed at transforming the state’s dairy sector through infrastructure expansion, institutional strengthening, and digital integration.

The agreements cover the formation and operationalization of the Kangra Milk Union, the establishment of new milk processing and chilling infrastructure, and the deployment of Enterprise Resource Planning (ERP) systems within the state’s cooperative dairy network. These initiatives are expected to significantly enhance milk collection, processing, and distribution efficiency across the region.

As part of the infrastructure push, two milk processing plants with capacities of 20,000 litres per day each will be set up in Nahan (Sirmaur district) and Nalagarh (Solan district). In addition, two milk chilling centres of similar capacity will be established in Jalari (Hamirpur district) and Jhalera (Una district), strengthening cold chain capabilities at the grassroots level.

A major highlight of the initiative is the development of a fully automated milk processing plant at Dhagwar in Kangra district, with an initial capacity of 1.5 lakh litres per day and an investment of Rs 250 crore. The facility is designed for future expansion up to three lakh litres per day and will serve as a central hub for the newly proposed Kangra Milk Union, which will cover Kangra, Una, Hamirpur, and Chamba districts.

The introduction of ERP software is expected to modernize operations across the dairy value chain by enabling digital tracking of milk procurement, quality testing, production, inventory, and distribution. The system will also facilitate better record-keeping of dairy farmers and ensure timely and transparent payments, while improving supply chain efficiency and operational oversight.

The state government has positioned the dairy sector as a key driver of rural economic growth, with a focus on ensuring direct financial benefits to farmers through systemic reforms. With the commissioning of the Dhagwar plant, dairy products under the ‘Him’ brand are expected to enter the market with improved quality standards, enhancing value realization for producers.

To further accelerate sectoral growth, the government has outlined plans to invest around Rs 300 crore in expanding dairy infrastructure across the state in the coming years. In parallel, Himachal Pradesh has also significantly increased milk procurement prices, raising rates for cow milk from Rs 32 to Rs 51 per litre and for buffalo milk from Rs 47 to Rs 61 per litre—among the highest in the country—aimed at improving farmer incomes and incentivizing production.