International Dairy Federation World Dairy Summit: A Sector with Immense Potential

Introduction: Importance of the Dairy Sector on India Economy

On September 12, 2022, Prime Minister Narendra Modi inaugurated International Dairy Federation World Dairy Summit (IDF WDS), 2022, at India Expo Centre & Mart, Greater Noida. The Prime Minister expressed that the World Dairy Summit is a great medium for the exchange of ideas in the field of the dairy sector, which provides incentives to the rural economy and is also a main source of living for people around the world.

The Prime Minister emphasized on the importance of milk-related business in India's cultural landscape. In India, small farmers are the driving force of the dairy sector, and a very large network of dairy cooperatives is a boon for India that is not found anywhere in the world. Milk is collected by these dairy cooperatives twice a day from about two crore farmers staying in more than two lakh villages and is delivered to the customers without any involvement of middleman. And, more than 70% of the money received in this process goes to the farmers.

Key Points: Efforts of Small Farmers and Women Power

The livestock sector is an important subsector of agriculture in the Indian economy. India is contributing 23% of global milk production. Milk production in the country has grown from 146.31 million tonnes in 2014-2015 to 209.96 million tonnes in 2020-2021, at a compound annual growth rate of about 6.2%.

The largest milk-producing country in the world is India, based entirely on the efforts of the small farmers with one to three cattle. In India, the dairy sector provides employment to more than 8 crore families. And, the engagement of women power in the dairy sector is 70%, with more than one-third of the members of dairy cooperatives being women, highlighting the power of women in the dairy sector.

The efforts of Government of India to enhance the potential of the dairy sector since 2014 have led to an increase in milk production, leading to an increase in the income of farmers. In 2014, India produced 146 million tonnes of milk, which has now increased to 210 million tonnes, an increase of about 44%.

Challenges of India's Dairy Farming: Highly Unorganised

The dairy sector of India is highly unorganised. About 60% of surplus milk is handled by this unorganised sector, whereas the remaining 40% is procured by the organised sector of dairy cooperatives and private companies. In developed countries, about 90% of surplus milk is handled by the organised sector.

The dairy sector in India faces scattered production and inadequate processing infrastructure. The shortage of milk quality testing infrastructure and the shortage of village cold chain infrastructure are affecting the enormous export possibilities. Currently, India exports 0.1% of world's dairy products.

According to a research by the Chambers of Commerce and Industry of India and MRSS estimates, about 3% of the milk produced in the country goes waste annually. The volume of wastage and increased demand for dairy products hamper India's plan to produce about 300 million tonnes of milk by 2024.

Government Initiatives: Focus on Increasing Milk Production

The government is trying to develop a dairy ecosystem where challenges of the dairy sector are being addressed together with a focus on increasing milk production. Many of the areas where the government is focused include more income for the farmers, empowerment of the poor, chemical-free farming, clean energy and care of the cattle.

Animal husbandry and dairy are being promoted as a powerful medium of green and sustainable growth in rural India. Further, the government is involved through schemes such as Rashtriya Gokul Mission, Goberdhan Yojna, digitization of dairy sector and universal vaccination of cattle and measures like banning single-use plastic.
The government is also emphasizing on the use of modern technology in the dairy sector, by building the largest database of dairy animals and every animal related with the dairy sector being tagged. This sector has seen a growing entrepreneurial structures such as FPAs and women self-help groups and start-ups.

Promotion of Dairy Industry: Establishment and Strengthening of Dairy Infrastructure

In order to overcome these challenges, the Department of Animal Husbandry and Dairying is implementing various dairy development schemes for financial assistance to dairy cooperatives and milk producer companies and for establishment and strengthening of dairy infrastructure for quality milk procurement and its processing and marketing. The various schemes include National Programme for Dairy Development (NPDD), Dairy Processing and Infrastructure Development Fund (DIDF) and Supporting Dairy Cooperatives and Farmer Producer Organisations (SDC&FPO).

The Solution: Digitalisation in the Dairy Sector

Adopting digital technology solutions will help the dairy sector to increase production efficiency and reduce wastage in the supply chain and will play an important role in making the transformation possible. A few start-ups have swelled in this space that aim to increase farmer productivity and reduce wastage. Recently, the number of start-ups in this sector has increased to more than 1,000.