Health, happiness and economy

           “Why the cow was selected for apotheosis is obvious to me. The cow was, in India, the best companion. Not only did she give milk, but she also made agriculture possible. Products coming from a living cow are thus considered pure and purifying for those who use them.” MK GANDHI


Holistic growth of Indian dairy industry:

Indian Hindu tradition believes cow is god and mother of human; it is part of in their life, so dairy and agriculture sector share a relationship because of the mutually linked inputs and outputs, it dependent on crop residues, natural resources and open grazing as sources of feed. Expansion of these traditional sources of feeds and fodder to support a large increase in dairy production is unlikely, as the available grazing areas and other common resources are shrinking and already degraded. It is important to promote the two in tandem to move towards holistic growth. It is important to introduce efficient feeding methods and feeds, encourage commercialization and mechanization of dairy farms, develop networks to promote processed food and beverages based on milk, have well managed cold chain facilities to minimize wastage and organize the sector. An integrated multi-sect oral approach across the whole food supply chain is required to address global food and nutrition insecurity. In order to promote these and ensure the all round development of the Indian dairy industry.

Since practice to profitable dairy business:

An estimated eight crore rural families across India are engaged in dairy production and the rural market consumes over half of the total milk produce. About 75% of milk is consumed at the household level which is not a part of commercial dairying. Loose milk has a larger market in India as it is perceived to be fresh by most consumers. Hence commercialization of dairy farming as a business activity is the need of the hour. Most of the farmers keep 2-3 dairy animals and sell milk locally. Thus, dairying business goes virtually unnoticed and is seen as a subsidiary farming activity.

Role of milk importance in human life:

Milk plays an important essential food for human life, since babyhood to end of elderly life. Milk is a complex food that contains vital nutrients for the bodies of young mammals. Milk is the only food of the mammal during the first period of its life and the substances in milk provide energy and antibodies that help protect against infection. For humans, milk and dairy products make a significant contribution to meeting our bodies’ needs for calcium, magnesium, selenium, riboflavin, vitamin B12 and pantothenic acid (vitamin B5) and therefore play a key role for make healthy and happiness in our development.

Future scope of dairy industry:

India derives nearly 33% of the gross Domestic population from agriculture and has 66% of economically active population, engaged in agriculture. The share of livestock product is estimated at 21% of total agriculture sector. The fact that dairying could play a more constructive role in promoting rural welfare and reducing poverty is increasingly being recognized.

Indian milk production is likely to reach 190 million tons by 2016 and the annual turnover is Rs.5 Lakh Cr. The planning commission is targeting 4.5 to 5% growth for Animal husbandry in the next 12th plan and the World Bank funded 1584 cr. National Dairy plan is in few months the sector is expected to witness a healthy growth in the coming years, by projecting with 17,300 cr National Dairy Plan by NDDB in the next 15 years, in First phase with 2000 cr investment to be launched soon.

Encourage commercial dairying by way of policy interventions such as Agriculture Status, Concessions in Electricity tariff & providing feed ingredients on discounted prices etc.

Dairy Value Chain stake holder’s key considerations:

Veterinary and medicine services

  • AI services
  • Veterinary / Medicines services
  • Feed producers
  • High input feed and grain costs significantly the production variable costs
  • Short and medium term Climatic conditions

Dairy producers

  • High dependence on climatic changes
  • High input cost associated with production and farm management as well as volatile retail prices inhibit producers from increasing production

Dairy processors

  • Increased pressure on margins
  • Alternative supply arrangements by super markets (private labels ) leading to supply chain complexities
  • Dairy product manufacturers
  • Large inventories of unallocated dairy produce
  • Competition  local  and private dairy players

Dairy exporters

  • EU’s policy changes that will come in to effect in 2015 will significantly impact milk procurement and processing resulting in distribution challenges
  • Demand surge in emerging markets
  • Challenging production conditions and high operational costs resulting in substitutions risks


  • Consumers remain value oriented and open to considering non-branded products spurring the growth of private labels
  • Low food prices inflation as retailers continues to compete on prices and focus on private labels strategies
  • Increased competition from food services outlets as they are emerging as alternate source for dairy producers



India is having mass production by mass people, so we cannot avoid present mass production system, the system may be alter in to advanced system by making community dairy farming system.

Raw milk quality control at the village level is a very challenging task and has to be taken up considering the long term perspective for making Indian Dairy products acceptable in the international arena.


Co-operative to community dairy farming system:

 Dairying is an important source of subsidiary income to small/marginal rural farmers and agricultural labourers. The manure from animals provides a good source of organic matter for improving soil fertility and crop yields. The gober gas from the dung is used as fuel for domestic purposes as also for running engines for drawing water from well. The surplus fodder and agricultural by-products are gainfully utilized for feeding the animals. Almost all draught power for farm operations and transportation is supplied by bullocks. Since agriculture is mostly seasonal, there is a possibility of finding employment throughout the year for many persons through dairy farming. Thus, dairy also provides employment throughout the year

Development of dairy hubs linking smallholder farmers to the industry , by making all cluster villages cattle is to brought in to BMC /CC collection point , where AMCU station operate automatic milking machines , immediate cooling and transport by tanker to process plant.



As per the FSSAI sample survey 68-70% of the milk is found adulterated, which is not safe for the human consumption and further product conversion and export, there is mass use heavy liquid consumption.

Factors influence on quality production:

Food safety:   1. Lack of quality medicines no regulatory framework for medicine quality

  1. Adulteration milk (dirty water, sugar, salt, detergents, urea, vegetables and mineral oils,, foreign fat, skim milk powder, preservatives, formalin , H2.O2 )
  2. High bacteria count, spread of unknown diseases, and shelf life product

Losses: 1. As much as 25-30% of milk is lost/ spoilage before it reaches to consumers

  1. Not all milk can be sold (evening milk, flush season excess milk)
  2. Lack of cooling spoils milk before it is consumed or processed
  3. Middle man role in malpractices

Demand drives and growth environment:

India rural liveliness

  • Largest milk producer communities
  • Fast growing economy, consumer preference for hygiene and fresh milk
  • Annual highest milk production growth
  • Emerging competent regulatory system and authority
  • New Food safety and standard law
  • Trained S &T human resource
  • Research and Educational Institutes (NDRI, NDDB, CFTRI)
  • Strong successful cooperative movement’, in particular parts of India

India drawbacks

  • Low milk productivity animals
  • Poor veterinary services
  • Lack of data on dairy sector
  • Weak organised retailing and established cold chain
  • Large unorganized market sector @ 80%
  • Poor raw milk quality Lack of Good dairy practices
  • Weak financial & policy support for industry
  • Low dairy plants efficiency
  • Inappropriate milk collection system

India future prospects

  • Large rural market gap
  • Increasing quantity of available milk for processing
  • Fast growing economy
  • Diversification
  • large market and investment opportunity
  • increasing income of consumers,
  • Changing life style and preference for milk and milk products, more number of adult consumers, untapped indigenous milk products market and exports.  low cost human resource and employment generation.

India need to immediate focus

  • Food safety
  • Unhygienic practices by farmers at farm
  • Uncontrolled use of antibiotics and
  • medicines on milch animals
  • Unfriendly WTO regime and
  • Imports from other countries
  • Drought and flood

Production and market share

  • Informal production – 97 %
  • Formal production – 3%
  • House hold consumption – 45 %
  • Rural and urban consumption – 55 %
  • Urban unpackaged milk – 35.5 %
  • Processed milk informal urban markets – 40 %
  • Packaged milk formal markets – 14.5 %
  • Packaged milk products formal markets – 12.7%

    Need focus for improvement

  • Strengthen economic viability of dairy farms by interventions on the input side as      well as ensuring fairer farmer prices and practices
  • Low productivity and scattered production leading to high cost of transportation
  • Increase the link between rural production areas and urban markets
  • Focus on strengthening the indigenous breed to help significantly enhance productivity
  • Support to dairying as an enterprise to encourage commercial dairy farming and encourage production and productivity by extension and breed development
  • Strengthen dairy farmer cooperatives to enable farmers to get a higher price for milk
  • Create rational export policy to enable farmers to take advantage of higher prices
  • Strictly implement quality regulations and improve infrastructure and training for quality
  • Focus on quality issues that are a barrier to exports
  • Encourage private sector to increase investment in dairying
  • Support expansion of dairy farmer organizations
  • Increase milk prices in accordance with feed prices



It is an urgent need for the Indian dairy industry to improve the quality of milk and milk products by adopting better handling practices from procurement to promotion of product. By putting advance technologies and testing facilities at different stages, until reaching its consumer. To ensure pure safe healthy hygiene milk for consumers, and export of products.

Extending scope for commercial / corporate Dairy Farming in India:

One of the emerging today trend in Indian is dairying is the growing number of the commercial dairy farms in the urban and peri-urban areas of the metros and big cities. These dairies mainly cater to the needs of the urban consumers.

In this junction there is urgent need for organized & modernized dairy farming. Commercial dairy farming is much different from villagers who rear few cows. Later does not employ labor, cultivates most of the green fodder needs on his own land with own labor, does not have to pay bank interest and above all invest too low in infrastructure facilities.

Though a profitable business venture dairy farming in India requires hard work, proper planning and active and very alerts for managers and supervisors. We all have heard many success stories in dairy farming. In today’s technological world there have been many advances in modern dairy farming. Everything from feed for dairy cows to milk processing equipment has added tremendous scope to the dairy farming industry.

Objectives for good dairy farming practices

Main Objective of dairy farming

Safe, quality milk is produced from healthy animals using management practices that are sustainable from an animal welfare, social, economic and environmental perspective

Good practices of dairy farming

  • Animal Health
  • Milking
  • Hygiene
  • Nutrition
  • (Feed & Water)
  • Animal
  • Welfare
  • Environment
  • Socioeconomic
  • Management

Uniqueness management system:

  • Animals that produce milk need to be healthy and an effective health care programme should be in place
  • Milk will be harvested and stored under hygienic conditions Equipment used to harvest and store milk will be well maintained
  • Animals need to be provided with feed and water of suitable quantity and quality
  • Animals will be kept according to the following principles:
  • Freedom from hunger and thirst
  • Freedom from discomfort
  • Freedom from pain, injury and disease
  • Freedom from fear
  • Freedom to engage in relatively normal patterns of animal behaviour
  • Milk production should be environmentally sustainable and cause minimal damage to the surrounding environment
  • Human resource and financial management ensures the sustainability of the enterprise
  • Animal waste management system development (Urine , dung , water and etc,
  • Animal history management record,
  • Technical application is required in applicable areas Ex: Milking, chilling and etc

Elements for commercial dairy farm productivity and profitability

  • Soil and forage management
  • Young stock management
  • Nutrition and feed management
  • Disease prevention and control
  • Reproductive and heat detection
  • Genetic improvement
  • Staff skill development training
  • Manure and renewable energy management
  • Value adding of milk

 Benefits of commercial dairy farming

  • Opportunity for export of milk and milk products
  • Free antibiotics milk which is suitable for infants to elderly people
  • Safe, Healthy and hygiene of milk will increase the shelf life of milk
  • Organised & well planned project.
  • Better management and operations of project.
  • Better climate control.
  • Cost effective.
  • Healthy and happy animals.
  • More production, better hygiene.
  • Better return to investment and profits.
  • Opportunity for export of milk and milk products
  • Free antibiotics milk which is suitable for infants to elderly people
  • Health and hygiene of milk will increase the shelf life of milk

Tax, Investment Policy, Incentives & Opportunities for commercial/Corporate Farming:

Taxation benefits:

  • Dairy Farm income should be exempted from Income tax under section 10(1) of the Income Tax Act.
  • Excise duty on molasses used in animal feed should be exempted.
  • So loans for big farms and its implements may be available. It is important to have a more conducive financial environment.
  • Exemption on custom duty for import of imported genetic material as well as farm Equipment.
  • Standardization of HS code and creating an 8 digit tariff line.
  • Special lower rate under GST for dairy products and exemption of milk and fresh Category dairy products

Liberal Investment Policy:

  • CAF declared as an industry
  • 100% foreign equity allowed
  • No minimum foreign investment
  • Remittance of capital, profits, dividends allowed
  • CAF will enjoy credit & other facilities
  • No ceiling on land holding
  • State land can be purchased, or leased for 50 years, and extendable for another 49 years
  • All banks and financial institutions will earmark separate credit share.

Attractive Fiscal Incentives:

  • 0% customs duty on import of agricultural machinery, equipment and implements (not manufactured locally) New or used.
  • Exemption of duty on transfer of land for CAF
  • Dividends from corporate agricultural farms (for non industrial activities) not subject to tax
  • Farm income given more favourable treatment than non farm
  • Corporate incomes because of the risk/uncertainty associated with farming.
  • Existing definitions of farming activity, as distinct from processing/industrial activity, continue to be maintained

Investment Opportunities:

  • Land development/reclamation of barren, desert and hilly land for agriculture, dairy farming, Production of quality seeds, A.I stations, breeding stations, veterinary drugs, feeding plants, and crops farming etc.
  • Modernization and development of irrigation facilities and waste water management plantation, utilization of advance technology.
  • Forestry, Horticulture, Dairy Farming, Livestock farming, breeding
  • Marketing/Export of Dairy- Agri-produce (separate package)
  • Cold Chains (Separate package)

Advantages of the system

  • Hygiene and safe milk for consumers
  • Frauds in procurement
  • Reducing primary transport risk
  • Establishment of agent wise AMCU system
  • Accurate in quality and pricing justice for producer
  • Avoid middle man play in quality and safety
  • Hazard Control of quality contaminants

Cow waste makes many economic benefits in present trend:

  • Health & Nutrition / Panch-gavya / Medicine / Fertility of soil / Bio Gas plant
  • Bio Power plant / Bio Pesticides / Draught Power

Commercial and small scale dairy farming in India is no doubt playing an important role in the total milk production and economy of our country. And almost all regions of India are suitable for setting up dairy farming business. Most of the dairy farmers in India are raising animals in small scale traditional methods. They are not aware about the modern farming methods and improved techniques for dairy farming. As a result, some farmers are losing their investment instead of being benefited. Proper business plan, well management and care can ensure maximum production and profit from dairy farming business.

The best approach is to create and run a sustainable dairy farm that gives maximum profits to the firm and also takes care of the effects of dairy farms on environments and animals for a longer period.