Indian dairying has progressed by leaps and bounds in the last five decades, thanks to the vision of Dr Verghese Kurien and his impeccable execution of Operation Flood programme. Today, India is Número Uno in milk production and is poised to continue 6-7 per cent growth in the coming decade. The target is to produce 200 million tonnes of milk annually by 2021-22 which currently is around 140 million tonnes.

In the coming decade, a huge Indian population is going to consume more milk and milk-based products in view of the improved income levels and through adoption of better food habits. The scenario is very positive and promising for Indian dairy farmers who must be credited for the status Indian dairying enjoys. They have kept faith in the business and despite bad patches, have kept on investing in milk production with whatever support provided by industry, government and scientists. Nevertheless, milk being the largest agriculture crop and touching lives of about 70 million farmers, Indian dairying would propel economic growth of farmers, meeting nutritional requirement of a billion plus countrymen and placing milk production activities as much needed employment opportunities to the rural youth.

India needs a very clear vision on the future of dairying as it factors some risks and uncertainties which need to be assessed and dealt with suitably to help farmers reap the maximum potential of domestic demand. Indian dairying has the unique advantage of having huge domestic demand which is in line with domestic production. This is not the case with any other country in the world. To get a clearer picture let us ascertain risks and uncertainties in crucial parts of dairy business which are: production, processing, pricing mechanism and policy framework etc.


India has travelled a glorious path in milk production especially during the Operation Flood era between 1970s to late 90s where milk production was quadrupled from 20 million tonnes to 80 million tonnes, surpassing USA. It was not a mean achievement as it created tremendous wealth for Indian dairy farmers along with generating mass employment at grassroots level by linking micro production system to burgeoning urban demand. The huge demand in coming years is going to put tremendous pressure on milk production which is very crucial and needs long term planning. We need to produce an additional 10 million tonnes year after year up to 2020.

Despite our milk production systems being based on “low input low output”, the milk output kept increasing without much focus on productivity and efficiency. It is a fact that scientifically designed nutritious concentrated cattle feed has not been propagated aggressively amongst dairy farmers. Similarly, area specific mineral mixtures also could not find place in the animal food basket. The scientifically designed concentrated cattle feed can efficiently utilise our agriculture residues which are being wasted if used as loose feeds. The conversion ratios are also poor.

For the current volume of milk production, India needs to have minimum 70 million tonnes of cattle feed capacities as against the installed capacity of some 10 million tonnes. This huge gap would be very critical in ensuring proper feed to animals. Ensuring feed security for the entire bovine population is a must to ensure economical milk availability to 1.25 billion Indians who are going to consume more milk.

Indigenous cattle and buffalo breeds

We also need to devise strategy to explore full potential of our bovine population. We have about 45 per cent indigenous cows, 35 per cent buffaloes and 10 per cent crossbred cows. The large population of indigenous cows needs to be taken care of in terms of their productivity and huge resources required to maintain them. Across India we have varieties of indigenous cows which need to be converted into more productive breeds. These are more resistant to diseases and are easier to maintain. There is need for focused research in our universities and institutes to transform under-utilised assets to more performing assets. The picture can be changed in 10 years of dedicated research and on field trials. This could be one of the top priorities of the National Dairy Plan which is focussing on breed improvement.

We cannot ignore the monster problem of infertility in our animal population which is close to 30 per cent of the total universal animal counts in India. By 2020, we are going to have more than 325 million bovine animals and with this rate of infertility close to 100 million would be infertile. Managing every infertile animal means disruption in milk production and making it costlier than rest of the world, an advantage India would not like to lose.

A National Mission by the Ministry of Agriculture must be initiated through state agriculture universities and veterinary colleges to eliminate infertility which is due to poor feeding, hormone imbalances, deficiency of vitamins and minerals in diet as well as poor management of animals. In fact it has to be done with a proactive approach rather than just treating infertile animals which is a costly affair that farmers are not ready to invest in. This should be supported by training and awareness of the farmers on better feeding of vitamin and mineral supplements and proper management of animals for the fertility cycle.

Availability of fodder

By 2020, India is expected to have a deficit of about 70 per cent in green fodder and 16 per cent deficit in dry fodder availability. There is specific need to develop region-wise high protein and high-yield green fodder varieties. State agriculture universities and the Indian Grassland & Fodder Research Institute (IGFRI) can definitely help in developing area specific fodder varieties.

Most important is to produce and make available high quality fodder seeds for farmers to cultivate fodders on the little land holding they possess. Similarly, we have to save crop residues and dry fodder generated out of crop, which is diminishing due to mechanised harvesting. While harvesting the crop we need to secure the crop residues and ensure their strict use for animal feeding. It is an irony that a huge quantity of crop residues is burnt and also used for other non-productive usage like cushioning materials etc.

Disease management is also a major area of concern as qualified veterinary doctors are not available for a large number of animal populations. We have to bench mark the major manpower requirement in this area and doctors should be motivated to serve in rural areas with proper monetary incentives by industry and government. FMD, mastitis, theileria, brucellosis, viral fever and other common diseases take a huge toll in milk production with consequent financial loss to farmers.

Farmer education and skill development

Another challenge in Indian dairying is to educate our farmers on various scientific and managerial aspects of milk production. It cannot be treated as a non-skilled occupation as the lack of knowledge flushes out precious resources with great loss to farmers in terms poor income from these low productive lot.

We should not undermine the need of skill development in dairying as scientific inputs are a must to explore the full potential of progeny and efficiencies are important, especially in feeding and management of dairying business at farm level. Milk farmers must be exposed to basics of dairying by way of appropriate mode of training. Radio, television and mobile messaging should be used for training and information sharing which is most cost effective today.


The Indian dairy sector has a unique feature of handling most of its milk as unprocessed. This has created major imbalances in quality and perception about good quality milk. About 50 per cent of milk is being consumed without any type of processing which has a major impact on the quality of milk being consumed. There is an urgent need of statutory guidelines on selling of unprocessed milk throughout the country. Any milk which is marketable surplus must be pasteurised and packed before consumption.

It may not be an easy task but we have done it successfully with a commodity like iodised salt. The statutory compliances for sale of only pasteurised and packed milk would ensure that milk is tested for quality parameters and adulterants with clear cut responsibility imposed on the processors. We need to improve the quality image of milk being sold in view of huge media exposure. The image of Indian dairying with regard to adulteration needs massive change over. This is important to get acceptance of Indian dairy products in global markets.

Milk pricing mechanism

One of the major uncertainties is the uncertainty on milk prices to farmers. It has been observed that milk prices are mostly unfair to majority of Indian dairy producers, making it a speculative business. During 2014, farmers received lower prices than previous year which would demotivate milk producers to invest in the business.

There is need to design a policy to support farmers to ensure that their inflationary expenses for milk production are met otherwise India may head for a huge demand supply gap in coming decade. This can only be assured when farmers get remunerative prices in case of huge milk production by way of proper inventory management of the excess SMP and butter. This needs a major policy design in line with storage of wheat etc.

Inventory management

Milk being a high seasonality produce like any agricultural commodity needs proper inventory management at pan India level. The Government must have a policy and create adequate infrastructure and policy guidelines so that milk powder and butter can be procured during flush and may be released to industry during lean season after covering all expenses. This would smoothen the sudden gap in supplies during lean season.

Alternatively, the government should provide support for working capital and storage to ensure that during flush season companies support farmers by providing reasonable prices without any distress sale by the farmers and huge fund blocking risk by the industry.

Farmer centric policy framework

It is of utmost importance to ensure that Indian farmers, predominately small farmers, must be at the core of any policy framework. Indian milk producers, mainly small farmers, need financial support. There is need to provide low interest loans for purchase of cattle, milking machines, cattle shed, chaff cutter etc. This may be further smoothened after farmers are covered under financial inclusion drive being undertaken. The export of agriculture residues as well as policy on milk products exports are main issues influenced by policy guidelines affecting milk producers in India.

Gen Next in dairying

The future of Indian dairying will be decided by the way our present young rural population takes this up as their profession. In fact our demography dividend advantage must align with their involvement in agriculture, including dairying. This would ensure that India will be able to produce national milk requirement and even export dairy products to strengthen the economy. We need to create skill development programmes, financial support and linking them to market so as to engage Indian youth to agriculture. There is an urgent need to provide respect and glory to Indian agriculture. Our farmers community should take pride in ensuring that next generation is attracted towards agriculture and is making it their occupation.

Undoubtedly Indian dairying is going to be the sunrise sector with very promising growth. However we need to tackle the challenges in most efficient ways. NDDB, private sector, cooperative federations, processors, technology providers and research institutes have to play very important roles to provide all needed support to farmers.

India may be capable of catering to the huge export demand in neighbouring countries as well as rest of the world and can boost foreign exchange earnings. The issues of low productivity, feed management, pricing mechanism, inventory policy and attracting youth to dairying will be key perimeters if we really wish to tap the huge opportunity to make India the milk bowl to the world apart from providing much needed nutrition to our lacto vegetarian society.

Our farmers are capable of achieving several more landmarks. However it is the responsibility of government, industry and consumers to support them to ensure that their interest is intact in milk business not only for present but for future generations as well. Indian dairying can create huge wealth for farmers and for the country in view of huge global business prospects.

Let us not miss this opportunity.