India continues to be the largest producer of milk and accounts for about 17 per cent of world production. The share of India in world milk production has been steadily growing. The growth rate of milk production over the last 10 years has been over 4 per cent. In the last fi ve years, India has been adding around 5 million tonnes of milk every year.

Contribution of livestock to agricultural gross domestic product (GDP) and share of dairying in livestock has been steadily increasing over the years. In terms of value, milk is the single largest agricultural commodity in India. Also, India is the largest market for milk and milk products and per capita milk availability is around 305 grams per day.

Livestock assets in our country are more evenly distributed as compared to land. About 73 per cent of milch animals are owned by small and marginal farmers and the landless. Higher investments in dairying will not only drive growth in the agricultural sector but also of the country’s economy as a whole. At the same time, the growth process will be more equitable as benefi ts will directly flow to mall and marginal farmers and the landless. Livestock and dairying in particular can, therefore, be used as an effective tool for agricultural development and poverty reduction.

Demand for milk and milk products has been rising at a fast rate on account of increase in GDP,  increase in disposable income particularly in rural areas, changing food habits, growing urbanisation etc. Until recently, India has by and large been able to meet the domestic demand without resorting to any significant imports. However, despite the large production, only about 15 per cent of the total milk production is handled by the organised sector where it is pooled, chilled, processed, converted into products and sold mainly in urban markets.



The National Dairy Plan-I (NDP-I) was launched in 2011–12 for a six year period1, with an overall   estimated project outlay of Rs 2,242 crore2. Out of the total financial outlay, Rs. 1,584 crore is met through credit from International Development Association (IDA) of the World Bank group. Government of India’s share is Rs 176 crore, the End Implementing Agencies (EIAs) that will carry out the projects will bear Rs 282 crore and NDDB and its subsidiaries will bear Rs 200 crore for providing technical and implementation support to the projects.


Despite recent trends of increase in the herd size of animals in a few States, India is likely to remain a primarily smallholder dairying system dominated by small and marginal farmers. However, the productivity of milch animals in India is about 4 kg/day per animal as against world average of 6 kg/day (in advanced dairying nations it ranges from 15 to 30 kg/day). Hence there is a huge gap between productivity potential and the actual.

By undertaking suitable scientific interventions in breeding and feeding there would be significant increase in milk yield resulting in higher milk production. Apart from increase in productivity, producers would be incentivised to earn a fair return on their produce through greater access to the market.

The NDP-I is designed with this in mind as a scientifically planned initiative with the objectives:

  1. To help increase the productivity of milch animals and thereby increase milk production to meet the rapidly growing demand for milk, and
  2. To help provide rural milk producers with greater access to the organised milk processing sector.

Implementing agencies and area coverage

NDP-I is being implemented by NDDB through End Implementing Agencies (EIAs) such as State Cooperative Dairy Federations, District Cooperative Milk Producers Unions, a few State Livestock Development Boards, Registered Societies/ Trusts (non-government organisations-NGOs), Section 25 companies, subsidiaries of statutory bodies, ICAR institutes and veterinary/dairy institutes/universities). At the State level, the participating State is selected on the basis of commitment to implement certain policy and regulatory measures that would provide a more enabling environment for future development of the sector.

Since over 90 per cent of India’s milk production is in the States of Andhra Pradesh, Bihar, Chhattisgarh Gujarat, Haryana, Jharkhand, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Odisha, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh, Uttarakhand, West Bengal and the newly-formed Telangana (18 States), NDP-I focuses on them. However, coverage of NDP-I will be across the country in terms of benefits accrued from the project.


Participating States’ commitments

All the participating States in NDP-I have committed to comply with the key policy and regulatory measures and provide an environment for successfully implementing the scheme. The regulatory/policy support to be provided by the State governments are:

  • Having in place an appropriate breeding policy;
  • Artificial insemination (AI) delivery services not being notified as a minor veterinary service (MVS);
  • Charges for AI delivery being raised gradually to cover full cost;
  • Semen for AI delivery in the State being sourced only from semen stations graded ‘A’ or ‘B’;
  • Adoption of common protocols and standard operating procedures (SOPs) issued by the Department of Animal Husbandry, Dairying & Fisheries (DADF), Ministry of Agriculture for all breeding activities;
  • Notification of State Rules under the Prevention and Control of Infectious and Contagious Diseases in Animals Act, 2009.

In case the timeline committed by a State Government for compliance has lapsed or is approaching, suitable communication is sent to the State by NDDB to ensure adherence to the committed timeline.



NDP-I has three components, namely:

  1. Productivity Enhancement,
  2. Village based milk procurement system,
  3. Project management learning.

While the scheme provides 100 per cent grant-in-aid for nutrition and breeding activities, 50 per cent of the cost of capital items will have to be shared by the EIAs in the case of village milk procurement systems.

Productivity enhancement

Productivity enhancement component involves:

  1. Improvement in genetic merits of cattle and buffalo
  2. Production of high quality semen doses for AI delivery along with a pilot project for AI delivery
  3. Improving nutrition of milch animals to produce milk commensurate with their genetic potential and for reducing methane emission.

Genetic improvement: Genetic progress over a larger population can be accelerated if a larger proportion of breedable animals are bred through artificial insemination using the semen of a few top high genetic merit (HGM) bulls. However, only about 24 per cent of them are bred through AI with semen being sourced from about 3,250 bulls spread across semen production stations in the country and only about 10 per cent of these bulls have come through any sort of an organised genetic selection programme. Conception rates of AI services are often low due to several factors including poor quality semen, skill of technician, and the fact that a large proportion of the AI services are from stationary AI centres. India also has some highly adapted indigenous breeds which have been largely overlooked in terms of genetic improvement programmes to increase their milk production capability.

Breeding activities under NDP-I include production of HGM bulls, strengthening of A and B graded semen stations, and setting up a pilot model for sustainable AI delivery service. HGM bulls would be produced using internationally established practices of progeny testing (PT) and pedigree selection (PS), along with import of bulls and embryos of exotic cattle breeds.

Progeny testing involves selection of bulls based on the performance of their daughters. Under the PT programme, 20–40 bulls are put to test. The bulls are ranked on genetic merit based on performance of about 70 daughters and the top 5–10 per cent are selected to be mated to top performing dams. Such planned mating will produce the HGM young bulls for use in semen production and AI. A number of breeds have been identified for improvement through PT — pure and crossbred Holstein Friesian (HF), Jersey crossbred cattle, as well as Murrah and Mehsana buffalo.

Till March 2015, all 13 sub projects for PT as envisaged from 12 EIAs have been approved with operations in nine States. Till December 2014, 185 bulls have been made available for distribution to the semen stations for production of semen doses. Some 80 HGM bulls of HF, HF crossbred cattle and Murrah and Mehsana buffalo breeds produced from various PT projects have been allotted to seven ‘A’ and ‘B’ graded semen stations.

Pedigree selection approach involves selection of HGM bulls based on performance of parents and grandparents. India is gifted with breeds that are well adapted to very dry, arid farming systems. Indigenous cattle and buffalo breeds like the Rathi, Kankrej, Tharparkar, Gir, Sahiwal, Hariana, Pandharpuri, Nili Ravi, and Jaffrabadi need to be conserved and developed to ensure sustainable dairy development, especially for farming communities who thrive in the marginal and resource poor environments.

The pedigree selection projects target cattle populations spread across 150–250 villages. Recording will focus on 20–25 villages having a concentration of higher yielding bovines and true-type of the breed. The top 10 per cent of sires and cows will be selected as parents to produce young bulls.

Till March 2015, ten sub projects for indigenous breed development have been approved, which are expected to make available about 427 bulls to semen stations across the country. The breeds covered under PS programme include Gir, Kankrej, Hariana, Rathi, Sahiwal and Tharparkar breeds of cattle as well as Jaffarabadi, Pandharpuri and Nili Ravi breeds of buffaloes.

Apart from producing bulls through PT and PS projects, import of bulls and embryos of HF and Jersey   breeds is also envisaged. These purebreds are predominantly used for crossing to upgrade nondescript low yielding local cattle. Apart from imports, purebred HF bulls are also being produced through PT project being implemented in Bangalore and Kolar milk unions of Karnataka.

As large populations of purebred Jersey do not exist in the country to run a PT programme, the focus will be on import of bulls/embryos. About 200 jersey bulls are expected to be made available for AI from import of bulls and embryos. Arrangements have been made for import of bulls and import of embryos for production of bull calves through embryo transfer.

Production of high quality semen dose: By 2016–17, it is proposed to produce around 100 million semen doses per annum from ‘A’ and ‘B’ graded semen stations in the country to cover around 35 per cent of cattle and buffaloes capable of breeding through AI. For this purpose, existing semen stations graded ‘A’ or ‘B’ by the Central Monitoring Unit, DADF, GoI, are being strengthened for increasing their production capacity of quality disease free semen doses. Till March 2015, 22 sub projects of 19 EIAs from 14 States have been approved, which together are expected to produce more than 98.67 million doses per annum by end of the project.

Considering that delivery of AI services as a door step service provides significant benefits to producers, NDP-I envisages a pilot model for providing doorstep AI services. Two sub projects for undertaking pilot model for viable doorstep AI delivery services have been approved wherein 4,868 villages would be covered by 730 Mobile Artificial Insemination Technicians (MAITs). Till December 2014, 555 MAITs have been deployed in 3,288 villages, who have performed about 80,000 AIs.

Improving nutrition: Ration Balancing Programme (RBP) and Fodder Development Programme (FDP) are being implemented to ensure that milch animals produce milk commensurate with their genetic potential. To ensure that animals produce milk at levels commensurate with their genetic potential, they must be fed optimally. Rations fed usually comprise one or two locally available concentrate feed ingredient(s), seasonal grasses and crop residues, which however are not balanced for key dietary nutrients. This often adversely affects the productivity and health of animals. Farmers are generally unaware of good feeding practices and technologies that could improve productivity.

Given that feed often accounts for 70 per cent of the total cost of milk production, it is important to optimise productivity at the lowest cost by proper utilisation of available feed ingredients, so as to provide a balanced ration with adequate amounts of energy, protein, minerals and vitamins. Studies show that ration balancing has potential not only to increase milk yield, reduce production costs, but also contribute to reduced methane emissions. RBP pilots under field conditions have reported reduction in methane emissions by 10–14 per cent per kg of milk produced.

Under RBP least cost balanced ration is formulated at the farmer’s door step by the local resource person (LRP) using user-friendly software called Information Network for Animal Productivity and Health (INAPH), developed by NDDB. Till March 2015, 67 sub projects of RBP have been approved. Till December 2014, this has helped in training and inducting about 6,364 LRPs and covering about 6,029 villages and 355,000 animals. Milk producers covered have reported 7 to 12 per cent reduction in cost of feeding per kg of milk. Study conducted by the National Dairy Research Institute (NDRI) on reduction of methane emission reveals that it has been reduced by 10 to 12 per cent.

Currently only about 10 per cent of 7.47 million hectare land under green fodder production is sown with certified/ truthfully labelled fodder seeds. Fodder development activities under NDP-I include promotion of certified/truthfully labelled fodder seeds along with large scale field demonstration of mowers, biomass bunkers and silage making. Till March 2015, 51 sub projects have been approved under fodder development activity. In addition, a proposal for setting up micro-training centres (MTCs) has also been approved.

Till December 2014, a total of about 358 demonstrations for silage making and 167 demonstrations for use of mowers have been organised. Eleven bio-mass bunkers have been constructed and about 1,531 tonnes of high quality certified/truthfully labelled seed have been sold for which production support has been given.

Village-based milk procurement system

Within India’s organised dairy sector, private dairies are rapidly expanding their operations in the dairy business with capacities created by them in 15 years equal to that set up by cooperatives in over 30 years. While the private sector would continue to grow, it is essential that cooperatives retain an equal share of the milk handled by the organised sector to ensure inclusiveness and livelihood for smallholder milk producers.

This requires providing milk producers greater opportunities for sale of surplus milk to the organised sector by expanding village-based milk procurement systems that facilitate fair and transparent transactions. NDP-I envisages strengthening of existing dairy cooperatives and promoting producer companies (a cooperative form of enterprise that can be setup under the Companies Act 1956). Producer companies will have flexibility to operate with greater professionalism and autonomy and would not face constraints that affect cooperatives which function under State cooperative laws. Producer companies would generally be set up in areas where cooperatives are not present or have low coverage or low procurement.

Village-based milk procurement system component of NDP-I would improve access of milk producers to organised markets by developing village level milk collection and bulking facilities. These investments are designed to strengthen negotiating power of dairy farmers and enable collective milk marketing to existing (and future) milk processing facilities. The activities supported under the component include:

  1. Mobilisation and institution building of milk producers through promotion of new milk producer institutions/dairy cooperative societies (DCSs) and strengthening of existing DCSs/producer institutions through infrastructure support
  2. Training and capacity building of milk producers and other functionaries
  3. Investment in village level infrastructure for milk collection and bulking such as milk cans, bulk milk coolers for a cluster of villages, associated weighing and testing equipment, and related information echnology equipment.

Till March 2015, 99 sub projects—97 for cooperatives and 2 for producer companies— have been approved. Till December 2014, about 9,590 villages have been covered with an enrolment of about 300,000 additional members of which about 116,000 are women and about 178,000 are smallholders.

To upgrade the knowledge and skill sets for successful implementation of the sub projects, need-based training and capacity building programmes are being organised for farmers, field functionaries and EIA personnel. These training programmes are being organised either by NDDB or by the EIAs. Till February 2015, about 251,000 participants of different categories have been trained under various training programmes. Further, a national symposium on women empowerment through dairying and an international workshop on bovine semen production and processing were organised as part of NDP-I implementation.


Project management and learning

The Project management and learning component is to ensure smooth implementation, coordination and monitoring of implementation progress. The activities to be financed include: (a) support for the Project Management Unit (PMU), (b) setting up of information systems at PMU and EIAs for collection and dissemination of data relating to breeding, nutrition, health and milk collection, (c) using services of external agencies for carrying out baseline, mid-term and project completion surveys and special studies, (d) third party quality assurance of civil works under the project, and, (e) technical assistance and support during implementation.

Project benefits

In terms of overall benefits, the NDP-I would put in place a scientific approach and systematic processes, which it is hoped, would take the country on a path to improving the genetics/productivity of milk producing animals in a consistent and continuous manner. It will make much more prudent use of the country’s scarce natural resources, help in reducing methane emissions, improve the quality of milk being marketed, contribute to disease control, help strengthen regulatory and policy measures that will provide an enabling environment for future growth of dairying in the country and contribute to strengthening livelihoods of small holder milk producers, with special focus on women, that form the majority of India’s milk production system.



It is also important to recognise some of the challenges before our dairy sector:

Firstly, the challenge from climate change and environment would pose one of the biggest threats to rural households dependent on crops and livestock husbandry for their livelihoods, as our limited stock of natural resources, such as land and water, are under increasing stress due to imprudent use. Extreme climatic events, such as droughts and floods, are likely to be a major threat to the sustainability of our crop production, with its attendant consequences on feed resources for livestock.

Secondly, we need to adapt to the challenges emerging from an increasingly globally integrated market, as volatility in prices is increasingly being transmitted from the global to domestic market. While surging international prices draw away domestic supply to international markets, it also could stimulate production in some parts of the world which could then depress prices, resulting in repetitive cycles of boom and bust. We need to develop our ability to manage volatile markets, if we are to provide the appropriate incentives to insulate our producers and consumers from the effect of price volatility and at the same time ensure that we remain globally competitive.

 Thirdly, we need to recognise the impact of technology in various spheres that has a bearing on the growth of our dairy sector. Advancements in science and technology in breeding and nutrition are helping large farms in developed countries to remain in the market, even if they do not have the advantages of a large labour workforce such as India. We need to help our small producers as well as the institutions that support them, to adopt appropriate technologies that will ensure that they continue to benefit from pursuing dairying as a livelihood and also remain competitive.

We need to not only continue investing in our dairy sector through schemes like the NDP but also prepare to meet the challenges that confront us, for the long term interest of our rural households who depend on dairying for their livelihoods.