It is easy to focus on the differences between New Zealand and India, particularly in dairying.

New Zealand is a small nation with only 4.5 million people (and 4.8 million cows), around 12,000 dairy farms and produces less than three per cent of the world’s milk.

In comparison, India has 1.2 billion people, 70 million dairy farms, largest livestock population in the world — 50 per cent of the buffaloes and 20 per cent of the cattle. This makes India the world’s largest milk producer — contributing over 17 per cent to global milk production.

But despite these differences there are strong similarities between both countries’ dairy industries.


Strong Cooperative Heritage

India and New Zealand have a long dairying heritage built on strong cooperative principles. Dairy farmers in both countries realised a long time ago that they could be more efficient by working together and sharing resources.

Dr Kurien, Father of India’s White Revolution, helped to modernise the cooperative model. He transformed India from a milk-deficient country to the world’s largest milk producer through Operation Flood — world’s largest dairy development programme. New Zealand takes pride that in the 1950s Dr Kurien spent time in Palmerston North, studying dairying.

In New Zealand, the dairy industry is the culmination of 80 years of cooperative consolidation. In the 1930s there were over 400 dairy cooperatives, today just three.

The farmer owned cooperative model is Fonterra’s core strength. It has allowed us to develop into what we are today — a cooperative owned by 10,500 New Zealand farmer-shareholders. While we are only 14 years old, our roots go back to the beginning of the New Zealand dairy industry, when in 1814 Samuel Marsden, a British Missionary, imported one bull and two heifers.

Since then it’s been quite a journey and New Zealand has built a 130-year history of farming in cooperative structures.


Strong Dairy Appetite

Like India, we are focused on developing dairy products and ingredients that meet the health and wellness needs of people at all stages of life.

Around 70 per cent of Fonterra’s milk comes from our farmer-shareholders in New Zealand, while the rest is produced in a number of different countries around the world. This helps us meet our customers’ diverse needs around the clock and around the globe, engage with local markets and continue to feed the world’s ever-growing appetite for dairy nutrition.

A unique part of our business is our fully integrated, cow to customer supply chain.

This means we source the highest quality milk on farm and control every step of the process as it goes from grass to glass, ensuring we apply best practice processes throughout our supply chain.

Our 17,000 global staff work across the dairy spectrum; from advising local farmers on sustainable farming and milk production to ensuring we meet our strict global quality standards and deliver the best dairy nutrition to people in over 100 markets around the world.


Strong Research and Development

Many events have shaped the New Zealand dairy industry. Through a focus on innovation and improvement, substantial gains have been made.

For example, refrigeration in 1882 opened new markets to New Zealand’s agriculture industry and, as a result, substantial trade to the United Kingdom developed.

New Zealand farmer Ron Sharp invented the Herringbone dairy shed in 1952, and another farmer Merv Hicks developed the Rotary Turnstile milking platform in 1969. Both of these are still considered best-practices in today’s dairy industry, and are still used by New Zealand farmers and others around the world.

The cooling of milk on-farm was introduced in 1955 and the world’s first manufacturing facility for whole milk powder and whey protein concentrate opened in Waitakaruru in 1971.

In addition, the New Zealand Government’s economic reforms in the 1970s and 1980s drove rapid change to the New Zealand dairy industry because these forced a major leap forward for efficiency and productivity improvement. Without Government subsidies, and without a captive market, the New Zealand dairy industry became more innovative. It did better research. It developed better technology. It became more efficient and productive.

As New Zealand’s dairying history has been shaped by these defining moments, so too will India’s.


Strong Government and Industry Support

While the New Zealand Government does not provide subsidies, it has helped the New Zealand dairy industry through long-range infrastructure development projects such as building roads, rail networks, port facilities, energy generation and transmission and testing facilities.

The New Zealand Government has played an active role in ensuring the highest standards in quality control, food safety and environmental protection.

Alongside the dairy industry, the New Zealand Government has invested in creating a strong research and development base through various groups including the National Dairy Research Institute, established in 1927 in Palmerston North. This research campus is now the Fonterra Research and Development Centre — a world leading dairy research centre with over 300 scientists.

It also has strong government support and public-private partnerships.

The New Zealand dairy industry has been powered by a strong network of research organisations focused on the agriculture sector. Some of these are funded privately by the cooperatives themselves. Others are funded by Government, including seven Crown Research Institutes. Some are operated through two high-quality agriculture universities. AgResarch is a specialist provider of science that is funded by the New Zealand government. DairyNZ also partners with AgResearch as required.

Farmers also invest directly in their own future. DairyNZ is an “industry good” organisation that is largely funded, voluntarily, by farmers. The average New Zealand farmer pays NZ $4,000 per year to fund DairyNZ—big farmers pay more and small farmers pay less. In return, DairyNZ provides activities that aim to secure and enhance the profitability and sustainability of New Zealand dairy farming through undertaking initiatives that benefit the industry. This includes activity that helps improve dairy farmer profit and investment that would otherwise be difficult for individual farmers to pursue.

A new development is the establishment of FRST (Foundation for Research, Science and Technology) and the formation of private research partnerships between government and private industry.

An important facet of the New Zealand dairy industry has been the coordination between the private and public sector. India has also recognised this as critical not only in moving towards the goals of the second White Revolution under the National Dairy Plan but also key to the success of the Indian Government’s 12th Five-year Plan (2012-2017).

It is important that there is a coordinated approach across the industry and that everyone is pulling the in same direction.


Strong Linkages

Unlike India, which sells most of the milk produced domestically, the New Zealand dairy industry relies on international markets, many of which are on the other side of the world.

As a result, innovation, research and development have long underpinned the New Zealand dairy industry, allowing it to adapt to changing domestic and international market conditions over its 200-year history and ensure its success.

In India, dairy farmers also require support to meet the increasing demand for milk and milk products. Providing this link is a key objective of the National Dairy Plan and the ongoing development of domestic private and cooperative dairy companies.

India is looking to improve its domestic dairy industry by increasing the volume of milk supplied through the formal (organised) sector, greater investment in on-farm infrastructure, cold chain logistics, farmer support through access to feed and fodder, veterinary and animal health.

Like New Zealand, India is seeking to continuously improve the ability of its farmers to produce high quality milk sustainably and profitably.


Strong Ties

India has a long history with the New Zealand dairy industry — the first New Zealand dairy products arrived in India in 1885. Today, we have developed strong relationships with distribution partners and customers across the country. We supply pharmaceutical grade lactose to India’s pharmaceutical industry, offer technical solutions to dairy ingredients customers and partners, and provide a range of high quality and innovative dairy ingredients to support the development of the food industry in India.

New Zealand has been engaged with the Indian dairy industry for almost 60 years. In 1958, the New Zealand Government provided funding to help house Indian students training in farm management, animal welfare, dairy production and development. Known as the ‘New Zealand Hostel’, this establishment played a critical role in helping to train India’s emerging dairy talent. Since then, New Zealand has continued to support the development of the Indian dairy industry through research, grants and the donation of equipment.


Strong Dairy Demand

Global demand is expected to increase by 100 billion litres by 2020. With 20 million more mouths to feed every year, an increasingly affluent population and demand for high quality dairy nutrition, India will be a key driver of this growth. Annual dairy consumption in India is forecast to reach around 180-200 million tonnes by the end of the decade.

At five billion litres the New Zealand forecast growth in milk supply is a mere drop in the bucket, meaning New Zealand milk can, at best, only play a small role in helping meet the demand of growing economies such as China, Indonesia, Vietnam, Brazil and India. However, Fonterra — as an organisation — can play a significant role in helping increase milk production in other countries.

We need to continue the New Zealand dairy tradition of evolution and apply knowledge and expertise in helping to develop younger dairy markets.

Like our predecessors, we are ready to adapt what we have learned over generations to cater to emerging global trends and changing market conditions. For example, our farmers lead the world in pastoral farming and we are sharing this expertise to help develop local dairy capabilities across the globe.

Like our dairy industry, the farmer owned cooperative structure has evolved over time. We have created a model that works in the New Zealand environment and adapted it to establish a presence in markets around the world.

The Indian dairy market is facing some unique opportunities of its own. The country has over 1.2 billion consumers who are becoming wealthier and, unlike other large countries like China, dairy is a traditional part of the Indian diet.

Like New Zealand, the Indian industry will be shaped by changing market conditions and a strong cooperative heritage, providing for an exciting future.