Opinion

India’s dairy sector has helped lift the rural economy and improve livelihoods

Yashobanta Parida/Deepika Yadav | Updated on June 01, 2020 Published on June 01, 2020

The country must now usher in a new era of development for the dairy sector, by building procurement infrastructure in milk deficit States and adopting appropriate technology in these regions

World Milk Day was established by the Food and Agriculture Organisation (FAO) on June 1, 2001, to recognise the importance of milk as a global food. This year we celebrate the 20th anniversary of World Milk Day. This day provides an opportunity to know the importance and benefit of milk with regards to health and nutrition and the importance of the dairy sector in the global economy.

This sector also plays an important role in achieving food security, reducing global poverty, generating employment opportunities for women, and providing a regular source of income for rural households. Moreover, in developing economies, landless and poor farmers are actively involved in dairying as an essential means of livelihood. According to the FAO 2018 report, more than 500 million impoverished people depend mainly on livestock, and many of them are small and marginal dairy farmers.

Additionally, dairy development helps in boosting rural economic growth and empowering rural women. Moreover, 160 million children around the world receive benefits from milk through school feeding programmes (Bulletin of the International Dairy Federation, 2020). The dairy sector plays a vital role in achieving the Sustainable Development Goals (SDGs) — especially SDG 1-No poverty, SDG 3-Good health, SDG 5-Gender equality, SDG 8-Good jobs and economic growth, and SDG 10-Reduced inequalities — and it helps in improving lives and transforming the global economy.

From deficit to surplus

Apart from being an important sector globally, dairying is equally important in developing economies like India, for providing nutrition support, reducing rural poverty, inequity, ensuring food security for millions of rural households, and enhancing economic growth, particularly in rural areas.

In the 1950s and 1960s, India was a milk deficit country, depending mostly on imports. In 1965, the government of India established the National Dairy Development Board to direct India’s dairy sector development. In 1970, the government launched Operation Flood (OF), the world's largest dairy development programme, whose aim was enhancing milk production in the country.

By 1998, India overtook the US to become the largest milk producer in the world, and it contributed 22 per cent of the global milk production in 2018. Between 1991 and 2018, the per capita availability of milk increased from 178 (gm/day) to 394 (gm/day). During this period, milk production in India increased from 55.6 million tonnes to 187.7 million tonnes, and growing at 4 per cent compounded annually.

As per the NITI Aayog working group 2018 report, milk production in India will increase to around 330 million tonnes in 2032-33, and milk supply will exceed milk demand by 38 million tonnes in 2032-33. As per the National Action Plan on Dairy Development vision 2022 report, it is envisioned to increase milk procurement and processing through setting up of village-level dairy infrastructure. Under this plan, organised milk handling is to be increased to 41 per cent by 2022 and to 50 per cent by 2023-24. Milk procurement by cooperatives will increase from 10 per cent in 2020 to 20 per cent in 2023, and milk procurement by the private sector will be increased from 10 per cent to 30 per cent in the same period.

Jobs and income

The dairy sector is one of the crucial sectors in the Indian economy that not only provides employment to millions of rural households but also contributes to the economy. Among the livestock products, milk consists of the highest share, and it accounted for 67.2 per cent of the livestock sector in 2017.

Moreover, there is an interesting note here that milk and milk products contributed more than 20.6 per cent of the combined output of paddy, wheat and pulses in 2017. Annually, 8.4 million farmers depend on the dairy sector for their livelihoods, out of which 71 per cent are women (Agriculture Skill Council of India). Furthermore, in a year, crop production employs the rural workforce for 90 to 120 days, but dairy provides alternative employment opportunities throughout the 365 days of the year.

India is self-sufficient in milk production because 73 million dairy farmers are engaged in the dairy sector, especially women. Regarding benefits to the farmer, around 60 per cent of the consumer price from milk goes to the farmer, which is the highest among major milk-producing countries (International Farm Comparison Network, Dairy Report, 2018). The data show that 10 States in India produce 81 per cent of the milk, and the rest of the States and Union Territories produce the balance 19 per cent.

Similarly, only nine States have achieved per capita availability of milk at par with the national level. The government needs to devise a suitable dairy development policy for enhancing milk production in potential districts and States. Therefore, dairy promotion among small and landless farmers is necessary to increase the availability of milk, and it will also help reduce nutrition related problems in milk deficit regions of the country.

Dairy business

The recent Covid-19 pandemic has affected different sectors of the economy and has reduced employment opportunities, particularly for migrant workers. As per the 2011 Census, India has 45.36 crore internal migrants, which includes both within-State and inter-State migrants; the latter have been hit hardest, due to pandemic enforced restriction on inter-State movements. When these migrant labourers return to their homes, this reverse migration will create new challenges for them, as the lack of employment prospects at the village level will make their life more difficult.

This is a great opportunity for the State governments to promote dairy business in those districts where milk production and milk availability are less than the national average. They can facilitate the promotion of the cooperative model in these regions, to channelise and formalise milk procurement, which will help millions of people to be gainfully employed.

They can channelise funds from different Central government schemes like ‘Dairy Entrepreneurship Development Scheme (DEDS), National Programme for Dairy Development (NPDD), and DIDF (Dairy Processing & Infrastructure Development Fund), for the same; a Budget provision of ₹3,289 crore was made exclusively for Animal Husbandry and Dairying, for the year 2020-21.

The Finance Minister recently announced an outlay ₹15,000 crore for Animal Husbandry Infrastructure Development Fund, which will be used for supporting private investments in dairy processing and value addition, and cattle feed infrastructure. This will not only give a boost to local manufacturing and consumption of locally produced goods but will also help the national consumer become “vocal for local”; thus taking India forward on the path of self-reliance.

Role of tech

This lockdown has steadily established the role of technology in the agriculture and livestock sector — be it Ninjacart (tech-driven supply chain platform) which is linking thousands of producers directly with consumers or Amul which has increased both its milk procurement (15 per cent) and processing during the lockdown period. Technology has played a crucial role in converting these uncertain times into opportunities for growth. Thus apart from building milk procurement infrastructure in milk deficit States and districts, efforts should also be made for the penetration of appropriate technology in these regions.

This Milk Day, let’s hope to usher in a new era of development for the dairy sector, which will reduce poverty, unemployment, and inequality in the most deprived regions of the country. Moreover, strengthening cooperative milk business across these regions will help generate alternative employment opportunities, especially for women and economically disadvantaged communities. A flourishing dairy sector will help rural India become self-reliant and will also contribute to doubling farmers' income.

The writers are with Verghese Kurien Centre of Excellence, IRMA, Anand. Views are personal

Published on June 01, 2020
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