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Dairy farming-important avenue to boost farm income

Published: 29th Nov, 2018

26 November is celebrated as ‘National Milk day’ to commemorate the birth anniversary of Dr Verghese Kurien, 'Father of the White Revolution' in India



  • 26 November is celebrated as ‘National Milk day’ to commemorate the birth anniversary of Dr Verghese Kurien, 'Father of the White Revolution' in India
  • Also on June 1, World Milk Day is celebrated globally. It was established by the Food and Agriculture Organization (FAO) of the United Nations in order to mark the importance of milk as a global food. 2018 theme was "Drink Move Be Strong".


  • India is the largest producer of milk followed by United States of America and China.
  • Within India, largest milk producing state is Uttar Pradesh followed by Rajasthan, Andhra Pradesh and Gujarat.
  • In 2014, India exceeded the entire European Union in terms of milk production.
  • At present, the livestock sector contributes to 4 per cent of India’s GDP and the dairy sector comprises a majority share of it. Milk contributes close to the 1/3rdof gross income of rural households.
  • Production of milk in 2016-17 was 165.4 million tonnes and in 2017-18, it was estimated to be 176.35 million tonne, a 6.5% annual jump.
  • The per capita milk availability in India is 355 grams per day. Punjab, Rajasthan, Haryana and Gujarat are among the top states which have the most milk available.


  • Operation Flood, known as the ‘billion liter idea,’ as conceived by Dr Verghese Kurien is the world's largest agricultural dairy development programme.
  • It aimed at making the dairy farming India's largest self-sustaining industry and the largest rural employment provider.
  • Launched in 1970, Operation Flood gave dairy farmers autonomy over the milk production in the area. Over 700 towns and cities in India were linked by the National Milk Grid, bridging the gap between milk producers and consumer.
  • Prior to the White revolution, the situation was different in India and the country was dependent on imports to meet its dairy-related needs.
  • Milk production and distribution was concentrated in hands of few wealthy farmers and rural businessmen which resulted in cartelization and deprived the grassroot farmers and villagers to reap the economic benefits of milk production.
  • The Anand pattern experiment at Amul, a cooperative dairy, was the pioneer behind the success of the program.
  • This model was replicated nationwide with rigorous efforts by National Dairy Development Board (NDDB) to give a boost to the co-operative sector in milk production.(


Opportunities in dairy sector

  • The Indian dairy industry is expected to register 15 per cent compounded annual growth till 2020 and emerge as Rs 9.4-lakh crore industry.
  • Dairy products are a major source of cheap and nutritious food to millions of people in India and the only acceptable source of animal protein for a large vegetarian segment of the Indian population.
  • Increase in income and rising standard of living has led to growing demand for dairy products like butter, cheese, paneer, yoghurt, ice cream, etc.
  • The growing demand for dairy products also raises the prospects for associated industries like milk processing, packaging, logistics, restaurants and eateries and exports.
  • Dairy farming is a viable and profitable alternative to crop production in rain fed and drought areas which are a frequent feature in India owing to climate change.
  • Organised dairies are likely to see spending of Rs 140-billion over the next three financial years according to credit rating agency CRISIL.


  • Informal sector: More than 70% of marketable surplus goes through informal channel where quality is a big concern. As a result, middlemen usurp large share of rofit meant for rural farmer and milk producers.
  • Quality issues: Quality of milk or value-added products is a barrier to entry to the export market, especially the USA and the EU.
  • Pricing issues: Prices decided by cooperatives are not based on fat measurement, which affects Farmer’s profitability. In addition, lower prices declared by cooperatives, results in low prices of milk paid by all the players in the industry.
  • Lack of adequate breeding and preventive care services: Along with low access to credit and risk-taking ability, this factor makes farmers unable to increase their herd size.
  • Adulteration: Adulteration and dilution is also a problem with adulterants like vegetable oil, detergents, glucose and urea entering the milk, thus degrading the milk quality and jeopardizing health of consumers.
  • Inadequate marketing: Due to lack of marketing facilities and extension services, there is poor perception of the farmers towards commercial dairy enterprise as an alternative to other occupation. 
  • Low milk availability: Associated Chambers of Commerce and Industry of India (ASSOCHAM), found the daily per-capita milk availability in the country is only 252g, which is below the global average of 279g.
  • Poor recording: As per 19th Livestock census, there are 88 million In-Milk animals whose records are unavailable on an annual basis. Records of those in breeding stage, their productivity, treatment and vaccination are also not properly maintained by State Animal Husbandry Departments.

Government steps to boosting the dairy sector in India:

  • Pashudhan Sanjivani Nakul Swasth Patra Scheme has been launched for sustaining the health of livestock.
  • National Programme for Bovine Breeding is being implemented for enhancing productivity of milch animals through extension of Artificial Insemination (AI) coverage.
  • Rashtriya Gokul Mission along with the allocation of Rs. 500 crores has been initiated in December 2014 for the conservation as well promotion of domestic species under National Bovine Genetic and Dairy Development programme. 
  • A National Bovine Genetic Centre has been established for the improvement in domestic species.
  • Quality mark is a quality and food safety initiative of National Dairy Development Board (NDDB) to enhance consumer confidence in Cooperative and allied dairy sector.
  • Two National Kamdhenu Breeding Centres are being established one in the State of Andhra Pradesh for southern region and other in Madhya Pradesh for northern region of the country with the aim of development and conservation of indigenous breeds in a scientific manner and thereby enhancing milk production and productivity.
  • E-pashuhaat portal aims to connect breeders and farmers regarding availability of bovine germplasm. The portal has been launched under the scheme "National Mission on Bovine Productivity."
  • National Dairy Plan-I a World Bank assisted project being implemented in 18 major dairy States with aim of enhancing milk production and productivity in order to meet demand of milk in the country
  • Central Herd Registration Scheme (CHRS): under the CHRS four units have been established for identification and propagation of indigenous bovine breeds (Gir, Kankrej, Hariana & Ongole cattle breeds and Murrah, Mehsani, Jaffarabadi and Surti).
  • Dairy Entrepreneurship Development Scheme is implemented by NABARD (National Bank for Agriculture and Rural Development) to generating self-employment & providing infrastructure for dairy sector, setting up of modern dairy farms & infrastructure for production of clean milk among other objectives.
  • Israel is partnering with Indiato establish a dairy excellence centre in Haryana with Israel's cost-effective and innovative dairy technologies accustomed to local conditions for achieving an intensive dairy production system of global standards.

Way forward:

  • Productivity needs to be brought on par with other nations. India’s milk production is a mere 7-8 kg per day compared to a dry nation like Israel which produces 32 kg milk per day.
  • Extension services and forward and backward linkages should be upgraded to meet demand-supply gap and increase shelf life of milk and milk products.
  • Skimmed milk powder (SMP) should be included in commodity market and Merchandise Exports from India Scheme (MEIS) scheme to give profitable return to small and medium milk processing industries.
  • States should follow Maharashtra government’s steps in providing minimum support price to milk so as to relieve farmers from market shocks and low prices.
  • Medium and small industries should be encouraged by the government to engage in milk production and processing industry.
  • Skill India mission should be aligned with dairy sector to provide trained and skilled individuals in dairy farming and milk processing.
  • FMD Mukt Bharat is a good initiative by the government to prevent and cure Foot and Mouth disease prevalent in cattle. Further research and development in dairy sector will help in boosting milk production.
  • The co-operatives sector engaged in dairy activities should be regulated so as to prevent irregularities and improve its functioning.


In India, dairying is recognized as an instrument for social and economic development. The nation's milk supply comes from millions of small producers, dispersed throughout the rural areas. It becomes essential to secure the farmer and producer incomes to fulfill the aim of ‘doubling farmers income by 2022’. Moreover, the market demand of milk and milk products is ever increasing which should be met with increased productivity using modern methods. The successful Indian dairy development programme Operation Flood has shown how food aid can be used as an investment in building the type of institutional infrastructure that can bring about national dairy development. Thus, a time has come to launch Operation flood 2.0 with a special emphasis on ensuring milk quality and making justified paybacks to the producers.

Learning Aid

Practice question:

India has emerged as the largest producer of milk in the world but still it is grappling with some concerns. Identify the challenges facing dairy sector and steps taken by government in this direction. Also suggest measures to improve the dairy industry prospects in India.

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