Friday, January 19, 2018
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
   

DAIRY PRODUCTS

Despite 15% CAGR in India’s dairy sector, threats to sector persistent
Friday, 12 January, 2018, 08 : 00 AM [IST]
Ashwani Maindola, Anurag More and Harcha Bhaskar
With the Indian dairy industry growing at a compound annual growth rate (CAGR) of about 15 per cent and expected to touch nearly Rs 10 trillion by 2020, fundamental questions remain unanswered. And these can somewhat derail the progress or at least slow down the growth.
 
Experts have opined that despite being the world’s largest producer, with 155.5 million tonne of milk produced in 2015-16, the dairy sector is by and large in the primitive stage of development and modernisation.
 
Abhishek Saareen, executive director, Trident F&B Consultants, said, “Though India may boast of one of the world’s largest cattle populations, the following are the challenges that the dairy industry faces today in India: low yield (average output) of Indian cows; poorly-developed cold chain infrastructure; unavailability of veterinary health services; inadequate availability of fodder in all seasons; lack of use of scientific practices in milching, poor quality of fodder, poor transportation facilities and fierce competition among various dairy brands.”
 
Besides, farmers are not getting enough remuneration for the milk. There have been reports about farmers agitating in some parts of Madhya Pradesh against the drop in milk prices per litre from Rs 38 to Rs 24.
 
Saareen stated that this could be a result of pressure from the international brands, who are introducing their products aggressively and importing milk and milk products into the country.
 
Terming it a national crisis, he added, “There are numerous international brands that have come up in India, becoming aggressive in terms of their penetration in the market.”

“Import of milk and milk products in India is a threat to the Indian dairy farmers,” Saareen said.

“There has been a significant fall in procurement volumes demanded from the farmers by the procurement agents/private corporations and also low remunerations received by the farmers,” he added.

“Farmers, in turn, have been advised to expand and modernise their practises. However, all this is not possible without proper investment. So the farmers take heavy loans, get trapped into debt and finally lose their livelihoods,” Saareen said.

“Neither the Central nor the state governments have taken any serious action to avert this crisis. Small dairy farmers everywhere in India, particularly those who own cows, continue to struggle. This is a national crisis,” he added.
 
According to reports, in Maharashtra, Rs 18 per litre for cow milk was being paid to farmers as against Rs 27 earlier.

In Uttar Pradesh and Haryana, farmers were receiving Rs 26 a litre against the earlier price of Rs 40 for buffalo milk.

Badrinath Raghavendran, director, F1rst, said, “Low remuneration/return on investment (RoI) to dairy farmers is due to supply chain deficiencies. Improvement guarantees better returns.”

“To prevent the issue becoming a pan-India problem, structural revisions are needed. Higher profit margins are crucial to farmers,” he added.

“Currently, the lack of support in animal maintenance, the unavailability of quality fodder, the lack of adequate transport to processing centres and the lack of access to bulk retail markets, such as institutions or restaurants, are pulling down farmers’ incomes,” Raghavendran said.

“For a comprehensive understanding of all challenges faced by the dairy industry, a project scope needs to be drafted,” he added.
  
Partly, the problem, experts have opined, lies in the crashing of prices of skimmed milk powder in the international market, which reduced to $1,600 from $5,000 per tonne.
 
Another factor is milk procurement by the private agencies.
 
R S Khanna, chairman, Kwality Limited, said, “The organised dairy sector is procuring only 20 per cent of the total milk produced and this proportion has not increased for almost a decade.”

“The dairy industry also faces seasonal surpluses of skimmed milk powder (SMP), that lead to the drop in the prices paid to dairy farmers,” he added, suggesting, “There is a need to increase the investment on procurement, processing and production of value-added dairy products.”

“There is also a need that the government creates a corpus fund to mop up the surplus SMP and use it for donating in times of natural disasters. The government should put in place a programme for the regular use of SMP for the mid-day milk scheme in all schools,” Khanna said.
 
However, on the part of the government, the dairy sector is being given importance since it wants to double farmers’ incomes and dairy is a vital component of this proposition.
 
The National Dairy Plan (NDP) being implemented by the National Dairy Development Board (NDDB) is aimed at helping to increase the productivity of milch animals, and thereby, increase milk production to meet the rapidly-growing demand for milk and to help provide rural milk producers with greater access to the organised milk processing sector.
 
NDP-I, ending this fiscal year, cost nearly Rs 2,300 crore. It focused on 18 major milk producing states, namely Andhra Pradesh, Bihar, Gujarat, Haryana, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Odisha, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh, West Bengal, Telangana, Uttarakhand, Jharkhand and Chhattisgarh, which together account for over 90 per cent of the country’s milk production.
 
Raghavendran said that NDP was supportive with regard to dairy infrastructure creation. This keeps the food sector viable - better infrastructure, by definition, increases resources, options and processes available to a farmer.
 
“Dairy, as a sector, is witnessing growth with regards to all products. The growth numbers are variable. Value growth is expected to overtake volume growth in the dairy industry, during the next five years,” he added.

“For the entire chain to be enabled (from farm to consumers), lower taxes, better infrastructure and digitisation incentives are mandatory across the value chain,” Raghavendran said.

Khanna said, “The NDP has developed a software that tracks the lifecycle events in the cows and buffaloes registered with the NDDB.”

“The farmer gets information on his mobile. For example, he can be informed that his cow/buffalo is likely to come in heat on a specific date. He can get her impregnated on time,” he added.

“The farmer can also get help in feeding and creating balanced rations based on the raw material availability,” Khanna said.

“This process helps in increasing the productivity of the cow/buffalo, and thus, a farmer can more. On a long-term basis this is good tool in improving the genetic potential,” he added.
 
And, therefore, the future will look bright if the dairy industry implements the plans and modernises itself.

Khanna opined that the sector will see more mergers, acquisitions and investments. More investments are likely to come up in modern methods of genetic improvement of cattle and buffaloes.
 
He said, “The government must support the private dairy sector through priority funding and inclusive financing.”

“Farmers, particularly the landless and marginal, should be provided a loan without collateral or guarantees for expansion and improvement of management of their herds of cows and buffaloes and insurance of cows and buffaloes should be made cheaper like crop insurance. An insurance policy should become a guarantee for credit,” Khanna added.

Saareen said, “Today, India is the oyster of the global dairy industry. It offers opportunities galore to entrepreneurs worldwide, who wish to capitalise on one of the world’s largest and fastest growing markets for milk and milk products.”

“Be it investors, researchers, entrepreneurs, or the merely curious, the Indian dairy sector has something for everyone,” he added.

“India has the potential to become one of the leading players in milk and milk product exports,” Saareen said.

“There is a vast market for the export of traditional milk products, such as ghee, paneer, shrikhand, rasgullas and other ethnic sweets, for the large number of Indians scattered all over the world,” he added.
 
Saareen suggested that for the dairy sector to remain on the path of growth, significant investment has to be made in milk procurement, equipment, chilling and refrigeration facilities.

“Also, training has to be imparted to improve the quality to bring it up to international standards,” he added.
 
And as India is located amidst major milk-deficit countries in Asia and Africa like the South-east Asian nations and the Gulf countries, there lie immense opportunities for the dairy sector to remain the potent sub-sector within the processing sector of the country.
 
Print Article Back FNB News Twitter
Post Your commentsPost Your Comment
* Name :    
* Email :    
  Website :  
Comments :  
   
 

 
 
Food and Beverage News ePaper
 
 
Advertise Here
 
 
Interview
“Food habits, govt policy driving growth of cold storage,” states Guru
Past News...
 
FORTHCOMING EVENTS
 

FNB NEWS SPECIALS
 
Overview
Packaged wheat flour market growth 19% CAGR; may reach Rs 7500 cr: Ikon
Past News...
 
Advertise Here
 
Advertise Here
 
Recipe for Success
"Adaptability to Indian conditions made us look at capers," says Arakal
Past News...



Home | About Us | Contact Us | Feedback | Disclaimer
Copyright © Food And Beverage News. All rights reserved.
Designed & Maintained by Saffron Media Pvt Ltd