Title : The rise of Indian traditional dairy products an economic perspective
Abstract:
This talk begins by familiarizing the audience with the Indian dairy market. India is world’s largest milk producer. Indian milk and milk products have been estimated to be worth INR 7,000 billion in 2016, growing at CAGR 13% during 2010-2016 and are expected to reach a value more than INR 16,000 billion by 2022. Of the milk produced each year in India, 50% is converted to a variety of traditional Indian products including but not limited to Ghee, Khoa and Chhanna (cottage cheese). Annually 950,000 tons of Ghee is produced, amounting to a value Rs.85,000 million and 1,200,000 tons of Chhanna is produced, amounting to Rs.600 million. The value of Khoa and Chhanna based sweets is about Rs.130,000 million annually. These traditional Indian products have high demand in the domestic market due to not only their nutritional value but also therapeutic values. In recent years, international demand for these products has seen sudden rise because of both increased awareness and high number of Indian nationals settling abroad. While the demand for these products has increased, the supply chain has failed up to keep up with this demand. The Indian dairy market, which is comprised of an organized sector (Co-operative milk societies and Private corporations) and un-organized sector (individual farmers). The un-organized sector dominates the market - only 20% of the total milk production of the country is handled by the organized sector. The un-organized sector is formed by marginalized individual farmers who come from over 550,000 villages – they own 33% of the land under cultivation and 60% of the female cattle and buffalos but 75% of the rural households own an average of just two to four animals. This talk argues that meeting the increasing demand for these products requires making significant improvements in the un-organized sector in the Indian Dairy Industry. Marginalized farmers in the un-organized sector need to be provided with an infrastructure to produce, store, transport and distribute high quality milk and other dairy products. Bringing parity between the quality of traditional Indian dairy products produced by organized and un-organized sectors presents a significant challenge. This challenge presents a crucial growth opportunity for various stakeholders in the dairy industry – both national and international. This talk then proposes solutions to this challenge such as large-scale organization of self-help groups for educating farmers on best practices, developing man-made symbiotic relationships (permassociation) between plants, animals and humans, considering feed efficiency, environment synchronization and bio-techniques to enhance crop and animal husbandry. Providing advanced equipment and technology to farmers along with access to acumen about modern business practices such as quality management, marketing, large scale supply chain management etc. will significantly improve the quality of their dairy products. While agro-based industry in India has developed significantly, animal husbandry based industry is still nascent, owing to the larger role played by the un-organized sector. Efforts need to be made to transform the mindset of traditional farmers into becoming “Animal Husbandry Entrepreneurs” and “Dairy Entrepreneurs” so that they can find innovative solutions to local problems and significantly reduce the inefficiencies in their farm and dairy based operations. Such solutions, if implemented at scale, can usher the next wave of White Revolution in India.
