But India is a dairy giant walking barefoot. That is evident from this report on India’s dairy farming and dairy industries. In this enormous country with more than one billion inhabitants, milk is produced from north to south, but primarily in the country’s west. Much of the production is transported to the major population centres in the country’s interior and east.
Rising production
Pankaj Karna, Corporate Finance director of Rabo India Finance, paints a picture of the Indian dairy sector in short, sharp lines.
‘Production is expected to increase this dairy year to 96 billion kg. At a national level, 57% of the production consists of buffalo milk and 43% of cow’s milk. Each year buffalo milk production rises by 4% and just cow’s milk by just 1.2%. One of the reasons for this is that the Indian buffalo herd is expanding by 1.2% per annum, while the dairy cow herd is decreasing by an average of 1% per year – due in part to the droughts in 2002 and 2004. And, moreover, Indian buffaloes produce more milk than the cows.’
Karna describes India’s unique system of milk production and milk collection; there’s nothing like it anywhere else in the world. No fewer than 70 million households are involved in the production of milk. These are mainly small and even marginal cattle farmers, but also labourers without land, who have at most two dairy cows or buffaloes, tethered near their homes.
Of these 70 million households, 11 million can be characterised as cattle farmers. These are dairy cattle farmers with an average of two cows or buffaloes producing between 10 and 12 litres of milk per day. They are organised into no fewer than 110,000 village dairy co-operatives or Dairy Co-operative Societies (DCSs). These co-operatives, set up across India following the Anand Model (read more about the Anand model here>>), collect the milk from their dairy farmers and cool it at 4-6 degrees Celsius. Some of this unpasteurised milk they sell to the village residents. The rest is collected by the travelling Milk Collectors, who take the milk to the co-operative Milk Unions for processing. This industry is organised on a state by state basis. This approach connects the predominately small dairy farmers via their co-operative system directly with the many hundreds of big cities in India. India also has various rivately owned dairy companies. They procure their milk from both milk collection centres in the villages and, in the north-west in particular, from milk traders. These traders are responsible for the quality of the milk they supply. The state of Maharashtra is a case apart because milk production there is subsidised by the government and the government is responsible for the milk collection. The state pays the dairy farmers a higher price than is paid by the state’s processing industry.
65% unpasteurised
Of India’s total milk production, no less than 65% is consumed unpasteurised. Of this percentage, 44% is consumed in the rural area in which it is produced, meeting the needs of cattle farmers and their families and sold, through the village co-operatives, to others with no cows or buffalo. The remaining 21% of the unpasteurised milk is sold to urban consumers. Of the 35% of the milk production that is pasteurised, 22% is processed by the unorganised dairy sector. Most of this milk is used to make sweets. This is done in ‘halwai’, workshops that are usually located beside a shop. Here, sweetened condensed milk, whith various additives is produced in accordance with the region’s traditions, religion and flavours. In India’s predominately tropical and subtropical temperatures sweets like chocolate are highly perishable. Thanks to the rich culture of festivities, the consumption of condensed milk sweets, which are usually eaten fresh and are also perishable, has surged. This means that only 13% of the Indian milk procurement is processed in the co-operative and privately owned dairy industry. ‘The majority of this, 8% of the total milk procurement, is processed into packaged or loose pasteurised drinking milk for consumers in the major cities,’ says Karna. ‘The other 5% is used to make products with added value, such as milk powder, ghee, ice cream, cheese and fresh milk products.’
Consumption outstripping production
Finally, he admits that the consumption of milk and dairy products in India is outstripping domestic production. Consumer demand for dairy products like drinking milk, condensed milk, baby food, ghee, butter and ice cream, is estimated to be worth EUR 13.54 billion. This demand grew by an average of 7.6% per year between 1996 and 2002. Despite this growth, the average availability of milk per capita of the population in India is no more than 229 gram per day. And that is clearly below the world average for per capita consumption, says Pankay Karna, which stands at 285 gram per day. Moreover, the quality of Indian milk is not particularly high. ‘We can establish the content of the milk’s fat and other standard constituents. But we have no infrastructure of laboratories to study any other aspects of the milk,’ says Karna.
Article from India Dossier, ZuivelZicht - 14 december 2005
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