Milk quality in India

India is changing rapidly in aspects of life. The effect of westernization is one of the main factors responsible for societal changes, mostly related to living standards, changing diets, and accordingly a change of product lines in the retailers. There are about 1.22 billion people in India, with around 120 million cows & buffalos. There is a long tradition of milk production and consumption (based on small units), cooperative structures, and a tradition of selling milk over the counter in the street, milk that consumed fresh. 70% of the population lives in the countryside with only 30% based in cities; however with the trend of urbanization this is changing. The dairy market is very much fragmented and the government involvement is limited. In the near future as a result of all the changes the dairy chain itself will change. The pace of the change is a multi factorial issue mostly depending on the government, government rules and their implantation. Food safety and food security are very much on top of the agenda in India and it will remain in the near future as food and feeding this huge population is crucial for sustainable growth of this ancient culture.

This article is part of the proceedings of the 53rd NMC Annual Meeting, in Fort Worth, TX, Jan 2014

Introduction

The Indus Valley civilization, one of the world's oldest, flourished during the 3rd and 2nd millennia B.C. and extended into northwestern India. Aryan tribes from the northwest infiltrated the Indian subcontinent about 1500 B.C.; their merger with the earlier Dravidian inhabitants created the classical Indian culture. There are 28 states and 15 official languages; Hindi is the most widely spoken language and primary tongue of 41% of the people, however you can find 325 languages spoken and 1,652 dialects. English therefore enjoys the status of subsidiary official language but is the most important language for national, political, and commercial communication. India’s population has a large proportion of young people (41% are below 25 years of age). The next chart gives a good overview of the demographics of India:

Figure 1: Indian Population Pyramid:

 

Source: CIA fact book

The dairy industry in India has been on a steady path of progression since Indian independence in 1947. It has grown from producing 17 million tons of milk in 1951 to producing 121 million tons in 2011. Today, India is the largest milk producing country in the world. This solid progress is primarily attributable to structural changes in the Indian dairy industry brought about by the advent of dairy cooperatives. The Indian dairy industry reported a market size of USD 48.5 billion for 2011. With a Compound Annual Growth Rate (CAGR) of 16 percent, it is anticipated to reach USD 118 billion in 2017 (NDDB yearly report 2013). On the back of a rise in disposable income, coupled with strong demand for dairy products, the Indian dairy industry is set to experience high growth rates in the next five years.

Environment - Current Issues

Many environmental issues currently challenge India: deforestation; soil erosion; overgrazing; desertification; air pollution from industrial effluents and vehicle emissions; water pollution from raw sewage and runoff of agricultural pesticides; the tap water is not potable throughout the country; and a huge and growing population is overstraining natural resources.

Milk Production

In India the average farm size is between 1-3 cows per farm, with 1,000 Kg/cow/year on average. Most milk is sold before entering a processing plant and the supply chain is long and complicated (IFCN 2012), in the next chart we can see the principals of the Indian milk supply chain:

Figure 2: Indian Milk Supply Chain

Source: DeLaval India

The Indian dairy sector is characterized by high fragmentation. It is dominated by the unorganized sector comprising of 70 million rural households. The per capita availability of milk in India stands at 289.4 grams per day. Backed by strong domestic demand, the per capita availability of milk is anticipated to reach 336 grams per day in 2017. Dairy is sold in small unit rather than in bulk volumes.

Table 1: Trends in annual milk production and per capita availability, 1950-2013

Sources: Department of Animal Husbandry, Dairying & Fisheries, Ministry of Agriculture, Government of India, New Delhi. State Departments of Animal Husbandry, Veterinary Services & Dairy Development. Publishers of Dairy India, New Delhi.

Figure number 3: Global milk price (farm gate) November 2013 - in Euro

Source: IFCN

Figure number 4: India milk price – in Euro

 

Source: IFCN

Milk Consumption

There is a long history and tradition of high dairy consumptions in India, as urbanization is an ongoing process there will be a shift from traditional to more commercial western dairy products as a result of changes in lifestyle. The consumption pattern of dairy products in India is quite unique as compared to some of the western countries. Consumption is primarily centred around traditional products; however, westernized products are gradually gaining momentum in the urban areas. Interestingly, buffalo milk accounts for the largest share of the total milk produced (55%) in the country. Since the pricing of milk is based on the fat content, buffalo milk offers higher profit margins as compared to cow milk as it contains higher fat.

Despite being the one of the largest milk producing countries in the world, India accounts for a negligible share in the worldwide dairy trade. The ever increasing rise in domestic demand for dairy products and a large demand-supply gap could lead to India being a net importer of dairy products in the near future.

Table 2: Consumption pattern

Source: National Dairy Development Board Annual

India dairy is emerging as a strong consumption story, with the market growing at pace. Probably this trend will gain momentum over the next 4-5 years driven by increasing consumption of value-added products and the formalization of the value chain. The main factors driving growth are increased consumer interest in higher protein diets, greater affordability due to growing disposable incomes, and a rising awareness and availability of dairy through channels such as organized retail and food service segments.

Conclusion

India is changing rapidly in aspects of life. The effect of westernization is one of the main factors responsible for societal changes, mostly related to living standards, changing diets, and accordingly a change of product lines in the retailers.

There are about 1.22 billion people in India, with around120 million cows & buffalos. There is a long tradition of milk production and consumption (based on small units), cooperative structures, and a tradition of selling milk over the counter in the street, milk that consumed fresh. 70% of the population lives in the countryside with only 30% based in cities; however with the trend of urbanization this is changing. The dairy market is very much fragmented and the government involvement is limited. In the near future as a result of all the changes the dairy chain itself will change. The pace of the change is a multi factorial issue mostly depending on the government, government rules and their implantation. Food safety and food security are very much on top of the agenda in India and it will remain in the near future as food and feeding this huge population is crucial for sustainable growth of this ancient culture.

References

Central Intelligence Agency, CIA World Fact Book 2013 retrieved from https://www.cia.gov/library/publications/the-world-factbook/

D. Tikku, Chairman, NDDB Dairy Services, report at the IDF meeting - 2012

International Farm Comparison Network (2012). IFCN Report.

National Dairy Development Board Annual Report 2011 – 2012 retrieved from www.nddb.org

Author

Lior Yaron

Lior Yaron
3 articles

Director Global Customer Project Support, DeLaval Intl, Sweden

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DeLaval

DeLaval

Every day millions of dairy animals are milked, fed and maintained by DeLaval solutions in more than 100 countries worldwide – and DeLaval meets with over 10 000 milk producers on their farms. 

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NMC 53rd Annual Meeting 2014 Proceedings

This article is part of the proceedings of the NMC 53rd Annual Meeting meeting in Fort Worth, TX, Jan 2014