Circular Economy in India’s Dairy Sector

Circular Economy Latest News

• The Union Home and Cooperation Minister, during an event at Sanadar village, Vav-Tharad district (Gujarat), highlighted the potential of a circular economy model in the dairy sector to raise farmers’ income by 20% in the next five years. 
• The event marked the inauguration of Banas Dairy’s bio-CNG and fertiliser plant and the groundbreaking of its milk-powder plant. 
• Banas Dairy—Asia’s largest dairy cooperative—serves as a national model under the vision of White Revolution 2.0.

Circular Economy (CE)

• Meaning: It is a system shifting from “take-make-dispose” to keeping resources in use longer via reuse, repair, refurbishing, and recycling, aiming to eliminate waste and regenerate nature. 
• Key features:
  • Closed-loop system: Designs out waste and pollution, keeps products and materials in use, and regenerates natural systems.
  • Contrast to linear model: Moves away from consuming resources, making products, and discarding them.
  • Key actions: Involves sharing, leasing, repairing, refurbishing, remanufacturing, and recycling. 
• Initiatives in India: India promotes CE through policies like the-
  • Vehicle Scrappage Policy, 
  • Mission LiFE for behavioural change, 
  • Promoting bio-CNG/fertilizer plants (like Banas Dairy’s model), and 
  • Initiatives under Swachh Bharat, focusing on resource efficiency, waste-to-wealth, and sustainable consumption. 

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The Circular Economy Model in Dairy

• Towards a sustainable dairy economy:
  • India’s dairy sector has historically focused on milk procurement and processing.
  • The emphasis is now shifting to resource efficiency, waste-to-wealth, and diversification of dairy products.
• The circular economy model: It represents a major structural reform linked to income enhancement, rural livelihoods, climate action, and cooperative federalism.
• Waste-to-wealth approach:
  • Example, from cattle dung to biogas (bio-CNG) and bio-fertiliser.
  • It provides additional income streams to farmers, and reduces reliance on chemical fertilisers and fossil fuels, aiding energy security and soil health.
• Dairy product diversification:
  • Global demand exists for several value-added dairy products not widely produced in India.
  • Diversification into global dairy products, milk powder, nutraceuticals, and specialty cheeses can boost exports.
  • It supports MSME growth, rural supply chains, and Make in India.
• Leather from naturally deceased cattle:
  • Use of cattle hides from naturally deceased animals within a regulated, cooperative-based system.
  • Envisaged as part of the circular model to prevent waste and generate farmer income.

Role of Banas Dairy as a National Model

• Asia’s largest dairy cooperative: With an annual turnover of ₹24,000 crore, it demonstrates integrated circular systems – bio-CNG plant, organic fertiliser production, milk-processing and powder plant expansion.
• Capacity building and knowledge sharing: MPs were invited to Banaskantha to study the circular model for national replication. The chairpersons/MDs of major cooperative dairies will visit Banas Dairy for model adoption.

Government Interventions and Institutional Support

• Strengthening the cooperative structure: Creation of three agriculture cooperatives and three dairy cooperatives by the Union Government. Policy push under Ministry of Cooperation.
• Financial and technological support: The Indian government has ensured a system where dairies receive –
  • Affordable finance
  • Advanced technology
  • Regulatory and institutional backing
• Alignment with national initiatives: Supporting White Revolution 2.0, Doubling Farmers’ Income, Atmanirbhar Bharat, Circular Economy Mission, etc.

Women’s Role in the Dairy Sector

• Women dairy farmers in arid Gujarat have shown remarkable entrepreneurship.
• Their income is directly credited to bank accounts, reflecting –
  • Financial inclusion
  • Women-led development
  • Demonstration effect for global NGOs advocating women empowerment

Challenges and Way Forward

• Technological readiness: Small dairies may lack access to biogas plants and modern processing facilities. Promoting scaling circular economy plants across all major cooperative dairies.
• Initial capital costs for waste-to-energy infrastructure: Dedicated funds for renewable energy and bio-fertiliser plants under NABARD and cooperative banks.
• Training and skilling requirements for rural dairy communities: Skill training for farmers in waste management, organic fertiliser use, and value addition.
• Market linkages and export standards for global dairy products: Promotion of niche/global dairy products for exports under APEDA.
• Logistics and cold chain gaps in remote areas: Strengthening women-led dairy cooperatives as part of Lakhpati Didi and SHG models. Improving cold chain infrastructure through PPPs and FPOs.
• Regulation of leather from natural death cattle: Ensure ethical and legal compliance.

Conclusion

• The circular economy model in the dairy sector marks a transformational shift under White Revolution 2.0, aligning sustainability with rural prosperity. 
• As India aims to boost farmers’ income and position itself as a global dairy leader, Banas Dairy’s success illustrates the potential for scalable, inclusive, and environmentally sustainable growth in the dairy economy.

Source: TH