{"id":60611,"date":"2025-08-25T11:21:35","date_gmt":"2025-08-25T05:51:35","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=60611"},"modified":"2025-08-25T11:21:35","modified_gmt":"2025-08-25T05:51:35","slug":"indias-dairy-model-competitiveness-efficiency-and-emerging-challenges","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/indias-dairy-model-competitiveness-efficiency-and-emerging-challenges\/","title":{"rendered":"India\u2019s Dairy Model: Competitiveness, Efficiency, and Emerging Challenges"},"content":{"rendered":"<h2><b>India Dairy Sector Challenges Latest News<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Unlike crops such as maize, where US farmers enjoy far higher yields and lower prices than their Indian counterparts, <\/span><b>India\u2019s dairy sector remains globally competitive<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">While American corn is far cheaper due to productivity advantages, this price edge does not extend to milk.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">India\u2019s unique low-cost dairying model\u2014built on <\/span><b>smallholder farmers feeding cattle crop residues and byproducts<\/b><span style=\"font-weight: 400;\">\u2014keeps milk production costs low.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This makes Indian milk prices competitive internationally, even without large-scale industrial farms, highlighting dairying as one of the few agricultural sectors where India matches global efficiency.<\/span><\/li>\n<\/ul>\n<h2><b>Dairy Industry in India<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">India has been the <\/span><b>largest milk producer for over two decades<\/b><span style=\"font-weight: 400;\">, contributing about <\/span><b>25% of global milk output<\/b><span style=\"font-weight: 400;\"> and <\/span><b>5% to the national economy<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">In 2024, production was estimated at <\/span><b>239 million metric tonnes (MMT)<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The dairy sector employs over <\/span><b>80 million farmers<\/b><span style=\"font-weight: 400;\">, serving as a key livelihood source for rural households, especially small and marginal farmers.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">India\u2019s dairy market was valued at <\/span><b>USD 135.3 billion in 2024<\/b><span style=\"font-weight: 400;\">, projected to grow to <\/span><b>USD 274.09 billion by 2032<\/b><span style=\"font-weight: 400;\"> at a <\/span><b>CAGR of 9.33%<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<\/ul>\n<h3><b>Production and Export<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">India is not only the largest milk producer but also among the leading global exporters of dairy products.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Major producing states include Uttar Pradesh, Maharashtra, Himachal Pradesh, Madhya Pradesh, Rajasthan, Punjab, and Tamil Nadu.<\/span><\/li>\n<\/ul>\n<h3><b>Government Initiatives<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">To boost productivity and support farmers, several initiatives have been launched, including:<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Rashtriya Gokul Mission<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">National Dairy Development Board (NDDB) programmes<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">State Cooperative Dairy Federations<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">National Programme for Dairy Development (NPDD)<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Dairy Entrepreneurship Development Scheme (DEDS)<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><b>Price Competitiveness in Milk<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Federal Milk Marketing Order (FMMO) in the US fixes monthly minimum prices for four classes of milk \u2013 fluid, soft dairy products, cheese, and butter\/powder.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">In July 2025, these averaged about <\/span><b>Rs 36.7 per litre<\/b><span style=\"font-weight: 400;\"> for milk with 3.5% fat content.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Indian dairies, such as in Maharashtra, paid farmers <\/span><b>Rs 34 per litre<\/b><span style=\"font-weight: 400;\"> for comparable milk quality.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This places India\u2019s farmgate milk price at par with or slightly below the US, and significantly lower than the <\/span><b>European Union\u2019s Rs 55.6 per litre<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<\/ul>\n<h3><b>Yield Comparisons<\/b><\/h3>\n<ul>\n<li><span style=\"font-weight: 400;\">Milk yields in India are much lower \u2013 only <\/span><b>1.64 tonnes per cow annually<\/b><span style=\"font-weight: 400;\">, compared with 4.6 tonnes in New Zealand, 7.3 tonnes in the EU, and 11 tonnes in the US.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Despite low yields, India\u2019s production costs remain competitive because dairying is <\/span><b>labour-intensive<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Tasks like feeding, milking, cleaning sheds, and managing fodder are performed manually at relatively low wage costs.\u00a0<\/span><\/li>\n<li><span style=\"font-weight: 400;\">In contrast, Western dairy farms rely heavily on costly automation and machinery.<\/span><\/li>\n<\/ul>\n<h2><b style=\"font-size: inherit;\">Processing and Marketing Efficiency in India\u2019s Dairy Sector<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">In the US, whole milk retails at about Rs 100.4 per litre, while Indian cooperative brand Amul sells toned milk at Rs 55\u201357 per litre.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">After adjusting for fat content, Indian farmers receive <\/span><b>55\u201357% of the consumer price<\/b><span style=\"font-weight: 400;\">, compared to just <\/span><b>35% in the US<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This highlights India\u2019s strong <\/span><b>farm-to-consumer efficiency<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Gujarat Co-operative Milk Marketing Federation (GCMMF) goes further, sharing over three-fourths of the consumer rupee with farmers\u2014paying them Rs 44\u201345 per litre for cow milk and Rs 65\u201366 for buffalo milk, much higher than private dairies.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Such efficiency stems from <\/span><b>streamlined procurement, processing, transport, and marketing systems<\/b><span style=\"font-weight: 400;\"> within cooperatives, which aim to maximise farmers\u2019 share in the final retail value of milk.<\/span><\/li>\n<\/ul>\n<h2><b>Challenges to India\u2019s Dairy Competitiveness<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">India\u2019s dairy sector is currently competitive mainly due to <\/span><b>low-cost and unpaid family labour<\/b><span style=\"font-weight: 400;\">, with farmers focusing on recovering only out-of-pocket expenses like feed or veterinary care.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">However, this model is becoming unsustainable as farm labour grows scarce and costlier, and even family members face rising <\/span><b>opportunity costs<\/b><span style=\"font-weight: 400;\"> with better education and alternative jobs.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Unlike New Zealand, <\/span><b>India lacks large pastures for low-cost grazing<\/b><span style=\"font-weight: 400;\">, and unlike the US, it <\/span><b>cannot rely on heavy mechanisation<\/b><span style=\"font-weight: 400;\"> due to high capital and energy costs.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">While the US produces milk from just 24,470 large farms, India depends on over 50 million small farmers and 110 million animals.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">To stay globally competitive, the future of Indian dairying will require <\/span><b>selective mechanisation, genetic improvement of breeds, better breeding technologies, and cultivation of high-yield protein-rich fodder grasses<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Sustaining competitiveness must shift from reliance on cheap labour to <\/span><b>efficiency and productivity gains<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<\/ul>\n<p><b>Source:<\/b> <a href=\"https:\/\/indianexpress.com\/article\/explained\/explained-economics\/indias-unique-dairying-model-and-the-challenges-it-faces-10209329\/\" target=\"_blank\" rel=\"nofollow noopener\"><span style=\"font-weight: 400;\">IE<\/span><\/a><span style=\"font-weight: 400;\"> | <\/span><a href=\"https:\/\/www.fortunebusinessinsights.com\/india-dairy-market-107416\" target=\"_blank\" rel=\"nofollow noopener\"><span style=\"font-weight: 400;\">FB<\/span><\/a><span style=\"font-weight: 400;\"> | <\/span><a href=\"https:\/\/www.newindianexpress.com\/thesundaystandard\/2025\/Mar\/30\/stakes-high-for-domestic-dairy-sector-amid-us-tariff\" target=\"_blank\" rel=\"nofollow noopener\"><span style=\"font-weight: 400;\">IE<\/span><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>India\u2019s dairy sector is globally competitive, driven by low costs and cooperatives, but faces long-term challenges of productivity, mechanisation, and sustainability.<\/p>\n","protected":false},"author":18,"featured_media":60638,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[2324,60,22,59],"class_list":{"0":"post-60611","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"tag-india-dairy-sector-challenges","9":"tag-mains-articles","10":"tag-upsc-current-affairs","11":"tag-upsc-mains-current-affairs","12":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/60611","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=60611"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/60611\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/60638"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=60611"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=60611"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=60611"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}