Milk Procurement By Private Dairies Goes Up In Eight States

Private players have a strong foothold in eight of the top 12 milk-producing States in the country that accounts for 88 per cent of the country’s milk production as of 2019-20, according to a study commissioned by Hatsun Agro Product Ltd and done by Crisil. In 2020-21, private dairies in Maharashtra collected 123-127 lakh kg of per day (LKPD) milk, while cooperative dairies collected 36-38 LKPD milk. In Uttar Pradesh, private dairies collected 121-125 LKPD milk, while cooperative
dairies collected 5-7 LKPD milk. Two-thirds of the total milk is handled by private dairies in Tamil Nadu. Private dairies across the States collected 557-562 LKPD milk, while cooperative dairies collected 535-540 LKPD milk.

Gujarat, Bihar and Karnataka are among the States where cooperative dairies collect more milk compared to private dairies. In Gujarat, cooperative sector dairies collected 225-227 LKPD milk, while private dairies collected just 12-14 LKPD milk. In Karnataka, Rajasthan, Haryana and Telangana, a subsidy of ₹2-6 per litre is being provided to co-operative dairies for procuring milk. This increases
the milk procurement price offered by co-operatives, encouraging farmers to divert more milk towards co-operatives. Private dairies need to match the procurement price of the co-operatives for a regular supply of milk, leading to an increase in raw material costs for private dairies. The report is extensive and gives a good picture of the contribution made by the private sector in the dairy industry starting from 1992 when the dairy industry was opened up for the private sector. The private sector used its own risk capital without any subsidies or loss write-off by State
governments and contributed to the dairy sector development.

Finance is crucial for the success of dairy farming. Stellapps, a dairy-tech start-up, has joined hands with Airtel Payments Bank to enable cashless payment transfers to small dairy farmers. With milk collection centres operating as a banking point, farmers and other residents in the neighbourhood will no longer have to travel long distances. Through these banking points, they will be able to open a bank account, withdraw and deposit cash, earn interest on savings, access Aadhaar-enabled
payments, get government pension schemes and make bill payments. Agri-fintech firm Dvara E-Dairy Solutions Pvt Ltd has entered into a partnership with Jana Small Finance Bank to service small dairy farmers. Through the partnership, they aim to empower small and medium dairy farmers with financial and cattle management solutions using digital technologies.

Milk Mantra from Odisha is looking to scale up its presence in eastern India and strengthen its omnichannel model of distribution even as it prepares to more than triple its turnover to ₹1,000 crores in the next five years from its current turnover of  ₹300 crores. Milk Mantra works with a network of close to 75,000 farmers for sourcing its milk. It is looking to grow the farmer base by 50 per cent in the next couple of years.

The objective of the National Digital Livestock Mission (NDLM) is to create a farmer-centric, technology-enabled ecosystem, where the farmers are able to realise better income through livestock activities with the right information. NDLM is a digital platform being developed jointly by DAHD and NDDB on the foundation of the existing Information Network for Animal Productivity and
Health (INAPH). The farmers will be able to effortlessly access the markets, irrespective of their location or holdings through this digital platform. This system will also include robust animal breeding systems, nutrition, disease surveillance, disease control programmes and a traceability mechanism for animals and animal products.

Cargill company has also developed a technology platform to connect with farmers helping them with crop advisory, besides providing input and market linkages. Digital Saathi, the mobile-based, hyper localised service platform is being piloted in the key maize-growing regions of Karnataka from February this year. It provides farmers with solutions like discussion forums and information on market price, weather forecast, pre and post-harvest practices among others. The app will also
feature crop input e-commerce and market linkage options. Small and marginal farmers can gain access to multiple stakeholders such as agri-input suppliers, buyers, traders, processors, farmer producer companies and peer farmers through the app. Cargill plans to source maize from farmers through the app going forward and would also take the platform to other states in India.