6.5 crore rural families involved in milk production are still outside the ambit of the cooperative sector and face exploitation as they are not getting a fair price. Only 1.5 crore out of 8 crore rural families involved in dairy farming are part of the cooperative sector. The National Dairy Development Board will ensure that they all get the full value of their produce. The cooperative ministry has set up three national-level cooperatives, one for conserving and promoting pure and sweet seeds, the second for selling organic produce using the ‘Bharat’ brand to the world markets, and the third for exporting cooperative products.
The Food Safety and Standards Authority of India (FSSAI) has issued a recent notification mandating the registration of primary milk producers, aimed at improving milk safety, traceability, and quality. This move targets the unorganized sector of the dairy industry, tiny and marginal dairy farmers, to raise awareness about clean milk production and address prevalent issues related to contaminants, hormones, and antibiotics in milk. By making primary milk producers accountable and ensuring they adhere to standardized practices, FSSAI’s notification will improve the overall quality and safety of milk in India. This initiative is aligned with global best practices for food safety, helping India’s dairy sector meet international standards and enhance consumer trust.
Investors are rushing to milk the projected ₹49.95-lakh-crore opportunity in the Indian dairy sector, on the back of a compounded annual growth rate of 13 percent during 2023-32. After attracting $154 million in funding in 2022, the dairy sector briefly saw a dip in interest before it revived again this year, pulling in $109 million to date. In India, the dairy sector accounts for about 5 percent of gross domestic product or GDP. It enjoys a global market too. Interestingly, of the estimated 901 dairy ventures in India, over 31 percent were founded in the past five years. Dairy startups differentiate themselves from many legacy units by controlling the entire supply chain, focusing on sustainable farming practices, and offering premium products. Also, unlike traditional dairy players who trade products from farmers, the startups actively manage production at every stage, from farm to market. Investors are all too aware of these roadblocks and the need for them to step up with financial muscle. The dairy industry in India involves 100 million stakeholders, mostly smallholder farmers. The surge in demand for value-added dairy products necessitates significant capital and innovation for supply to keep up. Addressing concerns around safety, adulteration, and wastage will require the private sector to do its part in modernizing the supply chain and incentivizing all stakeholders involved.
India’s dairy industry is expected to see healthy revenue growth of 13-14 percent this financial year 2024-25, asserted Crisil Ratings, as strong consumer demand continues along with an improved supply of raw milk. While the rating agency believes the demand will be supported by rising consumption of value-added products, the ample milk supply will be driven by good monsoon prospects. The value-added products segment – a 40 percent contributor to the industry revenues – is expected to be the primary driver, fuelled by rising income levels and consumer transition towards branded products. The milk powder inventory typically accounts for 75 percent of the working capital debt of dairies.
India would not be able to strike a free trade agreement deal with the European Union if the bloc kept insisting on seeking access to India’s dairy industry. A trade deal could be concluded swiftly if sensitivities were respected on both sides. Agriculture is a problematic area as there is a huge variation in the number of people working in the farm sector in India and Germany, it was 2 percent of the population in Germany compared to about 60 percent in India.
Amid concerns over aflatoxin levels in dried distillers grains with solubles (DDGS) and an increasing demand by the feed industry for its import, the ICAR’s maize research institute has said it is possible to reduce the levels to the permissible limit of 20 PPM (parts per million), using various technologies and post-harvest practices. It is possible to reduce aflatoxin levels in DDGS if it is managed using host plant resistance and agronomic management at source. Additionally, proper management during transportation and storage can significantly reduce toxin levels. Industries can also implement fractionation techniques to lower aflatoxin content while simultaneously increasing protein content. The Genetic Engineering Appraisal Committee (GEAC), the regulatory body for granting import permits for DDGS, set up a panel in 2019 that submitted draft guidelines for importing animal feed, including DDGS, following multiple requests for import permits.