Middlemen and retailers seemed to have cornered a large part of the price paid by consumers, thus profiteering at the cost of farmers, during the time of high inflation in the case of fruits and vegetables. In working papers prepared by RBI’s Department of Economy & Policy Research, farmers were found to have earned a far lesser share of the consumer rupee in the case of fruits, including bananas, grapes, mangoes, and essential vegetables such as tomatoes, onions, and potatoes. The share was much higher in dairy, poultry farming, and pulses. As per the working paper ‘Livestock and Poultry Inflation in India,’ the farmers’ share in the consumer rupee is estimated at 70% for milk and 75% for eggs; for poultry meat, the share of farmers and aggregators is 56% together.
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 raw milk supply. 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. A rise in raw milk supply will also lead to higher working capital requirements for dairy players. That, along with continued capital expenditure (capex) by organized dairies over the next two fiscals will result in debt levels inching up. The value-added products segment – a 40 percent contributor to the industry revenues – is expected to be the primary driver, fueled by rising income levels and consumer transition towards branded products. Additionally, various measures such as genetic improvement in indigenous breeds and an increase in the fertility rate of higher yield breeds will help enhance milk supply.
In 2008, the Gujarat Co-operative Milk Marketing Federation (GCMMF), which markets home-grown dairy brand Amul, earned the prestigious tag of India’s first billion-dollar milk cooperative with its turnover reaching Rs 5,255 crore. A decade-and-a-half later, Gujarat, the cradle of the White Revolution, is home to five billion-dollar milk cooperatives. GCMMF, India’s largest food product marketing organization, saw its turnover reach a staggering Rs 59,545 crore ($7 billion) in the financial year 2023-24. Three other member unions of GCMMF — Palanpur-based Banas Dairy, Anand-based Amul Dairy, and Himmatnagar-based Sabar Dairy have also joined the billion-dollar club. Banas Dairy recorded a Rs 19,003 crore turnover, making it a US $2.3 billion entity.
India’s oldest milk cooperative, Amul Dairy, the owner of the Amul brand, recorded a Rs 12,911 crore turnover, turning it into a $1.5 billion cooperative. Sabar Dairy, on the other hand, recorded a Rs 8,939 crore turnover, finding its place in the coveted club with a $1.1 billion turnover. Gandhinagar-based AmulFed Dairy, a unit of GCMMF, also recorded a Rs 12,969 crore turnover, turning into a $1.5 billion milk co-operative. Mehsana-based Dudhsagar Dairy is close to achieving this feat.
The Indian dairy industry welcomes the Food Safety and Standards Authority of India’s (FSSAI) recent decision to withdraw its directive regarding the labeling of A1 and A2 milk products. The advisory, issued on August 21, 2024, raised concerns over the use of A1 and A2 claims on products like milk, curd, butter, and ghee, which the regulator argued could mislead consumers. However, after industry feedback and further review, FSSAI has now withdrawn the notification for additional consultation and engagement with stakeholders.
Maharashtra government has decided to give a subsidy of Rs.50 per cow per day for the rearing of Indigenous cows by giving them the status of ‘Rajyamata’. Indigenous cows have many uses. Their milk, curd, and ghee are very nutritious and good for health. Hence, there is increasing demand for their milk. On average, the cost of a liter of milk is around Rs. 100, while the price of one kg of ghee is up to Rs. 1,000. Prime Minister launched the ‘Unified Genomic Chip’ – aimed at helping farmers identify high-quality cattle early and enhance dairy farming efficiency in India. The chip comes in two versions: the ‘Gau Chip’ for cattle and the ‘Mahish Chip’ for buffalo. Developed by the Department of Animal Husbandry and Dairying, the purpose of this chip is to help farmers make informed decisions on animal selection by identifying young, high-quality bulls at an early age. The chip is tailored for Indian cattle breeds and will help improve the quality of cattle and enhance the dairy farming sector. Prime Minister also launched a new indigenous technology for producing sex-sorted semen, which is designed to enhance the availability of sex-sorted semen for farmers, making it easier for them to select desired animal breeds. The project is a push for the ‘Make in India’ initiative and will help the farmers reduce the cost by about Rs 200 per dose.