Dairying in IndiaA medium-term Outlook

TN Datta(General Manager)

National Dairy Development Board (NDDB)

Indian dairying is based on the low input - low output modelMore than 80 percent of Indias farmers are marginal or small. They own almost 60 percent of the female bovines with only 30 percent of farm land.About 75 percent of the animal owners own 1-3 animals. Only 8 percent of households have herd size in excess of 4 animals.

*

Involves lakhs of small farmers, each with 1-3 animalsMilk is the largest contributor to Agriculture GDPValue of milk output is Rs. 350 thousand Cr. in 2012-13 (Paddy - Rs. 182 thousand Cr. & wheat - Rs.131 thousand Cr.)Contribution close to 70% of the output from livestock While the share of agriculture is waning in GDP, the same for Livestock is almost constantOffers relatively stable stream of round the year income vis-a-vis crop production, which is weather dependent

Dairying in India is more than a business

Value of output of milk group in India ( Crore)Source: National Accounts Statistics, CSO, GoI

Chart1

710.16553517931108.6826572299319.7971966765

924.92969956651856.4886270761455.6854623569

2222.0872050564341.13426882291909.5877335092

58684.309519471346007.117371426526744.7046345047

96419.675406759165555.810751684643752.928612386

269362.806234306151614.411740708102977.95846089

310020.549194506170002.10830067120123.9030255

milk group

paddy

wheat

Sheet1

Particulars1950-511960-611970-711995-962000-012010-112011-12

milk group71092522225868496420269363310021

paddy1109185643414600765556151614170002

wheat32045619102674543753102978120124

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Generates 5-6% of total rural employmentMajor source of rural employment, especially women employmentMajor source of subsidiary incomeSupports 20-30% of rural household incomeEnsures inclusive growth for rural householdsDairying as a livelihood in India

Female bovine ownership in rural areasSource: Land and Livestock Survey, 59th Round, NSSO, 2002-03

Chart1

65

62

62

60

40

35

27

53

47

30

23

39

16

20

41

Series 1

(%) Rural Households owning female bovine

Sheet1

Series 1

Punjab65

Haryana62

Rajasthan62

Uttar Pradesh60

Bihar40

West Bengal35

Odisha27

Madhya Pradesh53

Gujarat47

Maharashtra30

Andhra Pradesh23

Karnataka39

Kerala16

Tamil Nadu20

All India41

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Size of herd owned in rural milieu*Source: Land and Livestock Survey, 59th Round, NSSO, 2002-03

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0.3695548803

0.3175271274

0.1452245951

0.0801508406

0.03

0.06

Sales

% rural households

Sheet1

Sales

1 animal37%

2 animals32%

3 animals15%

4 animals8%

5 animals3%

5+ animals6%

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Milk production & per capita availability*Source: Department of AHD&F, GoI

Chart1

48.40788-89165

51.40889-90171

53.93890-91176

55.6291-92178

57.96292-93182

60.60793-94186

63.80494-95192

66.19895-96195

69.14796-97200

72.12897-98205

75.42498-99210

78.28699-2K214

80.60700-01217

84.40601-02222

86.158996556802-03224

88.082445294503-04225

92.48404-05233

97.06605-06241

102.5806-07251

107.93407-08260

112.18308-09266

116.42509-10273

121.84810-11281

127.90411-12290

132.43112-13295

13-14137.960873589413-14

14-15143.721656119314-15

15-16149.722989571415-16

16-17155.974918543816-17

17-18162.487907063617-18

18-19169.272856100118-19

19-20176.341121810919-20

20-21183.704534548220-21

21-22191.375418660321-22

Actual milk production

Projected milk production

Per capita availability

Production (million tonnes)

PCA (Grams per day)

Sheet1

YearActual milk productionProjected milk productionPer capita availability

88-8948.4165

89-9051.4171

90-9153.9176

91-9255.6178

92-9358.0182

93-9460.6186

94-9563.8192

95-9666.2195

96-9769.1200

97-9872.1205

98-9975.4210

99-2K78.3214

00-0180.6217

01-0284.4222

02-0386.2224

03-0488.1225

04-0592.5233

05-0697.1241

06-07102.6251

07-08107.9260

08-09112.2266

09-10116.4273

10-11121.8281

11-12127.9290

12-13132.4295

13-14138.0

14-15143.7

15-16149.7

16-17156.0

17-18162.5

18-19169.3

19-20176.3

20-21183.7

21-22191.4

*

*

Pattern in milk consumptionBased on figures for 2012-13 of 132.4 million tons +Surplus handled by organised private sector is an estimate

% Household reported milk consumptionSource: Consumer Expenditure Surveys, NSSO, GoI

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61.978.9

66.380

67.882.9

71.385

73.187

82.589

Rural

Urban

Sheet1

RuralUrban

87-8861.978.9

93-9466.380

99-2K67.882.9

04-0571.385

09-1073.187

10-1182.589

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Importance of milk in food basket*Source: Consumer Expenditure Surveys, NSSO, GoI

Chart1

0.150.6320.180.547

0.150.5940.180.481

0.150.550.190.425

0.160.5360.190.407

0.190.4860.20.385

Milk (Rural)

Food (Rural)

Milk (Urban)

Food (Urban)

Sheet1

1993-941999-2K2004-052009-102010-11

Milk (Rural)15%15%15%16%19%

Food (Rural)63%59%55%54%49%

Milk (Urban)18%18%19%19%20%

Food (Urban)55%48%43%41%39%

Factors influencing milk demand*Demand Drivers

Milk demandPublications by different researchers and analysts indicate high projected demand for milk in the years to follow.

Emerging trends indicate that milk demand is likely to be in the range of 200 to 210 million tonnes in 2021-22. *

Change in WPI (%)*

Year2013-20142012-20132011-20122010-20112009-20102008-2009Food12.89.97.315.615.39.1Foodgrain9.114.63.64.914.511.0Milk6.07.210.320.118.87.6Veg. & fruits23.18.36.516.49.68.2Egg, Fish &Meat12.814.112.725.520.87.7All Commodities6.07.48.99.63.88.1

Trade in dairy commodity*

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2.9153.473

3.2285.028

1.8546.258

6.6971.753

11.1582.254

* FEU: Fat Equivalent Unit

Export

Import

in 000 tonnes

Export & import (FEU*)

Sheet1

YearExportImport

2009-102.9153.473

2010-113.2285.028

2011-121.8546.258

2012-136.6971.753

2013-1411.1582.254

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0

-0.0001

-0.0003

0.0004

0.0006

Net trade as % of milk production

Sheet1

YearNet trade as % of milk production

2009-100%

2010-11-0.01%

2011-12-0.03%

2012-130.04%

2013-140.06%

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Milk supply and demandProjected milk supply and demand scenario leaves a gap of about 10-20 million tonnes by 2021-22To bridge this gap, one of the initiatives taken by GoI and NDDB is National Dairy Plan (NDP) I A project funded by the World Bank*

Why NDP I ?*The major source of growth in milk production is increase in animal numbers

Due to limited availability of resources like land, water, feed & fodder; growth in milk production may not sustain in longer run

Therefore, increasing the productivity levels of animals is need of the hour

National Dairy PlanNDP, with a 15 year horizon, envisaged the following objective:

Meet the projected national demand of milk through domestic sources (not imports) by increasing production at the pace required through productivity enhancement, and

Strengthen/expand infrastructure for milk procurement, processing and marketing.*

National Dairy Plan Phase ITo begin with, the World Bank agreed to support Phase I of NDP for a 6 year period (2012-13 to 2017-18) with the following Project Development Objective:

To help increase productivity of milch animals and thereby increase milk production to meet the rapidly growing demand for milk. To help provide rural milk producers with greater access to the organised milk-processing sector.

These objectives to be pursued through focussed scientific & systematic processes in provision of technical inputs supported by appropriate policy and regulatory measures.

Project ComponentsPRODUCTIVITY ENHANCEMENTa) Production of high genetic merit (HGM) bulls b) Strengthening existing semen stations / starting new stationsc) Setting up a pilot model for viable doorstep AI delivery services d) Improving nutrition of milch animals through Ration Balancing and Fodder Development programme

VILLAGE BASED MILK PROCUREMENT SYSTEMS a) Milk weighing, testing and collection b) Milk cooling c) Support for creating institutional structure d) Training

Thank You*

India has high population pressure on land and other resources to meet its food and development needs. The natural resource base of land, water and bio-diversity is under severe pressure Food demand challenges ahead are formidable considering the non-availability of favourable factors of past growth, fast declining factor productivity in major cropping systems and rapidly shrinking resource base

Classification of farmers

Marginal - less than __ haSmall - between __ and __ haMedium - between ___ and ___ haLarge above

Developing countriesDeveloped countriesFarm typeCottage industryIndustrial farmingHerd size1 to 4

The Industrial farming model is appropriate to countries where capital is plenty and labour scarce. The Cottage industry model is appropriate to countries where labour is plenty and capital is scarce.

30 to 400Feeding practicesCrop residuesGrain or pasture basedLabour use Human labourMachine labour

Developing countriesDeveloped countriesFarm typeCottage industryIndustrial farmingHerd size1 to 4

The Industrial farming model is appropriate to countries where capital is plenty and labour scarce. The Cottage industry model is appropriate to countries where labour is plenty and capital is scarce.

30 to 400Feeding practicesCrop residuesGrain or pasture basedLabour use Human labourMachine labour

Developing countriesDeveloped countriesFarm typeCottage industryIndustrial farmingHerd size1 to 4

The Industrial farming model is appropriate to countries where capital is plenty and labour scarce. The Cottage industry model is appropriate to countries where labour is plenty and capital is scarce.

30 to 400Feeding practicesCrop residuesGrain or pasture basedLabour use Human labourMachine labour