Future of Dairy Industry in India

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By:Daksh Mahajan (MBA batch(2012-14),Ambedkar University ,Dwarka campus,Delhi) Dairying has played an important role in strengthening India’s rural economy. It has been recognised as an instrumental to bring about socio – economic transformation. Small & marginal farmers and landless labourers derive a substantial part of their livelihood from the sale of milk .We own about seventy percent of cattle in the rural areas. The vast potential of dairying is in employment generation and poverty alleviation is well recognised. The white revolution which was brought by Dr V. Kurein in the early sixties has completely changed the scenario of dairy industry.It has increased the availability of milk as well as provided a reliable source of income and employment to millions of our rural families thus improving the quality of their life. More than 1.1 lakhs DAIRY COOPERATIVE SOCIETIES with 10 million farmer members in existence throughout the country. India the world’s largest milk producer accounts for 20 percent of global milk production and most of it consumed domestically. In India about sixty percent milk is consumed in liquid form and remaining forty percent is used in the form of butter, ghee(clarified butter), cheese ,curd, ice cream ,dairy whiteners and traditional sweets. Milk output is growing @4% annually but Indian dairy industry is pre dominantly controlled by the unorganised sector. Milk is not a status symbol, it is the symbol of nutrition which is not only food but an essential ingredient of our life and is quite indispensable. From being written off as a basket case, India has emerged today as the largest milk producer of the world with an annual production of more than 121 million tonnes as per the 2012 edition of ‘Dairy India’. It has one of the biggest markets both nationally and globally. Increasing population and urbanization is expected to expand the potential market for dairy sector. The world population is expected to increase by 1.5 percent per annum. Most estimates suggest that in 2025, total world’s population will be between 8.1 to 8.5 billion. The projected growth of 80 to 90 million per year will occur primarily in the developing nations. India will account for 30 percent growth in the population base of Asia. More than half of India’s population comprise the age group below 25 years whereas developed countries would be populated largely by the aged. The expected rise in the purchasing power of growing urban population would boost the dairy market. Rising awareness about hygiene standards and adulteration of loose milk has encouraged urban consumers to switch over to pasteurized packaged milk whose demand will be almost doubled in the next five years. Branded ethnic dairy products like sweets, paneer, curd, etc are witnessing rising demand and increased acceptance, especially among the urban consumer. The success of branded curd, flavoured milk and traditional sweets like shrikhand, gulabjamun, rasgolla and peda from companies like Amul, Mother Dairy, Haldiram, Bikanerwala,Bikano are gaining strength in national and international markets. The UHT (Ultra High Temperature) pack is an answer to consumer needs today. It ensures good raw milk quality, hygienic processing, convenience and long shelf life at ambient room temperature. Certain part of India is fresh milk scare like north eastern states and western coastline these markets are potentially huge for UHT. A new wave is sweeping the country as it used to be in the develop world. Consumer is more aware about the nutrition value of foods consumed. The customer is willing to pay extra for foods that can give some health benefits.

Demand| Increasing by 4% per annum| Perishable| Has to be processed with in hours after milking| Margins| Quite reasonable specially in Value added...
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