Essay, 5 pages (1200 words)

Future of dairy industry in india

FUTURE OF DAIRY INDUSTRY IN INDIA 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. SWOT ANALYSIS OF DAIRY INDUSTRY STRENGTH WEAKNESS Demand | Increasing by 4% per annum | Perishable | Has to be processed with in hours after milking | Margins | Quite reasonable specially in Value added products | Low productivity | Scientific feeding and properly managed animal husbandry practices required | Availability of raw Materials | Abundance | Procurement logistic | In adequate transport facility | Technical man power | At par with developed countries | Problematic distribution | Huge infrastructure required to maintain cold chain network | OPPORTUNITIES THREAT Export potential | Immense in SARC nation | Non organised sector | Huge share is still dominated by non organised sector where lot of adulteration still exist | Casein | Our rate are quite competitive in the world because of low labour cost / raw materials | Periodic ban on Export of milk product on milk product | Loosing credibility in the international market | Increase demand of value added products | Awareness among the urban consumer | Import of sub standard low priced product | Proper check is required on the dumping of cheaper quality products | Cultural products like sweet, dahi, paneer, ghee | Tremendous potential | | | The potential in SARC nation is immense as they are still being considered as milk deficient countries and would remain so for a considerable time. Dairy sector has good opportunity for the foreign investors in India. The basic reasons are — successful enterprise, free market system, availability of basic raw material i. e. milk, technology, infra-structure with the support of skilled manpower. Along with the opportunities to prosper, the dairy sector is also faced with responsibilities and challenges. To strengthen its recent gains in milk production, processing and marketing calls for use of innovative technology and new development initiatives. Government has some schemes which aim at turning dairying into a full-fledge agri-business for enhancing human nutrition and generating mass employment in rural areas. Government of India initiated a major programme “ National project for cattle and buffalo breeding “ from October 2000. A sum or Rs 300 crore has been invested under phase 1 and Rs 800 crore is likely to be invested in phase 2. This has been done because despite India being the highest milk producer in the world, the productivity per animal is very low which the result of poor genetic make is up of our cattle. A central government scheme has been initiated for strengthening infra-structure for quality and clean milk production. Dairy food processing continues to offer a good opportunity to NRI and Foreign investors in India. Growth prospects in dairy food sector are termed healthy according to the various studies on the subject. The industry shows attractive return on investment whereas potential is enormous for exporting it to East Asian countries. There are promising opportunity in the following fields —bio technology, dairy/food processing equipment’s , food packaging equipments, distribution channels , retailing , product development , ingredient manufacture technology-driven manufacturing units and training centres for continuing education. India per capita availability of milk is not commensurate with its ranking as world’s top milk producers. However the present per capita availability of 240 gm/day is much higher than the average for the developing countries in the Asia pacific region, My viewpoint is that we should concentrate on producing value added products like lassi, dahi, ice cream, shrikhand whose potential is vast as educated consumer is shifting towards milk and milk products because of its nutritional values compare to soft drinks. In the international scenario initially we should concentrate on milk deficit countries especially in the SARC region where we an edge on the cost competitiveness compare to the European Union and Oceania region where milk is surplus. The ministry of food processing Industries in conjunction with NDDB needs to undertake generic promotional campaigns to enhance the image of Indian dairy based products in these markets As Dr Kurien , the father of white revolution has observed, ‘ failure is never final and success never ending’.

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