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Dairy Vision 2025 Dairy Vision 2025 Opportunities and the Way Forward
Department of Animal Husbandry Dairying and Fisheries Ministry of
Agriculture, Government of India

Conference Paper · September 2014

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 Department of Animal Husbandry
Dairying and Fisheries
Ministry of Agriculture, Government of India

Dairy Vision 2025

Opportunities and the Way Forward
 Dairy Vision 2025

Indian Dairy Dynamics

India has travelled a long journey from a state of being milk deficient in 1970 to emerging as the
largest milk producer in the world. Operation flood that started in early 1970s has made great
impact on the Indian milk production system and helped it gain the current status. The key
objectives of operation flood were to establish links from the farm to the consumers and to
ensure a committed consumer base for the farmers. Over this journey, India has faced several
challenges, some of which still restrict its growth. For example, productivity or yields continue
to remain low in comparison to global standards. Fragmented nature of animal holding and
majority of processing (65~70%) by unorganized sector prevents economies of scale. A report
by planning commission mentions decline in pasture lands from 70 million hectares in 1947 to
38 million hectares in 1997 whereas the livestock population has grown from 336.45 million to
480.04 million by 2008. The report estimates 60% shortage of green fodder and 23% shortage
of dry fodder by the year 2020. Further India has shortage of - infrastructure facilities for
transportation, processing and storage of milk and milk products. Increased urbanization will
further accentuate these shortages. Lack of enough marketing avenues further restricts the
chances to realize the full potential.

With the increasing purchasing power, expanding markets, and rising population, demand for
liquid and processed milk products will rise. In the 11th five-year plan the average annual
growth rate of the milk production was 4.51% whereas the consumption is estimated to grow
between 6 to 8%. Therefore the gap in production and consumption is widening and India that
consumes 100 per cent of its production of milk and milk products may need to import milk if
production does not keep pace.

Milk supply is highly seasonal and depends on a number of factors including availability of
animal fodder during summers. Extra supply during winters is converted into powder milk and
is used to meet the demand during summers. There are regional variations in production and
consumption with certain states having shortfall and others surplus. A large percentage of rural
women and landless laborers are engaged in dairying activities thereby supplementing family
incomes. It is often said a farmer owning a cow does not commit suicide; therefore the potential
of this sector for alleviating poverty through rural employment is immense. This position paper
explores the dairy value chain by understanding the dynamic nature of its demand and supply.
We also explore the value chain fault lines and comment on the resilience of the value chain.
We expect this paper to form a basis for conducting structured research with the aim of gaining
clear and in-depth understanding of the dairy value chain. This will assist in the policy decisions
for enabling second milk revolution in India.

1
As per national economic survey 2009~10, approximately 80% of milk is processed in unorganized sector and
20% by cooperatives and private dairies.
2
Projection by the Sub Group III on Fodder and Pasture Management

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 Dairy Vision 2025

1. Dairy Value Chain

Dairy value chain is unique as there is only one input raw material and the entire chain is geared
to preserve, value add and distribute. High percentage of vegetarianism amongst Indians
makes milk a key protein source. Milk is also a cultural beacon in Indian context replete in
references to several mythologies with cow being considered as sacred. From a post-
independence shortage of milk to being the largest producer in the world, India’s dairy sector is
a success story. Indian system of milk production and consumption constitute of several
unique factors such as; highly fragmented supply base consisting of millions of small and
marginal farmers having livestock holding of less than 5 animals, unique ecosystem of delivery
such as standalone stores or milk booths selling only dairy products, direct delivery of milk to
the doorsteps of consumers, smaller pack sizes of milk etc.

Dairy system in India is considered to be low input low output system and suffers from the
relatively low productivity per animal. Large portion of production is self-consumed and it is
estimated that 40%~50% of the production is retained for self-consumption and the balance
being made available for processing by organized and unorganized sector. Dairy sector in
India is undergoing several changes with intervention of government for enhancing
productivity, rural infrastructure etc. and other market forces such as mergers and acquisitions.
Another prominent trend is organic dairy providing premium products by tapping into urban
quality and health conscious customers. The value chain is also gearing up for proliferation of
various value-added products with increased processing by organized sector. In the next
section we introduce a generic framework to understand the uniqueness of the Indian dairy
value chain factoring in many existing value chain structures that are based on the location and
business model.

1.1. Generic Framework of Mapping Indian Dairy Value chain

Figure 1 represents a generic framework of dairy value chain. The need for such a generic
framework is to construct specific value chains using further field research and surveys.
Production Collection Processing Distribution
Farmer Producers Organized Sector Registered Dairy Plants Dairy Retail Outlets
Value chain Participants

Corporate Commercial I. Cooperative Un-registered dairy DDC (Direct delivery to

Dairy farms II. Private Dairies Plants Consumers)
Cattle breeders and Un Organized Sector Processing plant Other Retail formats such
Articial insemination I. Local Dudhiya equipment providers as Kirana, Department
centers II. Village Aggregators Packaging providers store etc.
Feed and Fodders Milk Analyzers Value add raw material
suppliers Collection & Storage providers
Animal Health equipment’s suppliers
providers IT service providers
Sustainability

Preservation & Delivery Infrastructure

Value chain
Enablers

Formal and Informal Finance Providers

Human Resource Capacity
Information Flow
Resilience
Value chain
Concerns

Integrity(QA, Regulations & Standards)

Value Chain Innovation
Figure 1Framework for Dairy Value Chain

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 Dairy Vision 2025

This framework is intended to provide a broad outline of the complex dairy value chain. The
framework is constituted using four key pillars of dairy chain namely, production, collection,
processing and distribution. The value chain is then further deconstructed by identifying its
constituent players, the enablers and the key concerns.
The value chain through its constituent engages in the trade of production and supply of milk
and allied products to its consumers. Some of the players may never interact with each other
but there action may have intended or unintended consequences. The value chain players are
enabled by its four key components which are storage and delivery infrastructure, finance
availability, knowledge and capacity of the workforce and information flow. The entire value
chain needs to have an overarching goal of ensuring integrity of the product, be resilient and to
constantly innovate. This framework can be utilized to further construct specific dairy value
chains in organized and unorganized sector. Like any other value chain multiple channels exist
for supply of milk, in the next section we present one such example. Additional field research
and surveys are required to further refine this framework such that it can act as an input to
policy decision making for dairy sector. The organized players and new entrants can utilize the
framework to understand the dynamics of Indian dairy sector in order to enter the new markets,
introduce new products and to respond to the market needs.

1.1. Example of a Dairy Value chain

Figure 2 represents the value chain map of prevalent dairy sector in India. It shows that flow
from input suppliers such as animal feed to the farmer who produces milk and sells it to the
intermediaries. These intermediaries include consolidators, cooperatives and retailers, who
either directly or through a wholesaler or milk processor sells the produce to the consumers. In
return, consumer pays the price that is transferred upstream from the intermediaries to the
farmers and from there to the input suppliers. The flow of price is transparent in comparison to
other perishable produce like fruits and vegetables. Consumers also share information in
terms of signals for the future demand. These signals get distorted at the intermediary’s level
and are not communicated well to the farmers.

Figure : Example of a Dairy Value Chain

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 Dairy Vision 2025

1.2. Stakeholder Analysis

The primary stakeholder in dairy can be broadly segmented into 5 wide categories such as
input suppliers, producers, intermediaries, processors, and consumers. Input suppliers
include suppliers of dry animal feed, green feed, animal sellers, etc. Producer includes the
farmers and farm labor that indulges in the production of milk and maintenance of the farm and
farm equipment. In case of marginal production, they also act as transporters, taking the
produce to the intermediaries. Intermediaries include consolidators, cooperatives, and small
retailers who buy directly from the farmers and sell to the processors that include wholesalers
and processing plants. Intermediaries may or may not perform any value add to the product but
often they contribute in quality inspection at collection and achieving volumes. Often time in the
informal sector they provide finance albeit at a very high cost. Sometimes these intermediaries
are the worst offenders of the value chain when they adulterate milk.
The next stakeholder includes the processor who either sells the liquid or processed milk in
huge volumes through a network of distributors and retailers. The processors generally fix the
price based on the market dynamics. The price does not fluctuate in short run of few days rather
changes during season due to change in milk supply. The milk is delivered to the consumers
through various channels including home delivery.

Figure 3: Unique aspects of Dairy value chain

Based on the example of a typical value chain we identify the uniqueness and challenges faced
in this sector. Figure 3 captures few unique aspects and challenges of this sector, however
further research is required to establish a detailed value chain map which will include all
alternative value chains involving other channels and capture the uniqueness of the value
chain.

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 Dairy Vision 2025

2. Perspectives on Dairy Sector

2.1. Demand Scenario
Recent trends suggest that increasing population, changing eating habits, urbanization, rising
rural income, expanding middle class and increase of refrigeration facility has fuelled the
growth in dairy product demand. One of the prime factors is the population that is increasing at
the rate of 20 million people per year fuelling the demand for not just dairy products but all food
items in general. Another significant factor contributing to increasing demand is the rising
disposable income levels supporting higher consumption of animal protein. India having a
huge vegetarian population, the only source for animal protein is a dairy product. This is evident
from the higher demand rate for dairy products as compared to meat and eggs. It is not just
higher protein diet that consumer prefers but they also pay attention towards quality and safety.
The increase in income levels will also increase the consumption of value added products not
only in primary urban markets but also in underserved rural markets. For products such as ice-
creams, curd, butter and sweets the rural consumer demand will increase which may further
put pressure on pricing and availability.

Analysis of retail price index (2006-2013) for milk indicates an 8~10% increase every year
since 2006. Milk is one of the high weightage items of CPI and a top contributor to persistent
inflationary trends. Recently we witnessed a sudden jump of about 15 percent in dairy product
prices during flush season pushing inflation the most. This jump is not attributed to supply
shortage rather due to demand surge and increase in the input cost. The un-intended
implications of such policy decisions clearly demonstrate the dynamic behavior in dairy value
chain and therefore call for a systemic study of the various demand drivers. Studying such
behavior will assist trade decisions such as when to open exports or imports and the quantities
required to keep demand supply in balance. While India consumes its entire production the
opportunity to export and earn valuable foreign exchange is immense. The demand potential
for such exports needs to be incorporated in any policy formulation.

It is not just the demand of dairy products but the product mix that will also witness major
changes in the coming years. Currently 80% of the milk production is consumed as liquid milk
and another one third of the remaining is processed into butter and Ghee. It is expected that the
population will consume more processed products such as cheese and curd that is currently
less than 15 per cent of the market. The current Indian market for processed dairy products
such as cheese and curd is growing at a rate of 10 per cent per annum. It is also predicted that
milk based sweets and chocolates will also witness a rise in demand in the future. Ice-cream
production has also witnessed an increase due to foreign investment in processing facilities.
Experts also emphasize on the increase in demand for milk based drinks and hybrid fruit and
milk drinks. There is an increasing trend for substituting animal and vegetable proteins by milk
proteins in bakery products and ready-to-eat food items. Recently there is an emerging trend of
formula milk in the Asian countries giving rise to milk demand for milk powder. India is an
underserved market compared to developed country with respect to the products available on
shelves. It is expected that there will be a wide proliferation of products to meet said and unsaid
demand from consumers. We have already seen entry and success of global milk player such
as Danone which is focusing on curd segment of the Indian market. Further there have been a
5
 Dairy Vision 2025

spate of mergers and acquisition with the latest being that of Tirumala Milk Products by
Lactalis. Domestic producers such as Amul and Mother Dairy increasingly are offering more
product variety compared to yesteryears.

Having such a huge population, falling short of dairy products will compel India to import dairy
products that can result in price rise similar to what happened in the case of sugar and pulse
shortages in 2007. Government through its various schemes is working to increase the
productivity by introducing better breeds of animals and linking the supply centers to
processing facilities. Government is also taking needed measures with regard to dairy product
exports and food grain export to ensure food security.

2.2. Supply Scenario

Unlike west, the supply base of milk producers in India is highly fragmented and a large portion
is unorganized. The factors that restrict supply such as low productivity, shortage of feed and
fodder, absence of scientific farm management practices etc. are well documented.

On the positive side, India is progressing much better in terms of milk production at an annual
rate of 4~4.5 percent compared to the 2.75 percent global milk production. Per capita
availability has also touched the world benchmark of 290 grams per day. But the rising demand
due to various factors discussed in the previous section has created huge demand supply gap
in the domestic market that will put pressure on prices and availability.

India, with 1990 lakh cattle (as per the last Livestock Census 2007) has 14.4 % of the world
cattle population. Out of this, 1660 lakh are indigenous, which is 83% of the total cattle
population. During 2013, about 445 lakh cattle were in milk and produced 59.80 million tonnes

Figure 4: Trends in Bovine Population

3
Live Stock Development Government of India, Ministry of Agriculture,Department of Animal Husbandry Dairying
& Fisheries

6
 Dairy Vision 2025

of milk, which was about 45% of the total milk produced in the country during the same period.
India has the largest population of buffaloes in the world. India with 1053 lakh buffaloes
accounts for 56 % of the world buffalo population. During 2013 about 67.68 million tonnes of
milk was contributed by buffaloes. Increase in Cattle and Buffalo population in India, as
reported in successive Livestock Census Reports is given in the chart below

Government of India estimates milk demand to reach 180 million tons by 2021/22. Meeting this
demand will require the production to grow by 5.5% per annum over next decade.
Various other estimates have projected the demand of milk to be 127 to 271 million tons by
2020. Such wide variation and lack of consensus on demand for milk and milk products may
misdirect policy decisions, such as initiatives focused on productivity improvement can result in
oversupply negatively impacting price realization by the rural producers. Moving away from
maxims such as “All increase in production will be consumed” to adequate demand supply
balancing using scientific methods is better called for. In the past we have also seen supply
shortages in summers across several states. As recent as 2014, Kerala faced shortage of milk
due to lack of supply from neighboring Tamil Nadu. At the macro level the issue of supply may
not be critical however a shortage at local level needs to be addressed. Further the economies
of production will also need to be established based on the network of production infrastructure
and consumption hubs factoring in regional imbalances.

Experience has shown the price sensitivity towards milk production. Anything that impacts
farmers’ incomes such as oversupply of milk that depresses prices may shift the production
resources to other more profitable farming activities instead of milk production or lead to
increase in self-consumption. An undersupply of milk will result in increased prices and will
accentuate inflationary trends.

Milk integrity is often challenged when adulteration occurs; most common adulterant being
water. Absence of adequate control on such practices often increases costs of serious players
when they have to invest in upstream collection infrastructure. We have evidence of over-
capacity and under-utilization of such infrastructure. Though we do not have any evidence
there is a possibility that adulteration can overstate production figures. Further studies are
required such that accurate range bound estimates can be made for milk production. In the
interim any new policy decisions should factor in this variation. Focusing only on aggregate and
ignoring the seasonal fluctuations impacts pricing and availability at the micro level and leads
to poor supply planning. A detailed study of such shortages needs to conducted and factored in
during policy making.

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 Dairy Vision 2025

Figure 5: Factors impacting milk availability

The figure above represents the various variables that impact availability of milk. It is unique
that in its entire value chain maximum number of variables impact milk production. Milk
production is sensitive to the market price and cost of the input raw material. Often the input
cost ignores the labor component due to small holding and ownership of cattle. It is a given that
farmers will produce only those things that are profitable to them, therefore it is necessary that
the system behavior of the supply side is studied in detail.

Small and marginal farmers are often dependent on intermediaries to finance their dairy
production. Such informal lending at high interest rates increases cost and often farmers fall
into a debt trap. Accessibility of rural finance for dairying is an unmet need. There are various
central and state government schemes providing support, however as per planning
commission report as a percent of total planned outlay the share of animal husbandry and
dairy development has declined from 1.1 % to 0.4 % in 6th FYP and to 0.3% in subsequent
plans. As a proportion of total agricultural outlay the share of livestock was 11.2% on 2nd FYP
which declined to 3.6 % in 9th FYP but increased to 9.3% during 11th FYP. This is complete
contrast of diary livestock contribution which is a total of 25% of the agriculture GDP. Further
there have been large gap between planned and actual expenditure on in this sector except
during 10th FYP. Only in 2009 dairy processing has been included as a part of priority sector
lending. The total animal husbandry sector share is only 5% compared to the total advances
made to the agriculture sector. Livestock insurance and its coverage need to be made more
widespread.

4
As reported by The Working Group On Animal Husbandry & Dairying 12th Five Year Plan(2012-17), Planning
Commission Government of India New Delhi

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 Dairy Vision 2025

Figure 6: Status of AI Activities carried out by the Govt., Pvt Agencies and NGOs during 2013-14

The associated enabling infrastructure such as veterinary care and Artificial Insemination (AI)
infrastructure are key elements impacting cattle productivity. It is estimated that there is
shortage of nearly 50% for veterinary field staff and veterinary scientists. The shortage further
accentuates by 75% for para vets and other support staff. Figure 5 above shows the status of AI
activities in various states across India. At present there are 94,688 AI centers and 62 million
AIs were performed during 2013-14.Private mobile Artificial Insemination (AI) services for
delivery of quality breeding inputs at the farmers’ door-step have been promoted by
Government of India. 31,676 private AI workers have been inducted and are self-employed.
However the demand and need for sufficient AI technicians is an important requirement for
effective spread of AI coverage, which stands at 25% at present. It is proposed to increase the
no. of AI centers to 1,25,000 by 2017.

5
Live Stock Development Government of India, Ministry of Agriculture,Department of Animal Husbandry Dairying
& Fisheries

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 Dairy Vision 2025

Genetic improvement in bovines is a long term activity and Government of India had initiated a
major program ‘National Project for Cattle and Buffalo Breeding’ (NPCBB) from October 2000
upto 2013-14, with an allocation of Rs 1318 Crores. NPCBB which aimed at genetic
upgradation of bovines, with a focus on development and conservation of important indigenous
breed, has made tremendous impact in the area of livestock development even in traditionally
non milk States like the North East Region. Considerable impact has been made in areas like:
setting up and modernization of state of art semen stations; LN cold chain management;
delivery of artificial insemination (AI) at the farmers’ doorstep; bringing cattle and buffaloes
under organized breeding through artificial insemination or natural service by high quality bulls,
and undertaking breed improvement program for indigenous cattle and buffaloes . Impact of
NPCBB India is provided in Annexure-I

Animal Husbandry is a State subject. The Model Breeding Policy prepared by the central
Government forms the basis of the breeding policies prepared by State Governments, and
intends to preserve and conserve indigenous breeds. Each State has formulated its own
breeding policy deciding on choice of breed, cross breeding strategy, animals of different
breeds required, breeding goals in terms of expected genetic progress to be achieved, specific
breeding programs and the control measures that should be adopted to achieve the desired
genetic gains in the population. The details of the policy are provided in annexure II.

Another important government scheme is Central Herd Registration Scheme (CHRS) . It was
started in the third five year plan for identification and propagation of elite germplasm of
indigenous breeds of cattle and buffaloes in the country. Animal recording under the CHRS is
done primarily for the purpose of bull production, performance monitoring of animals and
genetic improvement of future stock. The majority of semen stations in the country today meet
their requirement of bulls, either from the CHRS registered animals / operational areas or from
the bull mother farms existing in the country. Milk production records of important cattle and
buffalo breeds are collected on a monthly basis and top quality pure bred indigenous animals of
farmers are brought on record through the process of certification of meritorious animals. This
process helps breeders to use such animals for production of future bulls. Further details of
CHRS and its Impact are provided in Annexure-III.

National dairy plan-I with an outlay of 2242 crore targets improvement in bovine productivity
through high genetic merit bulls, strengthening semen production and delivery of AI services
through trained mobile AI technicians. It is estimated that 50% coverage of cattle population will
be achieved by 2020. National dairy plan also focuses on animal nutrition with ration balancing
program and fodder development initiative.

It is important that sustainability is factored in with measures to reduce the total water footprint

6.7
Live Stock Development Government of India, Ministry of Agriculture,Department of Animal Husbandry Dairying
& Fisheries (India, 2014)

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 Dairy Vision 2025

for milk production. Availability of water therefore is crucial to maintain productivity. With large
tracts of India dependent on monsoon for water, the productivity of the animals can only be
maintained if adequate water supply is available. Techniques such as hydroponics need to be
encouraged which can provide year round green fodder with very low consumption of water.
Dairy sector provides livelihood to millions of farmers. Innovation targeted at the village and
individual level can significantly improve productivity. The innovations such as rapid milk
chillers from Promethean Systems provide refrigeration solution to electricity starved rural
areas. Another innovation from Invention Labs works on last mile delivery challenge of packing
and distribution of milk using redesigned in-situ vending machine. This can help managing
inventory of milk at the retail shelves in a better way due to aggregation of demand and
postponement of packaging.

Study of supply drivers in its entirety will assist in proper policy formulation leading to structured
investment in capacity building across relevant constituents.

2.3. Resilience

Milk is now travelling several kilometers before reaching to the consumers and in this process it
is getting exposed to several degrees of threats such as adulteration, contamination, and
diseases. Food safety is a major concern for long supply chains spanning across states and
nations. The 2008 Chinese melamine adulteration scandal resulted in death of 6 infants and
hospitalization of 54000 babies. A number of food-safety hazards over the years have made it
mandatory to have highly robust and safe supply chain. One of the ways to ensure safety is
through legislation and quality control. It is highly recommended to have an alert and
prevention mechanism in place once an issue has been identified, especially for the fast
moving supply chains.

CIPHET (Ludhiana) study calculates wastage of 0.8% for milk which is lowest across the food
sector compared to fruits and vegetables where the wastage is more than 18%. The cold chain
infrastructure for milk and milk products is still good in the country, yet distance between supply
and demand centers along with poor availability of electricity increases the cost of supply
chain.

Disruptions in the supply chains can make several communities vulnerable specially the ones
with limited connectivity. In such cases having higher inventories may be one of the ways to
mitigate the risk of delayed supply. But that option is limited due to the perishable nature of milk.
It is necessary to understand, map and examine the entire milk supply chain to find the possible
risks and security concerns. Moreover the identified potential risks need to be profiled
according to the nature of occurrence, probability and scale of damage. Some of the possible

8
The water footprint for cow milk is 1000 m3/Ton.

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 Dairy Vision 2025

risks include supply side uncertainty due to natural calamity and adverse weather conditions,
disease outbreaks and epidemic, increasing input price such as increase in feed and fuel price,
nuclear or chemical accidents, strikes, and rumors.

It is necessary to have a dedicated milk supply chain and to integrate various stakeholders
within the system. It is equally important to identify and understand the potential ways to control
risks by examining the existing solutions, factors and laws. Supply chains can be made more
resilient by forming collaborations across the supply chain and within the farming community.
The coordination and collaboration among the farming community can enhance the supply and
price security and ensure reliable supply at an affordable price. The collaboration across the
supply chain can help reduce the risk of over-demand-over-supply, produce handling hazards,
ensuring product integrity and final quality. The sudden increase in the food prices during the
year 2007-08 was an early warning of what is on the way. Thus, we need to be better prepared
for potential as well as unforeseen situations.

Climate change will have severe impact on Indian agriculture system. INCCA report indicates
that production of milk which is an important item in the food basket may also be adversely
affected by the increased heat stress associated with global climate change to dairy animals.

3. Roadmap for Next Steps

We propose following potential exploratory areas which can aid in sustainable policy creation
by systematically understanding the milk value chain and its various variants using the
framework proposed in this concept note. The broad areas for further exploration are as
follows.
 We suggest creation of a model dairy district using the best practices as observed locally
and globally. Such a project should lead to a case study which can be replicated in
underserved areas. The technical help from the best experts in the relevant fields should
provide inputs. The focus could be on sustainable dairy that conserve resources, as
example hydroponics for green fodder production, hygienic practices for milk collection
farm management, track and trace technique etc. Such an approach should explore
productivity improvement using collective farming methods, sharing of resources and
effort and latest animal and farm management techniques.

 We also suggest a study on competitiveness of Indian Dairy participants such a study

could be conducted under aegis of NDDB / Co-operative and consortium of private
players.

a. Institutions such as CII can be the nodal agency to aggregate all data and provide
benchmark services to firms and co-operatives conducting business in this domain.

b. The annual exercise will ensure the recency and accuracy of data collected which
will assist in course corrections on any policy measures taken by the government.

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 Dairy Vision 2025

 Another suggestion is to map the value chain for all existing players, capacities, and
location and consumption centers. This study will assist policy makers as well as private
sector in directing investment to the right location in future (Network of milk production,
distribution and consumption)

a. An online map of existing players will assist in focusing incentives to underserved

areas and producers

b. Supply chain disruptions such as natural calamity and disaster risk management will
assist in mitigating risk events

c. Optimization of milk routes can assist producers and processors to source and
supply milk at a most optimal costs and possible share infrastructure.

 We also recommend that a systemic study on implementation of track and trace

techniques for dairy supply chain should be initiated. Such a study should identify key
challenges in exporting milk and milk products and also assure domestic consumers with
following key benefits

a. Assurance of quality to consumers.

b. Increase access to foreign markets

c. Shifting of demand from unorganized to organized sector.

 We also recommend that to better understand and document demand drivers for milk and
milk products and create a comprehensive forecast model for estimating demand for
planning and policy making decisions.

a. The current demand estimates from different sources have shown huge variation.
Such variation can have significant impact on the farmer producer or on end
consumer due to reduced price realization or increased consumer prices.

b. Policy incentives for increasing production and processing in underserved areas

having unmet demand can be identified

c. Trends of value added products and its potential for consumption can be better
understood.

d. Another suggestion is to study efficiency of dairy cold chain infrastructure, its cost
assumption and future requirements. Such a study is necessary as cold chain
infrastructure is crucial for preservation of milk from producer to consumers. A
baseline study will assist in identifying the infrastructure needs; costs can provide
impetus for innovators to develop innovative solutions for preservation and
distribution.
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 Dairy Vision 2025

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Joshi, R. M. (n.d.). PROMOTING DAIRY EXPORTS FROM INDIA:EMERGING

CHALLENGES AND STRATEGIC REFERENCE. Indian Institute of Foreign Trade,.

M M Mekonnen, A. Y. (2010). The Green, Blue and Grey Water Footprint of Farm Animals and
Farm Products,Value of Water Research Report Series No. 48,. Delft, Netherlands:
UNESCO-IHE Institute of Water Education.

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Ministry of Agriculture. (2013). Pocketbook on Agriculture Statistics. New Delhi: Directorate of

Economics and Statistics.

Mishra, P. K. (2011). Impact of Risks and Uncertainties on Supply Chain: A Dairy Industry
Perspective. Journal of Management Research, 18.

P R Gupta. (2007). Dairy India 2007. New Delhi: Dairy India Yearbook.

Planning Commission of India. (2011). Report of the Sub Group III on Fodder and Pasture
Management. Delhi: Planning Commission of India.

Planning Commission of India. (2011). The working group on animal husbandry & dairying 12th
Five Year Plan. New Delhi.

Planning, commission. (2006). Report of the Working Group on Animal Husbandry and
Dairying for the Eleventh Five Year Plan.

Promethean Power Systems. (2014). technology. Retrieved from Promethean Power

Systems: http://www.coolectrica.com/

TIFAC. (1996). Agro Food Processing: Technology Vision 2020 Milk - Current Status and
Vision. New Delhi: Technology Information, Forecasting and Assessment Council.

Wikipedia. (n.d.). 2008 Chinese Milk Scandal. Retrieved 2014, from Wikipedia:
http://en.wikipedia.org/wiki/2008_Chinese_milk_scandal

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Table of Figures

Figure 1Framework for Dairy Value Chain 3

Figure 2: Example of a Dairy Value Chain 4

Figure 3: Unique aspects of Dairy value chain 5

Figure 4: Trends in Bovine Population 8

Figure 5: Factors impacting milk availability 10

Figure 6:Status of AI Activities carried out by the Govt.,

Pvt Agencies and NGOs during 2013-14 11

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Annexure -I

Achievements under national project for cattle and buffalo breeding (NPCBB)
The notable achievements under NPCBB since inception are:

i) Semen production increased from 22 to 81 million doses & number of AI

increased from 21.80 to 62 million (22 million animals under AI coverage). Overall
conception rate increased from 20% to 35%;

ii) 54369 Government Stationary AI centers have been converted into mobile AI
centers;

iii) 31676 Private AI centers have been established or under establishment.

iv) 28400 breeding bulls with high genetic merit have been inducted or under
induction.

v) 55,927 existing AI workers have been trained in all the aspects of frozen semen
technology (including funds released for training of existing AI workers during
current year);

vi) 20244 professionals have been trained outside and inside the State at reputed
training centers;

vii) 49 frozen semen bull station have been strengthened as per Minimum Standard
Protocol (MSP) for semen production;

viii) In order to improve quality of semen production in the country MSP for semen
production has been formulated and implemented at all semen station in the
country;

ix) Central Monitoring Unit (CMU) has been constituted for evaluation of semen
stations one in two years and implementation of Minimum Standard Protocol
(MSP) for semen production in the country;

x) 22 semen stations are graded as ‘A’, 17 as ‘B’ and 3 as ‘C’ during 2010-11
against 11 as ‘A’, 16 as ‘B’ and 7 as ‘C’ during 2007-08. A and B graded semen
station has increased to 37 against 27 in earlier evaluation.

xi) 42 semen stations in the country have acquired ISO certification against 3 during
2004;

xii) Number of animals in milk has increased from 62 million during 2000 to 83.15
million during 2012 i.e. about 18 million improved milch animals has been added
to milch herd of the country;
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xiii) Crossbred cattle population has increased from 20 million (1997) to 33 million
(2007) and

xiv) MSP (Minimum Standard Protocol) for progeny testing and standard operating
procedures for AI (artificial insemination) technicians has been formulated and
circulated among all the States.

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Annexure-II
Cattle and Buffalo breeding policy in different states
Policy Objectives:

 Preservation and conservation of indigenous breeds in their breeding tract through

selective breeding.

 Use of recognized indigenous breeds (Gir, Sahiwal, Tharparkar, Red Sindhi, Rathi,
Hariana, Ongole, Deoni) for grading up indigenous non-descript stock.

 Crossbreeding of nondescript cattle population with exotic breed’s min resource rich
areas. Jersey and Holstein Friesian (breed of choice).

 Grading up of nondescript buffaloes with recognized breeds (Murrah, Surti, Mehsani,

Jaffarabadi, Nili Ravi,)

 Preservation and conservation of indigenous buffalo breeds in their breeding tract

through selective breeding.

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Annexure-III

Impact of Central Herd Registration Scheme

 Presently CHRS is not only serving the need of identifying the superior breeding bulls and
bull mothers to be used under the breeding program but also training the manpower of the
States / Livestock Developments Boards to initiate their own field performance recording
(FPR) to identify the superior germplasm for the breeding purposes.

 The units under the scheme organize breeder awareness / publicity camps in the
breeding tract of important indigenous breeds for the benefit of the farmers. The
information for animals on sale is regularly put on the website of the Department and also
circulated to the States / State Livestock Agency’s for their use.

 The CHRS has played a significant role in assisting State Governments, Government
Undertakings, Cooperative Dairy Unions and Private Breeders procuring dairy animals
and sires of high genetic potential for the use in their cattle / buffalo improvement
programs.

 Breeders have also benefited by getting good prices for their registered animals and their
progenies hence they are encouraged to produce more good animals. The scheme also
motivates farmers for the formation of Breeder’s Associations.

 The CHRS is only agency providing indigenous Registered Animal Data Base (ADB),
which is important in intensive selection of germplasm for future breeding in the Country.

 CHRS is the Government Agency which provides information and availability of the
registered indigenous cattle and buffaloes through internet and by other possible means
to Live stock Developmental Agencies and breeders.

 Training program is provided by CHRS on “Field performance recording system” to the

State personals and has got immense effect both at breeders & farmers.

 The impact of continuous awareness/publicity camps organized at village level, farmers

have started showing their interest in conservation of indigenous germplasm and thus
improving their livestock. The scheme also provides incentives and meritorious certificate
to the owners of finally registered animal qualifying on the basis of their milk production
per lactation.

 Gaushala’s which are conserving the indigenous cattle breeds are in close touch with
CHRS in selection/Replacement of bulls/bull mother for maintaining pure breed.

 CHRS, that located and supplied hundreds of elite bull calves to implementing agencies
like SIA- Uttaranchal, Andhra Pradesh, Karnataka, Tamil Nadu, W. Bengal, Gujarat,
Rajasthan and other semen banks like Sabarmati Ashram Gaushala run by NDDB, BAIF,
CFSP&TI, Raymond Embryo Research Center.

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