Dairy Sector Overview

Dairy Sector Overview

India lives in villages. Over 60 percent of rural population are employed in agriculture and related industries. Dairying is an important contributor to the agricultural output of India. Milk production is an important rural activity in India providing supplementary income and employment to millions of rural households. According to latest survey by National Sample Survey Organization, the estimated employment in animal husbandry sector was 11.44 million in principal status and 11.01 million in subsidiary status. The total 22.4 5 million employment generation by this sector comes to 5.50% of the total working population of the country. During 2006-07, the contribution to the GDP from milk alone was Rs. 14,43,860 million which was higher than paddy, wheat and sugarcane in that order.

According to 2003 census, India has 19.74 million crossbred female cattle, 82.96 million female indigenous cattle and 80.03 million female buffaloes. Total production during the year 2003-04 was 84.37 million tones.

Today, India has emerged as the World's largest producer of milk. The worldwide milk production in 2007 is estimated at 676 million tonnes, out of which India's production is estimated at 102 million tones. In 1970, per capita availability of milk in India was about 107 grams per day. This is expected to reach 246 gms per day in the year 2007-08 against a world average 265 gms per day.

Total dairy plants registered under Milk & Milk Products Order 1992 (MMPO) as on March 31, 2004 was 748 with a capacity of 81.38 million litres per day out of which 232 plants with a capacity of 32.9 million litres per day belong to cooperatives. Out of this, more than 100 dairy plants are accredited as ISO 9000:2000 series, and about 80 plants also have the HACCP certification.

Share of cooperatives in dairy development
Cooperatives play an important role in the development of the Indian dairy sector. Today cooperative movement in India is one of the largest movements in the world. They are engaged in milk production, procurement, processing and marketing. Cooperative milk business comes from small producers with an average herd size of just about 2 animals, small and marginal farmers (2 hectares' land holding) together with the landless, account for more than 75 per cent of those 13 million rural milk producers who raise 60 per cent of the cattle. The dairy co-operative system represents more than 13 million dairy farmers affiliated to about 12.2 million primary cooperative societies, which sell their product to one of 198 milk producers' cooperative unions/dairies, which in turn, are supported by state cooperative milk marketing federations.

Average milk procurement by dairy cooperatives during 2007-08 was about 22.5 million kg per day with an increase of 4 per cent over 2006-07. And the average milk marketing by dairy cooperatives during 2007-08 was about 19.1 million litres per day as against 18.1 million liters per day during 2006-07, registering an increase of 6 percent.

Brief History of NCDFI
National Cooperative Dairy Federation of India (NCDFI) was registered on 7th December, 1970 under the Bombay Cooperative Societies Act (VII of 1925) as extended to the Union Territory of Delhi with its head office at New Delhi with the objects of (i) to promote the dairy industry on cooperative lines; and (ii) to co-ordinate, help, develop and facilitate the working of the dairy cooperatives. In December 86, to gain locational advantage, the NCDFI shifted head quarters from Delhi to Anand, the milk capital of India.

In April 1987, the NCDFI's By-laws were amended to bring it under the provisions of the Multi State Cooperative Societies Act. The by-laws of NCDFI were also amended to limit membership to federal dairy cooperatives of the states and union territories and the NDDB.

As a part of its networking strategy, the NCDFI broad based its membership in December 90 to include the cooperative oilseeds growers federations as its members. NCDFI functions as the umbrella organization for more than 129.64 lakh farmers/rural families, who are the members of about 1.22 lakh primary cooperative societies federated into 198 district cooperative unions that are in turn affiliated to their respective state federations Report on operations of NCDFI During the year 2007-08, NCDFI continued to coordinate marketing and offered other services in a need based manner. The highlights include:

Milk: NCDFI coordinated supply of about 5.44 crore litres of liquid milk valued at about Rs. 98 crore and butter fresh valued at about Rs. 11 crore from the cooperative dairies to about 200 Defence Units which include ASC Depots, Air Force Stations and Military Farms under the Ministry of Defence (MoD). NCDFI also coordinated supply of about 2.2 crore litres of tetra pack milk to various Defence Units in Eastern, Western, Northern and Southern Commands valued at about Rs. 63 crore.

Milk Products: During the year, sale of about 4,100 MT of milk products valued at about Rs. 60.56 crore was coordinated by the NCDFI on behalf of its members to the MoD. The products sold include Whole Milk Powder, Butter Tinned, Ghee, Cheese Tinned, and Sweetened Condensed Milk. NCDFI also coordinated supply of 275 MT Sweetened Condensed Milk and10.86 MT Butter Tinned valued at about Rs. 2.33 crore and Rs. 18.10 lakhs respectively, to the Indo-Tibetan Border Police.

Carrying & Forwarding agency: To honour its commitment to the milk producers, NCDFI is functioning as 'carrying & forwarding agency' of Frosen Semen Doses (FSDs) produced by Sabarmati Ashram Gaushala (SAG), Bidaj and Animal Breeding Centre (ABC), Salon. Both these organizations function under the technical guidance of National Dairy Development Board (NDDB).

The Central Monitoring Committee constituted by the Government of India awarded 'A' Grade to both SAG and ABC sperm stations. Both SAG and ABC are the most modern Semen Production Stations in the country with the most sophisticated semen processing equipment to produce frozen semen adhering to stringent quality control tests. M/s BVQI, an internationally reputed certifying agency, accredited SAG with ISO 9001:2000 certification for production, processing and supply of FSDs.

During the year 2007-2008, NCDFI has coordinated sale of 67.5 lakh FSDs produced by SAG and ABC.

Coordination with Railway Board/ IRCTC for allotment of milk parlours:

Since 2005, NCDFI has been working in coordination with the IRCTC/ Indian Railways for allotment of parlours at railway platforms to the dairy cooperatives. The move has two objectives; first to make available quality milk products at reasonable prices for consumption of railway commuters and second to provide much needed boost to the milk cooperatives to expand their market. As on 31 March 2007, IRCTC had awarded 469 stalls to various milk federations/unions.

Exploring New Markets
NCDFI has been coordinating supplies of milk and dairy products from its member cooperatives to the Defence Services and ITBP for a long time. Defence Services follow stringent quality checks prior to accepting products supplied by dairy cooperatives. The quality test results are shared with the supplying cooperatives and feed backs are also received at later stages of consumption. As a part of product development process, the authorities discuss and share thoughts on improving product quality, keeping quality features, taste, etc. Apart from the privilege and the business interests, cooperatives who have been consistently supplying to these institutions have had tangible and intangible benefits from this arrangement. For small district milk unions it served the purpose of having an assured market for their milk and milk products. For some, it helped in capacity building, consistently improving quality of products, in creating good will and also in expanding to other institutional markets.

In the present business environment, no progressive business enterprise can think of neglecting the importance of consumer feed back. Hence supplies to the Defence Services or any such institution might be viewed as an opportunity for consumer feed back and research and development exercise by NCDFI member cooperatives. There are still many potential markets yet to be explored by dairy cooperatives. With a collective approach, these could be explored by NCDFI for the benefit of its member cooperatives. NCDFI is putting its efforts to extend similar arrangements that it has with the Defence Services, to some other institutions of national importance. If these efforts bear fruits, it will benefit every district level processing unit to have a share in these markets.


D. V. Ghanekar
M.D., National Cooperative Dairy Federation of India

From Sahakar Srijan