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F&B SPECIALS

As Thomas wants separate ministry for dairy, sector likely to see opportunities
Monday, 01 August, 2011, 08 : 00 AM [IST]
Archana Aroor, Mumbai
The Dr Kurien-led white revolution might have won India's dairy industry a top-ranker’s ticket on the global dairy bandwagon, leading to an incredible jump in milk production - 112 million tonnes last year,  however, the success and statistics certainly did not satiate India's need for self sufficiency in production and supply of this essential white pearl.

There is a room, a giant one indeed, to tap the myriad opportunities which lay in the dairy sector, given the apparent high potential of the industry in the wake of growing global demand.

In this backdrop, food minister KV Thomas' suggestion to give dairy a separate ministry could be a subtle warning to the government that the sector needs attention, certainly more than what it gets today.

To reiterate his concern, the minister has written to Prime Minister Manmohan Singh urging him to create a separate ministry for animal husbandry, dairy and fisheries. He emphasised that the three sectors had plenty of scope to draw greater revenues.

Thomas pointed that with dairy and animal husbandry department befalling under the ministry of agriculture, it did not achieve the anticipated development, as agriculture and the intricacies involved in it took away a major share of the government’s attention.

In his letter, Thomas highlighted that animal husbandry's output was over 30 per cent to the country’s agricultural sector. The contribution of livestock and fisheries to the Gross Domestic Product (GDP) had been over 6 per cent, adding that India was also bestowed with high population of livestock in the world apart from being the largest producer of milk.

Global scenario

Globally, China and India are expected to lead a 30 per cent increase in the global liquid dairy consumption over the current decade, as per a research by Tetra Pak, which provides processing and packaging solutions for food and beverage. Particularly, the Indian dairy sector sees immense potential for future growth. A growing population, rising prosperity and urbanisation are all expected to conspire to bring about a boom in global dairy sales.

The Tetra Pak report states that the global demand for milk and liquid dairy products, like infant milk and drinking yoghurt, stood at 270 billion litre in 2010, whereby it was expected to increase to around 350 billion litre by 2020. However, the consumption was expected to fall in the western Europe, which was believed to have the highest per capita milk sales in the world today, while the other regions expected a boom in sales.

Indian industry

India is among the world’s largest and fastest growing market for milk and milk products, given the facts that it’s an important commodity in the dietary chart of the country’s middle-class population.

The International Market Analysis Research and Consulting Group (IMARC), a leading advisor on management strategy and market research worldwide, studied the current and future opportunities in the dairy market whereby, it clearly indicated that India represented one of the most lucrative dairy markets and that the sales of the dairy products in India would double its size from the current Rs 2.6 trillion to around Rs 5.1 trillion by 2016. The study was undertaken by using both desk research and qualitative primary research analysing the three aspects of the Indian dairy market.

“Overall, India is the largest milk producer in the world, as an estimated 112.5 million tonnes of milk production has been recorded since 2010 by the government which is claimed to be a good progress,” Tapan Jha, corporate communications officer, National Dairy Development Board (NDDB), informed FnB News in a chat over telephone.

Jha confirmed that indeed there was scope for development of the dairy sector, but the industry should adopt a scientific approach and methodical improvements of animals, better cattle breeding facility.

“The rural India has a lot of liquid milk but there is a shift in the consumer demand in the urban sector, whereby consumers are increasingly preferring processed milk products such as cheese, butter and ghee, unlike rural people,” Jha said.

In this rapidly changing world and a highly competitive globalised economy, there is a need to exploit the available resources to the maximum. The best technologies developed in India and abroad should be brought to use to cope with the rising domestic demand for dairy products.

Second, more emphasis on improving productivity of cattle is needed. “Much scope is there for the dairy industry in our country but the productivity of the animal such as the cow, buffalo or cattle is minimum. It can be obtained only by giving special attention to this sector,” Devendra Shah, chairman, Parag Milk Foods Pvt. Ltd, said. He added that more technological advancements should take place in the sector which is also one of the reasons that the industry has not improved in terms of animal productivity.

Despite India having one of the largest cattle populations on the planet, the productivity of a cow or buffalo to produce the milk is still very limited and that the processing operations for milk production are needed to be handled efficiently.

Solutions exist

The apex bodies such as National Dairy Development Board (NDDB) have drawn up a National Dairy Plan, two years ago in order to match an estimated demand of 180 million tonnes of milk 2021-22. The plan recommends two strategies. First, doubling of the milk production over a period of 15 years and second, increasing the share of marketable surplus of the organised sector, both cooperative and private dairies from 30 per cent to 65 per cent.

Many of the Australian milk processing companies are eyeing Indian dairy market as they could earn handsome profits by marketing their products in India, which is said to be facing shortages of up to three million tonnes a year. Besides these, many of the Indian companies are shifting towards dairy sector or planning to acquire dairy firms.

Meanwhile, the domestic challenges for the sector, such as the supply chain management and transport facilities need some permanent solutions.

The industry needs more attention and that can happen with a separate ministry for dairy, as the challenges are aplenty in several areas of this sector such as breeding of cattle, automation and technology upgrade. If the productivity increases there is scope for development of milk processing in the country, whereby it will add to more income than any other sector in the country.

Dr J B Upadhyay of SMC College of Dairy Science, Anand Agricultural University, pointed out that India had the highest number of cattle population but right from milking of a cow or buffalo to the processing and supply chain, the sector was unorganised and that could hamper the growth of the industry.

He said that the dairy sector had grown over the years and that it had pitched automation in the latter stages of milk production but the former stages, which include milking the cow or a buffalo and supplying milk, were still being performed manually in remote villages in our country today.

A separate ministry would give much scope for the development of the industry in terms of revenue and would definitely pave a way for identifying the loopholes in the industry and also bridging the gap between the private and the public sectors.

Though the milk price is sky-rocketing, demand for it does not dwindle. Milk is conside
 
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