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Indian share in global milk production 17%; Undergoing transformation
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Saturday, 03 January, 2015, 08 : 00 AM [IST]
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Christelle Labernède
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fiogf49gjkf0d India, the world’s largest milk producer, has been making its profound presence in the global arena with its quality and hygienic milk and dairy products. With 17% share of global milk production, Indian dairy industry is undergoing transformational change.
India’s fastest growing, top ranked cooperative model
White Revolution in India, led by late Verghese Kurien, man behind Amul (GCMMF), kickstarted the nation’s journey in securing food and security’s critical domain: milk and dairy products. Dairy farmers across the country, playing vital role in reducing hunger and poverty, have set standards of excellence that the entire world aspires to emulate. A constant growth in milk production as well as in per capita milk availability has been witnessed post the White Revolution. In 2012-13, the figures stood at 132 million tonne as compared to 51.4 million tonne of milk production in 1990[ Source: NDDB – National Dairy Development Board]. The total bovine population is 299.9 million numbers in 2012, which is the world’s biggest bovine livestock in the world.
Going the traditional way, dairy players have been engaged in the liquid milk processing activity. Buffalo milk as well as cow milk have primarily dominated Indian consumer households over a decade. However, with rising consumption, evolving tastes and preferences, and higher affordability value-added dairy products (VADPs) namely, butter, curd, cheese, paneer, ghee, and ice creams have emerged strongly, thereby enhancing overall animal protein consumption through dairy products as well as meat products. Milk derivatives like buttermilk, low fat yoghurt and flavoured milk have found their way into health-conscious Indian domiciliary.
With India’s population touching 170 crore in the next five decades[2 Source: ‘Amul Cooperative Model Critical for India’s Food Security’ Acknowledges Union Minister of Food Processing Industries, The Telegraph, September 29 2014] and level of urbanisation rapidly increasing, the emphasis is on sustainable production. In India, dairying is predominantly unorganised and the sector is dependent on rural households for supplies; over 70 million of 147 million households in India depend on dairy for their livelihood. They have been largely left to their devices and they continue to milk animals that produce around 3 litre a day. Also, the Indian dairy sector is highly fragmented, with organised players having only about 18% of the market, which contributes to the disarray at the farmer's end (source). Cooperatives are the central players in the formal dairy sector.
A well-structured framework and robust policy implementation is the need of the hour to overcome following hurdles:
?Climate change and tightening of natural resource constraints: water and soil footprint
?Reducing cultivable land for green fodder due to unplanned urbanisation resulting into current deficit of 63% green fodder [ Source : FnB News.com]
?Underserved compound feed market
?Prevalent gap in production of medicines and vaccines for animal husbandry
?High population of underfed and mismanaged animals (scattered cows and buffaloes) resulting into low average yield of the animal
?Existing unorganised middle men network making formal milk collection unavailable for local farmers
The French dairy sector: efficient and unequalled skills
Dynamic, sustainable and internationally competitive French dairy sector positions France as the European and world leader in dairy PDO products (PDO=protected designation of origin, a quality label regulated by the European Union).
Known for offering the world a broad spectrum of a unique range of extensive dairy products, including 1,200 varieties of cheeses, unrivalled diversity of cream, butter, yoghurts, and milk-based desserts, France drives its dairy industry by ongoing innovation and research. Big French groups namely, Lactalis, Sodiaal, Bel, Danone and Bongrain are ranked in the Top 25 dairy groups in the world. The dairy industry accounts for 1/5 of the total agribusiness sector in France, i.e. equivalent to the French aeronautic construction sector.
Milk is being produced all over France. Some 350,000 litre of milk per farm per year is produced on an average. Some 40% of the milk is exported around the world, approximately 10 billion litre, in the form of a very wide range of dairy products[ Source : Le Made in France laitier, Dairy products Made in France, CNIEL, Maison du Lait, 2013]. This high-rate and premium quality production can be explained by two factors: the improvements done in genetics to increase the productivity of milk production and the systematic control of cattle feeding.
Exemplary control of quality and food safety makes for the faultless management of the safety chain. Commencing from the farm, continuing in the factories, storage, till the end-user, the control of the food safety in the French milk industry is well governed. Strict regulations, regular inspections by veterinary services of the state enhanced by numerous voluntary measures taken by farmers and industrial operators further ensure super quality of the milk[ Source : Key figures, 50 facts about French dairy industry, lamaisondulait.com ].
The temperate climate and favourable rainfall provide an appropriate environment for the meadows and fodder crops, an essential for sustainable livestock breeding. More than 20% of the country’s surface area has been allocated as meadowland, allowing the French cows to spend more than six months a year in the meadow, thereby making fresh grass of the pastures as the primary feed. Additionally, more than 80% of the cows feed consists of fodder and cereals which are being cultivated and harvested on the farm further enhancing traceability[ Source : Le Made in France laitier, Dairy products Made in France, CNIEL, Maison du Lait, 2013].
Moreover, French farmers, the primary guarantors of the milk quality adhere to cattle breeding practices drawn in 1999 in the national charter of good cattle breeding practices. This certifies proper management of the herd, good and strict hygiene practice, animal health and welfare and respect for the environment.
All these exercises along with the policy of the industry favouring diversity and quality have ensured the preservation of different breeds of cattle, ancestral methods of production and a successful transition to modernity.
Coming together of the two nations
France and India are now coming together through bilateral partnerships.
Although there has been a slow shift toward the organised segment with farmers preferring organised channels due to increasing demand of VADPs and higher price realisation; still the challenges of sourcing, logistics, low productivity and yield are prevalent. The increasing participation from the private sector and foreign entrants into milk derivatives business has further accelerated India’s dairy market by enabling it to attain greater scales.
The recent entry of French player Le Groupe Lactalis SA in Chennai, India, acquiring Tirumala Milk Products Pvt. Ltd in January 2014 has reinstated the presence of international players in the development of Indian dairy space. “Lactalis, in their Indian venture, would primarily focus on encouraging farmers to link with Lactalis procurement system by ensuring transparent and direct dealing with farmers and by supporting them to improve milk quality. Another focus would be to enhance industrial efficiency and develop innovative milk products suited for Indian population,” said Rahul Kumar, CEO, Tirumala Milk Products (P) Ltd.
Dairy products packaging in India is also a segment that is considered by French companies in the context of an extensive production. Speaking about yoghurt packaging, CEDAP (European Company of Plastic Applications) export manager Mario Chiodi said: “Companies look for a packaging approach assuring hygiene, lower cost and high marketing impact. The Form Fill Seal Technology (FFS), used wherever there is a standardised production, allows using low quantity of plastic material, in an ultraclean environment to prevent all possible microbiological contaminations that may reduce the shelf life or deteriorate the quality or the taste of the dairy product. Cups can then have paper pre-printed label giving the best marketing possibilities.”
Crossing bovine breeds to increase cows productivity sounds as well as a challenge for the coming years for the Indian milk industry. “As far as I have been involved in promoting French bovine genetics during my trips to India, I have noticed growing interest in high quality products and technical support. Two French bovine breeds, Holstein and Montbeliarde, seem to me perfectly adapted to fit the need for productive and resistant cows. Montbeliarde breed is strong enough to succeed everywhere with good fertility, dairy potential and feed efficiency,” said Hélène Dubarle, export manager, Jura Betail. “But genetics is nothing without a technical support which helps farmers achieve their goals and use the benefits of the breed as management and feeding are important in the success of crossbreeding,” she added.
Bilateral partnerships like these and interest of many more international giants of dairy industry of the world, in India, highlight the possibilities of well-structured growth of the world’s largest milk producer.
Tier 1 cities are showing higher growth promising markets. There has been a significant increase in procurement of milk from farmers by the private sector. Emergence of commercial dairy farmers association launching farm branded milk products in India has been observed.
Despite all this, there is a need for Indian milk industry to get inspiration from the French export focussed industry to avoid the struggle to maintain 100% self-sufficiency due to mounting local demand; it has been anticipated that by 2030, the demand for milk will reach 160 to 170 million tonne[ Source : FnB News.com ].
Hence, it is of paramount importance that Indian models follow the transparent and closely monitored processes. Sustainable dairy farming keeping in mind the available resources is possible in India if the entire chain of the Indian dairy industry, from the farms to the consumers’ plate, keeps an eye on safety norms, strict hygiene criteria, sampling and inspection of milk to ensure standardisation and includes cutting-edge research and innovation techniques for its ever-increasing diversity, quality and safety of value-added dairy products.
(The author is head, agribusiness department, French Trade Commission, UBIFRANCE, India)
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