Potential of White Revolution 2.0
- Post-liberalisation and Milk and Milk Products Order (2002) was abolished, dairy businesses observed a radical shift toward a strategic product diversification towards functional and traceable foods like nutrition-based health drinks, packaged milk products (such as paneer), and frozen/probiotic products and so on.
- Market structure, conduct, and performance has dramatically changed post 2000s. Besides the established cooperative federations like Amul, other state cooperative federations and multinationals (namely, Nestle, Danon, and Lactalis) are aggressively harnessing the untapped business potential.
- White revolution 2.0 can strengthen the scope of vertical integration between cattle feed industries, dairy machinery firms, producer cooperatives unions, state marketing federations, advertising and marketing firms, logistics and distribution agencies.
- The dairy industry in India is unique. With six lakh villages housing about 90 crore people, dairying is not just a large economic activity but also an integral part of our social and cultural heritage
- Can help small farmers to reduce dependence on crop sales
- Can increase source of income of farmers in low yielding areas like Marathwada, Bundelkhand etc
- India is surrounded by countries and regions that are milk-deficient, such as the Middle East, South Asia and Southeast Asia.
- There is ample scope for export of value-added milk products to Bangladesh, China, Singapore, Thailand, Malaysia, Philippines, Japan, the UAE, Oman and other gulf countries, all of which are located close to India.
- At present, the population of South Asia alone is growing at 1.3 per cent a year; it is likely to be 2.2 billion by 2050. This presents an opportunity for India’s dairy industry
Challenges to White Revolution 2.0
- The Indian cows and buffaloes are generally low yielding and non-descript because of the lack of healthy cattle-feed and fodder, tropical heat and diseases.
- Despite lack of water and gradually declining arable land, dairy farming is on the rise.
- Free trade agreements, or FTAs, for instance, will allow EU government-subsidised products to be imported from Europe with little entry barriers. This will pose a big challenge to cow-farmers.
- Due to unhygienic production, handling conditions and high temperatures, the quality of milk is adversely affected.
- Because of inadequate marketing facilities, most of the marketable surplus is sold in the form of ghee which is the least remunerative of all milk products.
Measures needed:
- India may consider reducing GST on ghee and milk fat, from 12% to 5% to bring it at par with the GST rate for SMP. This has been a long-standing demand of the dairy industry and will ultimately benefit milk producers, increase rural incomes, spur demand and hasten economic recovery.
- Increase in the market share depends on how dairy firms’ capabilities and their resources are utilised given the opportunities and threats emanating from emerging markets economies.
- Contract/corporate dairying and emerging global dairy trade are required to rope in dairy supply chains stakeholders in order to expand their outreach and “on-the-go” product positioning into the target segment.
- Digital technology-enabled dairy firms need to identify their compatible partners and competitors for co-creation through product-process innovation via relationship/value-based marketing.
- Freshness in milk, and convenience to store milk or milk products can be a technology innovation brought in by large dairy firms in association start-ups.
- Education and Training at Panchayat level for small and medium size farmers
- Subsidizing cattle production and encouraging cattle markets
- Facility of logistics for produced milk
- Improved Veterinary facility specially in artificial insemination of cattle
- Encouraging private sector firm to procure dairy produced at rural level
- Low interest loans for small and medium scale farmers for cattle purchase
- Encouraging rural women to take up animal husbandry
- Insurance of cattle against diseases like Anthrax, Foot and Mouth, Peste des Ruminantes, etc.
- Nurture dairy entrepreneurs through effective training of youth at the village level coupled with dedicated leadership and professional management of farmers’ institutions.
- Agricultural practices, sanitation, quality of drinking water & fodder, type and quality of pipelines – all of these need to be aligned to the goal of healthy milk
