Dairy Farming in India

chillibreeze writer — Radhika Jayadevan

The dairy sector offers a good opportunity for those who are looking for new and expanding markets. While the farming sector is more or less stagnant, the dairy sector has seen much activity. In the past 15 years, milk production in India has doubled and is now over 100 million tons a year thus becoming India’s No.1 farm commodity.

India s milk production is expected to grow at about 3 per cent per annum. However, due to increasing population, per capita availability of milk is expected to increase by only about 1.5 per cent per annum. For an economy growing at about 8 per cent per annum, this increase in availability will be grossly inadequate. Production growing at only 3 per cent and consumption growing at more than double the rate leads to a mismatch between demand and supply. This creates opportunities for new entrants to this industry.

Role of cooperatives:
The presence of milk cooperatives all over the country helps to organize the industry and give this sector a distinct advantage. Cooperatives allow for much easier marketing of the end product as compared to other businesses. Cooperatives assure the farmer of not only a market for their product but also take care of logistical issues like transportation and containers. The farmer is spared these costs as well as the cost of putting up a retail outlet.

Cooperatives allow for stable selling rate which does not change even when they yield is surplus. Payments are guaranteed to milk producers and ensured within a maximum of 30 days.

Cooperatives play an important role by eliminating middlemen and the associated costs.

Role of State and Central Government:
There are several financial incentives provided by the governments for setting up infrastructural facilities for milk production. The tenth plan outlay for animal husbandry and dairying was Rs. 2500 crores.

The National bank for Agricultural and Rural Development (NABARD) assists farmers with loans and refinancing facilities for dairy farming. The interest charged ranges between 12% to 13% depending on the amount of loan taken. Loans are to be repaid in monthly installments usually within a period of 5 years.

There are several other factors that make dairy a safe sector to venture into. They are:

The demand for milk and its products is active year round. Demand for Milk is increasing day by day.
Dairy farming does not need skilled labor, thus reducing costs and making availability of labor easy.
Unlike other agricultural sectors, Dairy is not dependant on rains and production goes on year round.
Returns on this business are available within a month. Today, virtually no other business offers such a short gestation period.
Use of by products provides additional income and increases returns. For example dung can be used to produce biogas for cooking and even as manure and compost.
Veterinary Aid is available at most of the villages in India.
There is no direct competition from the foreign counterparts.

In India, farmers carry on dairy activity secondary to their main agricultural activity. Also, dairying is carried on in a traditional manner as was being done by past generations. For example, the same patterns of feeding and watering are followed as was being done years ago. Lack of scientific and modern methods, proper training and proper counseling regarding are some reasons why a dairy might fail. Another reason why a dairy might incur losses is that the farmer is unaware of the costs incurred and the economics of his day to day business.

Training:
Getting some initial professional training would help enhance productivity of the business. Opportunities for training are available with most of the:

Agricultural/Veterinary Universities of various states
Krishi Vigyan Kendras
State Department of Animal Husbandry
National level organizations like National Dairy Research Institute (NDRI) Karnal (Haryana) provide training on rearing of dairy animals and manufacture of milk products.
Alternately training facilities are also available in some non-governmental organizations that are active in farming sectors.

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Radhika writes for chillibreeze.

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