Milking progress

Private sector should not be excluded from dairy scheme

The government hopes to spur India’s milk production through the newly launched National Dairy Plan (NDP) and its massive investment of nearly Rs 17,300 crore. This has been provoked by a continuing escalation in dairy product prices caused by a supply deficit. Annual milk production has grown at about four per cent for several years — but demand has gone up by around seven per cent. The supply-demand mismatch has thus steadily worsened, affecting prices.

The “white revolution”, in which India became the world’s largest milk producer, had intriguing features. Largely cooperative-led, it provided sustained growth — unlike the green revolution which, after the initial boom, tended to slacken. That can be explained by the fact that the private sector has picked up the baton from the early leader, the co-operative sector, keeping output growth high. Its overall handling of milk now exceeds that of the co-operative sector. In any case, nearly half of the co-operative sector’s milk procurement comes chiefly from two states, Gujarat and (a distant second) Karnataka; the private sector’s command area is more dispersed. Both sectors have relied upon yield improvement through cross-breeding, health cover and better feeding. Assured marketing at fixed prices through procurement has, of course, been key to this sustained investment and consequent supply boosts from both sectors.

Thus, the decision to exclude the private dairy sector from the implementation of the new dairy development programme is questionable. In its present form, the NDP is meant to be implemented wholly by the National Dairy Development Board through milk co-operatives and state agencies. Nearly 80 per cent of the funding comes from the International Development Association of the World Bank and the rest from the government. It is also noteworthy that the new programme is to be confined only to 14 states. The rest of the country, where promotion of animal husbandry is equally vital as a means of livelihood security – especially for marginal farmers and the landless peasantry – has been left out. The strategy of focusing developmental efforts and resources in areas capable of quick productive results may have worked well in the past. But it sits uncomfortably in an era that emphasises “inclusive growth”. Shifting the focus to other areas, therefore, may prove more rewarding. It would, thus, be prudent for the government to revisit the whole programme and make it more broad-based, involving both the private and the co-operative sectors – as well as, indeed, the public sector – to ensure balanced and inclusive growth of the dairy sector even while augmenting milk supplies.