Milk industry sounds the alarm as India's production growth sees steep fall

From 6.62 per cent in FY18, India's milk production growth rate has fallen sharply to 3.78 per cent in FY24. The country, however, still remains the world's largest producer of milk

India, the world’s largest producer of milk, is seeing a slowdown in its rate of growth in production, latest data showed.

 

Annual milk production growth rate, which was 3.83 per cent in financial year 2023 (FY23), has slowed down to 3.78 per cent in FY24, though the country continues to remain the world’s largest producer of milk at 239.3 million tonnes (mt). Milk production growth rate was 6.62 per cent in FY18, 6.47 per cent in FY19, 5.69 per cent in FY20, 5.81 per cent in FY21, and 5.77 per cent in FY22.

 

The drop in growth has raised alarm bells within a section of the industry, with some attributing it to structural challenges that the country’s dairy sector faces while others linking it to a lingering-effect of Covid-led disruption in interventions such as artificial insemination and also poor monsoon in 2023.

 

Low rains are sometimes directly linked to lower milk production because good showers mean abundant availability of green fodder and also rise in production of other crops that go into the feedmeal. The data also showed that while in FY24 milk production from exotic and crossbred cattle rose by 8 per cent, that from indigenous and nondescript cattle increased by 45 per cent as compared to FY23.

 

However, milk production from buffaloes has gone down by almost 16 per cent in FY24 as compared to FY23. Buffaloes (both indigenous and nondescript) contributed almost 45 per cent to the total milk production of 239.3 mt in FY24. A drop in buffalo milk output is bound to impact growth.

 

The fact that growth has slowed down for two consecutive financial years has raised concerns as to whether India’s milk production is rising increasingly on the back of sheer number of cattle that it possesses while per animal milk yield is hardly growing.

 

The data showed that average yield from exotic and crossbred cattle in FY24 was 8.12 kg per day per animal while the same was 4.01 kg per day per animal for indigenous and nondescript animals.

 

Also, if the growth rate continues to slow down or remains stagnant, then there might be a time in future when total annual milk production will fall short of demand.

 

As per some experts, since the White Revolution days, India has been roughly doubling its milk production after every 15 years. But if growth remains slow, then this might remain a distant dream in future. 

 

Cattle population

 

India’s cattle population (both cows and buffaloes) is around 303 million as per the 2019 livestock census, which is the highest in the world. But when it comes to per animal yield, the country ranks much lower than the world average.

 

As per Integrated Sample Survey, the average annual productivity of cattle in India during FY20 was 1,777 kg per animal per year as against the world average of 2,699 kg per animal per year during 2019 (as per FAO statistics). FAO, or Food and Agriculture Organisation, is a United Nations body. This is around 52 per cent less than the world average. However, the average productivity of cattle has increased by around 28 per cent between FY14 and FY20, which is the highest increase in productivity in the world.

 

Another data showed that India is ranked 15th in the world when it comes to per animal, per lactation milk yield while the US is right on the top. India is close to Pakistan (which follows an almost similar dairy animal rearing system as India).

 

According to a 2023 report by eminent agriculture economist and NITI Aayog member Ramesh Chand, not only is India's average milk yield significantly lower than the world average, but there is very wide variation in yield across states. Milk yield of cows ranges from 1.49 kg in Assam to 13.31 kg in Punjab. Similarly, daily milk output per buffalo varies from low of 1.61 kg in Odisha to 9.63 kg in Haryana.

 

There are multiple reasons for this low yield, low productivity conundrum. The biggest among them is the small size of animal herds that farmers keep, and declining average landholding.

 

The average animal herd size in India, as per some reports, is just around two-four animals, while globally it is much more. Also, the per hectare landholding is just around 1.08 hectare, as per the last census, which has further gotten squeezed to 0.78 hectare, according to the latest Nabard survey.

 

Further, experts said, rising cost of producing milk due to spike in fodder rates, along with limited access to technology despite multiple efforts by both government and private agencies, is among other reasons for India’s “low input, low output” model of dairy farming.

 

Rahul Kumar, chief operating officer (COO) of Parag Milk Foods Ltd, feels that more than anything else, it is the low and fluctuating milk prices, and high cost of production, along with shrinking resources such as water, land and fodder, that are keeping away farmers from investing in improving yields of their animals. Kumar said multiple efforts are needed to be taken at all levels to reverse this trend. “I have been saying this for a long time that now the time has come to look deeply at per animal yield and not just production growth, and we should not be just contending with producing more but producing more from fewer animals, or the same number of animals,” Tarun Shridhar, former secretary of animal husbandry, dairying and fisheries to the Government of India, and director general of Indian Chamber of Food and Agriculture (ICFA), told Business Standard. 

 

Government steps

 

It’s not that the government is sitting ideal. The Centre's ambitious Rashtriya Gokul Mission aims to do exactly that which will boost India's milk production and productivity through a host of interventions to supplement the efforts made by states and Union Territories (UTs).

 

The Mission, as per a recent statement made in Parliament, aims to expand the artificial insemination coverage to boost milk production and productivity of bovines, including indigenous breeds.

 

As on date, 73 million animals have been covered, with 101.7 million artificial inseminations performed, benefiting 45.8 million farmers. This is a fraction of the total cattle herd in India estimated at over 300 million.

 

The insemination facilities are available at the door-step of farmers, that too free of cost. Rural youths are specifically trained and equipped for this purpose.

 

That apart, the Mission also aims to produce high genetic merit bulls, including bulls of indigenous breeds. Progeny testing is implemented for Gir and Sahiwal breeds of cattle, and Murrah and Mehsana breeds of buffaloes.

 

Under the pedigree selection programme, Rathi, Tharparkar, Hariana, and Kankrej breed of cattle and Jaffarabadi, Nili Ravi, Pandharpuri, and Banni breed of buffalo are covered. So far, 3,988 high genetic merit bulls have been produced and inducted for semen production, the same Parliament reply said.

 

The department of animal husbandry has also established sex-sorted semen production facilities at five government semen stations located in Gujarat, Madhya Pradesh, Tamil Nadu, Uttarakhand, and Uttar Pradesh.

 

Three private semen stations are also producing sex-sorted semen doses and so far 11.2 million doses of such semen from high genetic merit bulls have been produced and made available for artificial insemination.

 

Also, in order to propagate elite animals of indigenous breeds, the department has established 22 IVF (in vitro fertilisation) laboratories and produced 22,896 viable embryos, with 12,846 embryos transferred and 2,019 calves born.

 

Plus, to accelerate genetic improvement of cattle and buffaloes, the government has developed unified genomic chips — GauChip for indigenous cattle and Mahish Chip for buffaloes — specifically designed for initiating genomic selection in the country.

 

As part of the Mission, dairy farmers receive support for assured pregnancy up to 50 per cent of the cost of sex-sorted semen and, to date, around 341,998 farmers have benefited from this programme. For IVF, farmers get an incentive of Rs 5,000 per assured pregnancy. That apart, there are also programmes to improve fodder, animal feed, and credit.

 

The Centre and state governments have multiple interventions to boost per animal yield, but it seems they need to double those efforts in conjunction with private companies to reverse the declining trend in India’s milk production.