Will 'White Revolution 2.0' propel India's dairy sector to new heights?

India's overall milk production increased from 188 million tonnes in 2018-19 to 231 million tonnes in 2022-23 but the annual growth rate has dropped from 6.47 per cent to around 4 per cent

A few days ago, Union Cooperation Minister Amit Shah launched the Standard Operating Procedures (SOP) for ‘White Revolution-2.0,’ aiming to boost total milk procurement from cooperatives by creating new ones or revitalising moribund cooperatives.

The target, as per the official statement, is to raise milk procurement from cooperatives by 50 per cent, from the current 0.07 million tonnes per day to around 0.10 million tonnes.

This will be achieved by creating or strengthening nearly 100,000 dairy cooperative societies or multi-purpose primary agriculture credit societies across the country.

NDDB has already started the process by entering into agreements with state dairy cooperatives in Madhya Pradesh and Jharkhand and is looking to tie up with the dairy cooperative in Uttar Pradesh to revive them and improve procurement prices for farmers.

Currently, India has around 170,000 dairy cooperatives, many of which are inoperative or gather minuscule quantities of milk daily.

However, there are shining examples of successful dairy cooperatives like AMUL, and some state cooperatives are performing exceedingly well.

Around 30 per cent of the country’s over 640,000 villages are covered by dairy cooperatives, comprising almost 22 per cent of producer households.

This means that a large number of villages in the country do not have any dairy cooperatives.

Moreover, the concentration of dairy cooperatives is highly skewed.

About 70 per cent of villages in Gujarat, Kerala, Sikkim, and Puducherry are covered by cooperatives, while only 10–20 per cent are covered in Uttar Pradesh, Uttarakhand, Madhya Pradesh, and Jammu and Kashmir, and less than 10 per cent in Assam, Odisha, Jharkhand, Chhattisgarh, Himachal Pradesh, and the North-eastern states.

Funding for ‘White Revolution-2.0’ will initially be provided entirely by NDDB, assisting Rs 40,000 per multipurpose primary agriculture credit society. Further support will come from the proposed National Programme for Dairy Development (NPDD) 2.0.

The NPDD is yet to be approved, but sources indicate that a cabinet note has been moved, and a final decision is expected soon.

India’s overall milk production increased from 188 million tonnes in 2018-19 to 231 million tonnes in 2022-23. However, the annual growth rate has dropped from 6.47 per cent to around 4 per cent.

Earlier, experts believed the country's milk production would rise to around 300 million tonnes by 2028, with an average growth rate of 6–8 per cent per annum.

However, in recent years, growth has slowed to a more moderate 3–4 per cent per annum.

A major reason for the slowing growth rate is rising fodder costs. Meanwhile, with exports stopped, excess milk in the system has driven prices down.

A recent NITI Aayog report projected that under the ‘Business as Usual’ scenario, India’s milk demand by 2047-48 will be around 480 million tonnes, and production is expected to match that figure.

The ‘Business as Usual’ scenario, according to the NITI report, assumes the continuance of recent economic growth (6.34 per cent), with overall food demand expected to grow at an annual rate of 2.44 per cent by 2047-48.

Food demand will accelerate to 3.07 per cent if economic growth speeds up.

Food demand comprises household demand, food away from home (FAFH) demand, feed, seed, wastage, and other uses.

Meeting the demand by 2047-48 will require strong investment and focus on both milk production from cooperatives and private companies.

The first ‘White Revolution’ and Operation Flood, launched in 1970, delivered quick results, with milk production outpacing population growth after 1973-74.

Masterminded by the legendary Verghese Kurien, the revolution transformed India’s dairy sector. Production surged from 17 million tonnes in 1950-51 to over 200 million tonnes in 2021, propelling India to become the world’s top milk producer, contributing around 25 per cent of global milk production.

Daily per capita milk availability increased from 125 grams to over 263 grams during this period, while reliance on imports declined.

Amul is now one of India’s largest FMCG brands and a world leader in dairy.

Hundreds of dairy cooperatives service millions of litres of milk daily, all thanks to the ideals set forth by the revolution.

Dairy is now India’s largest agricultural commodity, contributing five per cent to the national economy and directly employing over 80 million farmers.

Milk production has grown at a Compound Annual Growth Rate (CAGR) of 5.85 per cent over the past nine years, from 146.31 million tonnes in 2014-15 to 230.58 million tonnes in 2022-23.

In contrast, global milk production grew by just 0.51 per cent in 2022 compared to 2021 (Food Outlook, June 2023).

Per capita milk availability in India was 459 grams per day in 2022-23, compared to the global average of 322 grams per day in 2022 (Food Outlook, June 2023).

However, multiple challenges remain. India’s per-animal milk productivity is among the lowest in the world.

According to the Integrated Sample Survey, average annual cattle productivity in India during 2019-20 was 1,777 kg per animal, compared to the global average of 2,699 kg per animal in 2019 (as per FAO Statistics).

Milk processing infrastructure in India also falls short of both production and global standards.

All of these areas require improvement.

Can 'White Revolution-2.0' propel India's dairy sector and cooperatives towards the next giant leap? Will it create another Amul? Only time will tell.