Dairy Economy Of India: Changes In Consumption & Production

The dairy Industry plays a very significant part in India’s economy and India today is the largest product of milk and dairy products.
India has the world’s largest dairy herd with over 300 million bovines, producing over 187 million tonne of milk. India is first among all countries in both production and consumption of milk. Most of the milk is domestically consumed, though a small fraction is also exported. It’s not only milk but other dairy products like butter, ghee, paneer, cheese, curd, milk drinks and ice cream, are also being consumed in larger numbers in our country.
Such large consumption of milk and milk products across cuisines is very prominent. Culinary applications of dairy products are beyond calculations. Dairy organisations procure their milk from local dairy farmers based across 70,000 plus villages all over our country.
Late Dr Verghese Kurien popularly known as the ‘Father of White Revolution’ is the visionary behind the success of India’s dairy industry. He was the man behind setting up one of India’s largest company or today one of the world’s largest milk cooperative i.e., Amul (Gujarat Co-operative Milk Marketing Federation) formerly known as Kaira District Milk Union Limited. He led the technical team & marketing team under the leadership of Tribhuvandas Patel and guidance of Sardar Vallabhbhai Patel. As of fiscal year 2019-20, Amul recorded an annual sales turnover of Rs 52,000 crore.
Dairy in India was once a largely subsistence-oriented occupation intended to produce milk for home consumption. In 1919, a dairy animal census was conducted for the first time by British colonial officials. A report authored in 1937 indicated a sub-optimal rate of milk consumption in the country. It estimated a per capita intake of 7 ounces (200 g) per day (inclusive of all dairy products), which was the lowest among all large dairy countries. Low productivity of dairy animals and widespread poverty were the challenges in increasing dairy production and consumption. Consumption varied by geographic and economic conditions, but was on the whole quite low.
In the 1920s, modern milk processing and marketing technologies were introduced in India. The National Dairy Development Board (NDDB) was founded in 1965. It launched ‘Operation Flood’ in 1969–70, a programme aimed at modernising and developing the dairy sector using co-operatives. During this period, dairy co-operatives emerged as a dominant force, as a result of the exploitative nature of private milk plants and vendors.

Co-operatives were based on the ‘Anand Model’ – a three-tier organisational structure comprising:
1. Village-level co-operative societies (the primary producers).
2. District-level co-operative producers’ unions which collected the milk and operated processing plants.
3. State-level federations for marketing.

This model was evolved in Anand, Gujarat, having begun there in 1946, and came to be adopted all over the country. Operation Flood proceeded in three phases. Phase I (1970–1981) focussed on developing dairy production in areas surrounding New Delhi, Mumbai, Kolkata and Chennai. Phase II (beginning 1986), a larger phase of the project and expanded investment to 147 urban centres across the country. Phase III, which continued to the mid-1990s, expanded investment still further, to a number of smaller towns. In addition to investments by the Government of India, several phases of Operation Flood were funded in part by the World Bank and European Economic Community.
Largest milk producer since 1997
India has been the world’s largest milk producer since 1997, when it surpassed the United States of America.
Dairy has been an integral part of Indian cuisine from ancient times to the present. In the Vedic Period, milk was one of the primary elements of the typical Indian diet. There is clear evidence that milk was widely consumed as a beverage by the beginning of the Common Era.
North Indian cuisines are known for their very high consumption of milk and dairy products. Paneer has been the most preferred choice of protein in the vegetarian diets especially Punjabi cuisine. Ghee has been the preferred option for cooking fat in royal Indian kitchens since centuries. Today ghee is also preferred by a lot of Indian middle income groups across various cultures as a cooking medium.
Use of dairy cream as an ingredient to enhance the texture and mouth feel in North Indian curries is very prominent. Dishes made with butter or finished with butter is endless. Butter also enhances the taste but also provides energy from ‘good fats’ based in it. A simple ‘maska pav’ or ‘bread butter toast’ has always been the go to breakfast for almost all middle or upper middle income groups in India.
Major ingredients used in Indian desserts
Khoya or Mawa and Cheena are one of the major ingredients used in Indian desserts. Not only food but Indian beverages like lassi and chass made from curd have always been consumed across cuisines for providing the essential dietary nutrients and hydration to the body. These beverages also help in maintaining the ph balance of our system as one is very prone to get acidic by the spicy Indian meal being consumed in the tropical climate of India.
Another common use of milk is in tea (chai). Most tea consumed in India is sugared milk tea or masala chai as we commonly know it. Drinking tea became ingrained in Indian culture over the 20th century. The average per capita consumption stands at 0.8 kg in 2020. In relation to total population figures, per person revenues of US$11.46 are generated in 2020. Revenue in the tea segment amounts to US$15,820.2m in 2020. The market is expected to grow annually by 6.8 per cent (CAGR 2020-2025).
In today’s era where modern age diets like Keto are gaining popularity, even their dependence on milk fats i.e., butter and ghee and milkprotein products like paneer, cheese and mascarpone is very prominent especially for vegetarians following The Keto Diet. Tough veganism is gaining popularity across the West, in India still it has not received much acceptance as here we treat our cattle as sacred so dairy production is highly regulated by the government making sure animal welfare is not neglected during the process.
Milk is an important part of Ayurveda
Ayurveda recommends daily consumption of milk because of its good digestive and sedative properties.
The annual production was 186,000 tonne as of 2018. Indian milk production has grown by about 4 per cent per annum for the past 10 years and now totals about 136 bn litre. Indian farmgate milk prices have increased in recent years to over Rs 30 per kg (45 euro cents) and prices are expected to continue to increase as dairy consumption is growing even faster than production. Dairy exports have grown but are restricted by the strong domestic demand. India accounts for less than 0.5 per cent of world dairy trade.
Milk consumption levels are not uniformly distributed across India. The people of northwest India are significant consumers; northeasterners consume less. States with higher consumption of meat and eggs are noted to have lesser consumption of milk, as dairy products are one of the few sources of protein for vegetarians.
During 2019–20, India exported 51,421.85 metric tonne of dairy products, at a total value of Rs 1,341.03 crore (US$186.71 million).

Agri Food & Dairy Bureau