Importing Milk Products

Importing Milk Products

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April 13, 2023

The central government is contemplating import of milk products as there is a looming shortage of these products within the country.

Present condition of India’s dairy sector - As milk products make up 6.6% of the consumer price index hence any increase in it can have significant impact on overall inflation figures.

• As per Food and Agriculture Organization Corporate Statistical Database, India is the largest milk producer globally and contributes 24% of worldwide milk production.

• Top milk-production states – Uttar Pradesh (14.93%), Rajasthan (15.05%), Madhya Pradesh (8.6%)

• The yearly growth rate of the Indian dairy industry is 5-6%.

• In 2022, the export of dairy items witnessed a jump of 39%.

• Major export destinations – UAE, Malaysia, Qatar, Bangladesh, Bahrain and Saudi Arabia.

Major challenges being faced by the dairy sector

• COVID – The pandemic led to demand destruction and crash in prices that further crippled the dairy farmers’ ability to maintain their cattle properly

• Lumpy Skin Disease – It has led to the death of about 1.9 lakh cattle thus inducing substantial damage to dairy farmers

• Fodder inflation – As per ICAR scientists, 70% of milk cost is due to the amount spent on feed and fodder.

• A critical aspect of rising milk prices is the fodder inflation which has been around 30%.

• Milk shortage – There is a rising demand of dairy items due to the rapid rise in population, urbanisation, changing diets and income levels.

• Investment – This cost-intensive sector requires significant supply chain investment.

• Co-operatives – Dairy sector has been revolutionized but the success has not penetrated beyond Karnataka and Gujarat due to multiple factors.

Government efforts towards improving the dairy sector

• National Dairy Development Board (NDDB) – Working with the central government, it monitors the demand-supply disparity in dairy products.

• Operation Flood – Launched by the NDDB in 1970, it transformed the country from a milk-scarce nation to the largest milk manufacturer globally.

• National Programme for Dairy Development – Aims to produce high-quality milk through infrastructure strengthening as well as marketing, processing and procurement of milk and dairy products.

Sources - Business Line & The Economic Times