Indian share in global milk production 17%; Undergoing transformation
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Christelle Labernède
December 29 , 2014
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India, the world’s largest milk producer, has been making its profound
presence in the global arena with its quality and hygienic milk and
dairy products. With 17% share of global milk production, Indian dairy
industry is undergoing transformational change.
India’s fastest growing, top ranked cooperative model White
Revolution in India, led by late Verghese Kurien, man behind Amul
(GCMMF), kickstarted the nation’s journey in securing food and
security’s critical domain: milk and dairy products. Dairy farmers
across the country, playing vital role in reducing hunger and poverty,
have set standards of excellence that the entire world aspires to
emulate. A constant growth in milk production as well as in per capita
milk availability has been witnessed post the White Revolution. In
2012-13, the figures stood at 132 million tonne as compared to 51.4
million tonne of milk production in 1990[ Source: NDDB – National Dairy
Development Board]. The total bovine population is 299.9 million numbers
in 2012, which is the world’s biggest bovine livestock in the world.
Going
the traditional way, dairy players have been engaged in the liquid milk
processing activity. Buffalo milk as well as cow milk have primarily
dominated Indian consumer households over a decade. However, with rising
consumption, evolving tastes and preferences, and higher affordability
value-added dairy products (VADPs) namely, butter, curd, cheese, paneer,
ghee, and ice creams have emerged strongly, thereby enhancing overall
animal protein consumption through dairy products as well as meat
products. Milk derivatives like buttermilk, low fat yoghurt and
flavoured milk have found their way into health-conscious Indian
domiciliary.
With India’s population touching 170 crore in the
next five decades[2 Source: ‘Amul Cooperative Model Critical for India’s
Food Security’ Acknowledges Union Minister of Food Processing
Industries, The Telegraph, September 29 2014] and level of urbanisation
rapidly increasing, the emphasis is on sustainable production. In India,
dairying is predominantly unorganised and the sector is dependent on
rural households for supplies; over 70 million of 147 million households
in India depend on dairy for their livelihood. They have been largely
left to their devices and they continue to milk animals that produce
around 3 litre a day. Also, the Indian dairy sector is highly
fragmented, with organised players having only about 18% of the market,
which contributes to the disarray at the farmer's end (source).
Cooperatives are the central players in the formal dairy sector.
A well-structured framework and robust policy implementation is the need of the hour to overcome following hurdles: ?Climate change and tightening of natural resource constraints: water and soil footprint ?Reducing
cultivable land for green fodder due to unplanned urbanisation
resulting into current deficit of 63% green fodder [ Source : FnB
News.com] ?Underserved compound feed market ?Prevalent gap in production of medicines and vaccines for animal husbandry ?High
population of underfed and mismanaged animals (scattered cows and
buffaloes) resulting into low average yield of the animal ?Existing unorganised middle men network making formal milk collection unavailable for local farmers The French dairy sector: efficient and unequalled skills Dynamic,
sustainable and internationally competitive French dairy sector
positions France as the European and world leader in dairy PDO products
(PDO=protected designation of origin, a quality label regulated by the
European Union).
Known for offering the world a broad spectrum
of a unique range of extensive dairy products, including 1,200 varieties
of cheeses, unrivalled diversity of cream, butter, yoghurts, and
milk-based desserts, France drives its dairy industry by ongoing
innovation and research. Big French groups namely, Lactalis, Sodiaal,
Bel, Danone and Bongrain are ranked in the Top 25 dairy groups in the
world. The dairy industry accounts for 1/5 of the total agribusiness
sector in France, i.e. equivalent to the French aeronautic construction
sector.
Milk is being produced all over France. Some 350,000
litre of milk per farm per year is produced on an average. Some 40% of
the milk is exported around the world, approximately 10 billion litre,
in the form of a very wide range of dairy products[ Source : Le Made in
France laitier, Dairy products Made in France, CNIEL, Maison du Lait,
2013]. This high-rate and premium quality production can be explained by
two factors: the improvements done in genetics to increase the
productivity of milk production and the systematic control of cattle
feeding.
Exemplary control of quality and food safety makes for
the faultless management of the safety chain. Commencing from the farm,
continuing in the factories, storage, till the end-user, the control of
the food safety in the French milk industry is well governed. Strict
regulations, regular inspections by veterinary services of the state
enhanced by numerous voluntary measures taken by farmers and industrial
operators further ensure super quality of the milk[ Source : Key
figures, 50 facts about French dairy industry, lamaisondulait.com ].
The
temperate climate and favourable rainfall provide an appropriate
environment for the meadows and fodder crops, an essential for
sustainable livestock breeding. More than 20% of the country’s surface
area has been allocated as meadowland, allowing the French cows to spend
more than six months a year in the meadow, thereby making fresh grass
of the pastures as the primary feed. Additionally, more than 80% of the
cows feed consists of fodder and cereals which are being cultivated and
harvested on the farm further enhancing traceability[ Source : Le Made
in France laitier, Dairy products Made in France, CNIEL, Maison du Lait,
2013].
Moreover, French farmers, the primary guarantors of the
milk quality adhere to cattle breeding practices drawn in 1999 in the
national charter of good cattle breeding practices. This certifies
proper management of the herd, good and strict hygiene practice, animal
health and welfare and respect for the environment.
All these
exercises along with the policy of the industry favouring diversity and
quality have ensured the preservation of different breeds of cattle,
ancestral methods of production and a successful transition to
modernity.
Coming together of the two nations France and India are now coming together through bilateral partnerships. Although
there has been a slow shift toward the organised segment with farmers
preferring organised channels due to increasing demand of VADPs and
higher price realisation; still the challenges of sourcing, logistics,
low productivity and yield are prevalent. The increasing participation
from the private sector and foreign entrants into milk derivatives
business has further accelerated India’s dairy market by enabling it to
attain greater scales.
The recent entry of French player Le
Groupe Lactalis SA in Chennai, India, acquiring Tirumala Milk Products
Pvt. Ltd in January 2014 has reinstated the presence of international
players in the development of Indian dairy space. “Lactalis, in their
Indian venture, would primarily focus on encouraging farmers to link
with Lactalis procurement system by ensuring transparent and direct
dealing with farmers and by supporting them to improve milk quality.
Another focus would be to enhance industrial efficiency and develop
innovative milk products suited for Indian population,” said Rahul
Kumar, CEO, Tirumala Milk Products (P) Ltd.
Dairy products
packaging in India is also a segment that is considered by French
companies in the context of an extensive production. Speaking about
yoghurt packaging, CEDAP (European Company of Plastic Applications)
export manager Mario Chiodi said: “Companies look for a packaging
approach assuring hygiene, lower cost and high marketing impact. The
Form Fill Seal Technology (FFS), used wherever there is a standardised
production, allows using low quantity of plastic material, in an
ultraclean environment to prevent all possible microbiological
contaminations that may reduce the shelf life or deteriorate the quality
or the taste of the dairy product. Cups can then have paper pre-printed
label giving the best marketing possibilities.”
Crossing bovine
breeds to increase cows productivity sounds as well as a challenge for
the coming years for the Indian milk industry. “As far as I have been
involved in promoting French bovine genetics during my trips to India, I
have noticed growing interest in high quality products and technical
support. Two French bovine breeds, Holstein and Montbeliarde, seem to me
perfectly adapted to fit the need for productive and resistant cows.
Montbeliarde breed is strong enough to succeed everywhere with good
fertility, dairy potential and feed efficiency,” said Hélène Dubarle,
export manager, Jura Betail. “But genetics is nothing without a
technical support which helps farmers achieve their goals and use the
benefits of the breed as management and feeding are important in the
success of crossbreeding,” she added.
Bilateral partnerships
like these and interest of many more international giants of dairy
industry of the world, in India, highlight the possibilities of
well-structured growth of the world’s largest milk producer.
Tier
1 cities are showing higher growth promising markets. There has been a
significant increase in procurement of milk from farmers by the private
sector. Emergence of commercial dairy farmers association launching farm
branded milk products in India has been observed.
Despite all
this, there is a need for Indian milk industry to get inspiration from
the French export focussed industry to avoid the struggle to maintain
100% self-sufficiency due to mounting local demand; it has been
anticipated that by 2030, the demand for milk will reach 160 to 170
million tonne[ Source : FnB News.com ].
Hence, it is of
paramount importance that Indian models follow the transparent and
closely monitored processes. Sustainable dairy farming keeping in mind
the available resources is possible in India if the entire chain of the
Indian dairy industry, from the farms to the consumers’ plate, keeps an
eye on safety norms, strict hygiene criteria, sampling and inspection of
milk to ensure standardisation and includes cutting-edge research and
innovation techniques for its ever-increasing diversity, quality and
safety of value-added dairy products.
(The author is head, agribusiness department, French Trade Commission, UBIFRANCE, India)
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