Wednesday, 27 May 2015

The Cooperative System and the Evolution of the Indian Dairy Industry

From being milk deficient, with both producers and consumers being regularly exploited by middle men, the cooperative movement brought about a paradigm shift in the Indian dairy Industry. The country is now the world’s biggest producer of Milk with the dairy industry becoming one of the most lucrative ventures for investors.

Dairy Industry in India

India was declared the world’s largest producer of milk in 1999. This was a moment of pride for India as it was a milk-deficit country earlier. This transformation was a result of the collective efforts of various government and semi-government bodies to promote milk production. In 1970 ‘Operation Flood’ was initiated by the National Dairy Development Board (NDDB) with the aim of replicating the Anand/Amul Model across the country. This model was first implemented in the Kheda (formerly Khaira) district in Gujarat and was the first step taken by the Indian government to regularise the milk production and supply. This model was built around a group of cooperatives or institutions owned by rural farmers, who wanted to market their milk collectively. The basic philosophy of the Anand Model was the establishment of a vertically integrated structure which created a direct link between the milk producers and the ultimate consumers. The purpose of the `Operation Flood’ was to revitalise the dairy industry in India by using cooperatives as a catalyst for converting India from a milk-deficit country to a milk-surplus country.

Operation Flood became a very successful initiative and led to dairying become a leading economic activity in the country. The Operation Flood was implemented in three phases and it led to capitalizing the success of running diaries as cooperatives. The success of the Operation Flood and the cooperative movement became an inspiration for several other Asian countries such as Sri Lanka, Bangladesh, Nepal, Philippines and some African countries.

But, why was it felt that there is the need for such an initiative? During the pre-Operation Flood period - middle-men between the producers, mainly the rural farmers, and the ultimate consumers were prevalent. Both, the producer and the consumers were exploited by these middle-men. The producers of milk were concentrated in the rural areas and they were exploited by those who were involved in procuring the milk from them and supplying them to the dairies. On the other hand, the dairies exploited the consumers by charging high prices. There was also the need to make India self-sufficient in milk. Since the late 1990s and the success of the Operation Flood, NDDB has taken the cooperatives movement to other agricultural products too. It has been offering guidance and training to all parties involved in the dairy and agricultural industry. The Operation Flood created a new policy environment in the dairy sector and linked rural and urban populations, introduced market orientation and technological advancements, developed extension services, and supported the growth of cooperatives in a sustainable manner. This movement also opened new employment and income avenues in the vulnerable sections in rural areas, thus slowing down the mass migration to the cities. It has also spawned a flourishing dairy machinery industry which is exporting equipment. It is expected that the government will continue to support the dairy industry in India with various initiatives and policies, not only due to its contribution to the growth of the economy, but also to continue improving the well-being of the rural population.

For further information on the Indian dairy industry you can buy our latest report titled “Dairy Industry in India: Market Size, Growth, Prices, Segments, Cooperatives, Private Dairies, Procurement and Distribution”. This report is the fourth edition of our highly acclaimed publication. The study is an outcome of an intensive research of the Indian dairy industry that draws upon a comprehensive analysis of every major dairy segment in the country.

Make an Inquiry of this Report at : http://www.imarcgroup.com/enquiry-form/




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