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India has huge potential in dairy exports
By agencies
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Monday, 18 April 2005, 19:30 IST
NEW DELHI:India is the world leader in milk production but the domestic dairy industry has a record of low productivity and less export orientation, preventing it from making a major mark in the global market, a government report has said.
The report said India exported dairy products worth $35 million in 2003-04 as against the milk output of nearly 85-90 million metric tonnes, about one-fifth of the world fresh milk production.
When cow milk alone is considered, India is ranked second, next to the U.S., with a global share of 7 percent. In milk products, India produced 2.5 million metric tonnes of butter and ghee and remained the world leader in their production.
However, India is an insignificant player with regard to production of skimmed and butter milk, condensed milk, dry milk, dry whey, and cheese.
This reflects lack of modernization and value addition in the dairy industry that has tremendous scope for innovations and new product development. A recent Exim Bank study observed that though the Indian dairy sector has been delicensed and is attracting global dairy players, very few steps have been taken to increase value addition and improve packaging and presentation of products. As per the study, reasons for low productivity in dairy sector were related to generic feeding, operational inefficiency, wastage and loss in fat and protein during the milk processing.
''Adoption of good manufacturing practices (GMP) and adoption of hazardous analysis critical control point (HACCP) standards are other requirements to meet the demands of some international markets.'' Inducting state-of-the-art technologies from the U.S., Europe and Australia could strengthen the technological input. The quality of milk products could be enhanced through clarification and bactofugation at the time of milk processing, it said.
Generally, the average Indian herd in a dairy business consists of just two animals as compared to 88 animals in the U.S., and over 200 in New Zealand. About 70 percent of livestock market in India is owned by small and marginal farmers, who are mostly engaged in livestock farming.
Milk co-operatives, which managed to impart some professionalism in the sector, account for roughly 20 percent of total market in India. The dairy sector, which is largely treated as a village industry, must adopt modern practices to attract large foreign and domestic investors for value addition and effective utility of raw milk production, it said.
The success of MNCs entry would depend on typical factors such as efficiency in procurement, adoption of hygiene practices, cost effective processing facilities and innovations in marketing, it added.