The most recent discussion in the community is Budget 2023, where a number of processes and decisions were made to fill gaps in our country’s production and resources.
One of the most important topics discussed was dairy processing. It is common knowledge that the White Revolution began in India in 1970 with the primary goal of increasing access to affordable food and improving the standard of living for small farmers whose livelihoods depended on agriculture. Additionally, the country’s economy was significantly impacted by the white revolution and now is the time for a change.
What is dairy processing?
Using diary products has been a part of our cultural roots for a very long time. Domesticating animals for milk is not a new concept. Dairy products are used in almost everything and the world’s largest producer and consumer of milk is one example that proves that dairy has been an inseparable part of Indians. The preparation of raw milk (from cows, goats, buffaloes, sheep, horses, and camels) for human consumption is known as dairy processing. The two primary categories of industrial processes are as follows: Heat treatment to extend the shelf life of milk and make it safe for human consumption dairy goods like butter, hard cheese, and milk powders are dehydrated.
Dairy processing in India?
With a consistent increase in the supply of milk and milk derivatives, India has been the world’s top producer and consumer of dairy products since 1998. The rural Indian economy is mostly based on the dairy industry, which also provides a significant amount of work and revenue. The world’s largest herd of cattle is located in India.
Comparatively to the other major dairy producers, the milk production per cow is noticeably lower. The majority of the dairy products supplied in India are fluid milk, and almost all of them are consumed domestically. Because of this, there is an enormous opportunity for value addition and overall growth in the Indian dairy business.
In addition to providing lucrative business opportunities, India’s dairy industry contributes to socioeconomic growth. In light of this, the Indian government has launched a number of programmes and initiatives aimed at expanding the dairy industry in the country. For instance, the “National Dairy Programme (Phase-I)” aims to increase milk production and cattle productivity by strengthening and expanding the infrastructure for rural milk procurement and giving farmers greater market access.
On the other hand, private investment in the Indian dairy industry has also grown in recent years. Due to the size and potential of the Indian market, both domestic and foreign players are entering the dairy industry. Value-added products like cheese, yoghurt, and probiotic drinks are getting the most attention. They are also launching novel products that are tailored to Indian customers’ specific needs. Additionally, these players are expanding their milk procurement network, which is further facilitating the growth of India’s dairy industry.
The most recent edition of the IMARC Group publication on the Indian dairy industry is the subject of the report. The study is the result of extensive research into the Indian dairy industry and includes an in-depth examination of each major Indian dairy sector. The following aspects of the Indian dairy market have been thoroughly examined in the report, which is based on both secondary research and multiple waves of qualitative primary research.
What does ICRA say about dairy processing after Budget 2023?
The nation’s dairy processing industry is projected to benefit from the cooperation incentives that were proposed in the Union budget for the years 2023 and 2024, according to rating agency ICRA. “Cooperatives that begin manufacturing before March 31, 2024, will qualify for the 15% reduced tax rate currently offered to new manufacturing enterprises,” Finance Minister Nirmala Sitharaman said in her budget speech.
“More small and marginal farmers would be able to engage in organised milk procurement as a result of the development of new cooperatives,” said Shamsher Dewan, senior vice president of ICRA.
Private players in the dairy industry will likely face more competition as a result of the cooperative incentives. The government has been actively involved in providing the impetus for developments to take place by introducing various schemes and programmes and staying committed to the fact that healthy and sizable livestock will always be the backbone for the absolute growth of the industry. The industry recognises the importance of private sector players contributing to the industry’s growth and achievement of its goals. A proactive public-private collaboration is quintessential to making the dairy sector as prosperous as agriculture and other manufacturing sectors. In these regions, the competition from such cooperatives could start to affect private dairy players. Additionally, low tax rates for new cooperatives planning to build factories may promote the expansion of the dairy processing industry. As part of the higher agricultural credit targets that have been announced, ICRA believes that the sector will also receive increased funding, which would encourage capacity addition and the strengthening of supply chain infrastructure.
It is anticipated that India will have a greater influence on the Indo-Pacific nutritional security agenda. As a result, the food processing industry has the chance to become more integrated with countries in the Gulf, and South-East Asia, and the African industry has the chance to become more integrated with countries in the Gulf, South-East Asia, and Africa. For both primary and processed food products from India, demand-generation initiatives in target nations should coincide with supply-side policy interventions.
The government can strive for partnerships at the national and state levels (such as the partnership between Madhya Pradesh and the United Arab Emirates as part of the I2U2 grouping) for particular crops and products that can help guarantee stable demand and raise price realizations for farmers and other stakeholders in the agricultural ecosystem. As the demand grows, it is critical to increase dairy processing. The steps taken towards this initiative are more than appreciable.
