Doubling the Dairy farmer’s income : A Gross Value add approach in dairy sector

This news is an excerpt from a recent strategy document by TV Mohandas Pai and Nisha Holla and is focused on livestock and dairy sector only. Studying trends of Gross value add in agriculture is very critical in developing strategy for agriculture sector. These trend lines actually help in developing strategies for doubling the farmer’s income. PM Modi’s dream of doubling the farmer’s income is reinforced further under Atma Nirbhar Bharat.

The farmers are empowered with freedom to sell their produce at anyplace where they could get better price. The 70 years old stagnation is broken and the farmers must realize full consumer price for their crops and other allied products. Horticulture is showing much higher growth in contribution to the Gross value added amongst other crops. Livestock sector has shown an exemplary growth in contribution to Agri-GVA from 22% in 2011-12 to 30% in 2018-19, growing at 15% YOY. It may be due to rise in consumption of milk and meat products.

Dairy and meat products need to be tracked separately while developing strategy as they show a different consumption and growth pattern. The milk group forms bulk of the livestock GVA add and its value output is growing at 13%. Meat value output is growing at 14.7% and is faster than dairy. Livestock category might grow to 37% of Agri-GVA in 2024-25. India is the largest milk producer in the world and is showing around 13.9% growth in terms of value output.

The strategies to procure more milk would mean more availability of protein based healthy food .  This protein rich diet may be made part of the midday meal scheme to build nutritional security of nation. Dairy may also play a major role in exports income . Large players like Amul and others need to harness this opportunity by developing robust supply chain ensuring scale and efficiencies. Rs 5000 Crore Agritech fund with NABARD may also focus on use of IT in dairy sector ,helping the sector to grow.