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The Significance of Dairy Industry in India’s Economic Development

India’s dairy industry has played a crucial role in the country’s economic development. This sector has also demonstrated an important part in achieving food security, reducing poverty, generating employment opportunities, and providing a regular source of income for rural households. Moreover, in developing economies, like India, landless and poor farmers are actively involved in dairying as an essential means of livelihood.

K Rathnam, the CEO of Milky Mist, a well-known expert of dairy industry is very confident about the industry’s role in India’s economic growth. “The dairy sector plays a vital role in achieving the Sustainable Development Goals (SDGs), especially SDG 1- No poverty, SDG 3- Good health, SDG 5- Gender Equality, SDG 8- Good jobs and economic growth and SDG 10- Reduced inequalities, and it helps in improving lives and transforming the economy.”, says Dr. K Rathnam.

The dairy industry is a major source of employment in India, particularly in rural areas. Annually, 8.4 million farmers depend upon the dairy sector for their livelihoods, out of which 71% are women, according to Agricultural Skill Council of India. Furthermore in a year, crop production employs the rural workforce for 90-120 days, but dairy provides alternative employment opportunities throughout the year. Regarding benefits to the farmers, around 60% of the consumer price from milk goes to the farmer, which is highest among major milk producing countries, according to Diary Report prepared by International Farm Comparison Network in 2018.

Dairy farming has also been a key driver of rural development in India. It provides an additional source of income for farmers, which helps to reduce poverty and improve living standards. The dairy industry also supports the development of rural infrastructure, such as roads and electricity. Allocating Rs 15000 crore towards the Animal Husbandry Infrastructure Development Fund, which aims to facilitate private investments in dairy processing, value addition, and cattle feed infrastructure, is expected to have a twofold effect, as per K Rathnam Milky Mist CEO. Firstly, it will promote the growth of local manufacturing and consumption of domestically produced goods. Secondly, it will accelerate India’s journey towards self-sufficiency.

The dairy industry also has a symbiotic relationship with agriculture, meaning they benefit from each other. Dairy farming provides a market for agricultural products such as fodder, which is used as feed for the cattle. As the demand for fodder increases, it leads to a rise in its production, benefiting the agriculture sector. This, in turn, boosts agricultural production, leading to more abundant and cost-effective feedstock for the dairy industry. On the other hand, the dairy industry’s waste products, such as manure, are an excellent source of nutrients that can be used as fertilizer in agriculture. Using dairy manure as a fertilizer helps to improve soil fertility, leading to increased agricultural productivity. Therefore, this mutually beneficial association between the dairy industry and agriculture results in a sustainable and integrated agricultural system that supports both sectors.

Dr K Rathnam also believes that Indi’s dairy industry has significant export potential. “Export of dairy products recorded a growth of 19% as its export rose to $471 Mn in FY2022-23 till now (April-December 2022) from $395 Mn in April-December 2021 of the last fiscal year.”, adds K Rathnam. India is ranked 1st in milk production contributing 24% of global milk production. Milk production in the country has grown at a compound annual growth rate of about 6.2% to reach 209.96 Mn Tonnes in 2020-21 from 146.31 Mn Tonnes in 2014-15.

The dairy industry also plays a critical role in ensuring food security in India. Milk and dairy products are a major source of nutrition for millions of people, particularly in rural areas. The growth of the dairy industry will ensure that more people have access to nutritious food.

According to Dr. K Rathnam, it is essential for the government to create an appropriate dairy development policy to boost milk production in promising districts and states. Statistical information reveals that 81% of milk in India is produced by 10 states, while the remaining 19% is produced by other states and union territories. To increase the milk supply and alleviate nutrition-related issues in regions with a shortage of milk, it is crucial to encourage dairy farming among small and landless farmers.

Indian dairy industry has immense potential to contribute to India’s economic development. Dr. K Rathnam believes that the industry should be supported through policies and investments that promote growth and innovation. By doing so, the dairy industry can continue to create jobs, boost rural development, and contribute to India’s food security and export potential.

(Above mentioned article is consumer connect initiative. This article is a paid publication and does not have journalistic/editorial involvement of IDPL, and IDPL claims no responsibility whatsoever)

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