India’s Dairy Sector – Growth, Challenges and Future Pathways

India’s dairy sector has seen remarkable growth since the 1970s. From producing 23 million tonnes in 1970, milk production soared to over 239 million tonnes by 2023-24. This expansion reflects the collective efforts of millions of small farmers who transformed dairying into a vital rural livelihood and a pillar of the economy. National Milk Day honours Dr Verghese Kurien, the architect of this transformation, whose vision placed farmers at the centre of India’s dairy revolution.

Historical Context and Growth

The dairy sector’s modern journey began with grassroots mobilisation. Small farmers organised cooperatives to gain dignity and fair economic terms. This movement changed milk from a household product into a national industry. Per capita milk availability rose from 130 grams in 1950-51 to 471 grams . The sector now supports over eight crore farmers and contributes nearly five per cent of India’s GDP.

Economic and Social Impact

Milk income offers more than livelihood; it provides financial security and liquidity, especially when crop failures or seasonal employment affect rural households. Women’s participation is , with over 48,000 women-led cooperatives enhancing economic inclusion. Dairy’s value, at over ₹11.6 lakh crore, surpasses the combined output of staple crops like paddy and wheat.

Structural Challenges

Despite scale, the sector faces serious constraints. Per-animal productivity remains low, affecting profitability for small farmers. Rising feed costs and shrinking fodder land exacerbate these issues. Cooperative reach is uneven, leaving many producers dependent on informal buyers with opaque pricing. There is no national minimum support price (MSP) for milk, exposing farmers to income uncertainty in a perishable goods market.

Quality and Health Concerns

Milk quality issues persist, including antibiotic residues and inconsistent veterinary care. Diseases like Foot and Mouth Disease threaten animal health and export potential. These factors undermine consumer safety and sector credibility. Young farmers are increasingly hesitant to enter dairying due to these challenges.

Future Directions and Policy Needs

The sector must shift focus from volume to value. Integrated supply chains and value addition through products like cheese, whey, and nutrition supplements are essential. Investments in chilling infrastructure, cold chains, and scientific processing can enhance economic returns. Policies need to protect farmers, promote innovation, and create pathways for small producers to climb the value chain.

Environmental Sustainability

Climate change impacts fodder availability and disease patterns. Sustainable feed systems, climate-resilient breeds, and biogas models are vital for ecological balance. Productivity, animal health, and environmental care must advance together to ensure long-term viability.

Continuing the Legacy

India’s dairy sector stands at a crossroads. It must grow in fairness, sustainability, and institutional strength. The legacy of Dr Verghese Kurien and the entrepreneurial spirit of millions of farmers provide a strong foundation. The future depends on collective resolve to transform India into the world’s most inclusive and future-ready dairy powerhouse.

Questions for UPSC:

1. Discuss in the light of India’s dairy sector transformation how cooperative movements can empower rural economies and enhance social inclusion.
2. Critically examine the challenges faced by India’s agricultural sectors due to climate change and suggest sustainable strategies with examples.
3. Explain the role of value addition and supply chain integration in improving agricultural incomes and rural livelihoods in India.
4. With suitable examples, discuss the impact of women-led cooperatives on rural development and gender empowerment in India.

Answer Hints:

1. Discuss in the light of India’s dairy sector transformation how cooperative movements can empower rural economies and enhance social inclusion.

1. Cooperatives enable small farmers to collectively negotiate fair prices, increasing their income and reducing exploitation by middlemen.
2. They provide farmers with access to inputs, veterinary services, and technical knowledge, improving productivity and livelihoods.
3. Cooperative models, inspired by Dr Verghese Kurien’s Amul, transformed milk production into a large-scale, organized rural industry.
4. Women-led cooperatives have expanded economic participation and social inclusion, empowering marginalized groups.
5. Cooperatives create rural employment and liquidity, stabilizing incomes during crop failures or seasonal unemployment.
6. They encourage rural self-reliance, dignity, and collective decision-making, strengthening social capital and community resilience.

2. Critically examine the challenges faced by India’s agricultural sectors due to climate change and suggest sustainable strategies with examples.

1. Climate change causes erratic rainfall, droughts, and temperature rise, affecting crop yields and fodder availability for livestock.
2. Increased incidence of pests and diseases (e.g., Foot and Mouth Disease) threatens animal health and productivity.
3. Degradation of land and water resources reduces agricultural resilience and sustainability.
4. Sustainable strategies include promoting climate-resilient crop varieties and livestock breeds adapted to local conditions.
5. Integrated farming systems combining biogas, organic manure, and agroforestry improve resource efficiency and reduce emissions.
6. Investment in water conservation (rainwater harvesting, micro-irrigation) and diversified income sources enhances farmer adaptability.

3. Explain the role of value addition and supply chain integration in improving agricultural incomes and rural livelihoods in India.

1. Value addition (e.g., processing milk into cheese, whey, nutrition products) increases product shelf-life and market value.
2. Integrated supply chains reduce wastage, ensure quality control, and improve price realization for farmers.
3. Infrastructure such as chilling units, cold chains, and scientific processing facilities are crucial for maintaining product standards.
4. Value addition creates employment opportunities in rural areas beyond primary production, diversifying incomes.
5. It reduces dependence on raw commodity sales, stabilizing farmer incomes and encouraging entrepreneurship.
6. Policies supporting innovation and market linkages enable small producers to participate in higher-value markets.

4. With suitable examples, discuss the impact of women-led cooperatives on rural development and gender empowerment in India.

1. Women-led cooperatives, like those in India’s dairy sector, increase women’s economic participation and financial independence.
2. They enhance social status and decision-making power of women within households and communities.
3. Such cooperatives provide training, credit access, and market linkages tailored to women’s needs.
4. Examples include Amul’s women-led units and over 48,000 women cooperatives contributing to rural incomes and nutrition.
5. Women’s involvement promotes inclusive growth, reduces gender disparities, and encourages community development.
6. These cooperatives also improve household welfare by stabilizing income during agricultural uncertainties.