The Regional Comprehensive Economic Partnership (RCEP) is a trading bloc encompassing 15 countries, including some of the world’s largest milk traders such as Australia and New Zealand. In 2020, India withdrew from this agreement following opposition from various sectors, including the dairy industry. This decision was hailed by unions and organisations representing farmers and small industrial producers.
India’s Dairy Sector Opposition to RCEP
Indian dairy sector had severe reservations against the RCEP. Over the past couple of decades, India has encouraged the growth of private milk companies which buy milk from local farmers. These firms would have been able to import milk from the likes of New Zealand or Australia at lowered tariffs if India had signed onto the RCEP, leading to potential issues for local farmers. Furthermore, projections from NITI Aayog suggest that India will become a milk-surplus country by 2033. Consequently, there appears to be no impending risk of a dairy shortage that would justify joining the RCEP.
The White Revolution and the Dairy Sector in India
The White Revolution marked a significant point in the history of India’s dairy industry. Led by Dr Verghese Kurien, it brought about the creation of key institutions such as the Gujarat Cooperative Milk Marketing Federation Ltd and the National Dairy Development Board (NDDB). These organisations played a vital role during the Operation Flood and have remained integral to the continuation of the milk production chain in India.
The Importance of Dairy Sector
The dairy sector is a major part of India’s economy, with a large segment of the farming population involved in dairying and livestock rearing. This labour-intensive sector contributed 28% to the Gross Value Added (GVA) from agriculture in 2019-20. Moreover, during periods of natural disasters like droughts and floods, milk production provides much-needed support to farmers.
Challenges faced by the Dairy Sector
Despite its contributions, the dairy sector in India also faces several challenges. One such issue is the invisible labour supplied by unpaid female family workers who supply a major part of the labour requirement for milk production. Another problem is the lack of remunerative pricing. The dairy sector lacks political clout as it remains largely unorganised, thereby hindering advocacy for rights and transparent pricing.
Government Initiatives in the Dairy Sector
The government has implemented several initiatives aimed at protecting and nurturing the dairy sector in India. The National Action Plan on Dairy Development 2022 seeks to increase milk production and double the income of dairy farmers, while the National Animal Disease Control Programme & National Artificial Insemination Programme targets disease control and livestock improvement.
Way Forward for the Dairy Sector
Several strategies can help improve the efficiency and profitability of the dairy sector. Increasing productivity through better healthcare, breeding facilities, and management of dairy animals can reduce the cost of milk production. It’s also important to invest in infrastructure that supports the production, processing, and marketing of dairy products while meeting international quality requirements.
