Business News/ Economy / What’s going on with India’s milk economy?
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From being a milk-deficit nation in its early years of independence, India has emerged as the largest producer of milk in the world. The country’s per capita milk consumption exceeds the global average, and domestic production has clocked a 61% growth in the eight years ending 2021-22, government data shows. With this, dairy has become the single largest agricultural commodity, contributing 5% to the economy’s output. But milk is getting costlier: production was reportedly stagnant in 2022-23, fodder prices are running high, and lumpy skin disease is inflicting pain on milch cattle. Last month, the government had to refute reports that imports may be required for some dairy products. Mint explains:
From being a milk-deficit nation in its early years of independence, India has emerged as the largest producer of milk in the world. The country’s per capita milk consumption exceeds the global average, and domestic production has clocked a 61% growth in the eight years ending 2021-22, government data shows. With this, dairy has become the single largest agricultural commodity, contributing 5% to the economy’s output. But milk is getting costlier: production was reportedly stagnant in 2022-23, fodder prices are running high, and lumpy skin disease is inflicting pain on milch cattle. Last month, the government had to refute reports that imports may be required for some dairy products. Mint explains:
Healthy growth
Milk production in the country has grown healthily over the past decade, growing at 6% per year, against the global average growth of just over 2%, Mint calculations show. However, production is likely to have been stagnant in 2022-23 (official data isn’t out yet). India has been the biggest producer of milk since 1997, according to UN data. Nearly half of its milk comes from indigenous and non-descript buffaloes (animals not selected or bred for milking purposes). Indigenous or non-descript cows contribute 20%.
Healthy growth
Milk production in the country has grown healthily over the past decade, growing at 6% per year, against the global average growth of just over 2%, Mint calculations show. However, production is likely to have been stagnant in 2022-23 (official data isn’t out yet). India has been the biggest producer of milk since 1997, according to UN data. Nearly half of its milk comes from indigenous and non-descript buffaloes (animals not selected or bred for milking purposes). Indigenous or non-descript cows contribute 20%.
Self-sufficiency
The growth in the segment has been aided by value-added products. Apart from being the largest producer of milk, the country has also been a net exporter of dairy products for years. Exports jumped by a whopping 97% in the fiscal year 2021-22, while import needs, mostly for specific items, are minimal—which is why the Centre had to quickly refute reports of the possibility in April.
Daily dairy: a diet need
Milk production has grown in tandem with consumption. Nearly half of the Indians consume 'doodh' or 'dahi' every day, the National Family Health Survey found. Daily per capita milk consumption has risen fourfold since 1970. Punjab has highest per capita milk availability of 1.3 kg per day, followed by Rajasthan. Six north Indian states dominate the top 10 list. Six north Indian states dominate the top 10 list. Six north Indian states dominate the top 10 list.
Fodder on fire
The cow economy is facing a supply crisis with high fodder prices and shortage of cattle due to lumpy skin disease. Fodder prices have run through the roof, causing significant impact on milk production. Wholesale fodder inflation hit a record high of 30.9% in November 2022. Meanwhile, over 3 million cattle have got infected by the lumpy skin disease so far. The resulting cattle shortage had a ripple effect on milk prices.
Milk on the boil
As a result, milk prices have risen steadily over the past year. Major cooperatives raised retail prices in two to three spells since September 2022. But will it affect consumption patterns? That’s unlikely, given the ubiquity of dairy in our diet. A recent survey pointed to some consumption shifts, but most families would rather bite the bullet and buy expensive milk.
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