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2014 GAP Report® – The New White Revolution
A FARMER-LED DAIRY VALUE CHAIN
In 1965, the National Dairy Development Board (NDDB) was established to transform dairying into an instrument for the development of India’s rural sector. Farmer cooperatives sprang up around the country. They collected and processed milk and other dairy products and sold them in villages and cities. This endeavor, financed with World Bank assistance and known as Operation Flood, created a “White Revolution” by successfully increasing the incomes of 80 million farmers and expanding people’s access to an important source of protein, minerals and vitamins.130 Today, India is number one in milk production worldwide.
Despite this remarkable achievement, domestic liquid milk demand outpaces production. A growing (and increasingly urban) middle class seeks more diverse, processed dairy products — such as frozen desserts, flavored drinks and yogurts, and cheeses — and food manufacturing industries want to invest in and expand dairy processing. The barriers to meeting demand are low per animal milk productivity and inadequate village-level milk collection facilities with access to organized food manufacturers.
To address these two challenges, the Government of India developed a new National Dairy Plan (NDP-I) that, from 2011–2012 through 2016–2017, will provide $454 million to NDDB to improve animal genetics and nutrition, expand bulk milk collection infrastructure, and create farmer cooperatives and companies in 40,000 villages across 14 states that account for 90 percent of total milk production.131 A line of credit from the World Bank Group’s International Development Association (IDA) finances some 80 percent of NDP-I, with the remainder consisting of Indian Government budgetary outlays.132
Increasing per animal milk productivity through improved genetics is a key facet of the project. Dissemination of high-quality semen to farmers to increase milk production per cow is critical for the future growth of the Indian dairy sector. Thus, to participate in the project, potential partners and locations at the state level (e.g., Dairy Unions and Federations) are vetted to assure they have the geographical and technical capacity to support the raising of bulls with desired traits and to produce, store and deliver disease-free, high quality semen in large quantities to farmers. The participating states must also commit to six regulatory reforms that facilitate artificial insemination services through private technicians and adopt minimum standards and protocols for breeding and to prevent and control infections. To date, the 15 participating states have substantially completed these reforms.
Improved animal nutrition is also critical for increasing production per cow. Local Resource Persons are trained to provide advice to farmers about balanced feeding regimens that increase per animal milk productivity, improve conception rates, reduce feeding costs and reduce methane gas emissions per unit of milk produced.
Increasing collection and sales of milk into the organized food industry sector is central to the NDP-I. This is accomplished by: (i) expanding existing Dairy Cooperative Societies to cover more villages; (ii) promoting the development of new milk producer companies that can meet the quality standards of dairy product manufacturers; and (iii) extending milk collection infrastructure to improve cold-chain management.
In order to increase productivity more rapidly and fully and improve the economics of the dairy sector, there is also a movement toward modernized dairy farms. Some food processors, such as Nestlé, are helping farmers transition to larger farms with more cattle, improved genetics, modern facilities, mechanization and transfer of knowledge and technology for better feed and upkeep of animals.133
An organized dairy industry offers benefits to all parties engaged in the value chain, from farmers to consumers.134 Nearly two-thirds of the money from milk sales is received by farmers, ultra high temperature processing enables longer shelf life and less loss of milk, with greater convenience to buyers, and demand for high-value products creates new opportunities for dairy manufacturers. For example, whey, a by-product in manufacturing dairy products like the fresh cheese called “paneer,” has not yet been fully utilized by the Indian dairy industry. It is highly nutritious and could be used more fully to boost the nutrient value of weaning foods, bakery products and dairy products.
Thus, NDDB, through the National Dairy Plan, is advancing a new White Revolution by promoting high-quality, cost-effective technologies that help farmers increase milk production and by integrating milk production into the organized food industry sector.
TABLE OF CONTENTS
The New White Revolution