Why in news?
Debate has arisen over whether India should liberalise dairy imports as part of free trade negotiations. Farmers’ organisations argue that opening up would hurt millions of small dairy producers.
Background
India’s dairy sector has grown rapidly since Operation Flood (1970–1996), which organised village cooperatives and built a nationwide milk grid. Today India is the world’s largest milk producer, generating around 248 million tonnes annually and consuming about 243 million tonnes. The sector contributes roughly 31 % of agricultural GDP and supports over 80 million rural households, mostly landless or small farmers.
Why resist liberalisation?
- Protecting small farmers: Indian dairy is dominated by smallholders owning two or three cows or buffaloes. Influx of cheap imports could undercut their livelihoods.
- Self‑sufficiency: After decades of effort India meets almost all its own milk demand. Dependence on imports could jeopardise food security.
- Social stability: Dairying provides regular cash flow, empowers women and supports nutrition. Disruption could have socio‑economic consequences.
- Infant industry argument: Developed countries heavily subsidise their dairy farmers, making their products artificially cheap. Indian farmers ask for a level playing field.
Global scenario and trade issues
Major exporters like the U.S., EU and New Zealand have surplus milk, whereas India is largely self‑reliant. Free trade agreement talks with the UK and European countries often stall over access to India’s dairy market. Although India’s dairy exports have grown, they remain small compared with the global market. Multinationals seeking entry could outcompete local cooperatives if protections are removed.
Challenges within the sector
- Low productivity: Indigenous breeds yield less milk than exotic breeds. Feed and veterinary services are inadequate.
- Feed deficits: Shortage of quality fodder and rising feed costs erode profits.
- Breeding gaps: Poor access to artificial insemination and genetic improvement.
- Supply‑chain inefficiencies: Lack of cold chains and processing facilities leads to wastage.
- Under‑investment: Research, infrastructure and extension services remain underfunded.
Reform agenda
- Boost productivity through balanced feed, better animal health services, artificial insemination and use of sex‑sorted semen.
- Create cluster‑based dairy parks, promote farmer producer organisations (FPOs) and strengthen cooperatives.
- Invest in cold chains, value‑added products and export‑oriented processing.
- Provide targeted subsidies and credit facilities to small farmers.
- Encourage behavioural change, such as adopting clean milking practices and diversified fodder crops.
Conclusion
India’s dairy sector is a pillar of rural livelihoods. Liberalisation must be balanced with domestic reforms to improve competitiveness. Protecting small farmers while modernising the value chain will help ensure inclusive growth.