Dairy sector likely to attract Rs 60,000 crore over 5 years


The country’s dairy sector hopes to see up to Rs 60,000 crore of new investment and creation of 10 million jobs in five years, in the wake of the Union Budget proposals, reports Business Standard.

The finance minister had announced a target of doubling the annual milk processing capacity to 106 million tonnes, from the existing 53 million tonnes. This translates to  300 million litres a day from the existing 140 million litres a day in five years.

“To process this massive capacity, the industry requires between Rs 20 and 40 crore investment for every 100,000 litres of processing. Thus, the sector would attract a fresh investment of at least Rs 60,000 crore. As every 100,000 litres of milk production creates 6,000 new jobs, the sector will see 10 million new jobs by 2025,” said R S Sodhi, managing director, Gujarat Cooperative Milk Marketing Federation, holder of the Amul brand to Business Standard.

The Karnataka Milk Federation (‘Nandini’ brand) has also begun examining the potential for a processing unit in the Mumbai area, setting aside Rs 200 crore for the proposed expansion. Currently, the Federation supplies milk and its derivatives from Karnataka to consumers in Maharashtra.

The Centre has also proposed the setting up of a national cold supply chain for perishables and to eliminate foot and mouth disease in cattle. Coverage of artificial insemination is proposed to be increased from the present 30 per cent to 70 per cent. Also, fodder farms and to link farming of grass to the rural employment guarantee scheme.  

The government also plans to focus on green fodder availability. The government grows green grass for use as fodder in advanced countries. In India, farmers, mostly small landholders, do animal husbandry only to the capacity of green grass growth in marginal land. Increase in grass availability would attract huge investment in the dairy sector. 

Shekhar Ghosh is consulting editor, Indoasiancommodities.com. He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at shekhar.ghosh@indoasiancommodities.in.

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