Managing Uncertainties

in Dairy Sector
Indian Case Study
CLFMA Symposium, Kolkata
14th September 2012

Rahul Kumar, MD , Amul Dairy , Anand

Dr. Verghese Kurien

1921 - 2012

Indian Dairy Sector

Highlights

Largest Producer of Milk

- 2011-12 : 121 MMT/Global 750 MMT
Largest Agriculture Crop
Rice : 95 MMT, Wheat: 80 MMT
Gross Value of Dairy Produce : 75 billion US$
Avg. Growth Rate : 5%
Largest share of Agri GDP

Indian Dairy Sector

Highlights

121

120
100
66.3

80

84

91

94

101

53.9

60
23.2

40

70.8

78.1
74.3

88

181 203

17 20

31.6

21.2

20
0

MMT

1970s Operation Flood

1970 2000 : 20 MMT to 80 MMT
Massive Infrastructure created by Cooperatives
Most efficient Agri/Rural Development Program
1970s : Operation Flood I
30 Years : 4 times 1990

We CAN do it

Indian Dairy Sector

Indian Dairy Sector

Highlights

20 % of World bovine population

Low Productivity : 1100 Kg/Year
(World Avg. 2038 Kg/Year)
Huge Number of unproductive animals, Poor
nutritious & low genetic potential
Social impact / Rural income model / Pro-poor
Lack of business oriented approach

What is Certain

Milk demand in India going to 200 MMT by 2020

121 200 in next 8 Years
Yearly increment 10 MMT
2011/12 : 1208 Million : : 2016-17 : 1283 Million
Rising Income Level More Food Demand
Competition for Land
Agri Vs Dairy
Milk Demand Income Elastic
Growth in Population / Consumer Income /
Farmer Income High Growth rate for Dairy.

What is Certain

6.5 Billion
Food Demand

9 Billion
100%

India : Food Trend

Current & Projected Food Production Vs Demand in 2010
2000

2020(BCS)

2020(Demand)

207

203
181

173

125

166

119
108
92

89
76

71

13.6 13 14 15.6

Rice

Wheat

Coarse Cerals

13.5 16

23 19.5

Pulses

Milk

Uncertainties

Uncertainties

Belgium to Jantar Mantar

Uncertainties

Challenges
- Input / Production / Processing / Market
Huge pressure on Milk Production
120 200 MMT in 2020
Road map to Reach
- Low Input / Low Output not workable
Under the Low Input System Farmers minimize
cattle feed rations and inputs to inexpensive green
fodder and agricultural crop residues. We cant
afford to waste our precious protein resources for
live stock.

Uncertainties
Productivity
Great leap required
45% indigenous cattle, 55% buffaloes & 10% cross
bred cows
AI coverage very poor, performance not up to mark
3.5 Avg.
Lack of extension / Awareness level / Poor feeding /
Management

Uncertainties
Availability & cost of feed an issue
- DORB: Jan12: `4000/July12 :`10500
Breeding / Feeding / Disease
No Institutional Credit
Is Dairying Agriculture ???

Fight: Food Vs Fodder

Uncertainties
Farmers : Milk Producers &
Milk Consumers with crops
as Priority
Limitations of feed resources
bot in quantity & quality
Lack of availability to Vet
System / Medicine /
Vaccinations / Doctors
Lack of proper handling &
processing of milk (30% being
processed)

Anticipated Deficit in % in Fodder & Feed

Demand

Uncertainties
Government Policies towards Dairying

Long term strategic policy

Control (export of Cattle Feed Raw Materials)
Priority
Market Price Control
Investment Road/Power / Infrastructure
Regeneration of Pasture land
Research support
Manpower for Dairy Sector
Increase in farmer income should be
isolated with inflation

Uncertainties
Un-remunerative prices to farmers
Availability of labour force
Man Vs Machine : Cost Competitiveness
Research : Rumen

Efficiency

Climate change & Environmental Issues

Food Vs Fuel
No inventory balancing of Dairy Products

Managing Uncertainties
Amul Experience

Managing Uncertainties
Amul Experience
Performance of Gujarat
Cooperatives : Amul
Amul Pattern / Model
247 Lit ----- 12 Million
(1946)
(2012)
Unorganized --- State of
the art production
system

Creating Institutions : Networking

Managing Uncertainties
Amul Experience

Peoples Institutions at Villages

Technology & Quality Systems at Grass
Root
Transparent System
Ownership of farmers 2.5 billion US$
Investment in State-of-the-art Plants
Cattle Feed Design Centre

Managing Uncertainties
Amul Experience

AI Intervention : 1970s
Farmers at core of the business
Production Marketing Link
Brand Building : 99% branded consumer
products
Productivity Enhancement Programme
Clean Milk Production (95% BMC Milk)

Managing Uncertainties
Amul Experience

Innovation in Cattle Feed / Large

Acceptance
Maximum Returns to Farmers (75-80%
Consumer Realization)
Huge concentrated feed capacity
creation
Use of I.T. to bring farmers closer
Financial Inclusion

Ration Balancing Programme

Managing Uncertainties
Amul Experience

Managing Uncertainties
Amul Experience

Urgent Need to Expand Organized Sector

Market Segmentation

Farmer-centric Approach

Cooperative Education Programme

Progressive Farming
Calf Rearing

Dairying to Next Generation

Managing Uncertainties
Amul Experience

Animals treated: 85,335

Managing Uncertainties
Amul Experience

Preserving
Environment

Managing Uncertainties
Amul Experience

AI To Retail

Conclusion

Uncertainties are Certain

Focused Planning with Long Term Approach must
Farmers must be the core
Production Market Customer link is important

Research / Feed Security / Rumen Efficiency /

Disease Management / Productivity / Inventory
Management
Government Policies / Working closer for
long term strategy
Private Sector to play vital role while keeping
Farmers at the centre of the business

And finally
We have traversed a path that few have dared to.
We are continuing on a path that still fewer have
the courage to follow. We must pursue a path that
even fewer can dream to pursue.
Yet, we must, we hold in trust the aims and
aspirations of millions of our countrymen.

Dr V. Kurien

THANK YOU
rahul@amuldairy.com