A Review of Milk Production in India with Particular Emphasis on Small-scale Producers

Keywords: cost of production, India, milk, policy, poverty reduction, small-scale dairy, typical farms

The current document begins with a general overview of milk production in India. This is followed by a detailed study of dairy farming in Haryana State, particularly of the small-scale producers owning two to four milking animals who form the majority. The purpose is to assess their prospects for earning more from dairy farming, and to identify which areas of intervention in terms of management or policy are likely to be most favourable to them, and whether they are vulnerable to international competition. A further objective has been to evaluate the methodology used.

The review applies a method of economic analysis developed by the International Farm Comparison Network (IFCN) which is based on the concept of 'typical farms'. Four farm sizes were selected to represent typical farms in Haryana State, with two, four, 22 and 37 dairy animals respectively. Each farm is described in detail with assets, costs, profits and other economic information presented both graphically and in the text. A series of variables is introduced to model the effect of changes - in market prices or in production practices, for example - and these are discussed in the light of the reality facing small-scale dairy farmers.

The Review concludes that the 'typical' farms with four and 22 dairy animals have the potential to cut their production costs and compete with imports. However, farmers with two dairy animals - the majority - are unlikely to be able to compete in future, even on the domestic market, without major changes. Nevertheless, the Review also recognises that in India, as in most other countries, farmers will keep their dairy animals as long as no alternative employment opportunities exist.

 

Authors: Torsten Hemme, Otto Garcia and Amit Saha

 
Working Paper:
A Review of Milk Production in India with Particular Emphasis on Small-scale Producers
Executive Summary:
A Review of Milk Production in India with Particular Emphasis on Small-scale Producers
Policy Brief:
Milk Production in India - Opportunities and Risks for Small-scale Producers