Swot Analysis Of Dairy India

Dairy Industry

The dairy industry in India has been existent for centuries as a tradition for the major population of Indian rural households. People have been domesticating animals and using them for farming purposes for time long-established. The contribution of Milk to the national GDP is much more than any other farming activity or by-product with a staggering figure of 10.5+ billion dollars as of year 1994-96 (Source: Dairy India, 97). Milk has been a boon for over 70 million farmers in more than 5,00,000 remote villages (Source: Dairy India, 97) as it has provided them with supplementary income. Milk has also been beneficial in terms of nutritional advantages and thus it has been critical to people who are suffering from malnutrition

Milk production in India has seen a phenomenal growth with the annual milk production more than tripling in the last three decades. It has risen from 21 million tons to almost 80 million tons from 1968 to 2001. There have been many activities carried out by the dairy co-operatives as part of the Operation Floor project which has contributed significantly to these astounding numbers. These co-operative societies were also helped by several agencies including the European Union, Food & Agriculture Organization, World Bank & World Food Program (WFP). However, not everything is good as though there has been significant growth in milk production, the milk marketing systems are still in nascent stages and the productivity of the dairy animals is still pretty low in the last three decades. As far as marketing is concerned, unorganized sector contributes to more than 80 % of the milk produced in the country and less than 20 % is marketed by the organized sector. Private organizations comprise the unorganized sector while the government and co-operative socities make up the organized sector. As majority of the milk is being marketed using the un-organized sector thus it is going to discourage small scale dairy farmers from

Below we have shown an example cost structure for a product with a MRP of Rs. 100

(5%) (5%) (10%) 82 Rs 86 Rs 91 Rs 100 Rs

The current status of milk marketing shows that milk is mostly marketed through the highly fragmented unorganized sector. The organized dairy industry comprising of government and co-operative societies, accounts for less than 20 % of total milk production. And in the organized sector, the co-operative sector is the largest in terms of volumes of milk