Digitalizing India’s Dairy Sector

Context

The National Dairy Development Board (NDDB) has achieved a major milestone in the digitalization of the dairy industry, notably generating over 35.68 crore “Pashu Aadhaar” IDs to enhance traceability and animal health management.

About the News

The Second White Revolution: India is the global leader in milk production (25% of world output). Digitalization marks a shift from simple production volume to a focus on traceability, efficiency, and value addition.
Key Trends and Data:
- Production Growth: 221.06 million tonnes produced (2021-22), a 73% increase over the last decade.
- Digital Integration: Over 17.3 lakh producers are now integrated into the Automatic Milk Collection System (AMCS).
- Consumption: Per capita availability has risen to 444 grams per day, exceeding the global average.
- Market Projection: The sector is on a trajectory to reach significant multi-billion dollar valuations by 2027.

Importance of the Dairy Sector in India

Rural Livelihood Security: Provides regular income for over 80 million households, acting as a safety net against crop failure (e.g., in Vidarbha and Marathwada).
Economic Contribution: Often surpasses the combined value of rice and wheat in agricultural GDP; the Amul model in Gujarat is a primary example of this commercial power.
Nutritional Security: Essential protein source for a largely vegetarian population; used in government programs like Mid-Day Meals to combat vitamin deficiencies.
Women Empowerment: Dairying is primarily managed by women. Self-Help Groups (SHGs) in states like Odisha have enhanced social standing by managing collection centers.
Inclusive Growth: Livestock distribution is more equitable than land ownership; 75% of rural households own only 2–4 animals yet drive the national output.

Initiatives for Digitalization

National Digital Livestock Mission (NDLM): Establishes "Bharat Pashudhan," a centralized database for breeding, health, and vaccination.
Pashu Aadhaar: 12-digit unique ID ear tags for animals to ensure full lifecycle traceability.
Automatic Milk Collection System (AMCS): Digitizes fat testing and payments, ensuring farmers receive fair, instant transparency.
NDDB Dairy ERP (NDERP): Employs open-source software (ERPNext) to manage the entire supply chain from "cow to consumer."
GIS Route Optimization: Uses satellite mapping to reduce procurement distances and fuel costs for cooperatives.

Challenges

Low Productivity: Average yield (987 kg per lactation) is less than half the global average (2,038 kg) due to the genetic profile of indigenous breeds.
Fragmented Supply Chain: 75–85% of surplus flows through unorganized sectors, often lacking the cold chain infrastructure necessary to prevent spoilage.
Input Costs: Rising prices of maize and soybean (feed) and shrinking grazing lands squeeze farmer profit margins.
Quality Standards: India’s share in global exports is <1% because many products struggle to meet strict European or US phytosanitary norms.
Credit Access: Smallholders often rely on high-interest local moneylenders as banks perceive livestock as a high-risk asset.

Way Forward

Breed Improvement: Scale Artificial Insemination (AI) and genomic selection through the Semen Station Management System (SSMS) to boost yield.
Cold Chain Infrastructure: Expand village-level bulk milk chillers and use AMCS to monitor milk temperature in real-time.
Value-Added Products: Shift focus from liquid milk to high-margin items like cheese, probiotics, and organic yogurts to meet urban demand.
Export Competitiveness: Align Indian standards with Codex Alimentarius and create specialized Export Zones to tap into Middle Eastern and South Asian markets.
Fintech Integration: Use "Pashu Aadhaar" data to create Livestock Credit Scores, allowing banks to use digital records as collateral for loans.

Conclusion

By merging the traditional cooperative strength of the White Revolution with cutting-edge tools like NDLM and AI, India is evolving into a transparent dairy superpower. This digital shift ensures that the benefits of technology reach the smallest farmer, securing a sustainable and technology-driven future for global milk production.

Digitalizing India’s Dairy Sector