Dairy sector

• India is the world's highest milk

producer.


• Accounts for more than 14% of

the world and 57% of Asia’s
Total production.


• Largest milch animals in the

world 198 million cattle and 86
million Buffalo. 1
Milk production 102 mill ton
Bovine population 1/5th of world bovine
Milch animals
Indigenous cattle 45%
buffaloes 55%
Cross bred cows 10%
Productivity 1000 kg/yr
Value of output (World
Rs 1489average
bn 2038 kg/yr)
Growth rate 5-7%
Milk availability 225 gm/day
 Milk Production in India

 Source: Department of Animal

Husbandry, Dairying & Fisheries, 3
 Milk Production top 5 states

• Source: Department of Animal Husbandry, Dairying & Fisheries,

Ministry of Agriculture, GoI
4
 P ro d u ctiv ity o f M ilk A n im a ls b y Z o n e

Zone Cross bred cows Indegineous cows buffaloes

Kgs/ day Lactation Kgs/ day Lactation Kgs/ day Lactation
days days days
East 5.82 300 3.01 150 5.39 200
North 7.07 300 3.29 200 5.25 250
West 7.80 300 3.19 200 4.51 250
South 6.39 300 3.35 150 3.96 200
 Share of household income by
source
H o u se h o ld D a iry in g C ro p O th e rs To ta l To ta l n u m b e r
o f m ilk
a n im a lsa ( p e r
100 H H )
Landless 53.08 0 46.92 100 11
Marginal 30.14 46.55 23.3 100 68
Small 29.67 53.75 16.58 100 114
Semi 26.25 58.98 14.76 100 136
medium
Medium 25.33 62.77 11.91 100 168
Large 19.02 71.48 9.5 100 239
All 27.28 55.36 17.36 100
• List of Dairy Products
• Milk
• Butter
• Curd
• Processed Cheese
• Ghee
• Cottage Cheese
• Sweets
• Ice-cream
• Milk Powder etc.
•
 Milk marketing channels in india
Pro d u ce r 20%
Unorganised 80% Organised

Village cooperatives Private

Milk agent Milk vendor Government

Wholesaler Retailer

R e ta ile r

retailler

Consumer
 Overview of the Indian Dairy
Sector
•
•
• Regulatory Environment
•
• Dairy sector was de-licensed in 1991
• •Milk and Milk Products Order 1992: some controls
• ▫Collection areas/milk sheds specified
• ▫Processing capacity fixed
• •Revised MMPO in 2002: controls stand withdrawn
• •Private sector investment in dairying has increased
considerably
• •Previously, co-operatives did not have any
competition from the private sector
• •To strengthen co-operatives (MACS Act,1995):
reduce government interference in mgt.
 Critical Issues -Input
•
• Breeding/health/extension
•
• Large majority of indigenous cattle (45%
indigenous cattle, 55 % buffaloes, and 10%
cross bred cows)
• •National Cattle and Buffalo Breeding Program
• •Only small percent is covered by AI, rest is
dependent on natural breeding; Performance of
AI is not up to mark
• •State veterinary departments, co-operatives,
NGOs, private veterinarians, and paravets are
the service providers.
• •Regions with high producing dairy animals –
•
• Feed
• •Availability, quality and cost of feed is an issue.
• •Land is largely rain-fed or dry land (70%), low output of dry
fodder
• •Availability of land for fodder grass
• •Subsidized feed is available through co-ops, but quality and
affordability are issues

•
• Credit
• •Poor access to institutional credit
• •Credit through informal channel has very high loan rate, and
results in exploitation of farmer through lower milk prices

•
•
• Production

•
• Dairying is a part of the farming system, not dairy as enterprise
 Business model of Private
Dairy
•
• Has agents in the village for milk procurement (agent
rel. with villagers)
• ▫No direct company involvement with farmers
• ▫The company has negotiated price with agent, but is
not involvedwith what price the agent gives the
farmers (slightly above co-op)
• ▫Farmer price at least state co-op price
• ▫Agent often times gives loans to farmers to maintain
loyalty
• ▫Competing with other private players for
procurement
• ▫Employees are previous dairy co-op employees
• ▫Collection areas depend on milk density and areas in
which district co-op is less active
 Business Model of MACS

•
• MACS (Mutually Aided Co-operative Societies)
•
• ▫As per MACS norms, 2 tier operation, village level
and districtlevel
• ▫Village level managed by village society, district level
by BOD
• ▫Elected members every year
• ▫The village level society itself is registered as a
separate MACS society and has the freedom to use
its own profits
• ▫MACS has the freedom to set own farmer prices,
higher than co-op
• ▫District Union managed by professionals
 Business Model of Co-op

•
• As per co-op norms, 3 tier operation, village
level and district level, and state level
• ▫Village level managed by village society
president
• ▫State level managed by bureaucrat
• ▫No democratic election at village level
• ▫Profits of village level society not
distributed to farmers, no ownership
• ▫Prices set by co-op (low prices because of
services and bonuses)
•
 State marketing federation:
All Dairies in a state
GCMMF in Gujarat 17 state federation in India

District Dairy
Every district in the state
12 district union in Gujarat
180 union all over India

Village cooperative society

All village in a district
10675 village in Gujarat
80,000 village in India

Milk producers
All milk producers in a village
2.2 million in Gujarat
10.6 million in India
 Milk and Milk Products
Order, 1992
•
• Milk & Milk Products Sector is regulated by the Milk & Milk Products Order, 1992
(MMPO), which is administered by the Department of Animal Husbandry &
Dairying, under the Ministry of Agriculture, Government of India.

•
• Every person engaged in the business of handling, processing or manufacturing
milk or any milk product, shall, in regard to the items of milk or milk product
manufactured and the packing, marking and labelling of containers shall
comply with the following:-
• (a) The product related to that items should be certified by the Officer
authorized.
• (b) Where certificate is issued to any person in relation to any item, such person
shall be authorized to place an emblem of certification on the packaged
goods;
• (c) The label on the packaged goods shall not contain any statement, claim,
design or device which is false or misleading in any manner concerning the
milk or milk product contained in the package or about the quality or the
nutritive value or of the place of origin of the same;
• (d) A holder of registration certificate shall not pack milk or any milk product
other than those processed or manufactured by him or, those obtained from
any other person holding a registration certificate.
• The MMPO regulates milk and milk products
production in the country
• The order requires no permission for units
handling less than 10,000 litres of milk per
day or milk solids up to 500 tons per
annum (TPA).
• The MMPO prescribes state registration to
plants producing between 10,000 to
75,000 litres of milk per day or
manufacturing milk products containing
between 500 to 3,750 tons of milk solids
per year
• Plants producing over 75,000 litres of milk
per day or more than 3,750 tons per year
of milk solids have to be registered with
the Central Government.
•
• Milk is a complex mixture of fats,
proteins, carbohydrates, minerals,
vitamins and other miscellaneous
constituents dispersed in water
(Harding, 1999). Milk composition
for a Holstein herd revealed
amount of fat, protein and lactose
averaged 3.5, 3.1 and 4.8%,
respectively
 DIFFERENT TYPES OF MILK

• Sterilized Milk
• his is defined as milk, which has been heated to a temperature of
100°C or above for such lengths of time that it remains fit for
consumption for at least 7 days at room temperatures. Usually
the milk is heated to108-111°C for 25 to 30 min. Commercially
sterilized milk is rarely sterile in the strict bacteriological sense.
This is because the requirements for the complete sterility
conflict with the consumer’s preference for normal colour and
flavour in the sterilized product.
• Flavoured Milk
• It is milk to which some flavours have been added. When the term
milk is used the product should contain a milk fat percentage of
a least equal to the minimum legal requirement for market
milk. But when the fat level is lower (1-2 per cent) the term
‘drink’ should be used.
• Acidophilus Milk
• It is fermented milk, produced by development in milk of a culture
ofLactobacillus acidophilus. It is claimed that acidophilus milk
has therapeutic and health promoting properties. It is also
claimed that the growth of Lactobacillus acidophilus under the
conditions existing in the intestinal tract will replace
undesirable putrefactive fermentations with a beneficial lactic
• Homogenized Milk
•  is milk, which has been treated in such a manner as
to insure break up of fat globules to such an extent
that after 48 h of quiescent storage no visible
cream separation occurs on the milk; and the fat
percentage of the milk in the top 100 ml of milk in
a quart bottle or proportionate volumes in
containers of other sizes, does not differ by more
than 10 per cent of itself from the fat percentage of
the remaining milk as determined after thorough
mixing.
• Vitaminized or Irradiated Milk
• Vitaminized milk is milk to which one or more
vitamins are added. Irradiated milk is milk in which
the vitamin D content has been increased by
exposure to ultra violet rays. Addition of vitamins
(and minerals) to milk is called fortification and
such milk is called fortified milk. The vitamins and
minerals may be added singly or in combination as
multi-vitamin and mineral milk preparations
• Fermented Milk
• Standardized Milk
• It is milk whose fat and / or solids not fat content have been adjusted to
certain pre determined level. The standardization can be done by
partially skimming the fat in the milk with a cream separator or by
admixture with fresh or reconstituted skim milk in proper proportions.
In India, as per PFA Rules (1976), the standardized milk for liquid
consumption should contain a minimum of 4.5 per cent fat and 8.5 per
cent solids not fat.
• Recombined Milk
• It refers to the product obtained when butter oil (otherwise known as dry /
anhydrous milk fat), skim milk powder and water are combined in the
correct proportions to yield fluid milk. In India, as per PFA Rules (1976),
the recombined milk should contain a minimum of 3.0 per cent fat and
8.5 per cent solids not fat.
• Reconstituted /Rehydrated Milk
• This refers to milk prepared by dispersing whole milk powder (also called
dried whole milk) in water approximately in the proportion of 1 part
powder to 7-8 parts water. Spray dried milk powder is usually used
since it is more soluble and produces less sediment.
• Toned Milk
• Also called single toned milk, refers to milk obtained by the addition of
water and skim milk powder to whole milk. In practice, whole milk from
buffalo is mixed with reconstituted spray dried skim milk for the
production of toned milk. In India, as per PFA Rules (1976), the toned
milk should contain a minimum of 3.0 per cent fat and 8.5 per cent
solids not fat.
• Double Toned Milk
• SNF
• The substances in milk other than
butterfat and water; abbreviated
SNF. They include casein, lactose,
vitamins and minerals which
contribute significantly to the
nutritive value of milk.
 Milk fat constants
• For the purpose of characterization, certain well known physical and chemical constants
have been derived for the more common fats. The fat constants serve as an
indication of the types of component fatty acids present in different fats. They also
serve the purpose of detection of adulteration of fat qualitatively and in some cases
quantitatively. The following points discusses the fat constants in detail.
• Saponification number
• It is defined as the number of milligrams of KOH required to saponify one gram of fat. The
normal value for milk fat may vary from 210 to 233 and more often the value falls
with in the range of 225-230. The constant is an indication of the average weight of
the fatty acids present in the milk fat. The constant for the milk fat is well above the
values of other fats and oils except coconut and palm kernel oil.
• Iodine number
• The iodine number is the number of grams of iodine absorbed by 100 g of fat under
specified conditions. This constant is an indication of the unsaturated linkages present
in the fat. The value of iodine number of milk fat falls within the range of 26 to 35,
wich is generally lower when compared to most of the other fats.
• Reichert-Meissl number (R-M Number)
• It may be defined as the number of milliliters of 0.1 N alkali solution required to
neutralize the volatile, soluble fatty acids distilled from 5 g of fat under specified
conditions. It is primarily a measure of butyric acid. The value for milk fat ranges
between 17 and 35 and this value is well above that for all other fats and oils.
• Polenske number
• This value may be defined as number of milliliters of 0.1N alkali solution required to
neutralize the volatile and insoluble fatty acids distilled from 5 g of fat under specified
conditions. While   R-M number is primarily a measure of butyric and caproic acid
content, caprylic and capric acids, which are some what steam volatile but largely
insoluble in water, are indicated mainly by Polenske number. The normal value of
Polenske number falls between 1.2 and 2.4.
• Melting point