India’s Dairy and Livestock Sector – UPSC GS3

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Facts:
  • Dairy is the single-largest agri-commodity in India. It contributes 5% to the national economy and employs 80 million dairy farmers directly.
  • A revival in economic activities, increasing per capita consumption of milk and milk products, changing dietary preferences and rising urbanisation in India, has driven the dairy industry to grow by 9-11% in 2021-22.
  • The livestock sector has grown at a Compound Annual Growth Rate (CAGR) of 8.15% over the last five years ending 2020.
  • The organised dairy segment, which accounts for 26-30% of industry (by value), has seen faster growth, compared to the unorganised segment.
Current issues with the Sector:
  • Dairy analogues, plant-based products and adulteration pose a major challenge and threat to the dairy industry.
  • Shortage of fodder resources and ineffective control of animal diseases.
  • Absence of field oriented conservation strategy for indigenous breeds.
  • Lack of skills and quality services to farmers for improving productivity and improper infrastructure to support the sector.
Initiatives taken in the Budget 2022-23 for this Sector:
  • Infrastructure Development under Vibrant Villages Programme:
    • Border villages in northern India with a sparse population and limited connectivity, have been covered under the ‘New Vibrant Villages Programme’ in the new budget.
    • Some 95% of livestock farmers are concentrated in rural India. Hence, infrastructure development under the Vibrant Villages Programme will play a significant role in enhancing market access for these livestock farmers.
  • Reducing Alternate Minimum Tax:
    • To provide a level playing field between co-operative societies and companies, alternate minimum tax has been reduced from 18.5% to 15%.
    • Government has also proposed to reduce the surcharge on co-operative societies to 7% from 12% at present for those having total income of more than Rs. 1 crore and up to Rs. 10 crore.
    • This would help enhance the income of cooperative societies and its members who are mostly from rural and farming communities.
  • Enhanced allocation for Central Sector Schemes:
    • Allocation for the Rashtriya Gokul Mission and National Programme for Dairy Development has been increased by 20% in 2022-23.
    • It is expected to help in increasing the productivity of indigenous cattle and quality milk production.
    • Allocation for the livestock sector has been increased by more than 40% for 2022-23 and the enhanced allocation for central sector schemes by more than 48% shows commitment by the government for the growth of livestock and dairy farmers.
  • Enhancement in allocation for Livestock Health and Disease Control:
    • An almost 60% enhancement in allocation for livestock health and disease control for 2022-23 over the previous year will ensure healthier livestock.
  • Incentivising Digital Banking:
    • Incentivising digital banking, digital payments and fintech innovations will create a ripple effect in the livestock sector through greater transparency by streamlining payments during milk procurement.
    • A completely paperless, e-bill system will be launched by ministries for procurement.
Related Schemes for the Sector:
  • Animal Husbandry Infrastructure Development Fund (AHIDF)
  • National Animal Disease Control Programme
  • Rashtriya Gokul Mission
  • National Artificial Insemination Programme
  • National Livestock Mission
Way Forward:
  • There is a need to increase the productivity of animals, also ensuring better health care and breeding facilities and management of dairy animals. This can reduce the cost of milk production.
  • Awareness on clean milk production and various schemes by the Department of Animal Husbandry and Dairying and the new Ministry of Cooperatives will help dairy farmers evolve in the future.
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