Entrepreneur- Dairy farming

Entrepreneur- Dairy farming

The country is the world’s largest milk producer 112.5 million tonnes of milk during 2009-10, accounting for more than 13% of worlds total milk production. It is the world’s largest consumer of dairy products, consuming almost 100% of its own milk production.

Most of the milk is produced by small, marginal farmers and landless labourers who are grouped into Cooperatives at the village level. To provide them a steady market and a remunerative price for the milk produced, about 13.90 million farmers have been brought under the ambit of 1,33,349 village level dairy cooperative societies in the country as a part of Operation Flood Programme.

The milk processing industry is small compared to the huge amount of milk produced every year. Only 10% of all the milk is delivered to some 400 dairy plants. A specific Indian phenomenon is the unorganized sector of milkmen, vendors who collect the milk from local producers and sell the milk in both, urban and non-urban areas, which handles around 65-70% of the national milk production.

In the organised dairy industry, the cooperative milk processors have a 60% market share. The cooperative dairies process 90% of the collected milk as liquid milk whereas the private dairies process and sell only 20% of the milk collected as liquid milk and 80% for other dairy products with a focus on value-added products.

There are varieties in traditional milk based sweets, manufactured in the country. The market size is around Rs.12000 crore. Many of the organized dairies are involved in the manufacture of varieties of milk based sweets: pedha, paneer, shirkhand, etc. These are now restricted to certain areas only but can go national. As the world is getting integrated into one market, quality certification is becoming essential in the market. However, there are very few plants in the country, which have successfully obtained ISO, HACCP certification. There is scope for introducing newer plants adopting newer processes by the dairy industry in the country.

The demand for processed dairy products through supermarket is expanding and is expected to keep doing so as cold supply chains and modern trade continue to evolve. Increasing urbanization, exposure to gourmet foods and corresponding changes in consumer preferences, behaviour and purchasing power are the catalysts for the rise of processed dairy categories..

The dairy industry needs to recognise the importance of indigenous products to sustain its overall growth. Also, enough attention and investments are necessary to raise the status of this product category from a dominantly non-organised to the organised segment and allow it to emerge as a mature sector of the industry The way forward would be the development of appropriate packaging system, consistent with the international standards,  that will help establish national and international marketing network.

Presently the chronic shortage of feed coupled with the poor quality of fodder is the major constraint in animal production. It has been estimated that with the present feed and fodder resources we are able to meet only 46.6% of animal requirements, which in turn resulted in 50% of the desired products. It is imperative to say that in the present system of intensive livestock production, increasing concentrate feeding has increased the milk production cost and substantially decreased the profits of farmers. The increasing cost of feed ingredients and its seasonal variability also adds to the gravity of the situation. Certain branded feeds also have a detrimental effect on animal health and reproduction.

The dairy sector offers a good opportunity to entrepreneurs in India. India is a land of opportunity for those who are looking for new and expanding markets.Growth propsects in the dairy sector are very bright.Nabard also provide Dairy Subsidy on Dairy Faming.

Model Project Report: For 10 Buffalo

Milk Production capacity(Annual)-  14000 Ltrs

Project Cost: Capital investment in to the project.

Term Loan: 500000

Subsidy: 125000

Own contribution: 60000

Fixed Cost :

Shed cost: 300000

Cost of Animal @ 40k/animal : 400000

Transport cost :10000

Equipment Cost: 50000

Working Cost :

Salary and wage: @ 10k/month  :120000

Feed Cost:

Milking period time @ 300 days/year : 400000

Dry period time @ 65 days/ year : 40000

Income:

Income for Milk Rs. : 960000

 Income for animal Waste Rs. : 125000

Total income Rs.: 1085000

Profit Before tax, interest and depreciation Rs.: 430000

Net Profit Rs.:130000