India is one of the world’s biggest dairy industries in terms of milk production. Despite that, the country is still lagging in terms of exports. Speaking about this during a webinar organized by the Indian Dairy Association (IDA), RS Sodhi, managing director of GCMMF (Amul), says, “The Indian dairy industry is growing leaps and bounds. Now the time has come where we have not only to see India but beyond. However, although we are number one in milk production, we are negligible in export and world trade. It’s time to become big in exports as well.”
The Indian dairy sector is an economic engine and a source of livelihood for 100 million rural households. Keeping this in view, the government has spelled out several initiatives to develop it further. Sodhi explained that in 2000, India’s milk production was only 14% of world production, which has now increased to over 21%. “Last year the world’s milk production grew by 1.3 %, and of this, 1% came from India. According to estimates made in 2013, in the next 15 years, India will produce one-third of the world’s milk,” he said.
India is well placed for exports
According to Sodhi, the world will realize India’s export potential. Of the current global milk trade of about US$ 45 to 50 billion, India exports just US$ 300 to 400 million, which is almost negligible. “We are not there as per the world, but we have a geographical advantage as many importing countries are located around us.” India is exporting milk to more than 100 countries and opening up trade relationships with others. “The global dairy trade has given significant recognition to Indian brands like Amul and others. Now people worldwide realize the goodness of Indian dairy commodities like skimmed milk powder, white butter, and milk with higher protein percentages.”
Gujarat government gives Amul Rs 160 crore export incentive
Sodhi argues that the central government should not arm the states to give milk subsidies for local and domestic consumption. Even if one-tenth of the states’ subsidies are used for exports, farmers will receive more direct and indirect benefits.
Amul had stocks of skimmed milk powder (SMP) due to demand disruptions caused by Covid-19 and the lockdown. The glut situation of SMP resulted in a sharp decline in prices from a peak of Rs 330 per kg (before the lockdown) to about Rs 135 a kg in June. To protect farmers’ income and export surplus SMP shipped to overseas, the dairy cooperative sought Rs 160 crore as an export incentive from the Gujarat government. Sodhi added, “We can bring up the price of SMP from Rs 135 by just spending the Rs 160-crore given by the Gujrat government. We are happy to announce that we will start the export of 30,000 tons of SMP soon.”
Discounting rumors of having excess SMP inventory, he says, “There are no stocks because Indian milk production has not increased overall. Only the organized players have started buying more milk to convert it into commodities. Consumption wise HORECA (Hotel, Restaurant, and Café) was impacted, and that is why we had the surplus milk. As soon as the HORECA resumes — which it already has to about 50%, I am certain that in June-July, the price of the milk will be back to the pre-Covid levels.”
Premiumization with buffalo’s white milk
According to Sodhi, India could also gain a premium market advantage for its pearl white high protein buffalo milk exports. No other country produces buffalo milk except Pakistan, which is already milk deficient. He believes that if energies are aligned in exporting buffalo milk powder, buffalo milk mozzarella cheese, Tetra Pak milk, ghee, and white butter, exports can enjoy a premium market with higher prices.
Plant-based vs. animal milk
Speaking on the recent dispute on using the word ‘milk’ for plant-based milk, he says, “We are happy that the government and FSSAI agreed and came out with an ordinance against calling non-animal product, milk.” He also said Amul is being pressured not to oppose but to allow milk to put against soya, oats, almond, and other products. “We will not support anybody in using ‘milk’ for anything but dairy products,” he said emphatically.
“Milk is a wholesome food, and milk-based products are taste-wise many levels better and more affordable than the plant-based milk,” he clarified. And added that Indians treat their cattle as their family members, so there is no debate of cruelty. According to him, if the calf leftover milk is not milked on time, it may harm the animal or even cause death. “Since all these plant-based milk alternatives are import-based, what will happen to the livelihood of 100 million rural families whose livelihood depends on milk?”
Exports – encourage farmers and fight against barriers
Sodhi believes that if India wants to emerge as a vital entity in exports, it has to empower, encourage, and give dairy farmers the confidence to produce more milk. The country should also fight against the tariff and other barriers created by other countries for the export of dairy products. “I think we need to unite to protect the Indian dairy industry and farmers and encourage them to produce more and more. As they produce more, they will be happier, and we will become stable and efficient exporters in another 10 or 15 years!”
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