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Day 15 – Q 3.What are the upstream requirements of the dairy sector? Examine the existing levels of backward and forward linkages in the dairy sector.

3. What are the upstream requirements of the dairy sector? Examine the existing levels of backward and forward linkages in the dairy sector. 

डेयरी क्षेत्र की अपस्ट्रीम आवश्यकताएं क्या हैं? डेयरी क्षेत्र बैकवर्ड तथा फॉरवर्ड संपर्क के मौजूदा स्तरों की जांच करें।


India is the world’s largest producer of milk, with 21 percent of global production due to its prospering dairy sector, which contributes 4.11% GDP and 25.6% of total Agriculture GDP in India. 


Upstream requirements of dairy sector:

  • Quality cattle to provide enough milk production for the population
  • Dairy farmers and cooperatives that can participate in dairying as the economic activity.
  • Fodder availability to feed the cattle.
  • Transportation for supplying milk produced to processing centers or market.
  • Coolers to improve the shelf life of milk in transportation to processing plants.

Existing levels of backward linkages:

  • India has world’s highest livestock population, and first in the total buffalo population in the world with 105.3 million buffaloes.
  • Dairy farming provides livelihood to two-third of rural community. It also provides employment to about 8.8% of the population in India. India has vast livestock resources.
  • Reduction in pasture lands, and decreasing availability of quality fodder owing to rain fed conditions.
  • Regional imbalance in availability and quality of transportation and bulk coolers.
  • Increasing incidence of veterinary diseases, with low presence of veterinary clinics in rural areas.
  • Low productivity of indigenous breeds and lack of nutrition in milk from foreign breeds.
  • Low availability of quality breeding bulls and semens and comparatively less success in cross breeding indigenous and foreign breeds.
  • Excessive use of anti-biotics in cattle growth.
  • Less than adequate extension services.

Existing levels of forward linkages:

  • Lack of marketing facilities for farmers.
  • High presence of middleman that eats away profit of farmers.
  • Regional success of cooperatives, only in some states like Gujarat and Maharashtra. 
  • Price rise due to increasing focus on protein intake, especially in urban areas.
  • Adulteration and presence of synthetic milk. Around 70% of Indian milk doesn’t meet the standards set by set by the Food Safety and Standards Authority of India (FSSAI).
  • Untapped export potential due to issues like quality, hygiene etc.
  • A taxation rate of 12% on dairy equipment and machinery.

Way forward

  • Cost effective and nutritionally balanced feed for animals.
  • Encouragement to cooperatives pan India.
  • Reproductive efficiency of cattle be improved.
  • Training related to entrepreneurial marketing of milk and milk product
  • ‘Optimum usage of technology’ for cattle management.
  • Improvement in logistics.


The active involvement of National Dairy Development Board (NDDB) in growth of dairy sector and the creation of Dairy Processing & Infrastructure Development Fund (DIDF) along with other initiatives in the sector are a welcome step not just to achieve growth in the sector but also to fight malnourishment and hidden hunger in country.

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