Israel offers expertise to triple India’s milk production, boost exports

There is a great potential for India’s milk exports, but it is still in its infancy and surpluses are occasional.

Bidhu Bhushan Palo | @TheDollarBiz Milk-TDB India is the world’s largest producer of milk, but is still taking baby steps when it comes to exports. Currently, India’s milk production stands at around 140 million tonnes, which makes it just self-reliant and allows a small surplus. However, consumption is growing at a steady rate and estimated to touch around 200 million tonnes by 2024. Meanwhile, much of India’s dairy sector is unorganised and far from the technological advances. In such challenging circumstances, Israel claims that it can help India triple milk production and boost milk exports significantly. In an exclusive interview, Akhil Choudhary, a trade officer for facilitation of Indo-Israel trade in clean-tech sector for Embassy of Israel, New Delhi, speaks to The Dollar Business about the details of this Indo-Israel dairy cooperation.  

Akhil Choudhary-TDB-Israel Akhil Choudhary, Trade Officer, Embassy of Israel, New Delhi

TDB: Why do you say India's dairy sector is antiquated? Akhil Choudhary: To answer that I would like to start with few arguments; India is probably the country with the largest cow population, yet average output of an Indian cow is much lower than that of its Israeli counterpart. In a country where almost all regions are suitable for setting up dairy farming business, dairies are yet to be moderated on newest available technologies. The real problem is that most of the Indian dairy farmers are raising animals in small-scale traditional methods and are unaware of modern farming methods and improved techniques for dairy farming. As a result, some farmers are losing their investment instead of reaping profits. There are other problems such as shortage of fodder, poor fodder quality, dismal transport facilities and poor cold chain infrastructure. Therefore, the term antiquated for the entire milk cycle of India is perhaps appropriate.   TDB: India is the world’s largest milk producer (140 million tonnes). Is there scope for further increase in milk production? Akhil Choudhary: Yes, India is the world’s largest milk producer, but we are talking about improving productivity rather than increasing the heads of bovine population. We are talking about a three-fold increase in milk production with the same cattle population with better, hygienic and cost-effective processing facilities and you will see Indian dairy industry innovate, profit and convert products into commercially exploitable ideas that will boost exports. TDB: How can Israel help? Akhil Choudhary: What Israel is offering is the know-how, latest advances and technologies, which require less capital, less time and minimum operations. We are here to promote sustainable dairy farming which is an integration of many factors. Without this, in my personal opinion, it would be difficult for India to keep pace with the growing demand. TDB: India’s milk consumption is forecast to grow to around 200 million tonnes by 2024. Can India meet this demand with the existing structure and how will it change with modernization? Akhil Choudhary: There are multiple challenges. I think India's dairy market will continue to grow at around 15% annually in the coming years partly due to increasing consumption of value-added products and the value chain becoming more organised. While the front end, from where we buy dairy products, is becoming more and more organized, the back-end, from where these products are produced and procured, is far behind. India is unlikely to meet growing milk demand in future due to a largely fragmented supply chain, raw milk quality concerns, and a narrow base for value-added dairy products. However, modernization can definitely help -- not only meet local demand but also create avenues for exports. TDB: India has started exporting small quantities of milk? What are the challenges to make it grow? Akhil Choudhary: There is a great potential for India’s milk exports, but it is still in its infancy and surpluses are occasional. This is because the dairy sector in India is still far from steady and growing profits. This is why the sector remains unorganized -- to an extent of almost 80%. TDB: How does India’s dairy structure compare with that of Israel? Akhil Choudhary: Israel has become a model for the world’s dairy industries despite lack of water and arable land. Dairy farming in Israel is now an industrialized system, creating optimal integration between the production unit (the cow), technologies and equipment (engineering), the operator (the farmer) and the production environment (the dairy farm). The Israeli cow has one of the highest national milk yield (production/cow/day) in the world of around 32 kilogram, compared to 7 kilogram in India. In Israel, dairy market is regulated and a 100% organized structure of market is in place. However, these advances were not achieved in a day. It was the constant push of the Israeli government which took into account all aspects of dairy science and market, which is different from touching chords here and there as has happened in India so far. TDB: How will Israel help in modernization of India’s milk sector? Akhil Choudhary: The Israeli dairy industry has a lot to offer ranging from proven know-how & design, technology, equipment, genetic material, etc. which can help in the upgradation of the dairy industry in India. Recent announcements -- like Punjab’s Advanced Institute of Dairy Farming in collaboration with an Israeli firm Dairy Farming Solutions (DFS); proposed Centre of Excellence for Milk at Hisar jointly by Haryana and State of Israel; MOU with Maharashtra for setting demonstration farms -- are some beginnings that will help streamline the Indian dairy industry. TDB: How will you reach the millions of dairy owners (mostly small) in India and how will you address the challenges of space (physical), finance and illiteracy? Akhil Choudhary: Israel is working closely with the Indian Government and respective states over collaboration to start demonstration farms which will be the platform where farmers and entrepreneurs can be guided to modern dairy modules very specific to Indian context and resource availability. This, we think, is the first and foremost approach to reach people. Indo-Israel efforts in Agriculture Centre of Excellences for fruits and vegetables is already very popular among Indian farmers. Similar concerns regarding space and illiteracy were raised earlier, but studies prove that these centres are popular and successful in India. The same can be done in the dairy sector. I believe “Opportunity knocks, when you create a door”, and this is the door which we are trying to create for the Indian dairy industry. TDB: Will modernization make India’s small dairy milk owners poor by putting most of the technology and modernization in the hands of those who can afford? Akhil Choudhary: Not at all. Dairy sector has always been considered as one of the activities aimed at alleviating the poverty and unemployment especially in the rural areas. Dairying generates a lot of employment opportunities for rural women. We are not looking and talking of copy-paste. Organized and unorganized sector are completely different aspects. We are accounting both. We have accounted a simple farmer with 5-10 cows and also large cow farms with strength of more than 100 cows. TDB: Please let us know more about IDF World Dairy Summit that is scheduled to be held on October 27-31, 2014 in Tel Aviv, Israel? Akhil Choudhary: It’s an international event. This year the event is in Tel Aviv, Israel. The Israel National Committee and Israel Dairy Board (IDB) will host the Summit with the technical collaboration of the Food and Agriculture Organization of the United Nations (FAO). The theme of this year’s Summit is “The Future Begins Here,” and will focus on the industry’s readiness in coping with the challenges of feeding the world’s growing population. It is expected that a business delegation, organized by the Indian Dairy association, will be there at the event this year. People who are interested to be part of this can get in touch with me directly at [email protected]