Dairy Value Chain

Livestock sector is the backbone of Indian agriculture and plays a crucial role in the development of the rural economy. More than one-fifth (23%) of agricultural households with area less than 0.01 hectare reported livestock as their principal source of income (GoI Government of India (2014) Key indicators of situation of agricultural). Livestock is one of the fastest-growing sectors of Indian agriculture. While the share of overall agriculture and allied sectors in Gross Value Added (GVA) declined from 18.2% in 2014–15 to 17.8% in 2019–20, the share of livestock sector in GVA increased from 4.4% to 5.1% in the same period (GoI Government of India (2021) The economic survey (2020–21). Ministry of Finance. Government of India). Livestock sector accounts for 31% of the gross value of output in agriculture and allied sector (GVOA). Within livestock, milk is the biggest component with 20% share in GVOA. In fact, milk is the largest agriculture commodity in terms of value of output worth INR 772,705 crores in 2018–19 which was more than the value of cereals, pulses, oilseeds and sugarcane combined worth INR 623,462 crores (MoSPI. (2021). National Accounts Statistics 2020. Central Statistical Organization. Ministry of Statistics and Program Implementation.). Around 70 million of rural households are engaged in milk production, most of them are landless, marginal, and small farmers (NCAER. (2020). Analyzing Socio-Economic Impact of National Dairy Plan—I. National Council for Applied Economic Research. February 2020.). As a source of livelihood for million of poor households, dairying also supplements their dietary sources of protein and nutrition thus playing a critical role in the country’s food security needs.