A BRIEF STUDY ON DIARY INDUSTRY IN INDIA by SARATH SASIKUMAR

A BRIEF STUDY ON
DIARY INDUSTRY IN INDIA







ASSIGNMENT - 1






Submitted to

Prof. JAYAMOHAN NAIR




Prepared and Submitted
By
SARATH SASIKUMAR






INSTITUTE OF CO-OPERATIVE MANAGEMENT
UNIVERSITY OF KERALA
THIRUVANANTHAPURAM
CONTENTS
Page No.
Chapter 1 Introduction 03
Chapter 2 Indian Diary Industry 04
Chapter 3 Diary Development 06
a) Diary Development in India 06
b) Diary Development in Kerala 08
Chapter 4 Effect of Operation Flood in Kerala 09
a) Diary Development before Operation Flood 09
b) Diary Development during Operation Flood 12
Chapter 5 Milk – A Major Diary Products 14
a) Importance of Milk 14
b) Indian Market of Milk Industry 15
c) Physical Properties of Milk 17
Chapter 6 Strength of Indian Diary Industry 18
a) Marching Towards Growth and Development 18
b) Role of Diary and Food Processing Industries in promoting Economic Growth in India 20
Chapter 7 Weakness of Indian Diary Industry 21
a) Threats 21
b) Technological Gaps 21
c) New Challenges of Globalisation and Trade Liberalisation
22
Chapter 8 Conclusion 24
ANNEXURE
Annexure Bibliography 27
Chapter 1
INTRODUCTION
Development is essentially a process of change from autonomous status to organized optimal change. The people trapped in illiteracy and poverty suffering from extremes of material and social deprivation tend to lose impulses of awareness and motivation and this deprivation makes them weak, isolated, vulnerable and powerless. The cooperatives play an important role in influencing these people towards social and economic change in terms of adoption of innovations. In this process the cooperatives assist people to move from the existing to the desirable and better. Cooperatives offer unlimited possibilities of people's participation in economic resurgence. Co-operation as a thought and system has found acceptance under all political and economic systems, the world over.
Milk is an inevitable part of a balanced diet. A large section of the population in India is vegetarians and therefore the importance of milk is much greater. According to the Nutrition Advisory Committee of Indian Council of Medical research a balanced diet of an Indian adult should include 10 ounces of milk per day. The daily per capita availability of milk in the country is less than half of the requirements. Central and State Government are taking concerted efforts to increase milk production in the country.

Chapter 2
INDIAN DAIRY INDUSTRY
Dairy is a place where handling of milk and milk products is done and technology refers to the application of scientific knowledge for practical purposes. Dairy technology has been defined as that branch of dairy science, which deals with the processing of milk and the manufacture of milk products on an industrial scale.
In India, dairying has been practiced as a rural cottage industry since the remote past. Semi-commercial dairying started with the establishment of military dairy farms and co-operative milk unions throughout the country towards the end of the nineteenth century.
The Indian Dairy Industry has made rapid progress since Independence. A large number of modern milk plants and product factories have since been established. These organized dairies have been successfully engaged in the routine commercial production of pasteurized bottled milk and various Western and Indian dairy products. With modern knowledge of the protection of milk during transportation, it became possible to locate dairies where land was less expensive and crops could be grown more economically.
The growth of the dairy sector during the last three decades has also been impressive, at more than five percent per annum; although the country has emerged as the largest producer of milk3 only in the ‘90s. This is not a small achievement when we consider the fact that dairying in India is largely a subsistence activity; farmers in general keep dairy animals in proportion to their free crop residues as also the available family labour with little or no purchased inputs and a minimum of marketed outputs. A restrictive trade policy for milk products and the emergence of Amul type cooperatives has changed dairy farming practices in the country. Farmers have started receiving a favourable price for their milk, and the milk production system, which was essentially a self-contained one is now being transformed into a commercial proposition. The crossbred technology has further augmented the viability of the dairy units by increasing the milk production per animal. Subsequently milk production has increased at an exponential rate while the benefits of an increase in milk production also reached the consumers as is apparent from a relatively lower increase in the price of milk. The favourable price environment for milk producers however appears to have weakened during the 90s, a decline in the real price of milk being noticed after the year 1992.









Chapter 3
DAIRY DEVELOPMENT
a) Dairy developments in India
The vision and wisdom of a technocrat, the tenacity and commitment of a group of Khaira farmers and the selfless dedication of a politician worked wonders on the concept of cooperation in reality. And thus the saga of Amul started catching the attention of those who are interested in improving the agrarian economy of India. The impetus given by Amul in growth and stability of dairy cooperatives and dairying as a whole in India can be capsulated in the successful implementation of Operation Flood Programmes.
The integrated approach of dairying adopted by Khaira District Cooperative Milk Producers Union Ltd popularly known as Amul proved to be a great success. The harnessing of milk production, procurement, processing and marketing under the control of a Cooperative opened flood gates of progress to the farmers in Khaira District. The ownership and management of the Cooperatives gave them a total involvement which yielded productive and profitable performance. Nothing succeeds like success. And the success of Amul compelled other districts in Gujarat to follow the same path to prosperity. The collective ownership and management of dairies committed to the integrated approach saw the genesis of a role model – Anand Pattern Cooperative Society.
The immense success of the Anand Pattern in Gujarat won national acclaim and none other than the Late Prime Minister Lal Bahadur Sastry became an admirer of this Cooperative movement after his eventful visit to Anand. As a result, the National Dairy Development Board was set up to replicate the Anand Pattern Dairy Cooperatives in the country. Subsequently N.D.D.B launched a project known as Operation Flood to increase the pace o dairy development of India. The Government of India established the Indian Dairy Corporation to channalise the finance for Operation Flood. N.D.D.B. provided the technical expertise.
The Operation flood I was launched to provide the milk producers direct access to the urban markets so that the largest share of consumer’s rupee spent on milk and milk products would be ploughed back to the rural milk producers. Operation Flood I was designed to streamline the milk supply to four metropolitan cities of Bombay, Calcutta, Delhi and Madras. Milk Producers Cooperatives were set up in eighteen hinterland Milk-shed Districts of ten States. These Cooperatives were envisaged as complete and integrated organization for milk production, procurement, processing and marketing. The Operation Flood I was financed from the sale proceeds of the gifted milk products from food and Agricultural Organisation and World Food programme during the lean season without being detrimental to the indigenous milk production.
The success of the Operation Flood I gave the confidence to replicate Anand Pattern far and wide. Hence Operation Flood II was designed to create a viable dairy industry to meet the needs in milk and milk products. The objectives of II included (i) to enroll ten million rural farmers in a viable self-sustaining dairy industry (ii) to create National Milk Grid linking producers in rural areas to urban areas (iii) to set up a national frozen semen center; develop vaccine production and step up design and manufacture of dairy equipment.

b) Dairy developments in Kerala
Dairy activity has been a very popular economic activity among the rural households of Kerala from time immemorial. ‘Even though the performance of agriculture as a whole indicates a somewhat stagnant position the dairy sector in Kerala made spectacular progress during the last three decades. The two most important facets of this growth phase were the implementation off. Through the cross breeding programme the milch herd became highly production oriented and is a matter of about twenty seven years, cross breeds accounted for an estimated 75 percent of all milch cattle in the State, the highest ration in the country. This helped to increase production and productivity.


Chapter 4
EFFECT OF OPERATION FLOOD IN KERALA
a) Dairy developments before Operation Flood
Organized dairy development in Kerala commenced in 1951 through the Key Village Scheme (KVS). This scheme aimed at improving the genetic potential of cattle by crossbreeding local cattle with superior indigenous breeds. The Department of Animal Husbandry was the implementing agency of the KVS. This was followed in with the Key Farm Scheme in 1952 and 1954. In 1955, crossbreeding with exotic breeds was initiated. The Animal Husbandry Department, in 1963, started the Hill Cattle Development Scheme. The Indo Swiss Project Kerala (ISPK), a joint venture of the Government of India and Swiss Development Corporation started in 1963 has played a major role in the genetic improvement of the cattle of the State. The project located in Mattupetty on the high ranges of Idukki aimed at developing a breed of dairy cattle suited to the local conditions. Frozen semen technology for artificial insemination was introduced for the first time in Asia through the ISPK. Fodder development was another important component of the project. The breeding policy for the Kerala Livestock Development & Milk Marketing Board in 1976, with monopoly rights for frozen semen distribution in the State.
During the Fourth plan, the Intensive Cattle Development Project (ICDP) was launched in the state in 1968. ICDP aimed at enhancing milk production through necessary technical and infrastructure support in the rural areas and linking them with the urban dairies. ICDP had four Regional Artificial Insemination Centers (RAICs) at Alwaye, Vaikom, Mavelikara, and Kanjirapally with 25 subcenters under each. Superior quality bulls mostly of the Jersey breed (and later, Murrah buffaloes also) were kept at the three RAICS for semen collection. Two more 81 CDOS covering the whole of the State.
Meanwhile, the Dairy Development Department, which was formed in 1962, understood a state-level crossbreeding program in 1972 using Chilled Milk Extended Semen. About 950 AI centers were opened in 721 panchayats and trained matriculate youth were deployed to deliver the service at the farmers’ doorstep for the first time. These centers which were reportedly doing over five lakhs insemination annually remained fully functional till 1981 after which they were mostly phased out and replaced with ICDP sub-centers. The adoption of AI spread dramatically through the seventies and eighties because of the Kerala farmer and the urgent need to enhance animal productivity on the face of rising input costs. As cattle composition changed in favour of crossbreeds, milk production too increased considerably.
In the case of milk marketing in Kerala, it was largely localized before the crossbreeding revolution. Neighborhood and local tea-shop were the main buyers of the marketable surplus (which itself was limited due to low yields). But organized milk selling had started in the pre- Independence days itself with the formation of village level milk co-operatives. The first such society was formed in 1934 at Thirumala in Trivandrum. The First Co-operative Milk Supply Union was established in Calicut in 1939, an apex marketing organization of village societies set up to sell milk in the city. Until 1962, 150 such societies were formed in the State. The formation and control of these societies were till then, vested with the Co-operative Department.
The Dairy Development Department was formed by separating the dairy development functions of the Cop-operative Department with the purpose of speedy and focused implementation of the schemes under the five – year Plans, mainly the City Milk Supply Scheme. This sought to supply good quality milk to the urban centers. The surplus milk from the societies was collected, bottled and sold in the towns and cities. Most of these unions were later dissolved and their marketing activities taken over the Department due to corruption, mismanagement and liquidity problems. The Department undertook the processing and marketing functions even as it continued the formation of the village level co-operative until 1981, when of was launched.
The first dairy plant in the State was commissioned at Trivandrum in 1961 by the Co-operative with a capacity of 6,000 liters per day and was later hundred over to the District Milk Union. Similar plants were set up in other district centers as well. 18 chilling centers were also set up for effective link-up. In 1976, the Kerala Livestock Development and Milk Marketing Board was formed.
b) Dairy development during operation Flood
The largest dairy development project in the world was launched in the year 1970 in the important milk sheds of the country. South and Central Kerala was brought under the ambit of OF in the second phase of the project following the signing of a memorandum of understanding between the Government of Kerala and the Indian Dairy Corporation, the national implementing agency in 1973. The Kerala Co-operative Milk Marketing Federation Ltd (KCMMF) was registered in February, 1980, under the Kerala Co-operative Societies Act, to implement the OF program in Kerala.
The major responsibilities assigned to the KCMMF were the formation of procurement network comprising village level milk producers’ co-operatives and the expansion of the processing capacity. The existing processing facilities were being run by the KLD&MM Board, which owned the Brand name MILMA. In 1983 the Government ordered the transfer of the milk processing and marketing functions of the KLD&MM Board (the name subsequently changed to KLD Board) to KCMMF along with the brand name. In 1985 Regional Milk Unions were establish in Trivandrum and Ernakulam to make the co-operative structure fully compatible with the ‘Anand model’.
The first integrated dairy development project, of, aimed at establishing infrastructure that would facilitate sustainable development of the sector. For this purpose the project addressed simultaneously all the critical areas, namely, milk production, procurement, processing and marketing. In the case of Kerala, major advances had already been made in the area of animal production by the time project arrived and, therefore, the thrust areas of in the State were procurement, processing and marketing. First of all, an extensive procurement network was created, by forming hundreds of village level producer co-operatives. The network of co-operative would also serve as a channel for the dissemination of inputs for milk production. Side by side, new processing facilities were wet up at different locations to handle all the milk that would be procured. A formidable milk distribution system gave producers direct access to consumption centers and urban consumers a reliable source of wholesome milk.







Chapter 5
MILK – A MAJOR DIARY PRODUCT
a) Importance of milk
Milk is an ancient as mankind itself. Milk may be defined as "the normal secretion of the mammary of glands of mammals". All species of mammals from man to whales produces milk as a food for their infant. Nature designed milk as a food for their young.
Thousands of years ago man kind learned the possibilities of milk and milk products as a food. Accordingly through selection and breeding, man has greatly increased, the milk producing function of those animals best adapted as a source of milk for man, especially the cow and the goat. Other animals used as a source of milk for human food are the buffalo, sheep and camel. The milk of different species, although containing the same constituents in general, varies in composition and properties in minor ways. In Europe and America 'cow' is the most important source of milk3. The term milk always will be understood as referring to the milk of cows. Milk is a dietary item. It is a complete balanced food. The high biological value of milk protein is an advantage not only for infants but also for adults. Milk from domestic animals and milk produced by human are an excellent food for human beings. The energy value of both human's and animal milk is similar but varies in its mineral and vitamin contents. It is not only an excellent food but also complements all other diets. It is valuable for growing children, convalescing adults, pregnant and lactating women and for older people. It can be used for making several milk products.
b) Indian Market of Milk Industry
Beginning in organized milk handling was made in India with the establishment of Military Dairy Farms.
• Handling of milk in Co-operative Milk Unions established all over the country on a small scale in the early stages.

• Long distance refrigerated rail-transport of milk from Anand to Bombay since 1945

• Pasteurization and bottling of milk on a large scale for organized distribution was started at Aarey (1950), Calcutta (Haringhata, 1959), Delhi (1959), Worli (1961), Madras (1963) etc.

• Establishment of Milk Plants under the Five-Year Plans for Dairy Development all over India. These were taken up with the dual object of increasing the national level of milk consumption and ensuing better returns to the primary milk producer. Their main aim was to produce more, better and cheaper milk.

Established in 1948, Indian Dairy Association (IDA) is the apex body of the dairy industry in India. The members are from the cooperatives, MNCs, corporate bodies, private institutions, educational institutions, government and public sector units. IDA functions very closely with the dairy producers, professionals & planners, scientists & educationists, institutions and organisations associated with the development of dairying in India.
The IDA since has a history of around six decades now, it has had the privilege of being headed by several Presidents and some of them were of national and international fame. The luminaries like Sardar Datar Singh, Dr. K.C. Sen, Dr. Z.R. Kothawalla, Dr. D.N. Khurody, Dr. V. Kurien, Dr. P. Bhattacharya were the past presidents of the IDA.
IDA has been providing a common forum to knit the dairy fraternity together and thus, over the years, it has emerged as the reigning czarina of information. The Association is managed by an apex policy making body called the Central Executive Committee (CEC). The CEC is headed by President and supported by two Vice-Presidents and 19 Executive Committee Members.
The ongoing CEC is spearheaded under the dynamic leadership of Dr. N.R. Bhasin, IDA has emerged as a platform for assimilation and dissemination of knowledge, as an important tool for policy making in the dairy sector, in India! Besides, the IDA, in the recent time, has also succeeded to focus itself at the national and international fora.
The IDA organises seminars, symposia and exhibitions on a wide range of topics catering to various segments of professionals, scientists, institutions and organisations associated with the development of dairying in India.
The IDA's Head Quarter is in Delhi and the zonal branches are in Bangalore, Kolkata, Mumbai and Delhi. It has State Chapters at Gujarat (Anand), Kerala (Thrissur) and Rajasthan (Jaipur).

c) Physical Properties of Milk
Acidity :
Milk has a pH of about 6.5 to 6.7. The salts of the minerals – calcium, phosphorus, sodium and potassium help to maintain this pH level.
Viscosity :
The viscosity of milk is affected by temperature, amount and nature of dispersion of protein and fat, acidity and the effects of various enzymes and bacteria. Homogenization increases the viscosity of milk.
Freezing Point :
The freezing point of milk is –0.55° C.
Boiling Point :
Milk boils at 100.2° C.
d) Milk and Milk Products
 Khoa
 Cream
 Butter
 Ghee
 Paneer
 Cheese
 Curd
 Yoghurt
 Sambharam
 Lassi
 Peda
 Ice Cream



Chapter 6
STRENGTH OF INDIAN DIARY INDUSTRY

a) Marching Towards Growth and Development
India has a huge livestock population and ranks high in world trade of livestock products. Dairy production accounts for 70% of the livestock produce. The growing demand opens up avenues for Indian farmers' incomes.
India holds a significant position in bovine population among the nations of the world. However, although India has an appreciable livestock wealth, she ranks very low in the international trade of livestock products.
Within the recent and concerted efforts made by the government to liberalize and open up the domestic economy to the world market, India's export trade of livestock products obtained newer heights.
The just started dairy industry in India accompanied with the introduction of corporate sector again, due to the liberalized policies of the government, boosts the functioning of the National Dairy Development Board to establish a white revolution.
If India is capable of exploiting her potential up to the mark in the livestock sector she can become one of the leading exporter of livestock products and generate surplus of these commodities. She would also rank as a competitive member in the world market.
In the FY'04 the total production of milk and dairy products was worth Rs1600 billion and the traditional dairy products accounted for Rs990 billion. While the organized sector's share was about Rs230 billion the unorganized sector accounts for more than 50% of all milk and dairy products. The co-operative sector has an installed capacity of 60%.
After conducting an intensive profiling of the livestock industry in India, NCOS in its recently published market research report named "Indian Livestock Industry - An Industry Analysis" says that the dairy production accounts for about 70% of the total livestock produce. The report also predicts a triple rise in the demand for livestock products in developing countries in the next two decades. This would open opportunities to farmers to increase their incomes.
On the basis of surveys in all the 29 states and 6 union territories of the country the report announces that Rajasthan, Jammu & Kashmir, Uttar Pradesh, Gujarat and the north eastern states are regions with maximum livestock population.
The report analyzes the opportunities and challenges facing this industry, a key one being disaggregated and unorganized form of activity in the livestock industry. It includes an extensively conducted study of various government organizations targeting development and support of the Indian livestock industry.

b) Role of Diary and Food Processing Industries in promoting Economic Growth in India

India is supplying its food and diary resources for satisfying the need of the world.
 41% of Mango  36% of Green Peas
 30% of Cauliflower  28% of Tea
 24% of Cashewnuts  23% of Bananas
 14% of Milk  10% of Onion

In the field of Diary sector the GDP is exceeding Rs. 100,000 crores. India is the largest milk producing country in the world with a record level of 94 MT, it is the 14 per cent of world’s and 57 per cent of Asia’s production. It is gradually increasing in the rate of 5 per cent.
India is the largest milk producer in the world. From being a milk impoverished nation to the top producer has been an arduous and almost miraculous climb. This of course must be attributed in great measure to Operation Flood and the historic Co-operative movement. Yet, it must be observed that the industry has failed to build on this bedrock and reach the paradigms set by the world milk majors. The dairy sector is the predominant component in the overall livestock
activity in the country. Milk production has increased from 72.12 million metric tonnes in 1997-98 to 88.08 million metric tonnes in 2003-04 (Fig 3.1) representing a compound annual growth (CAGR) of 3.37% p.a. Over the last one and a half decade the contribution of milk from India to the total world milk production has also increased from 9.9 % to 14.5%.
Chapter 7
WEAKNESS OF INDIAN DIARY INDUSTRY

a) Threats
 The milk vendors in the country are seems to be an unorganized sector in the country

 The dumping of subsidized imported milk products
 Fat Content and Cardiovascular Disease
 Milk Proteins and Diabetes
b)Technological Gaps
Several areas of the dairy industry can be strengthened by the introduction of state-of-the –art technologies from overseas. Those who bring in new technological or sign joint ventures with foreign companies stand to benefit the most. To make the best out of the present situation, the following areas require immediate remedial action on the part of dairy entrepreneurs:
 Raw milk handling needs to be upgraded in terms of physic-chemical and microbiological attributes of the milk collected. The use of clarification and bactofugation in raw milk processing can help improve quality of the milk products.
 Better operational efficiencies are needed to improve yields, reduce waste, and minimise fat/protein losses during processing. Control production costs, save energy and extend shelf life. The adoption of Good Manufacturing Practices (GMP) and HACCP would help manufacture milk products conforming to international standards and thus make their exports competitive.
 Latest packaging technology can help retain nutritive value of packaged products and extend their shelf life. For proper storage and transportation, cold chain needs to be strengthened.
 Good scope exists for value-added products like desserts, puddings, custards, sauces, mousse, stirred yogurt, nectars and sherbets.

c) New Challenges of Globalisation and Trade Liberalisation
The NDDB has recently put in place Perspective 2010 to enable the cooperatives to meet the new challenges of globalization and trade liberalization. Like other major dairying countries of the world, the Indian cooperatives are expected to play a predominant role in the dairy industry in future as well. However, India is in the mean time, attaining its past glory and is once again becoming DOODH KA SAGAR. But, what percentage of this SAGAR is handled by the cooperatives - just a little over 7%. Since liberalization of the dairy sector in 1991, a very large number of private sector companies/firms have, despite MMPO, established dairy factories in the country. The share of the total milk processing capacity by private sector is 44% of total installed capacity of 73 MLPD (Million Litres Per Day) in the country. Therefore, the total share of the organized sector, both cooperatives as well as the private sector is barely 12%. What is, therefore, disquieting is that as much as 88% share of the total milk production is commanded by the unorganized sector - who specializes in selling sub-standard, un pasteurised milk more often than not adulterated with harmful chemicals. Besides, growth in milk production is likely to continue at the present rate of 4.4% in the near future. Who is going to handle this incremental milk? We must bear in mind is both income and price what we must bear in mind both income & price elasticity account for approximately 15% of the total expenditure of food. Demand for milk, at current rate of income growth is estimated to grow at 7% per annum. Interestingly, demand for milk is expected to grow steadily over the next two decades as the low income rural and urban families who have higher expenditure elasticity would also increase their income due to new economic environment. Let us now look at some other economic indicators. According to the World Bank, India is the fourth largest economy in the world going by the purchasing power parity estimates. Further, India has been identified as among the first 10 emerging markets in the world. India has the vastest domestic market in the world with over one billion consumers - a majority of whom are vegetarians with drinking of milk as habit. The untapped potential of the dairy sector is immense and opportunity to set up a new dairy venture is great. In the works of Dr. Amrita Patel, Chairperson, NDDB, there is enough place under the scheme for both private and cooperative sectors. Notwithstanding the above potential it is cautioned that, entering dairy sector is not going to be a cakewalk.







Chapter 8
CONCLUSION
Globalization and Liberalization are the Mantras of the new economy today, which is now on the fast track. Industrial production is rapidly moving forward. The dairy industry is no exception. With the World Trade Organization (WTO) coming into effect, from 01 April 2001 and the imports and exports getting liberalized in the global economy, the dairy industry, which includes dairy products, faces both an opportunity for growth as well as a threat for its growth. There is no doubt that there is tremendous scope for the growth of the dairy industry in the new millennium. The product mix of world dairy trade is likely to shift further towards cheese. This has been developed in the world markets. As the market opens up, consumption trends associated with these markets will have increasing influence on the world trade. Whole milk powder is likely to continue to be a substantial beneficiary and growth substantially in the middle eastern countries.
As standards of living in the importing country rises, exporting countries will increasingly concentrate on whole milk powder and cheese with the assistance of butter and skimmed milk powder. There is vast potential for the export of dairy products, the cost of milk production in India being the lowest. The major factor influencing production of bye products is the newer uses that may be developed through R & D support. Milk proteins are being utilized increasingly replacing animal and vegetable proteins in special bakery products and instant foods. Through the application of membrane proven process, milk proteins isolates are being produced. These are being utilized for ice milk mixes and other such applications. Most of the dairy plants in the Government, Cooperatives and Private Sector produce almost similar dairy products like varieties of milk, butter ghee, skimmed milk powder and whole milk powder. There are 7 large-scale cheese manufacturers and 14 manufacturers are producing infant foods and malted milks. There is immense scope for the broadening of the products range and some of the products, which are likely to have considerable demand in the coming decade, have been identified.
The cheese market, presently valued at about Rs.80 crore is growing at about 9% annually. There are more than thousand varieties of cheese, which have been listed out of which cheddar; mozzarella, gouda and processed cheeses are being manufactured in India. Pizza is becoming a very popular item in the market. This segment alone commands 5% of the share in the cheese market and other area is fermented milk products. Dahi even though is a Rs.15000 Crore market, the share of the organized sector is only around 10%. This product has immense potential for growth.
Varieties of milk shakes are also increasing wherein milk and fruit pulp are mixed in different proportions to produce different beverages. Some of the milk and fruit based beverages which are likely to have demand are a combination of milk with mango, banana, sapota, strawberry, papaya, etc. Some of these beverages can also be produced in dehydrated form and can be an excellent health food. There are varieties in traditional milk based sweets, manufactured in the country. The market size is around Rs.12000 Crore. However, there are very few nationally known brands in this category. 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. Packaging of dairy products is also another very promising area. NRI and overseas investments can take place in manufacturing dairy processing equipment, fruit packaging equipment and equipments for biotechnology related dairy industry.














ANNEXURE – I
REFERENCES
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2. Jha, Brajesh (2003) Indian Dairy in the Emerging Trade Order, an unpublished report submitted to the Institute of Economic Growth, Delhi –7.

3. Jain, D. K. (1992) Food Demand Analysis in India , an unpublished thesis submitted to National Dairy Research Institute (NDRI), Karnal, India.

4. Konandreas, P. (1999) “Next Round of Negotiations in Agriculture with Special Reference to Dairy Sector.” International Symposium on International Prospects for Dairying in the Next WTO Negotiating Round, held at Buenos Aires, Argentina, June 3-4, 1999.

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