White Revolution 2.0 2024 - Rejuvenating The Indian Dairy Sector - IMPRI Impact And Policy Research Institute

Policy Update
Armaan Rawat

Introduction

India is already the world’s largest dairy producer, contributing over 25% to the world’s milk production, and the Government of India aims to further bolster milk production and processing with the newly launched White Revolution 2.0 initiative. This scheme, launched by the Ministry of Cooperation in 2024, builds upon the legacy of Operation Flood (India’s original White Revolution) and seeks to modernize, expand, and enhance dairy cooperatives across the nation.

Background

The first White Revolution, also called Operation Flood, was launched in the 1970s by the National Dairy Development Board. It was led by Dr Verghese Kurien who was responsible for the success of the dairy cooperative AMUL, and he was tasked with emulating this model throughout the country. Operation Flood was focused on milk producer’s cooperatives and had the following objectives –

Increasing milk production
Augmenting rural incomes
Providing reasonable prices for consumers

Operation Flood was carried out in 3 broad phases –

Phase I

Phase I (1970-1980) was financed by the sale of skimmed milk powder and butter oil gifted by the European Union then EEC through the World Food Programme. The NDDB planned and executed the programme and negotiated the details of the EEC’s assistance. During its first phase, Operation Flood linked 18 of India’s premier milk sheds with consumers in India’s four major metropolitan cities: Delhi, Mumbai, Kolkata and Chennai.

Phase II

Operation Flood’s Phase II (1981-85) increased the milk sheds from 18 to 136 and 290 urban markets expanded the outlets for milk. By the end of 1985, a self-sustaining system of 43,000 village cooperatives covering 4.25 million milk producers had become a reality. Domestic milk powder production increased from 22,000 tons in the pre-project year to 140,000 tons by 1989. In this way, EEC gifts and World Bank loan helped to promote self-reliance. Direct marketing of milk by producers’ cooperatives increased by several million litres a day.

Phase III

Phase III (1985-1996) enabled dairy cooperatives to expand and strengthen the infrastructure required to procure and market increasing volumes of milk. Veterinary first-aid health care services, feed and artificial insemination services for cooperative members were extended, along with intensified member education.

Operation Flood transformed India from a milk-deficient nation to the world’s largest producer, producing over 230 million tonnes in 2022-23, it also greatly increased the per-capita availability of milk for Indians (459g for India in 2024 as compared to the world average of 323g per day) and provided employment and income generation for rural areas through dairy cooperatives. Dairy cooperatives currently cover 70% of India’s districts, with over 1.7 lakh cooperatives operating in over 2 lakh districts. The dairy sector as a whole contributes to almost 40% of the total agricultural sector and supports over 8 crore directly or indirectly.

However, despite these incredible achievements, some issues continue to persist within the Indian dairy sector such as regional disparities in the spread of dairy cooperative societies (DCS) such as in West Bengal and Odisha, where less than 10% of all villages are covered by DCS. Other issues include a lack of rural dairying infrastructure, low exports, and dominance of the unorganised sector in milk procurement, which the Government plans on solving through the White Revolution 2.0 scheme.

Objectives and Targets of the Scheme

The cooperative led “White Revolution 2.0” is aimed at expanding cooperative coverage, employment generation, and women’s empowerment with an objective to increase the milk procurement of dairy cooperatives by 50% from the present level over the next five years by providing market access to dairy farmers in uncovered areas and increasing the share of dairy cooperatives in organised sector.

The major targets of the scheme are as follows –

To increase the rate of milk procurement done under cooperatives from six percent per annum currently to over nine percent in 5 years. In absolute terms, milk procurement done by cooperatives is expected to go from 660 Lakh Kg per day to over 1000 lakh kg per day by 2028-29.
The NDDB (National Dairy Development Board) has also set targets for establishing around 56,000 new Multipurpose DCS (Dairy Cooperative Society)(MDCS) during the next five years.
It is also envisaged that about 46,000 existing village level DCS/ PACS (Primary Agricultural Societies) will be strengthened in terms of better and advanced milk procurement and testing infrastructure e.g. Automatic Milk Collection Unit (AMCU), Data Processor Milk Collection Unit (DPMCU), testing equipment, Bulk Milk Coolers, etc. as per the requirement, and they will function as MDCS/ MPACS.

Functioning of the Scheme

The scheme hopes to achieve these targets, and to improve dairying infrastructure and milk production by providing financial assistance to the various PACs. The details are as follows –

The financial assistance would be provided to all PACS/ MPACS that wish to initiate dairy activities, subject to fulfilment of the following criteria:

The Gram Panchayat does not have any primary level milk collection institution for dairy activities.
The MPACS has adequate milk potential to initiate viable dairy operations.
The MPACS is under the operational area of a Dairy Cooperative Institution so that the forward linkages for onward transportation of milk can be ensured.
The decision to fund the MPACS shall entirely lie with NDDB based on feasibility assessment and willingness of MPACS to participate in the scheme.

One-time financial support of up to a maximum of `40,000 per PACS/ MPACS will be provided to viable PACS/ MPACS to initiate milk procurement activities. The financial assistance to PACS/ MPACS will be routed through Dairy Cooperative Institution operating in the region. Similarly, forward linkages will be provided through Dairy Cooperative Institution operating in the region. The NDDB will also provide technical support to the PACS/ MPACS.

Expected Outcomes/Impact

It is expected to improve market access for smallholder dairy farmers, while at the same time ensuring fair and remunerative prices for them.
It will help in furthering the network of primary dairy cooperatives and will help in strengthening the entire milk value chain from milk procurement, testing, chilling, logistics to processing infrastructure.
Since women are an important stakeholder in the dairy sector, a greater emphasis has been placed on having women as members in cooperatives. The scheme will help in the inclusion and empowerment of women, and will provide them with access to formal employment and increased incomes through working in dairy cooperatives.
Enhanced procurement can help in increasing the share of the organised sector in the dairy industry, which is still dominated by the unorganised sector. This will help in ensuring food safety & quality control and increased availability of fresh and hygienic milk & milk products.
The scheme will help in developing the dairy sector and in increasing milk production to meet the domestic demand, while at the same time also tapping into India’s dairy export potential. As India’s domestic demand tapers off and milk production rises, increasing India’s dairy sector exports is paramount, as India currently only occupies a tiny share of the global dairy trade, despite being the world’s largest milk producer.

Emerging Issues and Way Forward

While the scheme certainly has set ambitious targets, the White Revolution 2.0 still faces some major issues. Firstly, addressing the regional disparity in dairy infrastructure and dairy production will require substantial financial investments, along with proper logistical coordination, to ensure that places and states with limited dairy cooperative presence also benefit from this scheme.

Similarly, the long-term financial sustainability of newly established PACs under this scheme also depends heavily on continuous financial and logistical support, effective management and efficient use of resources. Lastly, the problem of two-thirds of milk being sold in the unorganised sector will be hard to solve, and requires further policies from the government to encourage the growth of the organised sector (led by cooperatives) in the dairy sector.

Moving forward, the scheme must deal with the aforementioned issues, in order to maximise the scheme’s potential. Addressing regional disparities may be done with the help of local incentives, and cooperative models tailored to local needs. The Ministry must also ensure that a robust monitoring and evaluation mechanism is also set up, to assess the effectiveness of the program, and to make data-driven changes wherever needed.

Increasing digital literacy, and promoting the use of new technologies through financial investments and incentives can help improve the efficiency of the milk production, processing and distribution systems. Similarly, encouraging collaborations with the private sector and with NGO’s can help in providing financial aid, technical expertise and other forms of support to dairy cooperatives, which can improve their overall efficiency. Lastly, other initiatives must also be taken to improve the export competitiveness of Indian dairy products, in order to reach the goal of becoming the world’s largest dairy exporter, as only exports can continue to fuel the growth of India’s dairy sector.

In conclusion, the White Revolution 2.0 represents a crucial opportunity for India to build upon its strong foundation in dairy production, to improve the dairy sector via the cooperative framework. By addressing regional disparities, promoting women’s participation, and leveraging technology, the initiative aligns with the broader goals of rural development and poverty reduction. However, the Government must address recurring issues in the dairy sector, in order to maximise the impact of such schemes.

References

Bureau, The Hindu. (2024, September 19). White Revolution 2.0 to empower women: Amit Shah. https://www.thehindu.com/news/national/white-revolution-20-to-empower-women-amit-shah/article68661246.ece
Chand, R. (2023). Working Paper India’s White Revolution. NITI Aayog. https://www.niti.gov.in/sites/default/files/2023-04/Working-Paper-Indias-White-Revolution.pdf
Government of India (2024). Press Release https://pib.gov.in/PressReleasePage.aspx?PRID=2056329
IBEF (2024, March 19). India’s White Revolution. India Brand Equity Foundation. https://www.ibef.org/research/case-study/india-s-white-revolution
ICAR (2024). Homage to Father of the White Revolution in India https://icar.gov.in/node/7946
Invest India (2024). Animal Husbandry and Dairying https://www.investindia.gov.in/sector/animal-husbandry-and-dairying/dairy
Ministry of Cooperation (2024) White Revolution 2.0 https://www.cooperation.gov.in/sites/default/files/2024-09/White%20Revolution%202.0_Booklet_Bilingual_New_19092024_%20%283%29.pdf
National Dairy Development Board (2024). Operation Flood https://www.nddb.coop/about/genesis/flood
Pti. (2024c, September 19). Amit Shah launches “White Revolution 2.0” to boost dairy sector. The Economic Times. https://m.economictimes.com/news/economy/agriculture/shah-launches-white-revolution-2-0-to-boost-dairy-sector/articleshow/113494116.cms
Sharma, H. (2024, September 22). A new white revolution in dairy sector: Where India stands, where it aims to be. The Indian Express. https://indianexpress.com/article/explained/explained-economics/a-new-white-revolution-where-india-stands-where-it-aims-to-be-9579806/

About the Contributor– Armaan Rawat is a research intern at the Impact and Policy Research Institute, pursuing a B.A. Honours in Political Science at Kirori Mal College. His interests include public policy, policy research, analysis and public administration.

Acknowledgement– The author would like to thank Aasthaba Jadeja, Anamitra Sinha and Ambika Vijay for their valuable contributions.