[Food Processing] Milk Dairy Sector, Supply Chain, upstream downstream issues, Amul Model, Operation Flood

SubscribeEconomy37 Comments

IAS Mock Interviews
  1. Prologue
  2. Scope-Significance of Dairy Sector
  3. Location: Dairy cooperatives
  4. Milk Supply Chain: Upstream Issues
    1. Low productivity of milch animals
    2. #1: Veterinary problems
    3. #2: Breeding issues
    4. #3: Fodder problems
    5. Azolla fern
    6. Milk Quality
  5. Milk Supply Chain: Processing Issues
    1. Regional imbalance
    2. Anand/Amul Model/dairy cooperative model
    3. Amul Supply Chain
    4. Cooperative sector limitations
  6. Milk Supply Chain: Downstream Issues
    1. #1: MRP and adulteration
    2. Synthetic Milk
    3. #2: Ethnic products: untapped potential
    4. #3: Export issues
    5. Fonterra crisis
    6. #4: Tax on inputs
  7. NDDB
  8. Operation Flood
  9. Government Schemes
  10. National Dairy Plan (NDP)
  11. Mock Questions on Milk Supply Chain Management


First, regarding “Write Articles, Win Books” competition: so far 34 entries received. And last date to submit is 25th Sept 2013. Click me for more details.

For UPSC General Studies Mains Paper III, we were looking at the Food processing and related industries in India. So far we saw following topics

  1. Food processing industry: Awesomeness and Obstacles
  2. Food processing industry: Truckload of Government Schemes and bodies
  3. Marketing of agricultural produce: issues and constrains, Nuisance of APMC Acts and Commission Agents
  4. Agro/Food Processing: Export, Dumping, FDI, Finance, Taxation, Budget Provisions, CODEX, NWR, BRGF, RKVY
  5. Supply Chain Management, Upstream Downstream requirements for Fruit & Vegetables, Confectionery industries

Then I got bored with food processing, hence made three compilations on Hindu Sci-tech (and some posts about results, answer keys etc.) Anyways, back to where we had left in [Food processing]: fruits veggies SCM-updream downstream. Now time for Dairy & Milk Supply Chain Management SCM-upstream downstream issues.

UPSC syllabustopic in this article
prelims Paper I
  • Chemistry: components of synthetic milk
  • Agro-tech: azolla fern.
  • Biology: Food and Mouth disease
(GS1) location of primary, secondary, and tertiary sector industries in  various parts of the world (including India)Dairy industry in India.
(GS2) Effect of policies and politics of developed and developing countries on India’s interests,How the Fonterra crisis will help Indian dairy biz.
(GS3) economics of animal-rearingLot fodder material.
(GS3) Food processing and related industries in India-scope and significance, location, upstream and downstream requirements, supply chain management.for Milk/Dairy business.

Next time we’ll see [Food processing] meat, poultry and fisheries.

Scope-Significance of Dairy Sector



Top five Milk producers (World)

  1. ​India
  2. ​United States of America
  3. ​China
  4. Pakistan​ (as per NDDB, but I’m baffled nonetheless.)
  5. ​Russian Federation


  • India has the  world’s largest livestock population
  • half the world population of buffaloes
  • 1/6th of the world goat population
CONTRIBUTION TO GDPLivestock sector (milk, meat, eggs) contributes 3.6% of GDP. (2010’s data)
  • Per capita milk availability All India: ~290 gm; Punjab (highest): >900gm.
  • still per capita milk availability in India less than world average
  • To Farmers, Women And Consumers
  • more details under “operation flood”

India has proximity to milk deficit countries e.g.

  1. Bangladesh
  2. Indonesia
  3. Malaysia
  4. Philippines
  1. South
  2. Korea
  3. Sri-Lanka
  4. Thailand

Hence Indian dairy production could be utilized to earn good foreign exchange by targeting those markets. More under “Downstream=>Export”.


YearMilk (Million Tonnes)Eggs(Million Nos.)Fish(Million Tonnes)

Location: Dairy cooperatives

STATEBrand Nameofficial name
GUJARATAmulGujarat Cooperative Milk Marketing Federation (GCMMF)
ANDHRAVijayaAndhra Pradesh Dairy Development Cooperative Federation (APDDCF)
KARNATAKANandiniKarnataka Cooperative Milk Producers’ Federation (KMF)
MAHARASHTRAMahanand, Gokul, Dhawal, Dudh PandriMaharashtra Rajya Sahakari Maryadit Dugdh Mahasangh (Mahasangh)
PUNJABVerkaPunjab State Cooperative Milk Producers’ Federation (MILKFED)
TNAavainTamilnadu Cooperative Milk Producers’ Federation Ltd (TCMPF)

Issue: there is a regional imbalance in production and processing capabilities. e.g. UP contributes over 17 percent of India’s total milk production. Ironically, only one percent is procured by co-operatives, remaining milk goes to private-dairy players, who exploit farmers, and do adulteration.
map Milk Supply Chain: Major producers in India

Ranking: Top Five States
  1. Uttar Pradesh
  2. Madhya Pradesh
  3. Rajasthan
  4. Andhra Pradesh
  5. Maharashtra
  1. Uttar Pradesh
  2. Rajasthan
  3. Andhra Pradesh
  4. Punjab
  5. Gujarat
  1. Punjab
  2. Haryana
  3. Rajasthan
  4. Himachal Pradesh
  5. Gujarat

Bottom in all of above: North Eastern States, Delhi, Goa and UT.

  • Milk production =directly related to fodder availability.
  • Fodder=need irrigation.
  • Therefore, states with good irrigation facilities and / or rich farmers that can afford tubewells= milk production is high.

For these reasons, you can see how MP is in top-5, for number of cows and buffalos BUT still MP doesn’t figure in top-5 in milk production due to fodder shortage. (Rankings taken from NDDB website)

Milk Supply Chain: Upstream Issues

Low productivity of milch animals
CountryAvg. Cow Milk Kg Per Year
World Average3100

India has world’s largest cow population, but the average productivity of Indian cows is among the lowest in the world. WHY?

  1. Veterinary service problems
  2. Breeding problems
  3. Fodder problems

Let’s see them one by one:

#1: Veterinary problems

  1. Manpower
  • To support health programmes for the massive livestock population, we need more than 60000 veterinary doctors in the rural areas. (right now we only have ~25000)
  • Need to strengthen the mobile veterinary services to ensure door-step veterinary support, particularly in inaccessible areas.
  • Veterinary hospitals, dispensaries are inadequate in rural areas.
  1. information
  • The disease reporting is neither timely nor complete which delays proper interventions.
  • NIC developing software for computerized National Animal Disease Reporting System (NADRS)
  • It’ll link taluka, Block, District and State Headquarters to a Central Disease Reporting and Monitoring Unit at the Department of Animal Husbandry, Dairying & Fisheries (DADF)
  • This will ensure faster and reliable disease reporting
  1. Inadequate availability of vaccines vs. High prevalence of FMD, theileriosis and brucellosis amongst cattle
  2. FMD alone causes economic loss of ~Rs.20,000 crore per year to India. let’s check more details about FMD for MCQs.

Foot and mouth Disease (FMD)

  • FMD is a viral disease that spreads rapidly between animals.
  • high prevalence in Africa, the Middle East and Asia
  • FMD affects cloven-hoofed animals (those with divided hoofs), including cattle, buffalo, camels, sheep, goats, deer and pigs.
  • It can even affect wild animals e.g. Deer, wild pigs and buffalos.
  • Pigs are regarded as ‘amplifying hosts’ because they can excrete very large quantities of the virus in their exhaled breath.
  • Cattle are very susceptible to FMD. They get infected by breathing even small quantities of the virus.
  • FMD spreads rapidly from one animal to another, especially in cool, damp climates and/or when animals are housed closely together.
  • Although FMD is not very lethal in adult animals, it can kill young animals and cause serious production losses.
  • Animal suffering from FMD :
    • Becomes lame and unable to walk to feed or water.
    • Stops eating because its tongue and mouth gets blister- very painful to chew anything. =Adult animal can survive a few days of starvation but young animal will die.
    • Its mammary glands are damaged=milk production loss.
  • FMD has serious ramifications in international trade of milk and meat. Because countries that are free of the FMD disease= they ban or restricting imports from FMD affected countries.
  • There is no cure for FMD. The Affected animals will recover with time. Although Vaccines can protect against the disease.

Department of Animal Husbandry, Dairying & Fisheries (DADF) has initiated National Programmes for prevention and control of FMD, with help of State government.

#2: Breeding issues

  • The cattle from temperate region have higher milk production. (e.g. Denmark)
  • But India: tropical, sub-tropical, hot-humid type climate
  • So even when we import foreign cattle breeds, they give less milk because of climatic factor.
  • Present breeding strategy focuses on high yielding cows/buffalos rather than developing breeds that are tolerant to adverse climate/fodder conditions.
  • Crossbred animals are sent to areas poor in feed resources=they don’t survive/don’t produce optimum amount of milk.
  • Limited availability of quality breeding bulls and semen.
Notable breeds
  • Cow: Sahiwal, Gir, Rathi and Kankrej
  • Buffalo: Murrah, Mehsana and Jaffarbadi


BREEDpromote in ___ area
HOLSTEIN FRIESIANin feed-fodder rich states
JERSEYin states poor in feed/fodder resources.
  • Government started ‘National Project for Cattle and Buffalo Breeding (NPCBB)’ is to promote genetic upgradation of Indian cattle livestock through Artificial Insemination.
  • NGOs like BAIF and JK trust are operating about 6,000 mobile artificial insemination centres.

#3: Fodder problems

  1. Rich farmers=irrigation /tubewell =can grow fodder=>higher milk yields
  2. But majority are poor farmers= rely on common pastures =>underfed cattle= less milk yields.
  3. For the same reason: MP is in top 5 for cattle population but not in top 5 for milk production
  4. While the number of livestock is increasing, the grazing lands are diminishing, because
    • Real-estate mafias and National Son-in-law encroaching on such land
    • Farmers prefer growing food grains, oil seeds, and pulses hence fodder production generally gets lower priority.
  5. At present, fodder is being cultivated only on 4% of gross cropped area= insufficient to meet requirement.
  6. High quality fodder seeds =not available.
  7. Agriculture crop residues are sold to paper industry, packaging, etc. rather than using as animal feed.
  8. We dont have specific extension machinery with specialized manpower for popularization of good fodder varieties.


  • to procure surplus fodder from the farmers in areas with good rainfall / irrigation.
  • Convert this fodder into silage or fodder blocks for storage
  • Supply this packed fodder to the deficient areas.
  • the degraded forest areas, mostly under the Joint Forest Management Committees (JFMCs), can be used for assisting growth of indigenous improved fodder varieties of grasses, legumes, and trees under area-specific silvi-pastoral systems.
  • Dovetail the ongoing schemes like MGNREGA and RKVY for ^this purpose.

Azolla fern

  • Azolla is a floating fern. It resembles algae, Multiplies very rapidly.
  • widely distributed in tropical belt of India.
  • Grows in paddy fields or shallow water bodies.
Benefits of Azolla fern?
  • Azolla is a Nitrogen fixing fern= aids in the growth of rice.
  • Azolla reduces evaporation from water surface and increases water use efficiency in rice.
  • Suppresses the weed growth.
  • Azolla has 50-60% protein on dry weight basis, rich in almost all essential amino acids, vitamin A, vitamin B-complex and minerals
  • Livestock easily digest it.
  • Dry Azolla can be mixed with other fodder, or can be given directly to cattle, poultry, sheep, goats, pigs and rabbits.
  • Green Azolla is also a good feed for fishes.

Milk Quality

From farm to dairy, there is significant deterioration in milk quality. Because of two reasons:

Factors affecting quality of Milk Supply
  1. lack of all-weather roads in many villages
  2. Electrical problems in rural areas= cooling centers don’t work 24/7 basis.
  3. lack of potable water and supply sewage disposal => animals kept in unhygienic condition=milk gets contaminated.
  1. Contamination through equipment. Because lack of potable water=> milk-cans, buckets, tankers are not regularly washed.
  2. Bad roads=more transport time=more bacterial growth in milk.
  3. Careless attitude of cooperative-staff. They don’t keep the prescribed low-temperature during collection and transport of milk.
  4. ^Why careless attitude? Because Dairy cooperative elections won through money power and then such office-bearers recruit any swinging dude in dairy as long as he is payin bribes for getting the job.

Result: following properties of milk get affected

SENSORY PROPERTIEScolor, taste, odour
COMPOSITIONfat, protein etc.
HYGIENEbacteriological growth


  1. Currently, when farmer supplies milk @dairy cooperative society (DCS) of his village, they only test one thing: “fat content”. Therefore, farmer has no incentive to maintain any other qualities of milk.
  2. Setup quality testing facilities @collection center to test bacteria count, acidity, smell/taste, bacterial count, heavy metals, pesticides residue etc. and not just fat-content alone.
  3. Train farmers on hygiene habits for milk collection.
  4. Pay farmers more money if they supply quality milk
  5. Supply of Hygiene Kits+ Training to DCS staff. Impose penalty if they don’t comply with the standards.
  6. Less manual handling, use more machines: Bucket Milking machines, Feed racks, water bowls and partitions etc.

Milk Supply Chain: Processing Issues

A typical supply chain of milk sector:

Regional imbalance

  • Bulk of new capacity in the period in last decade, has been established in the Northern states, Maharashtra and Tamil Nadu. Remaining states are lagging in dairy growth.
  • Capacity utilization of dairy plants is about 60% (assuming 300 working days in a year). Due to Lack of milk availability in the lean season.
  • For e.g.  Rajasthan has 8% share in milk production and 11% share in consumption of milk products, however the share in dairy processing capacity is 4%. Meaning much of the milk escapes from the ‘value-addition’ in dairy supply chain. A similar situation prevails in Bihar.

Anand/Amul Model/dairy cooperative model

Supply chain Amul

1946Sardar Patel encourage the farmers of Anand region in Gujarat, to form their own milk cooperative, to protect themselves from exploitation from private milk traders
1965National Dairy development board setup @Anand, to replicate the dairy cooperative model throughout country.

(PM Lal Bahadur Shashtri)

1971Gujarat Cooperative Milk marketing federation setup (GCMMF)
1974GCMMF starts maketing milk products under single brand name Amul (Anand Milk Union Limited)

Amul Supply Chain

  • In the given village, a dairy Cooperative Society (DCS) is formed.
  • Every dairy cooperative society has ~110 farmers.
  • Combined, all DCS together handle more than 18 million kg milk / day.
  • they’re equipped with Automatic milk collection unit (AMCUS): computer analyses fat content of milk, automatic printing of receipts etc.
  • they process milk=> butter, ghee, milk powder, cheese, ice cream etc.
  • E.g. Banaskantha District Cooperative Milk Producers’ Union Limited known as Banas Dairy. They manufacture a large number of dairy products under AMUL, SAGAR and BANAS brands. Usually “Banas” products sold locally, and Amul products sent to other states.
  • similarly Gandhinagar District Co-operative Milk Producers’ Union Ltd.=Madhur dairy.
  • Surat= Sumul Dairy
  • Surendranagar District Co =Sursagar Dairy.
  • They can sell their products under the brand name “Amul” as long as they meet the requirements of GCMMF. (e.g. must collect 30,000 litres milk daily for a period of three years)
  • The main “boss” is Gujarat Cooperative Milk marketing federation (GCMMF).
  • All of above district cooperative unions (Banas, Madhur, Sumul Sursagar) etc. fall under GCMMF umbrella.
  • Amul has more than  5000 outlets of own- at high streets, residential areas, Railway Stations, Bus Stations, Educational Institutions, across India.
  • 2012: Amul planned to setup 10000 retail outlets across India.
  • Other than that, even private shops, hotels, restaurants etc. too sell Amul products.
  • this “Amul Model” eliminates middlemen and directly engages farmer with the processor (dairy)
  • These cooperatives form part of a national milk grid which links the milk producers throughout India with consumers in more than 700 towns and cities

here is one more supply chain diagram: click to enlarge

Supply Chain Milk and Dairy products

Cooperative sector limitations

  • While dairy Cooperatives have played an important role in Indian milk industry’s development, but still dairy cooperatives reach barely ~20% of the Indian farmers.
  • Dairy cooperatives face increasing competition from private dairies: both in procurement + retailing of milk.
  • Private players are more agile, offering better incentives to farmers compared to the cooperative.
  • Even the largest Indian dairy player (Amul)’s annual turnover is quite lower than a large MNC dairy company like Nestle.
  • Dairy cooperatives are subject to state laws /regulations. But often, the elections in dairy cooperatives are won using money and caste equations.
  • When such fraudsters get key positions in the dairy board, all they care is how to recover their ‘investment’ by taking bribes in appoint of dairy staff=> inefficiency + lack of new initiatives.
  • Hence, State governments need to make these dairy cooperatives more accountable, democratic and professional in their functioning.

Milk Supply Chain: Downstream Issues

#1: MRP and adulteration

  • WPI for Milk product= more than 190 (for 2012)
  • Meaning there is 90% increase in the wholesale price of Milk, compared to base year 2004.
  • This type of killer price rise=> has led to adulteration, fake milk from urea, Nakli-Maawaa etc. once in a while, you’ve seen reports about this, particularly in Delhi-UP region.
  • Such fake milk products are extremely hazardous to health.
  • In long term, they’ll destroy India’s name in foreign market, just like Chinese milk products lost business internationally, after news reports of Melamine adulteration in 2008.

Synthetic Milk

Synthetic milk is prepared by mixing urea, caustic soda, refined oil (cheap cooking oil) and common detergents.

Ingredients of Synethic/artificial milk
INGREDIENTWhy added in synthetic milk?
REFINED OILAs a substitute for milk fat.
  • Detergent acts as an “emulsifying agent”. Meaning it helps above refined oil to get mixed in water and give a frothy white solution that looks like milk.
  • Even in legit (real) milk, the traces of detergent are found because farmers and dairy staff use cheap detergents to clean vessels, buckets etc. but don’t thoroughly wash them.
CAUSTIC SODATo neutralize the acidic PH of other ingredients and thus prevents fake-milk from turning sour during transport.
  • To increase solid-not-fat (SNF) content.
  • Higher the SNF=better the milk-quality, fetches more price when sold to dairy.
  • it also increases viscosity (thickness) of the liquid so you feel you’ve bought ‘premium’ quality milk .
STARCHPrevents curdling in fake-milk.

Heath hazards of Synthetic milk: damages kidney, heart problems, cancer and even death

National Survey on Milk Adulteration 2011

  • Was conducted by FSSAI. click me to learn more about FSSAI
  • Bihar, Chhattisgarh, Odisha, West Bengal, Mizoram, Jharkhand and Daman & Diu= their milk failed in all tests.
  • only Goa and Puducherry’s milk passed all the test.
  • ~70% of Indian milk doesn’t meet the standards set by set by the Food Safety and Standards Authority of India (FSSAI)

Last year, Union government quoted ^this report, while filling affidavit in SC about milk adulteration. Union also said that it Is state government’s responsibility to act on milk adulteration problem. Later SC asked state governments to file affidavit about what action they’ve taken.

#2: Ethnic products: untapped potential

  • Examples of ethnic milk products: Paneer, Rasogolla, Sandesh, Pantua, Rasomalai, Cham, Rajbhog, Kulfi, Rabri, Basundi, Burfi, peda, Gulabjamun, Kalakand, Dahi, Mishti Doi, Lassi, Chhach / Mattha, Srikhand etc.
  • Scope: For ethnic milk products, profit level is ~12-38% of the input cost.
  1. Most of the ethnic milk products are made by local halwaii / sweet shop= unbranded, unorganized. Can’t compete in foreign market. You need to create a brand first to earn the respect and trust of foreign customers.
  2. Since this is done on small scale = they use cheap quality packaging material, even harmful colors and preservatives used, =Doesn’t meet quality norm in US/EU market.
  3. To make Indian ethnic milk products famous like cakes, pastries, pastas and noodles => have to invest a lot in marketing promotions abroad. Small scale firms can’t do that.
  1. Train small manufacturers of ethic dairy products, such as halwaiis: make them to adopt hygienic practices, use state / district level bodies, cooperatives, ITI’s can be involved in such efforts
  2. Catalyze R & D for commercialization of ethnic dairy products
  3. The Ministry of Food Processing, in conjunction with the NDDB, needs to undertake generic promotional campaigns to enhance the image of Indian ethnic dairy-based products in US/EU markets.

#3: Export issues

Import export of milk products (2012-13) in crore Rs.

Earlier we saw India is located close to the milk deficit countries, but still India hasn’t capitalized on this location advantage due to the following reasons:

  1. Low quality and hygiene standards.
  2. Only ~35% of milk produced in India is processed. Rest is sold by local doodhwalla= not enough milk available for export.
  3. Domestic consumption of milk has increased => less surplus left for exports
  4. Lack of experience in marketing products in international markets, particularly for ethnic milk products.
  5. Low productivity and quality are the key reasons due to which processors in India, are not able to achieve the scale of operations of their counterparts in New Zealand or Australia.


2011Export of milk powders (Skimmed Milk Powders, Whole Milk Powders, Dairy Whitener, Infant Milk Foods etc.), Casein and Casein Derivative was prohibited
2012ban lifted, these milk/casein products export given under Vishesh Krishi and Gram Udyog Yojana(VKGUY)

Fonterra crisis

  • New Zealand = one of the biggest dairy exporter of the world.
  • Fonterra= New Zealand’s biggest dairy company
  • 2013: News report came that Fonterra’s milk powder could have been contaminated with the Clostridium bacteria. It can cause fatal botulism.
  • After this news report, China and Sri Lanka banned Fonterra’s products.
  • Fonterra CEO says: it was a false alarm, the bacteria variety found in our milk powder is not capable of causing botulism, but nonetheless we have recalled all the batches exported. So don’t worry

Anyways, all this negative publicity and banning of New Zealand dairy products= gives opportunity for Amul to tap those export markets.

#4: Tax on inputs

  • In earlier times, dairy industry had been subjected to octroi and sales tax etc. creating a non-level playing field with the unorganized sector.
  • There had been high level of taxation on dairy equipment and machinery (excise, sales tax, octroi) Even the excise duty on polyethylene film, aseptic packaging machines, milk vending machines, pouch filling machines, used in packing and distribution.
  • This has hampered the growth of dairy industry. Although nowadays, taxes on most of these items have been reduced / abolished.
  • Necessary Reform: Speedy implementation of GST.

Enough of supply chain, let’s look at some allied topics: NDDB, Operation Flood, Government schemes related to dairy sector.


  • National Dairy Development Board
  • Statutory body (1965)
  • apex organization of dairy cooperatives in the country
  • Chairman: Amrita Patel
  • HQ: Anand, Gujarat

2013: NDDB been in news because

  • NDDB has Won Indira Gandhi Rajbhasha Award for the financial year 2011-12. (But declared in 2013).
  • Rajbhasha awards are presented to institutions for outstanding achievements in the use of Hindi language to ministries/departments, banks and financial institutions, public sector undertakings and employees.
  • Dr. Amrita Patel:  Chairman National Dairy Development Board.
  • Recently decided to resign.(although Mohan wanted her to continue).
  • After Vergese Kurien, the father of white revolution, she has been managing NDDB.

Operation Flood

Timeline of Operation Flood
1965NDDB setup.
1970NDDB launches Operation flood.
1996The End of Operation flood.

Operation flood had three objectives:

  1. Increase milk production (“a flood of milk”)
  2. Increase farmers’ income.
  3. Reasonable milk prices for consumers

Op.Flood setup following hierarchy of dairy cooperatives

VILLAGEPrimary Village Cooperative Society
DISTRICTDistrict Union
STATEState Federations

Operation flood worked in three phases from 1970 to 1996:

  • Setup dairy cooperatives in 10 states and link them with four metropolitan cities: Mumbai, Delhi, Kolkata and Chennai.
  • Finance: by the sale of skimmed milk powder and butter oil gifted by the European Union
  • Karnataka, Rajasthan, MP
  • Connected more than 40,000 villages and 4 million farmers in the dairy cooperative umbrella.
  • finance: by World bank loan
  • To consolidate the gains made from previous phases.
  • Vaccination, Breeding research, artificial insemination, farmers’ training etc.
  • The end: 1996

Result of Operation Flood

  • Made India the largest Milk producer of the world.
  • Imports of milk solids ended. Our milk requirements now met through desi-dairies. (Otherwise imagine, if we were still relying on “imported” milk, like imported crude oil – than what will be the current account deficit and rupee’s downfall!)
How Dairy cooperatives lead to “EMPOWERMENT”?
  1. Per capita milk availability increased.
  2. Reduced the regional imbalance in milk availability.
  3. Reduced the seasonal variation in milk prices.
  1. Farmers connected in cooperative dairy grid=no exploitation, increased income.
  2. Village dairy cooperatives= less nuisance than APMC / food grain middlemen.
  1. Milk production doesn’t require much land. Even landless poor can participate.
  2. Village Milk Cooperatives bypassed the feudal power structure associated with cropping/foodgrains in villages. It covered farmers from all castes and religion.
  3. In that way, operation flood was more successful in Social empowerment than land reforms and  Panchayati raj.
  1. Many women dairy cooperatives were setup. (Particularly during and after phase III)
  2. Women became direct members and office bearers of such cooperatives and started earning.
  3. You may have seen in the latest Amul ad “Maari bairi sethani thai gayi che”: translated “my wife has become a Sethani” (thanks to dairy income from Amul.)

Government Schemes

(Although given in previous article, but copy pasting again for the sake of continuity during reading-revision)

Department of Animal Husbandry, Dairying & Fisheries

They run following schemes:

  1. install Bulk Milk Coolers at village level close to the area of milk production
  2. for installation of bulk milk cooler
Intensive Dairy Development Scheme (IDDS)
  • 100 per cent grants in aid given to provided to Dairy Milk Unions/Federations:
  • for Dairy processing and marketing
  • for milk equipment for bulk milk coolers, chilling centers, refrigerated tankers and cold storage
  • for developing dairy infrastructure at the village and district level.
Dairy Entrepreneurship Development Scheme (DEDS)
  • to encourage entrepreneurs in setting up modern dairy infrastructure for clean milk production
  • helps in bulk milk coolers, transportation facilities including refrigerated vans, cold storage facility
  • Centrally Sponsored Fodder and Feed Development Scheme (CSFFDS)
  • with help of state governments
clean milk
  • Official name: “Strengthening Infrastructure for Quality & Clean Milk Production”
  • trains of farmers on good milking practices
  • Fund to setup Bulk Milk Cooler (BMC) @village level.
  • fund to setup laboratories for testing of milk

National Dairy Plan (NDP)

By National dairy development board (NDDB), with support from International Development Association (IDA)

  • Phase-1 (2012-17) was launched at Anand, Gujarat.
  • Scheme will run in 14 states – Uttar Pradesh, Punjab, Haryana, Gujarat, Rajasthan, Madhya Pradesh, Bihar, West Bengal, Maharashtra, Karnataka, Tamil Nadu, Andhra Pradesh, Orissa and Kerala.
  • ^These states collectively account for over 90% of country’s milk production.

National Dairy plan will do following:

  1. Breed improvement + animal nutrition=> increase milk production, reduce methane emission.
  2. Strengthen of village based milk procurement system= Rural milk producers to get greater access to the organized dairy sector.
  3. Use of ICT technology: Internet Based Dairy Information System (i-DIS), Data warehousing System along with Business Intelligence tool etc.
  4. HRD, management, knowledge sharing, R&D and other fancy stuff

Funding pattern

ca$h comes from
  1. International Development Association (IDA) of the World Bank
  2. Central government (Department of Animal Husbandry, Dairying and Fisheries)
toNDDB: National Dairy Development Board (a statutory body)
ultimately toEnd Implementing Agencies (EIAs):

  • State Government
  • Cooperative dairy federations
  • Milk Producers Unions
  • ICAR institutes, and veterinary/dairy institutes and universities

Mock Questions on Milk Supply Chain Management


  1. Correct Statements about Foot and mouth disease(FMD)
    1. It is caused by brucellosis bacteria
    2. Wild animals are immune to FMD
    3. FMD is usually lethal to Adult buffalo
    4. None of above
  2. Incorrect Statement about Foot and Mouth disease (FMD)
    1. Pigs are considered amplifying hosts for FMD
    2. Pigs themselves are immune to FMD
    3. Both
    4. None
  3. Find odd term
    1. Sahiwal
    2. Murrah
    3. Gir
    4. Kankrej
  4. Correct statement about Azolla fern
    1. It is a weed that negatively affects paddy cultivation.
    2. If Azolla fern is mixed with fodder, it improves the health of cattle.
    3. both
    4. none
  5. Why is caustic soda used in manufacturing of synthetic milk?
    1. To act as an emulsifying agent and give frothy appearance to the liquid.
    2. To neutralize the acidity of other ingredients and stops milk from turning sour
    3. To increase the milk fat content
    4. None of above
  6. Correct statements about National Dairy plan
    1. It’ll be uniformly applied to all 28 states of India, in its first phase.
    2. International Development Association will finance part of this project.
    3. Both
    4. None


  • 2m
    1. NDDB
    2. Intensive Dairy Development Scheme (IDDS)
    3. Dairy Entrepreneurship Development Scheme (DEDS)
  • 12m
    1. Write a note on NDDB and its contribution in white revolution.
    2. National Dairy Plan (NDP) is a scientifically planned multi-state initiative to improve milch animal productivity. Comment
    3. Write a note on the functions of Department of Animal Husbandry, Dairying and Fisheries.
  • 25m
    1. The destruction of India’s village system was the greatest of England’s blunders.
    2. Government initiatives to boost the milk productivity in India.
    3. Dairy cooperatives have played an important role in the women empowerment and social transformation of rural India. Comment
    4. Write a note on the upstream and Milk Supply Chain: Downstream Issues in the dairy sector of India.
  • Essay (200m)
    1. Education remains the key to both economic and political empowerment.
    2. There is more potential for economic growth in rural India than at any time in decades.
    3. The Internet is becoming the town square for the global village of tomorrow.
    4. Emigration, forced or chosen, is the quintessential experience of our time.
    5. The notion of the world as a village is becoming a reality.
    6. A nation that continues year after year to spend more money on military defense than on programs of social uplift is approaching spiritual doom.

Mrunal recommends

  1. (free) NCERT, NIOS, TN-Books 4 History,Geo,Sci
  2. Indian Polity M.Laxmikanth (Hindi | English)
  3. Spectrum: Modern History (Hindi | English)
  4. Maths: Quantam CAT Sarvesh Kumar
  5. Objective General English SP Bakshi
  6. Word Power made Easy -Norman Lowe
  7. Topic wise Solved Paperset by Disha

37 Comments on “[Food Processing] Milk Dairy Sector, Supply Chain, upstream downstream issues, Amul Model, Operation Flood”

  1. Mrunal bhai, we very much depend on your articles for mains preparation even. They are easy to understand,time saving,conceptual….so please increase your no. of articles,so that we can go confidently in mains 2013…

  2. Being a bit finicky, the Map marking production of milk accounts for Punjab producing 9.4 MT while Andhra Pradesh tallies at 8.9 MT that is followed by the chart ranking the states according to their Milk production. Here Punjab is placed 4th below Andhra Pradesh…And on a side note while the government plays musical chairs with Mr Khemka he should file another case against our National Son in Law for stealing the graze of our Mango Man’s Buffaloes and Cow’s….But I guess our National Son in Law is entitled to milking the democratic system he is wedded too…
    PS: Maybe the “Animal Protectionist” in the family is sore with them just because of the grazing thing??

  3. MCQ answers (subject to correction)


  4. Grt job done sir, thnx

  5. a lot of thanks for nice work

  6. Thanks a ton Mrunal, Just waiting for this piece!!! Thanks for your old articles too!

  7. hi sir will dis food processing topic will help in appsc i.e state pub service exam in science n techh paper..?

  8. hi all,
    regarding the essay question “There is more potential for economic growth in rural India than at any time in decades.”
    what points could be included in this? can we disagree with the title of such essay?

    1. yes u can agree.

      PURA model given by APJ Kalam
      73-74 amendment
      focus of World bank/UNO on grass root level empowerment
      successful SHG/WSHG movements-> economic empowerment
      self employment base schemes, MGNREGA etc
      rising awareness – recently mining requests rejected by Gram Sabhas in Orissa, Jal Satyagrah in MP
      rise of internet/mobile – accessibility of info everywhere
      use of technology, better availability of tech today

      political unwillingness, gap between technology at labs and in field
      poor implementation of rules and regulations
      illiteracy, education which does not provide employment
      lack of land reforms

      Problem with Urban:
      dev comes with its own problems- overcrowding cities, pressure on infrastructure, unbalanced social fabric, issues related with migration, urban slums

      for economic dev in long term, v must go to manufacturing. Service industry can’t sustain momentum bcoz – skill oriented, high education, cant employ masses etc etc

      1. untapped economic resources due to lack of banking services penetration but today it is much more feasible than earlier decades. Thanks to technology and govt focus.

        try to find out some projects which private sector is executing in rural area.

    2. yes u can disagree too, but then u must prove ur point with different examples. Simply saying NO and then taking abt rural potential wil not help.

  9. National Son-in-law encroaching land.. very goog hahaha..


  11. Can anybody tell me how will be the CPT test for FCI gradeIII, the sort of questions?????????

  12. hello mrunal,
    can anyone tell me what all comes in the investment model…
    (GS 3)

    1. Hi SAM,
      Various angels of this acc. to me : Public investment/Private investment/ PPP/ public private people participation(PPPP)

      Investment led growth model/ Demand led growth model/ Savings led growth model/

      FDI/ FII are also involved here because they involve the basis for Joint ventures/Subsidiary company’s investment model etc.
      (I don’t know what more can be covered under it )

  13. i wonder where is “Manu Jha”?!






  15. got my acknowledgement from upsc…

  16. thank u very much.. we need articles about ethics paper..

  17. sir please throw some light on STRATGIES FOR UPSC AC(CPF)

  18. what is quantitative easing? in economics

  19. This one is amazing, I’ll have to read it again to understand better.
    Meanwhile I have a query, if you can, I will be grateful to you, —- I am using feedly for Hindu for last two months and particularly focus on two to three long articles in columns. I read the two liner current affair from Josh Jagran. Is it sufficient or should I subscribe for Hindu Newspaper ?

  20. small clarification needed

    the diagram with respect to milk production in states hives 3rd rank to punjab where as the table given below gives the same rank to andhra pradesh…..

    kindly clarify…..

  21. The per capita availability of the milk has reached a level of 290 grams per day by the year 2012, which is more than the world average of 284 grams per day.

    Source PIB

  22. thank you very much mrunal sir..
    you are a big support for mains preparation

  23. Thankyou sir for these awesome articles and study material…its really helpful:):)

  24. @Mrunal : World average milk per capita is 284 , India has 290. We are ahead>( Source : PIB)http://pib.nic.in/newsite/efeatures.aspx

  25. Sir, I want to know that -will the concepts about food processing industries, like what is scope, significance, upstream, downstream , NMFP, its salient features, supply chain management, not enough?

    You have given wonderful notes on fisheries, dairy, edible oils , beverages etc … GIven the time constraint, Can I skip individual industries ?

    What does the “location” mean in “Food Processing and related industries in India – scope and significance, location, upstream downstream requirements, supply chain management” ?

Leave a Reply

Your email address will not be published. Required fields are marked *