Cereals, pulses, milk, milk-products, and oils form almost the whole of the Indian diet. These along with sugarcane and cotton also account for most of the production potential of Indian agriculture. Traditional Indian agricultural practices seem to have maintained a balance in the relative production of these products and their spread over the geographical extent of India, which perhaps corresponded to the dietary needs in various areas, and perceived priorities of the Indian farmers in fulfilling those needs. During the mid-60s of this century a serious attempt was made to introduce new agricultural practices in India, especially in those areas which were traditionally rich in agricultural production, and had the resources to support the modern techniques and practices. We have earlier analyzed the impact of this exercise on the production of cereals and pulses in India(l) The objective of the present attempt is to do a similar analysis of the effect of modernization on the milk and oil-seeds sector of Indian agriculture.

In our analysis of the production of cereals and pulses in India after the introduction of the so-called Green Revolution technologies we noticed the following: we found that the new technology did increase the production and productivity of a few cereal crops, mainly wheat, in a few relatively rich areas, which had even earlier been producing surplus food. It seems that the new technology, by making it possible for a few crops in a few areas to absorb large quantities of productive resources, led to the deprivation of vast agricultural areas of India. While production and productivity of a few crops in a few areas increased, other crops and other areas stagnated or actually lost in production and productivity. The increases in a few areas, though visible, could not offset the resultant stagnation in other areas, and the aggregate growth rates started falling. Since the increase in production occurred in those areas which were already producing surplus food, more and more food kept on arriving in the market, giving an impression of unheard of plenty, while food production in scarce areas actually declined.

The new technology, by making food-production dependent upon industrial inputs, increased the cost of food in the market, thus reducing further the access to food. Hence arose the tragic phenomenon of the country facing the problems of plenty and the farmers failing to sell their produce at remunerative prices, while the per-capita availability of food in the country remained unaltered. The new technologies also disrupted the traditional balance between the various cereals and pulses. This forced the Indian people to go through the painful process of changing their food habits, and encouraged the production and consumption of non-vegetable proteins and industrial foods. At the same time it forced everyone to change living habits, without making life any richer, better or easier.

Modernization of cereal production consisted in the introduction of new technologies which made it possible to obtain substantially high productivity per unit area", at least in a few areas though at the cost of enormous input of resources. No such new technology has been introduced in either pulses or oilseeds. Therefore, whatever changes are seen in the production pattern of these crops is a consequence of the change -in agricultural practices that was necessitated by the introduction of new cereal production technologies, and of the changes in market structure arising out of that change. In the case of, milk production, though the technology of rearing exotic cross-breeds corresponds quite closely to the high yielding cereal technology, not much success has yet been achieved in introducing these exotic animals on the Indian scene in a big way. Modernization of the milk sector, as we shall see, has essentially consisted in the introduction of modern processing and marketing techniques during the 70s. A survey of the milk and oil-seeds' sector is therefore likely to provide insight into a different facet of modernization: the facet not concerned productive efficiency at all*. It shall also allow us to see what happens to related sectors when the technology in a particular sector, in this case cereals is changed.


1.1. Rate of Growth: Let us begin with a look at the size and composition of the bovine population in India, and the changes that have been taking place in this population over the years. In table 1 below we present a summary of the detailed data on bovine population as recorded in the livestock censuses held between 1951 and 1977 (2). Projections for the year 1985 and 2000 reported by the National Commission of Agriculture have also been included there.


Function-wise Break-up of Bovine Population 1951-2000 (in millions)

  1951 1956 1961 1966 1972 1977 1985 2000
Number of Work Animals 67.38 70.69 80.45 81.40 82.61 83.24 84.55 80.14
Number of
Breeding Females
67.38 68.95 75.24 77.28 82.03 85.85 88.47 81.84
Those in Milk 29.18 31.92 33.13 33.89 37.11 40.21 Not separately given
Young Stock 58.33 59.90 67.33 66.64 67.60 69.09 67.64 61.56
Total Bovine 198.64 203.62 226.77 229.52 235.77 241.96 233.71 217.60

A striking feature of the data above is the substantial spurt in bovine population that takes place between 1951 to 1961, and the remarkable slackening in the rate of growth after that period. In the ten 'years between 1951 and 19J51 bovine population grew by a total of 14.2% adding 28.13 million heads to the stock. How-ever, in a period of more than one and a half decades between 1961 and 1977 total accretion to the bovine stock amounted to 15.19 million heads, giving a percentage increase of 6.7 in sixteen years. This trend of declining growth in bovine population is expected to continue and become more pronounced, with the projections beyond the seventies indicating bovine absolute decline in stock.

To understand this trend, it is important to remark that the period 1950-51 to 1964-65 was an exceptionally, good period for Indian agriculture. This was the period when traditional Indian agricultural practices came into their own, and total agricultural production, total area under crops, and yields per unit area kept on rising (see appendix I). It is true that towards the end of this period, during the third plan (1961-62 to 1964-65), rate of growth of total area under crops had become rather low, but this was compensated by a rise in the compound rate of growth of yield per hectare. The latter rate had reached 2.7% per annum during the third plan, and this sharp increase in yield was achieved without the introduction of any new technologies in agriculture. This initial period (1950-51 to 1964-65) was followed by a couple of exceptionally bad years. Then around 1967 the new ‘Green Revolution’ technology was introduced and the era of modern agriculture in some selected areas of India dawned. It 1B therefore instructive to take the period between 1950 to 1960, or there about, as the pre-modernization phase, and the period following ideas 1966 as the post modernization phase and to treat the two periods as stock shown separate distinct phases of Indian agriculture. The decline in the rate of growth of bovine stock noticed in Table 1 above can then be seen as a reflection of the modernization of Indian agricultural practices which was formally instituted in mid-sixties.

1.2, Composition of Bovine Stock 1951-61: Pre-modernization Phase:

Table 1 reveals further interesting information as we look at the variation in the composition of bovine population over the years. It seems that during the 1951-61 period the number of work animals rose at a rate much faster than that of the breeding females. The period begins with the number of work-animals and breeding females being exactly equal, at 67.38 million. In 1961 there are almost 5 million more work-animals as compared to breeding females. In this decade while the total bovine population rose by 14.2%, the population of work animals" grew by 19,4%J',, and that of breeding females by 11.7%. Out of the breeding females those in milk fared slightly better with their number rising by 13"'.l5%, still much lower than that of work-animals. This trend is quite understandable. Milk, after all is an expensive product, and in a situation lacking plenty, production of milk can have" only low priority. During the period 1951-61 gross sown area was increasing quite sharply, and the first priority of the farmer could only be to meet the increasing requirements of animal power, for the extra areas being brought under, plough. It is interesting to see that Indian farmers with their traditional ideas and practices were able to readjust the composition of bovine stock quite rationally and quite quickly to meet the new needs as
below in Table-2 (3).


Availabilities of Work Animals and Mechanical Power 1951 - 1961:

  1951 1956 1961
Number of Work-animals (millions) 67.380 70.690 80.450
Gross sown area (million ha) 127.900 145.700 155.200
Work-animals/ha 0.526 0.485 0.518
Mechanical power (HP/ha) 0.006 0.008 0.016

It should be remarked that in the period 1951-61 though the population of milch animals grew at a rate slower than that of work-animals, yet per capita availability of milk declined only slightly from 48.2 gms per day in 1951 to 47.4 gms in 1961. We shall see in a later section that during the period 1951-65 production of major oil seeds also kept on increasing in proportion to the overall increase in the production and productivity of the major crops in the country.

Thus it seems that in the first phase of about 15 years after independence our agriculture was doing remarkably well on all fronts. The marked and rationally balanced increase in bovine stock that took place between 1951 and 1961 only underscores the general health of Indian agriculture during this period. This needs to be emphasized in view of the general impression that is sought to be created of acute scarcities and stagnating yields persisting in Indian agriculture which would be eliminated only with the introduction of hew Green Revolution technologies in the post 1965 phase.

1.3. Composition of Bovine Stock 1961-77: Modernization Phase: In the second phase of Indian agriculture the picture of balanced growth in milk, oil seeds and animal power sectors depicted above starts to change. To understand the situation in terms of bovine population, let us once again look at Table 1. We have already noticed that the rate of growth in bovine stock shows a sharp decline after 1961, and beyond the seventies the projected growth rates turn out to be negative. More importantly, while in the earlier period the population of work-animals rose at a rate faster than that of milch animals, the trend is reversed in the post 1961 period. For the sake of comparison with' the earlier phase we have displayed in Table 3 below the percentage increase in different components of bovine stock that took place during the ten year period between 1951-61 and the sixteen years between 1961-77. The trend of decreasing rate of growth of Total bovine stock along with a decrease in the number of work-animals relative to that of milch-animals is projected to continue and become stronger in future (see Table 1). Incidentally the decrease in the growth of work-animals is not merely a reflection of the in rate of growth of area under crops which becomes rather noticeable after 1961(see, appendix I). The decline in the rate of growth of work-animals is sharper than that in the sown-area, and after 1966 availability of work animals per hectare of gross sown area starts declining substantially (Table 2 and Table 5 below).


Percentage Increase in Different components of Bovine Stock: 1951-61 & 1961-77 (Total of the Period)

Period/Stock 1951-61 (10 years) 1961-77 (16 years)
Total Bovine Stock 14.16 6.69
Work Animals 19.39 3.45
Breeding Females 11.66 14.10
Females in Milk 13.54 21.37

Thus the modern phase of Indian agriculture is reflected here in a declining tendency, or perhaps capacity, to support bovine stock on the one hand. On the other hand we see a shift in emphasis from raising of work-animals for providing essential power on the farms, to raising of milch-animals for production of milk, probably for the market. That milk production was becoming more of a commercial activity is indicated by the rising number of breeding buffaloes compared to the number of breeding cattle - see Table 4 (1), Buffalo, unlike the indigenous cow, is essentially a producer of milk for the market.

It is true that changes in bovine stock noticed above start occurring around 1961, before the introduction of new Green Revolution technology in Indian agriculture. But the period 1961-66 seems to be generally bad for bovine population, and the trends we are noticing, get firmly established only after 1966. Bovine economy in India was perhaps coming under modernizing and commercializing pressures even earlier. Introduction of new technology in agriculture around 1966 accelerated the pace of change in bovine stock.

1.4. Impact of Changes in Bovine Stock

a) Reduced Availability of Power for Agricultural Operations: At first glance it may seem that the trend of decreasing availability of animal power is merely a reflection of the increasing availability of mechanical power. Mechanical power per hectare of the gross sown area indeed starts becoming non-negligible after 1966, and this could in theory substitute for the decreasing animal power (4). However, an analysis of the state level data shows that what is happening is not merely a substitution of the traditional animal power with modern mechanical power. Data from five selected states in which there was a rapid and sustained rise in mechanical power per hectare between 1956


Ratio of Breeding Cattle to Breeding Buffaloes

Year 1951 1956 1961 1966 1972 1977 1985* 2000*

Breeding Cattle

Breeding Buffaloes

2.21 2.18 2.10 2.03 1.87 1.74 1.67 1.67

and 1972 indicate that in three of those there was a decrease in the number of animals per hectare while two recorded a net increase in animal power per hectare (5) (see appendix II). There thus seems to be no consistent relationship in the rate of increase in mechanical power per hectare and the[rate of change in animal power per hectare.


Availability of Work Animals & Mechanical Power 1961

  1961 1966 1972 1977 1984
No. of Work Animals (Millions) 80.45 81.40 82.61 83.23 84.55
Gross Sown (Million hectare) Area 155.2 158 164 170.2 174
Work Animals/ha 0.518 0.515 0.503 0.488 0.486
Mechanical Power (Hp/ha) 0.016 0.035 0.113 0.168 0.323

* Projection

It is not that animal power is being selectively replaced, by mechanical power. On the other hand what seems to be happening is that with the introduction of modern techniques in agriculture, including 4 the introduction of mechanical power, the over-all capability of Indian agriculture to sustain bovine stock is going down. Consequently those who have no access to modern mechanical power, and there are a vast majority of Indian farmers in this category, are now also faced with scarcer availability of their traditional power source, the work-animal! It should be* instructive to study how this phenomenon is working itself out at the micro-level. However, aggregate trends are clear enough.

We have earlier seen a similar phenomenon taking place in the case of cereal production (1). We saw there that as resources were concentrated and newer resources were made available in the Green Revolution areas, traditional farming areas had limited access to even their traditional resources like water. Now we see that the access of traditional farmers to animal power was also reduced. However, this is not at all surprising. Modern techniques and organizations are meant to undermine the viability of traditional patterns of production and availability of traditional resources. Pauperization of those who are bound to traditional sectors of economy is after all the essence of economic progress. What is tragic however, is the fact that this deprivation of the traditional sectors for the sake of the modern does not even lead to enhanced production of the relevant commodities. We saw earlier that after the introduction of the new technology of cereal production, the aggregate rate of growth of food-grain production as well as productivity per unit area became actually lower. Increased production of cereals -in a few areas was not sufficient to offset the loss of productive potential in large areas elsewhere.

b) Effect on Milk Production: While looking at the effect of changes in bovine stock on the total production of milk in India it should first be noticed that though during the 1961-77 period number of breeding females rose at a rate greater than that of work animals, yet the rate of growth of breeding females in absolute terms was not any larger than the rate of growth recorded in the earlier 1951-61 period. Referring to Table-3 we find that number of breeding females during 1961-77 rose by 14,10%, representing a simple rate of growth of 8.8% per decade, which is in fact less than the rise of 11.66% that occurred in the earlier decade. The percentage rise of 21.37% in the number of females in milk during the sixteen year period however implies roughly the same rate of growth as the increase of 13.54% that took place during 1951-61. Thus it is not that number of milch animals during the post-modernization phase has shown a sharp rise. It is only that the female stock in milk has not suffered the sharp decline in rate of growth that overtook all other categories of bovine stock. Therefore we should not expect any spectacular increase in production of milk or per capita availability of milk occurring in the modern phase. The data on production and availability of milk displayed in Table 6 below seem to bear this out at least up to the year 1971 (6).Between 1961 to 1966 the production of milk actually declines by about 1 million tons reflecting the stagnation in bovine stock that obviously occurred during this period (see table 1). By 1972 milk production however picks up, and between 1961 to 1972 there is a rise in milk production of 10.42%, roughly equal to the rise of 12.01% in the female stock in milk. We have seen earlier that in the 1951-61 periods also rise in production of milk was comparable to the rise in milch stock. After 1972 however data show sharp increase in the


Production of Milk in India 1961-1960

Source of




Per caput
1951 7743 9184 479 17406 132
1961 8753 11087 535 20375 127
1966 6918 11879 571 19368 108
1972 9450 12375 675 22500 112
1974 9744 12760 696 23200 110
1978 No Separately Listed 27500 119
1979 29108 124
1980 30204 126

number of females in milk. Thus between 1972 and 1978 milk production rises from 22.5 million tons to 27.5 million tons, an increase of about 22%; and keeps on increasing at even a faster pace after that. This seems odd. Between 1972 to 1977 the number of animals in milk rose by only 8.35% and even the number of buffaloes in milk rose by only 12.80%. Rise in milk production at a rate faster, in fact almost double, than the rise of buffaloes in milk seems unlikely, especially, when the rate of growth of oil seeds and consequently of oilcakes, an essential component of the milch animal diet, started declining in the period following 1966. In fact the data on milk production after the seventies refer to a period when an ambitious programme to modernize the milk economy had been launched. Since this programme has often been under attack the data on milk production referring to this period is perhaps not very reliable. As we shall see later there was really nothing in this programme that could have enhanced milk production at this rate.

In any case looking at the period 1961-72, data for which are more reliable, we find that the rate of growth in milk production is lower than the rate achieved in the earlier decade. Per capita availability of milk in 1976 declines to 40.1 gins/day in 1972 compared to 47.4 gms/day in 1961 and 48,2 gms/day in 1951. Impact of modernization of bovine stock therefore is reflected in both a decline in the availability of animal power per unit sown area, and a decline in the per capita availability of milk. Commercialization of bovine stock indicated by the increased number of milch animals compared to that of work animals, and increased number of buffaloes compared to the cows, may have resulted in greater availability of milk in the market, but there was lesser milk available per capita to go around.


Changes in the size and composition of bovine stock, and therefore in the milk economy of India that we have discussed above were perhaps an indirect consequence of the increasing commercialization and selective modernization of Indian agriculture that started occurring around the mid-sixties. However, in the early seventies a more direct intervention in the Indian milk economy was planned through a national dairy development programme funded by the European Economic Community. Some state (province) level attempts to modernize the dairy sector had been going on even before this national project, called operation Flood, came into existence. However this project once launched, though initially modest in terms of funds and coverage of area, became the model for all dairy development activity in the country, and later, much of this activity was in fact brought under the Operation Flood umbrella. Therefore to understand the changes that occurred in the milk sector of Indian agriculture after 1970, it is instructive to look at the working of this project, Operation Flood, in detail.

2.1. Short History and Basic Strategy of Operation Flood

Period of Operation: The project Operation Flood (OF) was launched in 1970, initially for a period of five years. It was continued up to 1981. Meanwhile another project called Operation Flood II, (OF II) with the same objectives and strategy as the original project, but with a much larger area of) operation and appreciably larger funds was started in 1978. OF II was supposed to end in 1985. It seems to have been extended up to at least'1990. The programme thus spans the whole period following the introduction of modern practices and new technologies in some areas of Indian agriculture.

Strategy: The operation Flood strategy, as enunciated by its proponents, was to organize milk farmers in some of the important milk-sheds of the country into cooperatives, to provide them with inputs and services necessary for improving their milk production, and to link these milk cooperatives with the milk markets of the country, especially with the vast markets offered by the four metro cities of Delhi, Bombay, Calcutta and Madras. If. was hoped that this strategy would on the one hand enhance milk production in the country and provide remunerative prices to the milk farmers freeing them from the clutches of the middle men, the traditional dudhiyas. On the other hand the project was expected to ensure abundant supply of liquid milk at a reasonable price for the urban consumers, especially benefit-ting, according to the project authorities, the vulnerable groups, namely pre-school children, nursing-and expectant mothers etc.

The Operation Flood approach, even though based on village level cooperatives, was to be a high technology capital-intensive approach. The inputs envisaged to be provided to the cooperative for enhancing milk production were artificial insemination, veterinary health care, feed concentrates etc. These would require liquid nitrogen plants, liquid nitrogen containers, mobile veterinary care vans, vaccine production plants, feed mixing plants and so on. However, the village level milk' co-operatives]and provision of inputs to them was not the main focus" of the project. The project focused much more at the urban markets, and making provisions for taking milk from the rural areas to these markets," According to the project proposal itself the aim of the project was to develop the dairy industry in Bombay, Calcutta, Delhi and Madras and in the rural areas which supply milk to those cities (see appendix III). The linking of the scattered village cooperatives with the markets of the metropolises required the establishment of a network of chilling plants, feeder dairies, and balancing dairies, which converted milk to Skimmed Milk Powder (SMP) and other products, and recombined them back into liquid milk. It required major increases in the dairy processing facilities in the big cities. It also needed the development of transportation facilities to allow for the movement of large quantities of milk over long distances, These procurement, processing and marketing activities were even more expensive and required more sophisticated technology than the various component of I the inputs programme.

Management: The Operation Flood was first tried successfully by Amul, a private cooperative venture based in Anand, Gujarat, The execution of Operation Flood was entrusted to the Indian Dairy Corporation (IDC) established in 1970 with its headquarters in Baroda near Anand. The professional competence organizing this type of activity developed at Anand was made available to (IDC through, the Nationals Dairy Development Board (NDDB), an Anand based registered society. The NDDB was appointed to act as the technical consultant to the IDC. Incidentally, Shri.Verghese Kurien ia Senior Manger of Amul was designated the honorary Chairman of both NDDM and IDC.

Funding: While the managerial expertise for the project thus came from the Amul experiment money for-all/the capital-intensive activity to be undertaken? Under the project was to come from the sale of Skimmed Milk Powder (SMP) and butter/butter oil (B0) to be gifted by the European Economic Community/(EEC) under the World Food Programme (WFP). Initially (these gifted commodities would also provide the milk supply necessary for the urban dairies to get into the business and capture a major share of the milk market. It However, it was hoped that as the project proceeded of the product proceeded, the production and procurement of milk would pick up and the dependence of the dairy programme on imported SMP and BO would keep coming down. The way the project has been getting extended from 1975 to l981 to 1985 and now to 1990 it seems that this hope has not materialized. As we shall see in the section on oil seeds something very similar seems to be happening there too.

2.2. Relative Importance: of 'Product-ion’ Enhancement and Marketing in OF: Budget and Expenditure: We have noticed that Operation Flood as envisaged had two distinct components. On the one hand production of milk in the country, at least in the major milk sheds of the country was to be improved through the Organization of farmers milk co-operatives and provision of critical technical inputs. 0n the other hand the procurement, processing and marketing of milk was to be organized through the establishment of the necessary storage transportation and processing infrastructure. While making money allocations for the original OF project some sort of balance was maintained in these two components. In fact in money terms the first OF project was not really big. Sale of the gifted commodities during the five years of the project was expected to generate a ‘revenue' of 95.4 crore rupees. Out of this revenue,40.06 crore were to be spent on expansion of dairy plants and ancillary facilities, and 34.30 crore on cattle development and enhancing milk production Of the remaining 21.04 crores, 5.64 crores was to be spent upon resettlement of city cattle-keepers in rural areas", a major objective of the first 0F project. The project ended up generating actual revenue of 116 crores. However, irrespective of the allocations, most of it was spent, on generating processing-capacities, and marketing infrastructure In fact, the attempt at shifting city, cattle keepers to village was formally shelved and the money earmarked for this purpose reallocated towards increasing infrastructural facilities, especially in the four major cities. OF II is a much bigger project than the first OF project, involving a total allocation of 485.5 crores. In Table 7 we show the item-wise allocation of funds in OF-II and the money spent on various items up to March 1984 (7). Out of the expenditure of 202.53 crores, 108.47 crores had been spent on building processing capacities and buying equipment for the dairies under construction. This amounted to 72% of the total allocation of 150.005 crores on this head. On the other hand, of the allocation of 108.456 crores for providing technical inputs for milk production, only 23.47 crores, barely 22% of the allocation had been spent by March 1984. Similarly of the rupees 65.149 crores allocated for providing support to,village cooperative organizations, a sum of 8.85 crores constituting 13.6% of the allocation had been spent. Incidentally the expenditure of 18.09 crores that appears under the head of support for disease control and milk production enhancement (item 8 in Table 7) was all spent on setting up a vaccine manufacture plant in Hyderabad, about the products of which we shall have more to say later. The special interest that has been endowed in OF to processing and marketing activities and to the acquisition of hardware comes out quite clearly for the expenditure figures of OF II.

2.3. Milk Production Enhancement Activities under OF: Jha Committee Appraisal: The Government of India appointed the Jha Committee in February 1984 to evaluate the functioning of the OF project. This committee in its report submitted in December 1984 generally approved of the objectives and achievements of the projects. However, the Jha Committee in its detailed evaluation of the OF project did notice the failure of IDC/NDDB to implement the milk production enhancement component of the project "while doing rather well on the procurement, processing and marketing front. It is instructive to look at the evaluation presented by the Jha Committee of the progress made under OF in various activities related to the milk production enhancement component of the project.

a) Milk-producers cooperatives: One of the most important activities envisaged in the OF project was to organize milk producers cooperatives in the rural areas so as to encourage and help more and more farmers, especially the small farmers and the landless people, to take to milk production. According to Jha Committee report, under OF II 28,614 cooperative societies had been organized by March 1984 as against the project target of 70,356. However, the Committee suspected


Action Item-wise Allocation and Disbursement of Funds


Description Allocation Disbursement

up to Mar.'84
         (Rupees in Crores)
Item 1 Processing Capacity 150.055 84.26
Item 2 Technical Inputs for Milk Production 108.456 23.47
Item 3 Milk Marketing System 53.912 16.79
Item 4 Support for Village Cooperative
65.149 8.85
Item 5 Planning Information System,
Training & Research (NDDB's expenditure)
17.919 9.61
Item 6 Project Implementation
(IDC's direct expenditure)
25.710 3.84
Item 7 National Milk Grid & Stabilization
(IX's direct expenditure)
34.511 13.12
Item 8 Infrastructural support for
disease control & Milk production
enhancement (IDC's direct expenditure)
25.800 18.09
Item 9 Supplementary Feeding Programme
(IDC's direct expenditure)
3.000 0.29
  Dairy Equipment Pool   24.21*
  Grand Total 485.512 202.53

*This represents purchase of dairy equipment for supply to dairies under consideration.

that not all the cooperatives were newly formed under the project. In many cases it seems that already existing cooperatives were brought under the OF wings and were counted as achievements of, the project. In fact, Jha committee goes further to point out that OF project was not even equipped to undertake the type of grass root level activity that is necessary for the development of milk potential in an area, and distribution of this potential amongst the poorer producers, to quote the committee (para,12.4) - The Anand pattern is based on the assumption that those who are already producing milk will join the cooperative. This was a reasonable assumption in an area in which milk* supply had been adequately developed even before the cooperatives came into the picture. However, when bringing in new areas under OF-II the assumption is not necessarily valid. While the richer farmer may well own a herd of cattle, the objective of enabling the marginal farmers or landless laborers to derive a supplementary income from the production of milk necessitates appropriate arrangements being made to enable them to own cows or buffaloes. Operation Flood II itself has no provision to assist in this. Thus even at its best OF could only organize the milk producing farmers for profitably marketing their milk. It could not help any farmers, definitely not the poorer ones, in acquiring new resources for production of milk. And hence could make no direct contribution to the enhancement of milk production.

b) Technical Inputs for Milk Production ,Enhancement: The second element in milk production enhancement part of the OF project was the provision of a number of technical inputs for improving milk production. We have already noticed that OF expenditure on this item rather small. Jha Committee reported that the inputs programme lacked not only in fiscal but also in physical terms. Let us look at the efforts made in providing various technical inputs envisaged under the OF project.

(i) Animal Breeding: One of the major technical inputs for enhancement of milk production was to be the induction of superior dairy breeds, largely through cross-breeding of cattle with exotic breeds and of buffaloes with selected indigenous breeds. Breeding of exotic and improved stock was to be done through the provision of artificial insemination facilities in the OF areas. The OF-II objective was to build the so called National Milch Herd of 10.24 million (15 million, according to Jha Committee) heads of superior cattle and buffaloes by 1985. One" can raise questions about this method of enhancing milk production and about the wisdom of the exotic breeding policies being followed in the country; Yet it seems that this component of the project, like all other components of the inputs programme, was not taken very seriously. Jha Committee found that during 1981-82, 1982-83 and 1983-84 the number of artificial inseminations done, both for cows and buffaloes, was 8.03, 7.75 and 9.93 lakhs respectively, and the number of improved female calves born during these years was 0.88, 1.10 and 1.21 lakhs respectively. Though the IDC could not provide information on the total number of cross-bred milch animals in OF-II areas, yet the rates of insemination and successful conception during 1981-84 period given above do not indicate that the target of 10.24 million upgraded cows and buffaloes was approached with any seriousness. Jha Committee in this context also quotes a survey of selected milk sheds in OF-II areas made by the Indian Institute of Public Opinion according to which cross-breeds accounted for about 4% of the milch animals in the households surveyed (para 4.46). Since the project was expected to cover some. 15 million milch animals, the above percentage of cross-breeds in the project area means that in 1984 the proposed National Milch Herd had acquired strength of perhaps half a million.

(ii) Animal Feed and Fodder: Increasing the availability of balanced feed and fodder has to be a necessary component of any programme to raise milk production. As a matter of fact, fodder and feed requirements of the cross-breed exotics are, as we shall see later, many times more than those of the local breeds. According to the OF-II project plan, the target was to bring 2 million hectares of irrigated area in the OF milk-sheds under fodder cultivation. This was to be achieved by encouraging farmers in the project areas to take to fodder cultivation through demonstration farms, and supply of minikits for fodder cultivation and good quality fodder seeds. This was obviously a huge task, considering the fact that total area under fodder crops in the country has remained below 7 million hectares for the last 30 years. However, it seems that like the figure of 10.24 million heads for the National Milch Herd of improved milch stock, this figure of 2 million hectares under fodder cultivation, was also not taken very seriously. The Jha Committee while evaluating the performance of OF project, does not tell us how far the project succeeded in inducing the farmers to shift their irrigated lands to fodder cultivation. However, the committee reports that in the five years between 1979-84, a total of a little less than a thousand tons of fodder seeds were distributed through the farmers1 societies (para 4.32). That does not suggest that the target of 2 million hectares under fodder by 1985 was meant to be approached.

The project seems to have fared better in generating the capacity for production of balanced cattle feed. According to Jha Committee report by, the end of March 1984 feed mixing capacity of 2500 tons/day, or about 75 lakh tons a year, had been created. However, capacity utilization of these plants during 1983-84 was only 40%. In this context it should be remembered that these feed-mixing plants do not actually generate any feeds. These plants only help in moving critical elements of animal feed into the industrial stream, and then making these available in those areas which are advanced in terms of commercial dairy farming and are therefore relatively surplus in milk. Movement of critical animal feeds from milk deficit areas to milk surplus areas has long been noticed. Thus in a study of the impact of modernization on dairy industry in Kaira district of Gujarat in 1967 it was found that farmers of that district produced 6,000 tons of cotton-seed cake, while they fed 30,000 tons of it to their animals (9). Feeds programme under operation flood seems to have encouraged this tendency, Thus of the total feed-mixing capacity of 2500 tons/day, created up to March 1984, fully half was established in the milk-surplus state of Gujarat; of the total balanced feed production of 24,562 tons in March 1984, 18,994 tonnes was produced in Gujarat, and of the total sale of 30,311 tons of all the cattle feed plants in this month 21,226 tons was sold in Gujarat (Jha Committee Report para 6.12 and Appendix 6.3). Perhaps it is a corollary of this phenomenon of movement of scarce cattle feeds from milk-deficit to milk-surplus areas within the country that oil seed cakes and even compound feeds have often been exported from the country while importing milk products.

(iii) Animal Health: For any milk production enhancement programme to be successful it is necessary to provide facilities to take care of the health needs of the animals. This is especially so when a milk enhancement programme is largely based on the introduction of newer and exotic breeds of animals which are not adapted to the environment, end whose needs and diseases are not likely to be amenable to the traditional animal husbandry practices and knowledge. According to Jha Committee, under the OF project, some sort of health cover has been provided in 17,402 of the 28,614 societies. However, the committee found that the service was largely limited to only 3 or 4 states and even there the health cover provided in the majority pf the societies was not really adequate (para 4.22 and Appendix 3.1)

It seems that provision of adequate basic health cover for the animals in the OF area was not the top priority of the project. From the budget and expenditure of OF-II (Table 7) it appears that of the Rupees 25.80 crore allocated towards infrastructural support for disease control and milk production enhancement, a sum of Rs.18.09 crores had been spent by March 1984, and all of it on the establish-ment of a Foot and Mouth Disease Vaccine Plant at Hyderabad. This plant has the capacity to produce 25 million quadrivalent doses of the vaccine annually. On the working of this plant Jha Committee reported: Some members of the committee visited the plant in November 1984 and were greatly impressed by its working. However they found that it had an unsold stock of 2.7 million doses. It was explained that the vaccine produced was not being lifted by the states in view of doubts about the relevance of the strain incorporated in it, namely ‘A-22', as against ‘A-5' incorporated in the vaccine produced by other Indian manufacturers. The decision to incorporate ‘A-22’ was stated to be based on the tests carried out by Animal Virus. Research Institute, Pirbright, U.K, and the IDC's collaborator, Welcome Foundation U.K. (para 4.30). One wonders who is a better judge of the disease of Indian cows, the foreign foundations or the Indian states who have to pay for the vaccine? On the technical inputs side, it seems that the objective of building a National Milch Herd of 10.24 million heads of improved stock was quickly forgotten, and with it other elements of the inputs programmes, like enhanced production of feeds and fodder and provision of basic health cover, which were really meant for the improved herd, became redundant, and were, therefore, pursued in a cursory fashion.

It is perhaps fortunate that this component of the OF project was not seriously implemented. If the project had successfully produced a huge herd of elite animals it would have only resulted in the strengthening of the evil consequences that followed the success of the procurement, processing and marketing component of the project.

2.4. Milk Procurement. Processing and Marketing Activities under OF: Notwithstanding the various social and economic objectives appended to the OF project proposals, the project seems to have been essentially conceived as a programme to assure plentiful supply of liquid milk in the major urban areas, especially in the four metropolitan cities of Delhi, Bombay, Madras and Calcutta (see excerpt from OF project summary, Appendix III). A major objective of the OF project therefore was to capture the liquid milk markets in the urban areas in favor of the modern dairies to be established under OF, displacing the traditional small scale supplier's1 of milk. OF-II end-of-project target, in fact, was to corner 80% of £he liquid milk markets in the four metropolitan cities, 70% of the markets in other cities with populations of a lakh and more, and 60% in smaller towns in and around the milk-shed areas (9). Thus the OF dairies were to become a monopoly enterprise commanding bulk of the liquid milk markets in the country.

To achieve its objective OF project planned to exploit modern milk processing and long-distance transportation techniques to the full. It was planned to dot the rural milk-shed areas with so-called feeder dairies which were to process and pasteurize milk collected from the neighboring areas before onward transmission to the urban markets. Milk processing capacity of these dairies was to reach 140 llpd (lakh litres per day) by the end of the project. To transport the milk emanating from the feeder dairies, long distance transportation capacity of 4.45 llpd was to be generated under the project. Capacity 6f the metro dairies which were to receive, reprocess and market this milk was to be raised manifold. In addition, in the rural areas balancing dairies with a capacity to handle about 60 llpd of liquid milk ' were to be established, in order to collect the excess milk in flush seasons and convert it into milk powder and other products. Milk handling capacity of 60 llpd implies powder manufacturing capacity of about 600 tpd (tonnes per day). Much of this powder and other products were also to be used up in the metro dairies for recombination into liquid milk during lean seasons. Incidentally, all these targets for milk processing and marketing capacity should be read in the perspective of a total milk production that according to OF plans should have and has reached 1030 llpd by 1985, and which in reality was perhaps much less than that figure. OF plan was to generate processing, transportation and marketing capacities to handle more than 20% of the total production of milk in the country, which must indeed be a very large fraction of the total marketable surplus of [milk in the country.

Of the total 0F-I budget of 95.4 crore rupees, fully 40 crores were allocated jto expansion and establishment of various types of processing and transportation 'capacities. Later another 15.4 crore rupees originally allocated to resettlement of city kept cattle and buffaloes was reallocated towards generation of processing capacity (10). In the OF-II budget of 485.5 crore rupees, some 238 crore rupees seems to have been allocated towards processing and marketing facilities and of the sum of 202.5 crores, spent in the OF-II project up to March 1984 a total of 438.4 crore rupees seems to have been spent on these (see Table 7, items 1,3,8 and the Dairy Equipment Pool). From the data on progress achieved in this aspect of the OF project provided to the Jha Committee, it is clear that the programme to enhance milk handling and marketing capacities have been vigorously pursued. In Table 8 below we have displayed the achievements of the project in creating various types of processing and transport capacities along with the relevant end-of-project targets (11).

From the table the target of 140 llpd of feeder dairy capacity seems to be well within reach of the project. So also the target of 60 llpd of milk to be handled in these dairies (which perhaps amounts to about 600 tpd of milk drying capacity). Under the OF-II programme it was envisaged that by the end of the project, metropolitan dairies shall be supplying 49 lakh liters of liquid milk and 9 lakh liters of liquid milk equivalent of milk products daily in the four cities of Bombay, Calcutta, Delhi and Madras. As we shall see below, procurement of milk did not rise to the expected level, seriously jeopardizing these ambitious plans of the metro dairies. Yet the capacities of the metro dairies by March 1984 had been raised to 35 llpd from a mere 9 llpd in 1970-71. It was perhaps the lack of sufficient procurement in the milk-shed areas of the metropolitan dairies that made the need for long distance transportation of milk rather acute. The large amount of tanker capacity (see Table 8) must have been sufficient to fulfil the project target of moving 44.5 lakh liters of milk daily by the end of the project. According to Jha Committee Report, in 1984, milk produced as far as Guntur (Andhra Pradesh), Nagpur (Maharashtra) and Anand (Gujarat) was being transported to Calcutta and Delhi was receiving milk from Anand in Gujarat.


Processing & Transport Capacities created under OF: Targets and Achievements

Type of Capacity
End of project
Capacity created up to
March 1984
Feeder dairies 140 llpd 81 llpd + 41.5 llpd* + 18.5 llpd**
Balancing dairies 60 llpd(about
600 tpd of powder)
494.5 tpd + 98 tpd*
Metro dairies 58 llpd 35 llpd
Long Distance Transport 44.5 llpd 92.87 lakh liters + 33.70 lakh
litres (Total Tanker Capacity)

llpd: lakh litres per day; tpd: tonnes per day (powder)
* Under construction or on order.
** Being planned.

In spite of all the capacity created under OF to collect milk from the rural areas and deliver it to the cities, actual procurements refused to raise at the rapid rates envisaged. Since, as we have seen, the milk production enhancement programme under the project was lagging so badly, there perhaps was not much milk in the rural areas to be fed into the high technology marketing system put into place under OF. In table 9 below we have collected some figures for the 'procurement targets and actual procurement made under OF (12).


Procurement of Milk under OF

  End of Project

Target 1985

Total Procurement

(Feeder/Balancing Dairies)
183 llpd 57 llpd (Mar.'84)

36 llpd (1983-84)

22 llpd (1980-81)
Metropolitan Dairies 58 llpd 17.6 llpd (1983-84)

14.2 llpd (1980-81)

6.5 llpd (1970-71)
28.0 llpd(1983-84)

21.7 llpd(1980-81)

9.1 llpd (1970-71)

The figures are not entirely reliable, since procurement figures for different years often refer to different months of the year, and milk production rand procurement happen to vary considerably over the year. Yet the data collected in Table 9 is perhaps fairly indicative of the trends. From this data we find that total milk procurement during the relatively (flush month of March in 1984 averaged 57 llpd, This figure is indeed large compared to the average procurement of 22 llpd at the end of OF-I (1980-81), yet it is nowhere near the target of 183 llpd which was to be reached at the end of the OF project in 1985. Because of the failure of milk procurement to rise to the expected levels, much of the processing capacity created under OF, especially in the rural feeder dairies and the powder manufacturing plants, remains unutilized. Average utilization of rural milk processing dairies during 1983-84 was only 62%, Utilization of milk powder plants was worse, with only 32% of the installed capacity being utilized on the average,, and even the peak month utilization being a mere 56%. These overall figures hide to some extent the actual situation which seems to be much worse in many of the states. According to Jha Committee, average annual utilization of rural processing dairies in West Bengal, Haryana, Bihar and Uttar Pradesh was around or less than 30%, and there were powder manufacturing plants, as in Varanasi, Darjeeling and Jaipur, which had been hardly utilized at all (para 6.10 & Appendix 6.1 & 6.2).

Utilization of the metropolitan dairies was however quite good. During 1983-84 throughput of the four metro dairies averaged 28 llpd as against their capacity of 35 Upd. But of this through-put of 28 llpd only l).6 llpd on the average constituted fresh liquid milk procured by the metro dairies. The rest of the throughput (37%) was made up of milk recombined from imported and indigenous milk solids. The average recombination ratio (percentage of recombined milk to total throughput) was as high as 74% in Calcutta and 55% in Delhi; it must have been much higher in the lean seasons (Appendix 5.2 and Table 10 above).

The metro dairies were able to maintain their high level of utilization and throughput largely because much of the milk procured in the country found its way into these four dairies. Of the total milk procured in 1983 only 29% was marketed in the milk-shed areas. Of the remaining 71%, 49% was taken to the metro dairies, and 22% was converted into products such as skimmed milk powder, butter, and ghee. A large part of these products also found their way into the metro cities either as direct consumer products or for recombination in the metropolitan dairies (Report para 5.7). In addition the metro dairies had access to the skimmed milk powder and butter oil imported under the project.

Looking at the working of the processing and marketing component of the OF project the picture that emerges is of brisk activity to set up gleaming new feeder plants all over the country, with rail and road tankers waiting at the back, designed to collect all the possible milk from the rural areas and rush it to the far off cities, to be sold there as liquid milk, or to be converted into milk products like powder and butter, or even into a sophisticated range of chocolates and cheese. These OF feeder plants have not been able to collect and feed into cities as much milk as was hoped for. But the capacity and the technology, are now there to suck up every additional drop of surplus milk that may become available in the rural areas. And, the mechanisms of the milk sellers' cooperatives and the price ' incentives that a monopoly enterprise is always in a position to offer, can now be utilized to induce the milk farmers to sell for the city what may not be actually surplus in the family or in the neighborhood.

2.5 Impact of Operation Flood:

(a) Impact on Production of Milk: The OF project proposed to enhance the production of milk in the country by replacing 10.2A million (15 million according to the data provided to Jha committee) milch animals in the OF areas by an equal number of cross-bred cows and upgraded buffaloes. However, this part of the project was not seriously pursued. It seems that the project executing agencies, the IDC and the NDDB, did not even have information about the total number of genetically improved animals in the project area. Only information these agencies could provide to the Jha Committee was about the total number of improved female calves born in the project area up to March 1984, which was stated to be a mere 4.7 lakhs (para 3.21 of report). Other components of the milk production enhancement programme under the project were also equally poorly pursued (see section 2.3 above). Therefore it is unrealistic to expect the OF project to have contributed anything significant towards increasing the production of milk in. the country. It is possible that because of the improved market for milk, created through the OF project, some commercial milk farmers in the milk-shed areas may have been tempted to raise milk-yields of their animals by feeding them larger amounts of concentrates. Such market phenomena however could not have led to any increase in the overall production of milk in the country, unless the improvements in the market were also accompanied by substantial changes in the genetic stock of milch animals in the country and/or substantial improvement in the availability of feeds and fodder for the milch animals. Both the latter conditions were not fulfilled. And, therefore, there is no basis for expecting the milk production during the project period to have risen at a rate higher than that of the .female stock in milk.

The data on milk production reported by the Ministry of Agriculture (Table 6) however gives a different picture. According to these data rate of increase in milk production starts outstripping the rate of growth in milch stock after 1972, or perhaps 1974, and after 1978 milk production starts increasing at a rather rapid pace, totally unrelated to the rise in milch stock. In fact, if one is to go by the available figures on milk production in the country, production of milk seems to have been increasing by around 1 million ton or more every year since 1978 and by 1984 it is supposed to have reached the level of 36.33 million tonnes. Thus the OF target of 103.17 million liters per day or 37.65 million tonnes annually to be achieved by 1985 seems to have been met even without the OF milk production enhancement programme taking off the ground.

These data on production of milk in the country over the years are however widely suspected to be unreliable. The Jha Committee itself admits of their unreliability stressing the fact that data for different periods have been collected by different authorities, who have used different techniques for estimating the volume of milk production in the country (para 4,6). The committee also recommends that arrangements should be made to collect reliable milk production data on a continuous basis, and in particular bench-mark surveys in the OF areas should be conducted so that the progress of the project can be properly assessed (para 4.8).*

It seems strange that a dairy development project of the dimensions and potential of Operation Flood should be undertaken, continued and expanded over a period of more than 15 years without establishing the means to collect the basic milk output data. It seems to have become a habit with us to evaluate our modernization projects in terms of input targets met without caring for the outputs achieved.

(b)Impact on Distribution of Milk: We have seen that though the OF project was not very successful in enhancing production of milk in the country or in the milk-shed areas, yet it obviously created the capacity to move large amounts of milk over long distances. It is true that much of the capacity generated under OF to move milk from the rural areas to the cities remains unutilized. However, even with this low utilization of the established "feeder capacity, milk procurement in the OF milk-shed areas has gone up substantially during the project period, from much less than 10 llpd in the, pre-project period to 22 llpd at the end of OF-I in 1980-81, and to 36 llpd in 1983-84 (see table -10). A very large fraction of the milk thus procured was taken out of the production neighborhood to the metropolitan dairies, either 'in the form of liquid milk (49% of the total milk procured in 1983), 1 or in the form of milk products (22% of milk procured in 1983). The situation is thus the following. No serious effort has been made under the OF project to enhance production of milk in the milk-shed areas, and yet the procurement and movement of milk out |of these areas has increased manifold during the project period. This is borne out by the data provided by the NDDB/IDC and authenticated by the Jha Committee. This situation can only mean that milk which was normally consumed in the production neighborhood is how being taken to the far-off metropolitan cities through the modern milk marketing technology introduced under OF project."

There have been persistent reports that the OF activities have led to complete drainage of milk from the milk-shed areas and even the children of the poorer milk producing farmers have been deprived of their essential milk intake. The project executing authorities, the JDC and the NDDB, and the Jha Committee refuse to admit this natural Consequence of the OF operations. Their argument is that small milk farmers in the traditional milk-shed areas have always been producing milk mainly for the market, and not for home consumption. This milk they were earlier selling through halwais and dudhiyas. The Operation Flood now offers them the opportunity of selling it through their own cooperatives and getting a better price for it (Jha Committee report para 7.5 to 7.8).

Even if one grants that the wider market for milk offered by OF and the inherent dynamics of the commercialization of milk economy in the milk-sheds did not compel or tempt the small farmers to sell their last drop of milk, and that the milk procured under OF was the milk that would have otherwise been sold to halwais and dudhiyas at a lesser price, yet the fact remains that the latter, the traditional milk middlemen, were in no position to take the milk bought by them out of the immediate neighborhood of the production area. There thus seems to be no doubt that the OF operations deprived, if not the children of small milk farmers individually, then at least the whole milk-shed neighborhoods collectively, of their normal supplies of milk. The effect of this operation can be seen in any of the smaller towns in the OF milk-sheds, where milk often cannot be obtained at any price.

Given the acute inequities that have arisen in the Indian countryside over the last two centuries, it must be true that traditional middlemen in the rural neighborhoods were to some extent exploiting the smaller milk producers prior to OF. The OF project seems to have utilized this iniquitous situation, and the popular educated sentiment against it, to drain all the milk from the rural areas to feed the metropolitan cities. The honored instrument of producers' cooperatives, coupled with professional scientific management and sophisticated imported technology, has been used to generate this latest inequity between the city and the village.

OF protagonists also offer the argument that by giving the milk farmers good cash for their milk, they have left the milk farmers with greater options to meet their basic needs [see, Jha committee report para 7.11 (iii)]. What is implied in this is the suggestion that poorer milk farmers should preferably derive their nutrition from sources other than milk that they produce. It has been explicitly argued that milk is an expensive product and it makes better sense for a poor farmer to sell his milk and buy cheaper nutrition in the form of vegetable fats and vegetable proteins (13). The Secretary of the NDDB is reported to have gone to the extent of suggesting that *drinking milk for the poor is like eating cake'. It is of course true that milk is an essentially expensive product. As can be expected, only a small fraction of the protein and calorie intake of the milch animal gets converted into milk calories and proteins. Perhaps that is why cattle in India, except for a few specialized milch breeds, have been basically bred to provide good draught. Ordinarily Indian cows produce small amounts of milk on a diet of agricultural residues, unlike the industrial breeds of today which consume huge amounts of socially manufactured concentrate feeds in addition to large quantities of green fodder. However, the fact that milk is an expensive product does not make it inessential. To suggest, as has been done by the OF protagonists, that children can be fed equally well and more conomically on vegetables and pulses, instead of milk, is to insult the wisdom of generations. In any case if milk proteins and fats are so easily replaceable by alternative sources, then what was the need of carrying out the massive exercises of OF to provide milk in the cities? It would have been much simpler to produce or import some soyameal and soyaoil and supply it in the cities.

Organized dairying on this country it seems was begun in the 19th century for the purpose of supplying milk to the armed forces and their families. History of the Anand operations, which later became the model for OF can in fact be traced back to the Poisons Dairy which during World War II was engaged to manufacture cheese for the troops from milk procured in Kaira District of Gujarat (see Jha Committee report para 2.l to 2.3). Starting from such beginnings dairy operations) in India seem to have stuck to their original objective of supplying milk and I milk n products to the company towns. Modern technology has come in handy for expanding these operations and converting larger areas of the country into the backyards of the metropolitan cities.

c) Impact on Costs of Distributed Milk: Looking at the price at which milk has been, sold by the metropolitan dairies, especially in Delhi and Calcutta, it seems that even thought OF drained the rural areas of their, essential milk supply yet it succeeded in its objective of supplying cheap milk for the deprived sections of urban consumers. This is of course true to some extent. However, it should be remembered that if metro (dairies have been able to sell milk at a low-price it is not because of any Inherent economy in the OF technology of milk distribution compared to that of the traditional dudhiya. As a matter of fact, it seems irrational to imagine that the modern dairies managed by jet-set, executives at the top vand an army of well paid technicians, scientists and managers down the line, whose idea of economic dairying is to transport liquid milk from Anand in Gujarat for consumption in Delhi and to pasteurize it before supplying it to a population that invariably boils milk before consuming it, could compete in economic terms with the dudhiya, who travels, mainly on a bicycle. Procurement, processing and bottling costs of the modern dairies are on the other hand expected to be quite high. According to a study of the costs of production in a toned milk plant during 1976-77 it was found that milk procured at Rs.1.35 per kg. cost Rs.2.07 per kg at the plant after transport, processing and bottling. Procurement, processing and bottling costs thus amounted to more that 50% of the producer price of milk (14). This seems to be supported by a data provided by Jha committee according to which producer price as a component -of consumer price varied between 65% to 75% in most states (Appendix 5.1). The metro dairies were able to keep their prices low in spite of their high costs mainly because of their access to cheap gifted milk products which could be used for lowering the raw material costs in the metro dairies. According to Jha Committee report the amount of cheap milk powder used for recombination in the dairies of Delhi and Calcutta alone during 1983-84 adds up to a hidden subsidy of Rs.14 to Rs.15 crores to these two metropolitan dairies. Once sources of such hidden subsidies start drying up, as they are bound to, after the modern systems have fully established themselves and fully destroyed the traditional systems, prices of milk in metropolitan areas will have to rise to the level of the true costs of the modern dairy processes. In fact already in Delhi prices of the cheap Mother Dairy milk have been brought at par with the more expensive milk supplied by Delhi Milk Scheme.

d) Impact on Freshness and Wholesomeness of Distributed Milk: Milk coming out of automatic vending machines, or better still, lying at the grocers in colourful conical Tetrapaks, evoking images of sophisticated Swedish technology and Swedish preferences, has a way of looking inherently clean, hygienic and wholesome to the educated Indian eyes. Milk supplied by the dudhiya from his traditional, generally well scrubbed, buckets on the other hand seems to have, got permanently associated with adulteration and contamination (see Jha Committee report para 5.14, for example). Yet the traditional milk vendor supplies milk at the consumer door fresh, within hours of its being milked. While modern dairies in the metropolitan cities seem to specialize in distributing stale and recombined milk in modern packaging. As we have seen, of the 28 llpd of milk supplied by the metro dairies in 1983-84, as much as 11 llpd on the average was re-combined milk prepared from skimmed milk powder and butter oil, both indigenous and imported, the latter of which must have been manufactured many months before recombination. Of the 17 llpd of real liquid milk supplied by the metro dairies, only about half is perhaps procured from the vicinity of the distribution area; the remaining half comes from long distances taking much more than twelve hours before reaching the consumer. Such stale and recombined milk, without its aura of modernity, and without the compulsions of city living, could hardly have been acceptable to the discerning Indian consumer, who used to be often able to guess the composition of the diet fed to the animal and its lactation history from the taste of milk.

The traditional Indian milk vendor adulterates his milk, with water to increase the volume, and (then sometimes with wheat starch to make the diluted milk thicker. These adulterants are well known to the consumer, and in the face to face situation in which the dudhiya and the consumer operate it is hardly possible for the former to vary the quality of milk beyond limits tacitly agreed upon between him and his customer. In any case the dudhiya perhaps never dilutes*milk to the level of dilution of the toned milk supplied as a standard practice by the metropolitan dairies. The modern dairies perhaps do not willfully adulterate milk supplied by them. But they have access to a whole range of modern chemical preservatives, additives and flavoring agents. Indian metropolitan dairies hopefully do not use any of these. However, the point is that in case these dairies decide to use or experiment with such agents, the consumers would not know, and even if they happen to learn about the additives; they would not know whether and where to complain. Many city consumers during the lean seasons must have had the experience of getting milk that stinks, probably of stale butter-oil. If their dudhiya had supplied such milk they would have thrown it in his face. When they get it from the faceless metropolitan dairies they don't even grumble.

These fears about, the modern dairies being tempted to use modern chemical preservatives and additives are not entirely unfounded. There had been reports-that hydrogen peroxide was being used as a preservative during long distance transportation of milk. The Jha Committee has now been told that it was only an experiment carried out by the NDDB and the milk so treated was used for the manufacture of industrial casein (Jha .Committee report para 5,19). There is perhaps no reason to doubt the veracity of the assurance given by NDDB on this issue. However, the fact remains that even if the NDDB had made the use of hydrogen peroxide a standard practice and had supplied such milk to the consumers nobody would have probably known about it for a long time. After all it was only last year that the Indian Parliament was told [that almost all major public sector dairies had been using imported rennet derived from bovine intestines for preparing cheese. And this fact was not even mentioned on the labels, in a country where for a large percentage of people the cow remains a sacred animal.

2.6. An Alternative: It seems however that simpler and perhaps less iniquitous ways of meeting the requirements of the city could have been found if they had been seriously searched for. One possibility for example' could be to supplement the traditional channels of supply of milk to the cities with milk powder sold directly to the consumers through, perhaps, the ration shops. To study the feasibility of this alternative let us have another look at the milk economy of the four metropolitan cities. During 1983-84 approximately 58 llpd of milk was consumed in these cities. Of this consumption only about 28 llpd was met by the metropolitan dairies and the remaining 30 llpd even in 1983-84 came from the traditional channels. The 28 llpd throughput of metro diaries consisted of 17 llpd of liquid milk about half of which was probably procured from the vicinity of the cities in which it was supplied. This half, or about 8 llpd, would have been picked up by the traditional channels in the absence of the metro dairy systems. Thus the supplementary supply coming from the modern dairies consists of about 20 llpd. The problem then is to supply milk powder equivalent of about 20 llpd of liquid milk in the four cities. Do we have this amount of milk powder available? According to the Ministry of Agriculture estimates, milk powder production in the country during 1983-84 was around 100,000 tonnes a year. This incuded production in both the private and the public sector dairies. About 25-30% of this milk powder along with some imported supplies, was used for the purpose of recombination to produce the 11 llpd of additional supply that emanated from the metro dairies. The remaining 70-75,000 tonnes of milk powder produced in the country was used for making various sophisticated products like infant milk food, malted milk foods, ice-creams, confectionery and so on (Jha committee report para 8.5), It must be rather simple, in a milk deficit country, to restrict the urge for these luxury products, and divert another 25 to 30% of the milk powder to meet the liquid milk deficit of about 8 llpd in the cities.

Thus the present level of effective availability of milk can be maintained in the cities by leaving 'milk market entirely in the hands of traditional suppliers, and distributing about 60-70,000 tonnes of milk powder annually. Such an alternative has many obvious advantages. First of all, it shall completely eliminate the need for long distance transport of liquid milk, and therefore the temptation and the facilities to drain distant rural areas of milk for supply to the cities. Milk drying plants, carefully located in the country, perhaps can be organized to suck in only the flush season surplus of milk. Secondly, it shall greatly reduce the procurement, transportation processing and packaging costs involved in the handling of fresh or re ordained liquid milk. This alternative shall remove the illusion amongst the city dwellers that they are getting fresh liquid milk from the metropolitan dairies, and put in their hands, at much lesser cost, a product which more accurately represents what they have been getting from the dairy systems. There are perhaps no great advantages in recombining milk in sophisticated plants as compared to recombining it at home, except for the illusion of getting fresh liquid milk. Thirdly, since the powder milk supply shall not probably compete with the liquid milk market, it shall be possible to sell powder milk at a subsidized rate to the deprived sections of the city populations without running the risk of depressing the prices of liquid milk and affecting its production adversely. It may even be possible to import some milk powder without injuring indigenous production of milk. In fact, once the metropolitan dairies stop interfering in the liquid milk market by their long distance transport of milk and recombination of indigenous and imported products, liquid milk prices will in all probability rise to give an impetus to enhanced production. In any case the producers shall be assured of a good price and the poorer consumers shall be protected. With so much milk powder in the market however it shall be necessary to ban commercial recombination of milk. This alternative thus can achieve all the proclaimed objectives of OF without causing any of its inequities. It shall of course be necessary to study the possible consequences of this new scheme in detail.

2.7 Possible Consequences of the Success of Milk Enhancement Programme under OF: The OF strategy to enhance production of milk in the country consisted in replacing about 10 million of such milch animals in the country with an equal number of crossbred or otherwise genetically improved cows and buffaloes. These 10 million elite animals constituting about 12% of the total milch animal population of the country (projected to be about 82 million in 1985) were to form the National Milch Herd. It was expected that this special herd would produce about 24% of the total milk production in the country. Most of this production [was planned to be mopped up by the modern dairy sector (15). What would have been the feedstuff requirements of this elite herd? The National Commission on Agriculture (1976) in its report on livestock feeding has given a schedule of the daily average intake of feedstuffs for different categories of animals. In table 10 below we present extracts from it showing average rates of feeding for different categories of milch cattle.

From the table we find that on the average a cross-bred milch cow is expected to consume more than twenty times the concentrates, about six times the green fodder and about twice the dry fodder ordinarily fed to an average Indian adult cow. Even the young cross-breed calves are expected to receive about twelve times the concentrates and three times the green fodder that falls, to the share of an average indigenous milch cow. In fact, the diet of the cross-breed young stock in table 10 happens to be superior to even that of the improved varieties of Indian milch cattle, who are supposed to be fed at a rate considerably better than that of the average milch stock. The enhanced feeding requirements of this stock therefore necessarily have to be met by diverting rations from other less favored animals; arrival of a cross-breed cow in a locality thus implies that about twenty of the local cows must forego their generally meager quota of concentrates, and suffer a substantial cut in their limited supply of green fodder.

TABLE - 10

Average Rates of Feeding of Different Categories of Milch Cattle

Category Rates of Feeding per day in Kg.
  Concentrates Green Fodder Dry Fpdder
1) Crossbred Milch Cows 2.75 20.00 6.00
2) Improved Milch cows 1.20 10.00 6.00
3) Other Milch cows and Not
calved even once
0.125 3.50 3.16
4) Crossbred young stock 1.50 10.00 2.00

The National Commission on Agriculture seems to have anticipated this movement of feed stuffs in favor of the improved and cross-breed stock while arriving at its diet estimates reproduced in table 10. The Commission thus takes the feed concentrate requirements of ordinary indigenous stock to be much less than what was calculated by Amble et al in 1965 on the basis of feeds actually fed to the animals in the various regions determined through sample surveys (16). In fact, for the purposes of estimating feed-concentrate requirements, the National Commission on Agriculture dumps milch and dry indigenous cows in the same category, and even for the valuable work-animals suggests diets which are far below the ones actually fed in i965 according to Amble et al. Is this movement of feed stuffs in favor of the exotic and improved stock beneficial in terms of overall milk production? We shall attempt to answer this question by making an estimate of the relative feeding requirement of an upgraded milch herd of 10 million heads in a total milch animal population of 82 million, as envisaged in the OF project. The National Commission on Agriculture report that we have quoted above for the feeding schedules of various categories of livestock, also makes an estimate of the total feeding requirements in the country for a stock that was expected to include 10 million upgraded cows and buffaloes. The estimates given there give useful indications as to how the available feed-stocks in the country are distributed among various categories of livestock including, fin addition to the bovine stock, poultry, sheep, goats, pigs, horses and ponies.

For the purpose of answering our question about the relative efficiency bf an elite milch herd, we only use the population profile of the upgraded herd assumed in the above report. The National Commission seems to have envisaged a modest herd consisting of only 1.00 million cross bred cows and 5.50 and 3.50 million heads respectively of improved milch cows and buffaloes. We now assume that these cows and buffaloes replace equal numbers of milch cows and buffaloes in the milch stock of 1972 which happens to consist of just 82 million heads. We next use the feeding schedule of Table 10 to calculate the feedstuff requirements of this assumed herd of 82 million heads including 10 million upgraded cows and buffaloes. In table 11 below us have displayed the calculated feedstuff requirements for different components of this herd separately. From the table we find that if in the 1972 population of bovine milch stock consisting of 82.03 million heads, 10 million milch animals had been replaced by an elite upgraded herd, then that elite herd consisting of about 12% of the total stock would have" consumed some 47% of the concentrates, 26% of the green fodder, and 18% of the dry fodder consumed by the whole stock. And if one trusts' the OF plans, such a herd at best would have provided 24% of the total production. The population profiles and feeding schedules assumed under OF are perhaps not the same as the ones assumed here, but the OF herd could not be more modest in terms of the cross-bred component, and the feed requirements relative to the whole stock. An elite herd, consuming 47% of the concentrates, 26% of the green fodder and 18% of the dry fodder to produce 24% of milk clearly cannot be claimed to be more efficient compared to the ordinary stock. This herd will of course produce much more milk than an ordinary herd of equal strength. But it does not even seem to be certain that replacement of a part of the ordinary stock by an elite herd will actually add to the total production of milk, unless of course the total availability of feeds stuffs for the milch stocks goes up. It is not easy to increase the total availability of feedstuffs in the country in any case it does not depend on the breeding policy.

It is perhaps even more difficult to shift feedstuffs from non-milch stock to milch stock. As can be seen from Appendix 5 there are many claimants on the available feedstuffs for livestock and they cannot be easily deprived in favor of milch animals. Of the feedstuffs which are available for bovine stock, a certain irreducible minimum has to go towards meeting the requirements of working animals who remain the predominant source of agricultural power, and are likely to remain so for some [time to come Under the circumstances it seems, highly unlikely that the total amounts of feedstuffs available for the milch stock will increase substantially if the genetic complexion of the milch stock is changed. But it seems that even a small upgraded herd of 10 million heads in a population of 82 million requires substantial enhancement of the availability of feedstuffs, especially of the concentrate's, for the milch stock, if the ordinary animals are to continue to receive their normal rations. In table 12 below us have compared the feedstuff requirement of the 1972 milch herd without any up gradation, with the requirement when 10 million cows and buffaloes are upgraded. We find that with this change in the complexion of the hard, the total requirement of concentrates for the milch stock goes up by as much as 67%, and of green fodder by 20%. Since such increases in the availability of feedstuffs for the milch stock are not likely to take place, the most probable consequence of the up gradation of a part of the livestock will be able to deprive the ordinary stock of its usual rations. That will of course promptly depress the output of the ordinary stock, offsetting any increases in production occurring from the upgraded stock.

TABLE - 11

Estimated Requirements of Feeding Stuffs for Crossbred & Improved Milch stock Compared to those for the total Milch Stock*

Category Requirements
(Million tons)
(Million tons)
Crossbred cows 1.00 1.004 7.300 2.190
Improved Milch cows 5.50 2.410 20.075 12.045
Improved Milch buffaloes 3.50 1.916 12.775 7.665
Total crossbred   & Improved Milch stock 10.00 5.330 40.150 21.900
Other Milch cows 46.92 2.140 59.940 54.117
Other Milch buffaloes 25.11 3.757 52.424 46.558
Total Milch Stock 82.03 11.227 152.514 122.575
Crossbred & Improved Milch
stock as a percentage of
Total Milch Stock
12.19% 47.47% 26.32% 17.87%

TABLE - 12

Additional Feedstuff requirements for the 10 Million Heads of Upgraded Milch stock in: a Total Milch Stock of 82 Million

Population Profile Feedstuff Requirement In Million Tonnes
  Concentrates Green Fodder Dry Fodder
82.03 Million ordinary milch
cattle and uffaloes according
to 1972 populationprofile
6.718 127.975 114.661
Same population as above but with
10 million milch animals replaced
with upgraded stock (as in Table 11)
11.227 152.514 125.575
Additional requirements (2-1) 4.509 24.539 7.914
Additional requirements as
percentage of original
requirements (3/1) x 100
67.12% 19.17% 6.90%

However, it seems that the OF project was able to bring milk to the metropolitan markets by merely controlling the marketing channels. It was therefore not necessary to control the productive resources. That is perhaps the reason why the OF programme was so lax about its milk enhancement component. In modernizing any sector of economy it seems trade always precedes production. And till a sector can be controlled through trade, interference in production is generally uneconomical.

For the present we wish to point out that Milk production is not enhanced by exotic breeding. There is perhaps only one way to enhance it, and that is to increase the production of feed stuffs for the livestock. But, as we shall see in the next section, modernization in another sector of Indian economy, the cereals agriculture, seems to have militated precisely against the possibility of increasing the availability of feedstuffs, especially, of the most important of them, the oilcakes. (The second part of this article will appear in the next issue of PPST Bulletin).


1. Green Revolution: A Historical Perspective by J.K.Bajaj, PPST Bulletin Vol.3, No.2 (1982) pp.87-113.

2. Live Stock census figures quoted in various editions of *Agriculture in Brief (Ministry of Agriculture, Govt, of India), Projection for 1985 and 2000 are from the Report of National Commission on Agriculture, Ministry of Agriculture, Government of India, 1976.

3. (a)Data on work animal population is taken from Table 1. Gross sown area given above refers to triennial averages obtained from the annual data in various issues of "Estimates of Area and Production of Various Crops', published by Directorate of Economics and Statistics, Government of India Mechanical power per hectare is estimated by using the data on number of agricultural implements given in various issues of Agriculture in Brief, published annually (by the Ministry of Agriculture. We assume average power of a tractor to be 15 Hp and of all other implements to be 5Hp each as in (b) 'Aspects of India's Bovine Economy' by A.Vaidyanathan, Indian Journal of Agriculture Economics Vol.33(1)." January - March, 1978, pp.1-29.

4. Source - as in Table 2. Data on Agricultural implements for 1977 and 1984 are taken from ‘Basic Statistics Relating to Indian Economy', Centre for Monitoring Indian Economy, August 1985, Vol.1, Table 12.9. For oil engines, in 1977, data for 1974 used.

5. A.Vaidyanathan Op.Cit.

6. Various editions of Agriculture in Brief - Ministry of Agriculture.

7. Jha Committee Report, Ministry, of Agriculture and Irrigation, New Delhi', 19o4 (Appendix 3.2).

8. Impact of Modernization of the Dairy Industries of Kaira District by D.K.Desai and A.V.S. Narayana, Indian Journal of Agriculture Economics 22 (1967), pp.54.

9. Another revolution fails by Claude Alvares (Ajanta Publication,
New Delhi, 1985) pp.54.

10. Claude Alvares Op. Cit. pp.262-63.

11. Claude Alvares Op. Cit. pp.265-6 and Jha Committee Report Op. Cit Para 5.55, 6 and 6.6.

12. Jha Committee Report Op. Cit paras 2.20 to 2.22 and 5.6 to 5.7.

13. See for example, V.Kurien, Chairman NDDB and IDC in 'The Black Lie' - an NDDB/1DC pamphlet issued in 1984. Reproduced in Claude Alvares Op. Cit. pp.56-57.

14. Cost analysis of; Toned milk processing by R.V.Singh and S.K.Sharma. Indian Journal of Agriculture Economics, Vol.34, No.3 (1979) pp.61-65.

15. See OF-II documents reproduced in Claude Alvares. Op. Cit. pp.264-5.

16. Milk I Production of, Bovines in India and their feed availability by V.N.Amble et, al., Indian Journal of Veterinary Science and Animal Husbandary Vol.35, No.3 (1965) pp.221-33, see especially Table IV on p.231.

17. 1949--50 to 1964-65 growth rates from 'Indian Agriculture in Brief' Op. Cit. 9th Ed. (1968) and J.K.Bajaj Op. Cit. pp.97. 1967468 to 1980-81 growth rate from 'Indian Agriculture in Brief’. Op. Cit. 19th Edition (1982).

18. Various issues of 'Estimates of Area and Production of Principal Crops in India', Directorate of Economic Survey 1985-86, Ministry of Finance Government of India,

19. Various issue of Indian Agriculture in Brief, Op. Cit. Data for 1975-76 and 1980-81 is from Economic Survey 1985-86, Ministry of Finance, and Government of India. Area for these years include in addition to the area under the five major oil seeds, minor oilseed crops of Soyabean, Safflower, Sunflower and Niger also. Since the later area is small it does not substantially affect comparison with data from earlier year.

20. Agricultural situation in India, August 1984, pp.321.

21. Agricultural situation in India, August 1984, pp.321. 1979-84 data have been taken from the Economic Survey of India 1985-86, Ministry of Finance, and Government of India.

22. 1932-83 and 1983-84 data from, Hopeful sign in Oilseeds by S.Gangadharan Economic Times, Bombay, February 13, 1985.

23. Agricultural situation in India, August, 1984 pp.322 and 1981-82 data from 'Indian Agriculture in Brief op. cit.

24. Ref.21, pp.323, Directorate of Economic and Statistics, Government of India 5-327, Dte E & S (ND)/82 p.47 & 49. Indian Agriculture in Brief op. cit. 19th edition (Dec.1982).

25. Directorate of Economic and Statistics Government of India, New Delhi 5-327, Dte E & S (ND)/92 p.48.

26. Vegetable OR output possible by K.K.G.Menon, The Economic Times, February 13, 1984.

27. Economic Survey of India, 1985-86, Ministry of Finance, Government of India.

28. Ref.21, p.323 Figures for total imports here do not agree with those in Table 23, because different sources often take different financial years.

29. Indian Agriculture in brief Op. Cit. 19th Edition (December 1982).

30. See 'Exotic Cross Breeding of Cattle in India', Report of the expert Committee appointed by Akhil Bharat Krishi Goseva Sangh, published by Goseva Sangh, Bombay, 1981.

31. Agricultural development in China - 1368-1968 by D.H.Perkins. Incidentally the author uses the data to prove that there was no technological advance in Chinese agriculture over such a long period,

32. Charaka Samhita 1:2-16 and 4:4-4.

33. ibid 1:11-28.33.

34. ibid 1:26-36.

35. Economic History of India by R.C.Dutt.

36. Choices of food to shorten food chains in India, in Agriculture and Energy (Ed.) W.Lockeret, Academy Press, New York, 1977, pp.581-195.

Author:J.K. Bajaj, Jansatta & Sameer Shah and U.S. Shanker


* The second part of this article will appear in the next issue of PPST Bulletin.

* Incidentally, milk and oilseeds are very closely linked. Important milk products like ghee land butter are substitutable with oils in Indian diet.' Also oilseeds and oil-cakes form an important component of the bovine diet, a component that practically determines the quality and strength of quantity of the milk-output of the milk cattle, and the draught animal.

* Incidentally, the Jha Committee begins its report on milk production enhancement aspect of OF by quoting the number of cattle and buffaloes in India and their yields (along with the figures for some other countries) from the FAO Production Year Book for 1983. Why does a committee of the Government of India appointed to evaluate a national dairy project refer to a foreign source for the number of animals and their yields in the country, especially when the FAO itself in all probability would have got these data from original Indians sources? Is it that we have no confidence in ourselves, or is it just continuation of habits picked up by Indian economists in foreign universities and Indian elite institutes? The honorable way for a Committee of the Government of India is to quote the Indian data from Indian sources, and the foreign data from the original sources in the respective countries. But then even our National Commissions do not hesitate in quoting foreign sources about Indian conditions and data.

* Based on total Milch stock population of 1972 with the assumption that 10 million heads in that stock are replaced by crossbred and improved milch animals according to the population profile assumed by the Nation Commission of Agriculture (Appendix 5). Feeding stuff requirements have, been calculated according to the schedule provided in Appendix 4.

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