On World Milk Day, looking back at Operation Flood and how India arrived at milk surplus

From being a milk-deficient country after independence to an abundance of safe and affordable milk, lassi, and paneer in our stores, Operation Flood has played a massive role in the country's white revolution.

• It was the work of The Amul trinity: Verghese Kurien, Tribhuvandas Kishibhai Patel, and Harichand Megha Dalaya; in making India the world's largest milk producer and surpassing the USA in 1998 with about 24% of the global production in 2021-22. 

The Amul success story is known to all.

On World Milk Day today, June 1, we take a look back at India's journey and path ahead.

What was Operation Flood?

• Operation Flood, dubbed as the White Revolution, was a dairy development program by National Dairy Development Board (NDDB) from 1970 to 1996, aimed at boosting milk production to ensure nutrition security and a steady income for farmers.

• The initial phase (1970-1980) was assisted by European Economic Community (EEC), and World Food Program strengthened the dairy sector in metro cities to increase the producer's share in the market and enhance rural dairy development near the cities.
• The second phase (1981-1985) expanded the number of milk sheds multi-fold and created a self-sustaining system of village co-operatives.
• The last phase (1985-1996) boosted infrastructure, expanded cooperatives, provided veterinary services, and promoted research and development. The program's success led to increased milk production, self-reliance, and remarkable participation of women in dairy co-operatives.

Today, Amul is the biggest player in the dairy industry in India, and it has also entered the milk-alternative industry with its lactose-free milk to cater to lactose-intolerant people.

Opportunities and challenges for foreign dairy companies

• The primarily unorganised and fragmented Indian dairy sector where the majority of small farmers (primarily women) own just a couple of cows, adds a whopping 5% to the national GDP today.
• Post lockdown, the demand and supply of milk and milk products grew exponentially; making it a Rs 13 lakh crore industry. The numbers are attractive enough to attract big foreign players from Europe and Australia to invest heavily in India.
• The global bigwigs of dairy find it tough to source milk from local producers because of the trust the farmers have developed over time. They are quite apprehensive to sell their milk to unfamiliar buyers.

• Importing milk is costly and has resulted in failures for foreign companies.
• Specialised nutrition products and homemade milk products are preferred over readymade dairy products by the majority of Indians.
• High tariff and opposition to foreign investment further complicate entry into the market.
• In 2020, India backed out of the Regional Comprehensive Economic Partnership (RCEP) to protect the interests of a variety of domestic industries including dairy.

Despite challenges, some foreign companies are exploring opportunities through joint ventures and investments because the industry shows promising growth potential of reaching Rs 30 lakh crore by 2027.

India on the way to export milk

• As of now, India lags behind in dairy exports, with only 53 medium and small enterprises exporting milk and milk products, mainly to Bangladesh and a few West Asian countries to meet diaspora needs.
• On the other hand, India has come a long way in fulfilling its domestic milk needs to now having a surplus, which is expected to reach 100 million MT by 2027. 
• A  NITI Aayog member recently asked the industry to look for avenues to export dairy goods. Amul is already looking to enhance its phytosanitary standards and establish networks to ship abroad.