Competitiveness and Trade Performance

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The paper "Competitiveness and Trade Performance of India's Dairy Industry" by Ramphul Ohlan can be analyzed from multiple perspectives, each offering unique insights into the challenges and opportunities in India’s dairy sector. Below are the key perspectives: 1. Economic Perspective Contribution to GDP & Rural Livelihoods: Dairy contributes ~5% to India’s GDP and supports 80 million farmers, making competitiveness crucial for poverty alleviation. Informal sector dominance: ~70% of milk is sold via unorganized channels, limiting value addition. Cost Competitiveness: India has low production costs (cheap labor, crop-residue-based feed) but high logistics costs (poor cold chain infrastructure). Compared to New Zealand (grass-fed) or EU (heavily subsidized), India struggles with scale inefficiencies. Key Question: Can India leverage low costs to compete globally without sacrificing farmer margins? 2. Trade & Global Market Perspective Export Potential vs. Reality: India is the top milk producer (24% global share) but only 0.5% exporter (ranked ~20th). Main exports: Skimmed milk powder (SMP), ghee (to UAE, Bangladesh), but face non-tariff barriers (e.g., phytosanitary norms in EU/US). Import Dependence: Surprisingly, India imports high-value dairy (e.g., cheese, whey) due to quality gaps. Key Question: How can India shift from being a "volume leader" to a "value leader" in global trade? 3. Policy & Governance Perspective Subsidies vs. Market Realities: Operation Flood (1970s) made India self-sufficient but did not prepare it for global competition. Minimum Support Price (MSP) for milk is debated—helps farmers but may distort market efficiency. Infrastructure Gaps: Only 30% of milk is processed formally; the rest spoils due to lack of cold chains. Policy suggestions: Tax incentives for dairy-tech, FDI in processing, and cluster-based farming. Key Question: Should India prioritize domestic food security or export-oriented dairy reforms? 4. Sustainability & Ethical Perspective Environmental Impact: Dairy accounts for ~18% of India’s agri GHG emissions (methane from cattle). Water scarcity: 1L milk requires 1,000L water (feed crops). Animal Welfare & Productivity: Low yields: Indian cows average 2-5L/day vs. 30L/day in Israel (due to breed quality). Ethical trade: Rising global demand for organic/A2 milk, but India lacks certification systems. Key Question: Can India adopt sustainable intensification without compromising small farmers? 5. Technological & Innovation Perspective Digital Disruption: AI/blockchain for supply chain traceability (e.g., Amul’s tech-driven procurement). Precision dairy farming: IoT-enabled monitoring of cattle health/milk quality. Product Diversification: Plant-based dairy alternatives (global market: $35B) could threaten traditional dairy. Value-added products: Probiotic yogurts, fortified milk for exports. Key Question: Will tech adoption widen the gap between large cooperatives (Amul, Mother Dairy) and small farmers? 6. Social & Cultural Perspective Milk as a Staple: Cultural significance (e.g., religious use of ghee, milk in tea) drives domestic demand. Vegetarian protein shift: Dairy is India’s primary protein source, limiting exportable surplus. Gender Dynamics: 75% of dairy labor is female, yet women have limited access to credit/market linkages. Key Question: How can dairy growth be inclusive for women and marginal farmers? Synthesis: Interconnected Challenges The paper highlights that India’s dairy competitiveness isn’t just about trade policy but a complex interplay of: ✅ Economics (farmer incomes vs. global prices), ✅ Governance (subsidy reforms), ✅ Sustainability (climate-smart dairy), and ✅ Technology (leapfrogging infrastructure gaps).

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