Collective Action in Indian Dairy Industry: A Unique Model

Collective Action in Indian Dairy Industry: A Unique Model
Case Code: BSTR395
Case Length: 19 Pages
Period: 2000-2011
Pub Date: 2011
Teaching Note: Not Available
Price: Rs.400
Organization: National Dairy Development Board
Industry: Agri-business, Dairy
Countries: India
Themes: Organizing, Inclusive Business Model, Value Chain, Supply Chain
Collective Action in Indian Dairy Industry: A Unique Model
Abstract Case Intro 1 Case Intro 2 Excerpts


In 2011, India emerged as the world's largest milk producer with an estimated 112.5 million tonnes of milk production recorded since 2010. The National Dairy Development Board (NDDB), sought to usher in another White Revolution by launching the First Phase of the National Dairy Plan to double milk production in India and meet the projected demand for milk production of 180 million tonnes by 2020-21. Despite India being a leading milk producer, it was feared that if production did not grow faster, it would fail to keep pace with future demand. India's transformation into a milk surplus country was largely due to the collective action model implemented by NDDB as part of Operation Flood (1970-1996).

Acknowledged globally as one of the most successful rural development programs, Operation Flood transformed the country's dairy sector into a demand driven and profitable business proposition. This model had a vertically integrated three-tiered structure with the dairy cooperative societies at the village level federated under a milk union at the district level and a federation of member unions at the state level. While the village cooperatives procured milk from the producers, the district unions transported and processed the milk products.

The role of the federation was that of marketing, strategic planning, and investment. Under this unique model, a national milk grid was created to direct supply milk from surplus producing areas to the urban areas throughout the country. The model revolutionized the dairy industry in India and set up a unique collective approach to dairying. It not only helped increase milk production, but also provided a sustainable livelihood to millions of farmers and led to empowerment of women. Though the collective action model brought in some important changes in the dairy sector and continued to thrive, there were some critical issues which impeded dairy development in the country.

With about 80% of the dairy industry in India still falling under the unorganized sector, it was largely unable to overcome the challenges. According to experts, one of the biggest challenges was to organize milk producers under cooperatives and increase milk production and per capita availability. As NDDB looked at increasing milk production aggressively to keep up with future demands, analysts wondered what the implications for the dairy cooperatives would be and what role the cooperatives should play in realizing this objective...

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