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


The Collective Action Model

The Operation Flood model organized rural dairy farmers into cooperatives and helped them produce more milk through technological advances. The cooperatives offered farmers an assured market price for their produce besides offering inputs such as better fodder, breed improvement through artificial insemination, and disease control measures. The model replaced the ad hoc milk production system with an organized, continuous dairy-supply chain covering all aspects right from production to consumption...


The Operation Flood model brought about a revolution in the dairy sector and transformed India from a milk deprived country to a self-sufficient one. The model successfully boosted milk production in rural areas and established a linkage between the rural producers and urban consumers through dairy cooperatives. By introducing production enhancing technologies, establishing effective and efficient supply chains, and orienting producers toward markets, the model helped in increasing the productivity of the dairy industry...


Though the Operation Flood model brought in a series of changes in the dairy sector there were several challenges ahead for the sector. Improving milk production and quality, infrastructure support, and marketing were some of the challenges faced by the dairy sector in India. Factors such as shrinking grazing areas leading to shortage of fodder resources, increasing feed prices (Rs.7000 per tonne from Rs.4500 per tonne in 2009), and traditional practices of production in rural areas affected milk production and widened the demand supply gap. As of 2011, there was a 15 million tonne shortfall in fodder availability...

Way Forward

Over the years, India had emerged as the world's largest milk producer and it was growing at a faster rate than the world average. However, Amrita Patel (Patel), chairman of NDDB, said that while milk production in India had been able to meet demand by growing at 3.5 million tonnes a year (or 4%), it would now have to grow at 6% to keep up with the demand. The Economic Survey, in early 2011, raised concerns on the stiff increase in milk prices and declared that unless production increased to 180 million tonnes a year over the next decade, India would need to import milk...


Exhibit I: Top 10 Milk Producing Countries in 2009(in Tonnes)
Exhibit II: Constraints Faced by the Dairy Industry
Exhibit III: The Anand Pattern
Exhibit IV: Structure of the Operation Flood Model
Exhibit V-a: Milk Production in India
Exhibit V-b: Estimates of Milk Production - Statewise
Exhibit VI: Growth of Dairy Cooperatives during 2009-10*

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