How Digital Start-ups are Transforming Indian Dairy Farming
The opportunities for digitalization are immense, and even more so because of the greater adoption of emerging technologies such as Artificial Intelligence (AI), Internet of Things (IoT), and Cloud.
India is the largest milk producer in the global dairy industry. In the past six years alone, the country’s milk production has grown by 35.61 per cent, reaching 198.4 million tonnes by the year 2019-20 from being 146.3 million tonnes during 2014-15. In fact, the National Dairy Development Board (NDDB) has estimated that the demand for milk as well as milk products in India is going to reach 266.5 million metric tonnes by 2030.
As per the 2030 projections, the rural sector with have 57 per cent share in the total consumption. However, the consumption on a per capita basis will remain higher in urban areas at 592 ml, compared to 404 ml in rural areas. In terms of state-wise production, a substantial proportion continues to be contributed by Uttar Pradesh, Madhya Pradesh, Andhra Pradesh, Rajasthan, Gujarat and Punjab.
Unorganised Nature of Dairy Farming in India
Indian dairy farming continues to be highly unorganised in nature even when business environment across the country is improving. As a result, around 60 per cent of the surplus milk comes within the unorganised sector, while the rest 40 per cent is often procured by organised sector entities such as dairy co-operatives, private companies etc.
This unorganised nature of the dairy farming industry has resulted in minimal penetration of technological progress within the sector. This has further led to consistently high wastage as well as lack of standardisation in terms of quality and quantity. In fact, 3 per cent or close to 5 million tonnes of milk often gets wasted, often resulting from lack of electricity.
India’s ambition to produce roughly 300 million tonnes of milk by 2024 may be hampered by high wastage and growing demand for dairy products. Furthermore, the average milk yield of cows in India is lower than that of some of their counterparts. To accomplish the aim, Indian dairy producers must boost production while focusing on minimising waste.
Indian Start-ups Providing Digital Solutions
Digitalisation can have a significant impact on the value chain’s ‘Milk Production’ component. Dairy farming in India is unorganised, and therefore, technology penetration is low, but nonetheless, a few start-ups have popped up in this field in the previous five years. These businesses strive to boost agricultural production while reducing waste.
One of the primary areas where digitization can have a substantial influence is cattle management. Farmers can watch cow feeding patterns and check their health using the Internet of Things (IoT) and advanced analytics. Cattle productivity and milk yield are projected to improve as a result of this. However, in India, livestock monitoring utilizing Artificial Intelligence (AI)-based systems are still in its infancy, with only a few companies providing this service.
Prompt Equipments is one such organisation that provides livestock management solutions. The firm teamed up with the Indian Institute of Technology (IIT) in Mumbai to design the ‘BovSmart’ wearable belt. The belt uses AI and IoT for tracking livestock breeding and deliver timely information to farmers. Another business, Stellapps Technologies (Stellapps), offers a similar solution, which uses a wearable gadget for cattle and a mobile application to deliver recommendations to improve herd performance. According to Stellapps, using this approach, milk yield can be raised by 20% and calf health costs can be decreased by up to 50 per cent. The Stellapps technology is currently being used to track around 4.5 lakh livestock.
In addition to livestock management, some other possible areas of dairy digitisation include the supply network and farmer payments. Due to its reliance on many elements such as ambient temperature, presence of cold chains, and limited shelf life, India’s dairy industry’s supply chain is highly complex. Its fragmentation further adds to the complexity. Digitalisation solutions such as IoT along with advanced analytics can assist by communicating real-time data to various stakeholders, detecting any abnormalities in milk’s quality and quantity even during value chain’s transit phases.
Improved decision is another possible benefit of digitalising dairy supply chain. Order monitoring, stock management, transactions tracking, and growth in sales may all be automated with real-time database and advanced analytics, allowing for better knowledge of clients’ purchasing habits. Stellapps, Mr. MilkMan, as well as Trinetra Wireless are three Indian start-ups among several others that are digitalising the dairy supply chain.
Dairy farmers’ cooperatives and unions have also started focusing on introducing online payments to farmers instead of relying on cash payments. Given that smaller dairy farmers control a big portion of the business in India, the advent of digital payments comes with its own set of obstacles. The most prominent amongst these is the fact that most small dairy farmers do not own a bank account. Co-operatives like the Gujarat Co-operative Milk Marketing Federation (GCMMF), popularly also referred to as ‘Amul,’ are, however, supporting them in opening bank accounts and transferring money to them promptly. Fino Payments Bank has also partnered with Gokul Dairy as well as Mother Dairy, since 2017, to digitalise payments in the dairy industry.
Alongside depositing money into farmer bank accounts, when it comes to digitising payments, given that smaller dairy farmers control the majority of the Indian dairy business, there is an urgent need to also develop methods to supply farmers with low-cost finance and insurance solutions.
In the past few years, the Indian dairy industry has received a tremendous boost through technology-driven products, services and solutions, the credit for which deservingly goes to agricultural and dairy startups.
Some of the technologies are already in practice in India, albeit the adoption is still quite low while many others are yet to penetrate the industry. Nevertheless, there is no doubt that technology is playing a key role in modernising the Indian dairy industry. Let’s take a look at some key new-age dairy technologies:
Health Tracking Devices for Cattle
Health disorders reduce the productivity, longevity and reproductivity of cattle. Every year, farmers cough up huge amounts of money on their cattle’s health and wellness. However, thanks to wearable animal gadgets which are akin to human fitness trackers, farmers can track, monitor and manage cattle’s health, nutrition, behaviour, pregnancy, milking frequency, milk production anomaly and activity level in real-time. These smart animal trackers can be implanted in the cattle’s ears, tail, legs, neck or any part of the body.
Last year, Karnataka government had implanted GPS-enabled digital chips in the ears of 56 lakh animals across the state to track their health and early diagnosis of medical condition. Some of the companies that have developed smart cattle health tracking devices are SmaXtec, Cowlar, Moocall, Smartbow, Stellapps, etc.
Robotic Milking Machines
Traditionally, cows have always been milked manually by hands. This is not only a time-consuming activity but also has labour cost associated with, thereby increasing the price of milk. Robotic milking machines are enabling farmers to eliminate the pressure on physical labour, maintain a hygienic milking process, milk the cows anytime of the day instead of following a fixed schedule and improve the milk production.
The robotic milking machines have arms or cups with sensors that can be attached individually to cows’ teats. The sensors can detect whether the cow or which of its teat is ready for milking or not. Once the milking starts, the machines can also identify impurities, colour and quality of milk. If the milk is not fit for human consumption, it is diverted to a separate container. The machines can also automatically clean and sanitize the teats once the task is over.
Raghava Gowda from India has developed a low-cost, non-electric milking machine for cows. Some other startups which have introduced automated milking systems are miRobot, GEA, DeLaval, Fullwood Packo and Lely among many others.
Cattle Monitoring Drones
Farmers are required to keep a manual vigilance whenever the livestock moves out of the farm for grazing. There are high chances of the cattle getting lost, stolen or being attacked by other animals. The cattle monitoring drones can keep track of the cattle and herd them back from fields to barns. Some drones are equipped with thermal sensing technology, which helps to track the cattle from the heat of their bodies. Drones can also capture the pictures of pasture areas and relay information as to whether these are suitable for cattle grazing.
A number of companies such as TRITHI Robotics, Dronitech, Sagar Defence Engineering, DJI Enterprise and Sunbirds have made headway in building commercial drones for various purposes, including for agriculture and livestock management.
Product Traceability for Customers Through Blockchain
These days, customers like to know the journey of their dairy products from farm to table. This calls for end-to-end supply chain transparency to enhance the trust of customers. An increasing number of dairy manufacturers, suppliers and other stakeholders are leveraging blockchain technology to give real-time data about their products to customers. This is done by putting a QR code on the packaging which customers can scan on their mobile devices to get information on the origin of the milk – how and where it was collected and packed, how old it is, what kind of transportation and cold milk chain facilities were used, etc.
The Kerala government in India is leveraging blockchain technology to streamline purchase and distribution of milk, fish and vegetable in the state. The international food giant Nestle has tied-up with Australian startup OpenSC to deploy blockchain technology in to improve its dairy supply chain. French supermarket Carrefour sells its micro-filtered full-fat milk in bottles with a QR code.
Some of the startups operating in food biotech are StaTwig, Ripe, AgriLedger, TE-Food and Foodcoin.
Milk Freshness
Milk is a highly perishable product. In spite of treating it with pasteurization, freezing and preservation processes, it has a tendency to go stale. Millions of tons of milk turns stale before timely consumption and goes waste. Efforts are also being consistently made to increase the shelf life of milk without adding additives or preservatives.
Technology is now making it possible to detect the freshness of milk and store it for a longer period of time. Australia-based food technology company Naturo has developed a technology that can keep natural milk fresh in the refrigerator for at least 60 days without using any additives or preservatives. US scientists have pioneered a new pasteurization technique which increases shelf life of fresh milk from 13 days to 40 days without changing its taste or nutritional value. Back home in India, IIT Guwahati scientists have developed a smartphone-app aided paper sensor kit that can test the freshness of milk and inform how well it has been pasteurized. This kit can come quite handy in large kitchens, milk collection centres and milk bars.
Automated CattleTraffic Management
It can be an extremely tedious task to manage and move cattle to milking stalls and back to barns. There is also a risk of injuries to the cattle. Automated cattle traffic management system has computer-controlled gates which opens and closes electronically. These gates can sort the livestock on the basis of their readiness to milk. The livestock ready to be milked is moved to the milking area while the others are either put in the waiting area or returned to the barns.
Companies like Delmer, Bump Gates, Fullwood Packo and Lely are known for their automatic cattle traffic systems.
Feed Management
The feed requirement of cattle depends on their health and weather. For example, a sick or pregnant cow may need more nutrition. Hot and humid weather means that cattle need more glucose in their feed.There are a number of feed technologies that produce formulated feed additives, supplements, premixes and base mixes to maintain optimal milk production throughout the year. For example, the National Dairy Development Board (NDDB) has developed bypass protein technology to produce specially treated protein supplements that can be fed to cattle to increase milk yield and quality.
Then, there are also digital feed monitoring solutions which can help farmers detect the quality of feed, manage feed inventory and understand cattle’s feeding pattern. In fact, feed monitoring solution can help design customized diet for each cow based on the assessment of their body weight, milk quality and yield, and thereby improve fertility and productivity per cow.
Some of the companies providing feed management solutions are Godrej Agrovat, DeLaval, Dairy Margin Tracker, etc.
Ecommerce Marketplaces
Several online B2B marketplaces such as AgroStar and Gold Farm have been launched in India to make modern equipment and advisory services available at the doorstep to farmers and dairy manufacturers on their smartphones. Many B2C platforms such as FreshVnF, WayCool and FarmLink have also emerged at a rapid pace – they pick fresh produce from farms and deliver them at the doorstep of retail customers, hotels, restaurants and cafes.
Supply Chain Technology
The Indian dairy industry supply chain is quite complex owing to its dependency on a number of factors such as storage temperature, cold chains availability, weather, perishability/shelf life, first and last-mile distance, packaging, etc. The fact that the Indian dairy industry is unorganized and fragmented also adds to the supply chain woes. However, a number of technological innovations are taking place in the dairy supply chain in India.
Take, for example, India-based supply chain startups such as Stellapps, MilkManApps and Trinetra Wireless.
Under supply chain, cold chain technology is expected to progress by leaps and bounds. The coming years will witness the rise of energy-efficient and cost-effective cold chain warehouses, cold boxes, Phase Changing Material (PCM) pads, temperature-controlled cold chain packing, refrigerated vehicles, cold chain pallet shippers, and other advanced cooling technologies. Tessol and Warehouse-India startups are making their mark in cold chain infrastructure in India.
Farm Management Technology
From accounting, finance and labour management to livestock and supply chain management, a dairy farm has to ensure that all its operations run seamlessly. Farm management software can help automate and digitize end-to-end production and operations activities. It can give a holistic view of all farm activities, manage records, generate reports and detect inefficiencies.
Stellapps, Milc Group, My Dairy Dashboard and Nedap are some of the smart farm management solutions that exist currently.
Biotechnology
Biotechnology is a relatively emerging field in the dairy industry. However, it is being touted as one of the most disrupting dairy technology of the future. The potential of dairy biotechnology lies in the areas such as increasing disease resistance in livestock, scientific feeding of cows, embryo transmit technology, artificial insemination, development of new molecules and vaccines for prevention and disease management of animals, dairy enzymes/proteins/probiotics, food-grade bio-preservatives, etc.
Some of examples of dairy biotechnology products that have made headlines are animal-free ice cream by Perfect Day, livestock disease diagnostic tools by Advanced Animal Diagnostics, bovine genetics breeding by Genus ABS India, etc.
The above list of technologies is inclusive but not exhaustive. Currently, most dairy technologies face adoption barriers in India because a large percentage of the Indian dairy industry still comprises of small-scale and unorganised players who lack financial means, accessibility and expertise to deploy the technology. The good news is that dairy technological revolution has already begun in India, and it’s only a matter of time that these technologies become common.
Digital identity
Cattle in a lot of countries, including EU countries, the UK and the US, have “cattle passports,” which authorities use to track infectious disease outbreaks, ensure the effective rollout of government schemes, and make insurance claims. In practice, this means that many cattle are identified by tags punched into their ears. Not only are these tags painful for the animals, but are unreliable as well. In some developing countries, including India, farmers cut the cattle’s ears to commit identity fraud and make fraudulent insurance claims.
Cattle facial recognition, which is also called the Aadhar of cattle in India, is the perfect solution for this cattle identity problem. It is also a technically validated solution, thanks to the recent advancements in machine vision.
MoooFarm, an AgriTech start-up with the mission statement “to make farmers prosperous,” is working to produce the technology at scale and work with the government to build a robust cattle identity mechanism. This technology can become the foundation of multiple auxiliary services like cattle insurance, cattle loans and government subsidies. Other companies including Cainthus, Techvantage’s Moo-ID, and Stellapps, are also working to roll out a market-ready version of this product.
These solutions can also improve the relationship between farmers and insurance companies. A meagre 9% penetration in the cattle insurance market points towards the fact that there is a huge amount of mistrust between the farmers and the insurance companies due to the high amount of identity fraud. Automated detection and inspection mechanism can thus help create more trust between farmers and insurance companies.
Health monitoring
Cattle health is the most important aspect of any dairy business, considering that it is directly connected with the milk output. Diseases like sub-clinical mastitis, one of the more common diseases in the dairy industry, cost the Indian dairy industry $1 billion annually.
Currently, the cattle-health-monitoring industry is dependent upon IoT devices to collect real-time data of cattle including their walking patterns, rumination patterns and temperature changes. The IoT device that is most popular in the dairy industry is the collar, which goes around the neck of the cattle and transmits large amounts of data every second. This data can be further used to detect cattle heat symptoms, subclinical diseases, among others.
At MoooFarm, we are approaching this problem in a different way. We are working with Microsoft to create a product that uses machine vision to detect whether the cattle has subclinical mastitis using the images of its udder. The algorithm detects the change in markings or discoloration in the udder among many more features to make the prediction. We are also working on a project that involves measuring the Body Conditioning Score (BCS) just by using images of the cattle from three different angles.
Cattle trading
Cattle trading is another area that is currently highly unorganized and has a huge scope of improvement. The price of cattle is currently being decided on the basis of negotiations between the buyers and the sellers.
If we can get the history of a cattle, including information about milk productivity, age, health records, sire and dam, we can create a live price exchange of the cattle using machine learning models wherein cattle price will be displayed like stocks in an exchange, and buyers and sellers interact through a transparent platform.
Financial inclusion
Financial inclusion of India’s rural population, or banking the unbanked, has been a big challenge despite several efforts from government policies like Pradhan Mantri Jan Dhan Yojana, which have increased the banked population from 35% to 80% overall. Still, around 72% of the transactions in India happen via cash.
When we talk about rural India, the numbers are even worse, and the dairy sector in the country is highly fragmented, with the organized segment accounting for approximately 20% of the market. With no digital financial footprints, many farmers, who are in dire need of credit, are unable to avail credit from formal sources. Informal sources of credit sometimes worsen the condition of the farmer because of high-interest rates and inhumane methods of recollection.
AI can help solve this problem by using indirect ways of calculating the creditworthiness scores of farmers and giving out loans to them on the basis of those scores. Multiple companies in the industry are using unconventional data like psychometric questionnaires, social media and network connections, phone/app usage, SMS, phone calls, and similar datasets to calculate how creditworthy farmers are and extend loans to them. (At MoooFarm, we are working on a product called MoooInclusive which is a bundle containing credit and Insurance products.)
Overcoming roadblocks
There are three major challenges to achieving the AI vision of India’s dairy sector.
First, one of the biggest roadblock to these innovations is lack of dataset availability. There are no standardized datasets that can be used to develop AI solutions like health monitoring, financial products, and cattle trading marketplace.
For these solutions to exist, the government and private organizations must work together to create a dairy data stack. The government can contribute by providing farmer-specific livestock profiling data, cattle genetics data, and milk yield data (from cooperatives). Private organizations can contribute with financial history datasets, cheap IoT devices for smallholder farmers, and up-to-date technology resources.
Second, most government policies and initiatives are implemented in the crop agriculture sector, not the dairy sector. Since the government sees dairy as the secondary source of income for the farmers, new policies are first deployed in the crop agriculture sector and then transitioned to dairy. For example, the PKCC (Pashu Kisan Credit Card for animal husbandry and dairy) was launched 20 years after the KCC (Kisan Credit Card for crop agriculture), and the National Digital Agriculture Blueprint agri-stack scheme, a database for farmers, did not include open-source dairy data in the first phase of its launch.
Third, it can be difficult to extend high-end technology solutions to the rural population. For AI to disrupt India’s dairy industry and help farmers, governments must create ecosystems that enable innovators to improve the lives and incomes of smallholder farmers. The best way forward is to build multi-stakeholder partnerships that can tap into these opportunities and collectively create the pathway to an AI-enabled dairy market in India.
How technology is changing the dairy industry?
Nowadays, farmers no longer spend hours hand milking each cow one by one, thanks to the advent of the relevant technology, which has drastically changed the functioning of Indian farms and dairies. Over the last few decades, such advancements in technology have allowed dairy farmers to improve the everyday quality of life of their herds as well.
According to the Ministry of Food Processing Industries, the capacity created by private dairies in the last 20 years is more than the capacity set up by the cooperatives in over 30 years. It’s all because of the advanced high-tech setups in private farms. Which indicates that development is proportionate to tech-adoption.
Director at Mr Milk by Mittal Happy Cows Dairy Farm, Neeraj Mittal says that technology adoption is imperative for them to improve their operations,
“The use of technology has definitely helped us grow faster. Technology has also reduced our dependency on manual labour and especially during the pandemic, technology has helped in making sure our delivery process has been smooth,” he asserts.
Neeraj Mittal, Director at Mr Milk by Mittal Happy Cows Dairy Farm,
Mittal’s farm in Maharashtra is fully equipped by Swedish tech brand DeLaval, who have planned and installed the technology at the farm for them. While their software partner is Indian dairy-tech startup Mr. Milkman. “Technology has been a great helping hand to the dairy industry and at the Mittal Dairy Farm,” he says as he feels that it was all because of the automated processes in the farm, that they and other farms like them could keep going during the pandemic.
Citing the example of his own farm as it is entirely automated, he tells us about the processes where dairy farms are leveraging technology, “We use an automated milking system through which the milk is directly stored in the milk parlour at a certain temperature and directly packed into milk cartons that are recyclable and eco-friendly. We maintain the delivery process through our software; hence we can assure our customers of the timely delivery of our products. Also, our app is extremely user friendly. Our customers can place their orders and pay directly on the app,” he clarifies.
Similarly, a leading private dairy label, Hatsun Agro, which already has 18 processing units, has recently set up a 19th fully automated dairy processing plant in Solapur (Greenfield Dairy) with imported equipment from Germany. According to an official, the plant will process 6 lakh litres of milk per day (LLPD).
Additionally, the setting up of this plant will help onboard dairy farmers to the mainstream network and will boost the income of over 75,000 to 90,000 dairy farmers in Maharashtra.
Having said that, it’s not only the co-operatives, private or large farms that are getting tech-savvy, but small dairy farmers too are now utilizing modern dairy processes.
A small dairy farm owner, M. Sharma who has over 30 cows of a native breed in Greater Noida, says, “The technologies have the potential to change the way we manage cows.”
Sharma has been milking his herd using a herringbone milk parlour, which not only saves time but also saves manpower, money, and allows them to monitor the freshness of the milk. Sharma feels that since its inception, his business has grown significantly, and he is now supplying and delivering unadulterated A2 milk and milk products to at least 50 + customers.
“I believe that technology is present in all aspects of dairy operations. From feeding to milking to herd tracking. Today’s technological solutions are more advanced, allowing us to better manage our farms and animals. As a result, disease losses are reduced, longevity is increased, and animal well-being is improved,” he adds.
In another instance, Akash Patil, the owner of Motake dairy farm in Maharashtra, uses technology to monitor his cow herd’s health. According to him, using technology-based tags eliminated the need for labour, manual intervention, and guesswork in determining the heat and health status of an individual cow or a group, which has only increased the value of his revenues.
This suggests that technological interventions in dairy operations are not only making their lives easier but also increasing the farmer’s incomes, which is the government’s ultimate goal by 2022.
Technology has opened more avenues
Experts also agree on the fact that it was mainly due to technological interventions that the sector was barely impacted by the pandemic. In fact, it turned the crisis into an opportunity in many ways—there was more SMP production, it aided the formalization of the dairy sector, and the players went online.
According to FAO data, India’s milk output reached 195 million tonnes in 2020, up 2.0 per cent from 2019, underpinned by the continued rise in dairy cattle numbers and improved feed and fodder availability due to favourable monsoon rains (June to September).
When consumption and sales of dairy items were witnessing a dent, the cooperative model and private companies in India went out of their way to protect the milk producers.
They kept procuring milk resulting in surplus supply and channelled it to drying plants for the manufacturing of skimmed milk powder. Which actually is a whole new gamut of technological processes (pasteurizing, heat treatments, drying and more) and can be considered as a different industry within the dairy sector. We can, however, say that the fast mobilisation of the village cooperatives’ network facilitated milk output growth.
In what seems like a record production of skimmed milk powder, India doubled its production in just one and a half month during the lockdown. The figures of NDDB reveal that on March 15, the stock of milk powder was 70,000 metric tonnes.
On the flip side, due to going online and relying heavily on technology in the dairy business, the unorganised dairy segment was greatly diminished.
“There was a clear and rapid shift in milk collection from the informal to the formal channel at the farm level immediately after the lockdown, with farmers delivering more milk in the organised collection centres of private companies and cooperatives. The informal milk market disappeared almost completely from April to June 2020, and it is attempting to recapture its market share. However, even before COVID-19, there was a movement towards organised milk markets that became more pronounced during the pandemic,”
says Shiva Mudgil, Research Analyst at Rabobank, on the emerging trends in the Indian dairy sector.
The dairy industry adopted and shifted to various new methods and processes, including major technological interventions, in response to the changing trends thrown up by the pandemic.
To summarise, consumers’ emphasis on quality, safety, and hygiene prompted farms to implement technological solutions to cater to their customers who work from home. These changes were implemented from the shop floor to the management level, and included the adoption of online payment, e-commerce, and e-logistics solutions.
Meanwhile, many companies have established new business channels and partnered with retail and online delivery start-ups such as Bigbasket, Milkbasket, Supr Daily, and others. Dairy companies, in fact, are attempting to increase their engagement with QSR chains that have highly developed online and take-away business models. Take, for example, Domino’s India.
Another emerging trend is that of sustainability, in which stakeholders are working together. Farm owners are now making continuous efforts to implement sustainable processes in their operations, whether it is in chilling the milk, packaging it, or reducing spoilage. This is pushing farms to partner with innovative start-ups.
“Technology will play a crucial role in augmenting sustainability by way of data collection, analysis, and adoption of tools than can leverage the chain’s maximum benefits, starting with the dairy farmers. Stellapps, Promethean Power, and Inficold are some of the companies working on this concept,” states Mudgil in the Rabobank analysis.
Why dairy needs technology?
Meanwhile, it’s important to note that unlike in the West, India’s dairy industry is highly unorganised. Which means that about 60 per cent surplus milk is handled by the unorganised sector (milkmen), while the remaining 40 per cent is procured by the organised sector comprising of dairy co-operatives and private companies. In developed countries, about 90 per cent surplus milk is handled through the organised sector.
According to the experts in the field, due to the highly unorganised nature of the sector, technological advancements have been minimal. In fact, a lack of technological adoption has created a slew of other issues for the sector.
Some of these challenges are—high wastage and inconsistent quality and quantity of milk for many small farmers.
According to Chambers of Commerce and Industry of India (Assocham) and MRSS estimates, about 3 per cent of the milk produced gets wasted annually.
The volume of the wastage, coupled with the increased demand for dairy products, may hamper India’s plan to produce about 300 million tonnes of milk by 2024.
In addition, the average milk yield of cows in India is lower than that of their American counterparts—1,248 kgs of milk per cow in a year compared with ~10,000 kgs of milk per year. Indian dairy farmers must increase production and focus on reducing wastage to meet their targets.
“The Indian dairy industry is mainly based on the collection module as farmers are unable to manage a bigger herd. People are now preferring single sourced milk to make sure of its hygiene and quality. With the right kind of technology, small scale dairy platforms can grow their farms and assure customers about the purity of their milk,” says Mittal of Mr. Milk. According to him this will aid the sector in mitigating the wastage of milk.
At the same time, even if India is the largest milk producing nation, because of its large cattle population, it doesn’t have high milk productivity.
“One of the bottlenecks hindering the growth of milk productivity is the lack of a technology-based system of production in rural areas,”
opines Pravin Kini, Founder & MD, Tropical Animal Genetics.
According to him, 80 per cent of Indian cattle are owned by farmers with a herd size of up to four animals with little automation and infrastructure. Moreover, the poor genetics of the herd also leads to low milk productivity.
Parallel to this, the appetite and demand for dairy products is on the rise too.
According to the National Dairy Development Board (NDDB), the demand for milk and milk products will surge up to 266.5 million metric tonnes by 2030.
This is owing to the growing urban population, an expanding middle class with a high disposable income, and consumers seeking out healthy food options. The advent of COVID-19 has also triggered a change in the consumption pattern of dairy products including curd, paneer, ghee and other cheese variants.
However, the supply side is not yet equal to this challenge of fulfilling this ever-growing demand.
According to Kini, the demand for milk is growing at 6 per cent annually in India but supply is growing at only 4 per cent. “To meet the increasing demand for milk and ensure that India is self-dependent about milk production, there needs to be more productivity. Hence there is a need for a second white revolution. The gap between this supply and demand can be addressed by adopting innovative dairy farming practices,” he opines.
Also, most of India’s dairy presence remains in rural areas which lack a continuous and reliable power supply. Here, milk chilling is one of the major hurdles for farmers.
According to experts such as Shridhar Mehta, Director at Prompt Equipments, an Ahmedabad based dairy tech firm, “I fathom that the majority of milk collection centres also do not have cooling infrastructure such as chilling centres, cold chains, or bulk milk coolers. Which can be a huge challenge for them. Whereas solutions to instantly chill milk are available, we just need more efforts for their higher adoption.”
But on the other side, it also presents a huge opportunity for the dairy segment, according to Mehta.
As per the projections of the government’s National Action Plan, there is a requirement of 8,80,000 rapid milk chillers in India, and this translates into a $3 billion opportunity.
Another challenge for India is to enhance its export share in the global market.
Currently, India’s exports share in the world is meagre—0.36 per cent.
The goal is to take this share up to 10 per cent. Another aim is to double the processing capacity from 53.5 million metric tonnes (MMT) to 108 MMT by 2025. The government, in its roadmap for 2025 for the dairy sector also aims to increase value added products from 23 per cent to 40 per cent.
India’s export of dairy products to the world was 51,421.85 MT, worth Rs. 1,341.03 crores or US$ 186.71 million during the year 2019-20.
Adulteration is yet another very prominent issue for the milk sector.
Milk is tainted either intentionally or accidently during the production and processing of milk. Milk adulteration is primarily an economic act used to generate extra income. However, the primary reasons for adulteration are the demand and supply gap, the inability to meet urban demand, a lack of milk purchasing capability, the lack of a systematic approach to milk production, and the desire to extend the shelf life of milk.
There have been numerous reports of milk adulteration in the past and the government is now taking care of such issues.
However, the stakeholders are unanimous in their belief that technology solutions can assist in mitigating all of the dairy industry’s challenges. While digitalisation will play a crucial role in making the transformation possible.
Tech interventions are imperative
Digitalisation will have a profound impact on the ‘milk production’ segment in the value chain. In India, dairy farming is unorganised, so technology penetration is relatively less; however, in the last five years, numerous start-ups have mushroomed in this space. These firms aim to increase farmer productivity and reduce wastage.
One of the key areas where digitalisation can have a significant impact is cattle management. Farmers can track cattle feeding patterns and monitor their health by leveraging IoT and advanced analytics. This is likely to boost cattle productivity and milk yield. However, cattle monitoring via AI-based solutions is still in its infancy in India, with only a few companies providing this service.
Prompt Equipments is a pioneer in this field. Over the last 27 years, the company has launched a number of innovative products and solutions that ensure transparency and quality in the milk supply chain. Some of their products include, iSmart milk analyser, milk procurement software, a collection system, chilling solutions, Farm365 management apps etc.
Mehta says, “From the cow to the consumer, milk travels a long way. Prompt’s innovative products and solutions cover the entire spectrum from farm management solutions, milk collection systems and milk testing equipment to ensure that the quality and purity of the milk is retained at every step of its journey.”
Last year, they tied up with IIT Mumbai, to invent a wearable belt ‘BovSmart’. The belt utilises AI and the IoT to monitor cattle breeding and send timely alerts to farmers.
“It’s an animal wearable, which is a comfortable, non-invasive, IoT solution designed for the timely detection of the onset of the cow’s heat cycle. Developed with a specialised algorithm, it is designed to give actionable alerts which ensures timely breeding with a high success rate. The software leads to improved farm productivity and better animal health,” says Shridhar Mehta, Director, Prompt.
Mehta further adds, “Our efforts are focused on combining business intelligence and digital innovation to elevate the global standing of the Indian dairy industry. Dairy farmers are the focal point of our innovations, and we are proud of the fact that we have been able to make a difference in the lives of lakhs of farmers over the last 27 years.”
Stellapps Technologies, another dairytech company, digitalizes and enables supply chain traceability for dairy companies. Their solution, mooOn, is similar to Prompt’s in that it helps to maximize cattle productivity and herd management via a wearable device and app. Through the IoT and sensor based SmartMoo cloud, they have digitised cattle health, milk production, milk procurement, milk testing, and cold chain management.
Stellapps launched MooPay, a direct payment platform for dairy processors and cooperatives, last year. This service makes use of the entire Stellapps product and service portfolio to facilitate instant payment into dairy farmers’ existing bank accounts and assists them in receiving their actual payments without delay. In a recent development, a Bangalore based start-up has signed an agreement with India Post Payments Bank (IPPB) to digitise the dairy milk procurement value chain and promote banking facilities at milk collection centres.
Another start-up in the field is Bodhishop, which is trying to solve the problems of adulteration as well as other issues.
Rajas Paranjpe, its founder says, “Everyone speaks about the adulteration of milk, but nobody is interested to know why this adulteration happens. As a start-up, we decided to take up this challenge and jumped in to find out the root cause of adulteration. After thorough research, we identified that the selling price of milk products, traceability and over-dependence on technology (lab testing, reports etc.) are a few of the main reasons for adulteration.”
To solve this issue, Bodhishop started a tech+human process of verification in 2018.
“We started visiting farms periodically, observed the cows, the process of making milk products, packaging and the basic philosophy of the farmer/seller who was selling these products. In addition to requesting periodic lab reports, we came up with strict parameters (no hormone injections, no formalin, etc) that had to be met when it came to any food product. Farmers just have to keep on making the best products without any adulteration,” he continues.
The physical verification of the farm and the process followed is a major service that Bodhishop as an E-commerce platform provides to its customers. Besides that, Bodhishop also assists sellers or farmers in getting their branded products sold, marketed and shipped across the globe.
Paranjpe tells us, “A few of the major challenges that the farmers approach us with are sales, marketing, branding, packaging and logistics since organic and A2 milk products are expensive. Since such products are free from preservatives and chemicals, they also have a short shelf life. Bodhishop provides 100 per cent support for free warehousing, free marketing, free packaging training and shipping to Gaushalas.”
The start-up offers warehousing facilities to farmers at no extra charge. Once they deliver the products to the warehouse, it takes over from there for the final packaging, selling and logistics.
“We work on getting these products safe for transit and the necessary export compliances at no extra charge. This way, the farmers can continue to focus on production while we get them sales through our platform. We have also introduced all our farmers to the latest technology of packaging glass bottles called as Airpack,” Paranjpe informs us.
Currently Bodhishop has 8 gaushalas listed on their website. While they work with 4 more gaushalas for their Export Incubator Programme and Fodder Drive. They have many more plans for the future, “In the coming year, we wish to introduce more indigenous local products from different geographical locations that will be managed by a separate verification and onboarding team. We are also planning to create free training videos with experts that will teach farmers about how to start organic farming and make the highest quality cruelty-free dairy products that are gaining popularity in India and abroad,” he avers.
Development lies in dairy-tech
The dairy sector in India is still unorganised, but dairy farmers are conscious of the implications of digital transformation and the growth through it. Covid-19 has also established a narrative for them.
That is why, the dairy sector holds immense potential to bring the rural economy back on track. High-end technologies can transform the dairy value chain by unlocking access to relevant insights, products and services at the right time to smallholder farmers. Also, quality and traceability solutions can make India an export hub for dairy and data driven decisions in dairy farming could lead to building a smart dairy value chain.
It’s just that the small farmers, whether rural or urban, require more assistance and guidance to become digital.
“India is still catching up with new technologies. However, there has been tremendous growth through technology in the dairy sector, and with modern technology there is definitely more scope for development in the future,” says Mittal.
Even though the adoption of new technology and digitalisation has been slow in the sector, it is gradually permeating the sector, resulting in its growth. With dairytech start-ups entering the space and bridging the gaps in cattle management and the supply chain, the scenario is changing. The future of the Indian dairy sector appears bright, as digitalization is expected to usher in a new era of growth.
Conclusion
The government has facilitated the dairy farming infrastructure through its initiatives such as the development of the National Dairy Plan, a sustainable development-focused framework for the sector, along with general empowerment schemes such as the Jan Dhan Yojana and the Startup India initiative . However, as India’s dairy industry is largely unorganised, its future depends predominantly on the assistance of small dairy producers. The sector has been sluggish to adopt new technologies and digitization, resulting in lesser production. Nevertheless, with start-ups entering the industry and addressing gaps in livestock management and supply chain, the situation is beginning to change, ushering in a new era of growth for the industry, rooted in digitalisation.
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