Value Addition in Dairy: Driving Rural Economy through Innovation

Dr. M. K. Patil

Associate Professor

College of Veterinary and Animal Sciences, Udgir Dist: Latur-413517, Maharashtra, India

Abstract

In India, the most of dairy farmers own very little land and make very little money. They do dairy farming by allowing their cows/buffaloes to graze or by stall feeding with limited feed and fodder. Because of the poor per animal milk yield, the per litre cost of production is higher. As a result, value addition is crucial to raising their family income from dairy farming. Making various milk products, such as butter, khoa, paneer, lassi, ice cream, butter milk, and dahi, can add value to milk. Their family income will rise as a result, and they will also become more enterprising. Additionally, it will lead to more job prospects in dairy farming. Milk products have a longer shelf life than milk overall because they are prepared from milk, preventing waste. By including some of the nutrients in milk products, milk enrichment can be accomplished. In addition to improving the human health and social and financial status of dairy farmers, these goods will serve as useful and healthful food items.  Preparation of the milk products lead to decrease in per litre milk production cost and increase in margin of profit in dairy farming. Hence, innovations in milk value addition will lead to an increase in dairy farmer income and contribute to increasing India’s GDP.

Keywords: Family income, Milk, Milk products, Social status, Value addition

Introduction

At the moment, India is the world’s top producer of milk and a major exporter of dairy products. During the 2023-24, the total milk production in India was 239.3 MMT with per capita availability of 471 gms/day. Over eight crore farmers in India are directly supported by the dairy business, which makes up 5% of the country’s GDP. India’s leading producing states include Uttar Pradesh, Maharashtra, Himachal Pradesh, Madhya Pradesh, Rajasthan, Punjab, and Tamil Nadu. Additionally, the government has implemented a number of programs to support the growth of the dairy industry in India. These programs include the Rashtriya Gokul Mission, the National Dairy Development Board (NDDB), State Cooperative Dairy Federations, the National Programme for Dairy Development (NPDD), and the Dairy Entrepreneurship Development Scheme (DEDS). In 2024, the Indian dairy market was estimated to be worth INR 18,975 billion. According to IMARC Group’s forecast, the market would grow at a compound annual growth rate (CAGR) of 12.35% from 2025 to 2033, reaching INR 57,001.81 billion. With a market share of more than 18.7% in 2024, Uttar Pradesh dominated the industry.

Furthermore, almost all of India’s dairy products are consumed at home, and most of them are marketed as fluid milk. The dairy sector in India has enormous potential for growth and value addition. To extend the shelf life of perishables, value is added by changing the commodities’ shape, colour, flavour, and other characteristics. By meeting the need at the appropriate moment, a commodity can also gain value. This can entail storing the goods and selling them when demand is strong, or it could entail shipping them to locations where more money can be made. Value addition increases margins and profits. The margins in value-added dairy products can reach up to 34%, while those in liquid milk range from 4 to 5%.

Why value addition for milk is needed?

1. Fast-paced lifestyle:

People are choosing ready-made dairy products that are readily available at the grocery store as their lives get busier and faster. People don’t have much time for everyday tasks like preparing homemade ghee or butter, or even setting curd and lassi.

2. A Healthier Way of Living:

The need for health products has increased due to increased urbanization. Additionally, the demand for health and nutritional items rises as a result of improved awareness of nutrition and health brought about by increases in disposable income and educational attainment. People are choosing healthier diets as they become more health-conscious. Demand for value-added dairy products has increased relative to the raw product, such as liquid milk, because they are a healthier dietary choice.  Products like probiotic drinks, which help with intestinal health and digestive problems, are very popular these days and have a big influence on the expansion of the value-added functional food sector as a whole.

3. Increasing monetary patterns: In recent years, consumers have been more likely to purchase pricey value-added products than liquid milk due to increases in their discretionary income. People are becoming more accustomed to dining out more frequently at cafes and restaurants that use more high-value items like cheese, paneer, and so forth.
4. Decreased Wastein dairy: Milk spoilage and waste are reduced when it is processed into durable products.
5. Market Expansion: Market Expansion: Value addition makes it possible to reach international markets for premium dairy products.
6. Rural Development: Promotes employment creation and local entrepreneurship in remote areas.

Mainly, four different types of milk products are to be prepared for the value addition. These products are as follows,

1. Basic dairy products like Cheese, butter, yogurt and cream etc.
2. Health and functional products like lactose free milk, probiotic and prebiotic infused milk products and fortified milk with vitamins, minerals and omega 3 acids etc.
3. Advanced milk products like ice-cream, milk powder and condensed milk etc.
4. Innovative milk products like flavoured milk, dairy snacks, milk based beverages etc.

From the above categories of the products, the health & functional products demand is increasing day by day due to health awareness among peoples. These products gain more price than any other value added milk products. Hence focus on these products definitely increases income and profit of farmers.

Bioactive chemicals, which are derived from plants and animals, are useful in treating and preventing diseases like cancer, thereby improving society’s safety and health. Food manufacturers, consumers, and scientists all agree that adding bioactives to conventional foods is a good idea. Although milk and dairy products are among the most essential foods we consume on a daily basis and can be a good way to give the body bioactive, there are issues with taking these substances in their original, unprotected, or free form. The qualitative attributes of the related foods may be negatively impacted by their degradation prior to reaching their targeted site in the body and their interaction with milk components. Therefore, a good encapsulation method can help shield these delicate substances from environmental stressors and the processes they go through in food production. This also keeps bioactive from negatively interacting with milk-based substances.

Vitamins A and D are added to milk in very few nations. In certain American dairy companies, milk is supplemented with calcium, vitamins “C,” “A,” and “D.” Beta-carotene is added to various milk byproducts, such butter, to improve their colour. Always calcium, iron (folic acid), vitamins A and D are added in powdered milk. A variety of vitamins, minerals, and other nutrients, including unsaturated fatty acids, are added to special milk-based infant formulas and/or diets as alternatives to breastfeeding. Vitamin C, iron, copper, and zinc are added to Chilean powdered milks used as supplemental nutrition for kids.

The amount of milk consumed, the sensory qualities of the milk (taste, colour, and flavour), and the stability of the nutrients throughout the processing and preservation phases all affect the amount of nutrients supplied to the milk. Vitamins A and D are added to liquid milk, particularly milk-producing cream, at a rate of 5,000 and 500 international units per litre, respectively. All vitamins and minerals that can be added to milk are available in powdered milk, while vitamins that dissolve in fat are available in oil. The process of enriching milk is straightforward. More than one nutrient is typically given to milk, and these nutrients are combined beforehand to create a single, cohesive substance.

The most straightforward method of enriching powdered milk is to mix powdered or dried forms of vitamins and minerals with the milk, even though oily forms of nutrients can also be added. It is possible to enhance dry or powdered milk both before and after heat treatment, unlike liquid milk. Spraying powdered milk on this type of milk is the most convenient approach to improve it. It should be mentioned that different grades of vitamins are subject to oxidation elements, moisture, light, temperature, and humidity.

 Benefits of value addition of milk

Economic benefits:

1. Enhanced farmer income: Dairy farmers directly get profit from the higher prices that value-added products like cheese, yoghurt, and ice cream command as compared to raw milk.
2. Employment creation: In rural areas, the dairy processing sector, which includes value addition, generates a large number employment opportunities.
3. Improving the national economy: The export of value-added dairy products generates foreign exchange and makes a substantial contribution to the national GDP.
4. Increased profit margins: Sales of value-added goods have substantially larger profit margins than those of liquid milk, which encourages additional investment in the sector.

Health benefits:

1. Diversity in nutrition: Value addition makes it possible to produce a large variety of dairy products with varying nutritional profiles to meet a range of dietary requirements.
2. Improved storage and shelf life: Pasteurization and refrigeration are two processing methods that increase the shelf life of milk and dairy products while decreasing waste and increasing accessibility.
3. Increased food safety: Milk and dairy products are safer to consume since processing lowers the danger of food borne infections.
4. Increased intake of nutritious foods: Dairy products with added value are frequently enhanced with vitamins and minerals, giving customers a more nutrient-dense option.

Points to be considered while doing value addition of milk

1. Quality of Raw Milk:

Make sure the milk comes from cows that are healthy and receiving the right care and nutrition, including a balanced diet. To reduce contamination, use proper milking techniques. Regularly check the milk’s quality by noting its content and bacterial count. To keep milk from spoiling, keep it in clean containers and at the proper temperature (below 4°C).

2. Hygiene Procedures:

Keep the entire dairy facility, including the storage spaces and milking equipment, clean. Observe stringent sanitation guidelines for processing, such as washing and sanitizing tools after every use. Maintaining proper personal hygiene is essential for dairy workers in order to avoid contamination.

3. Methods of Processing:

The technique of pasteurization involves boiling milk to kill harmful bacteria while preserving its flavour and nutritional value. Apply pressure to milk to force it through tiny holes and prevent fat separation. If necessary, fortify by adding nutrients like vitamin D. To preserve product quality and shelf life, use suitable packaging and storage techniques.

4. Specifications of Value-Added Products:

    Make sure flavours are suitable for the intended product and safe to add. Make sure the additional items are safe to eat and of excellent quality. To preserve product quality and freshness, use the right packing materials.

5. Distribution and Marketing:

It Include ingredients, nutritional data, and storage guidelines on a clear and accurate label. To assure that goods are maintained at the proper temperature throughout storage and transit, maintain a cold chain. Take into account and let customers know how long the finished product will last.

How value added milk products increases farmer economics?

1. Higher margins of profit:

Higher Prices: Because value-added goods undergo more processing and have more value added, they are more expensive than raw milk.

Increased Market Access: Value-added goods can be offered to more customers, particularly those in cities and overseas markets, which will increase sales.

Decreased Waste: By minimizing milk spoiling and enabling the use of byproducts, value addition lowers waste and boosts overall profitability.

2. New Sources of Income:

Direct Sales: By avoiding middlemen and selling value-added goods directly to customers, farmers can raise their profit margin.

Farm-Based Processing: To generate a range of goods and generate extra income, farmers can invest in small-scale processing facilities on their properties.

Partnerships with Businesses: In order to process milk and produce value-added goods, farmers might work with larger dairy firms or entrepreneurs, splitting the earnings.

3. Reduction of Risk and Diversification:

Decreased Dependency on Prices for Raw Milk: Farmers can be protected against changes in raw milk market prices by using value-added products.

The ability of farmers to provide a variety of products will allow them to satisfy a wide range of consumer tastes and boost sales.

Extended Shelf Life: Steady revenue is ensured and the risk of spoiling is decreased by the longer shelf life of many value-added products compared to raw milk.

4. Sustainability and Empowerment:

By offering women farmers financial prospects and the ability to enhance their standard of living, value addition can empower them. Also, by fostering local enterprise and generating jobs, the dairy industry including value-added products makes a substantial contribution to rural economies. A higher standard of living can be attained by dairy farmers and their families as a result of increased revenue and economic prospects brought about by value addition.

5. Income Diversification and decreased risk:

Making and marketing a range of dairy products makes a company less reliant on a particular market and offers a more reliable source of income. Compared to selling raw milk, which is prone to price swings, value-added products may provide a more steady and predictable revenue source.

Conclusion

Milk sale rates fluctuate, and the input cost in the dairy business is increasing daily. Therefore, farmers do not get sufficient profit from the dairy business by selling only milk. To get more return from the dairy business, value addition in milk by the preparation of milk products is needed. It gives more profit and employment opportunities in rural areas than only producing milk from animals.

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