1. Senior General Manager
RCEP: Impact on Indian Milk Producers
RCEP Business Stakeholders Consultation
Hyderabad
Jayen Mehta
Senior General Manager
GCMMF Ltd. (Amul), Anand
July 2017

2. Points to Ponder Dairy Scenario Dairy : RCEP V/s India The Road Ahead
Global V/s India Production
Global V/s India Prices
India Today - Dairy
Dairy and Farmers’ Income
Dairy : RCEP V/s India
Status
ASEAN
Oceania
The Road Ahead

3. Milk Production RCEP 240 MMT World 800 MMT (65% of RCEP)
INDIA
156 MMT
Organized
Dairy
27 MMT
(17% of India)
(65% of RCEP)
(30% of WORLD)
MMT: Million Metric Tons

4. Milk Production: India (MMT)
Operation Flood ( )
Graph not to scale

5. Per Capita Availability India (Gms. Per Day)
World average: 229 gm/day

6. Creating structure - Institution
CAPACITY BUILDING
TOOL
Traditional Wisdom
Professional Support
Nutrition
Income
Employment
Creating structure - Institution
NEED
Owned by farmers
Managed by professionals

7. 212 District Unions in India 18 District Unions in Gujarat
Amul Model
28 State Fedns. in India
SALES REVENUE
SALES REVENUE
GCMMF in Gujarat
212 District Unions in India
18 District Unions in Gujarat
Addl. Price Diff.
Bonus
Rural Health Schemes
Cattle Feed
Dividend on Shares
Vet. & AH Services
1,70,992 VDCS in India
18,545 VDCS in Gujarat
3.6 million in Gujarat
15.8 million in India

8. All figure in MMT

9. India : Milk Production Projection
: 155.5
MMT

10. Milk Production Outlook 2025
Region
Past
Present
Future
2000
+15 Years
2016
+10 Years
2025
World Milk Production
560
Million MT
240
(43%)
800
180*
(23%)
980
India Milk Production 80 76
(95%)
156
75**
(44%)
* FAO Estimates,
**GCMMF Analysis

11. India: Importance of Agriculture
1.3 Billion
1.2% Gr
Rural: 70%
Urban: 30%
60% of population dependent on Agriculture
18% of GDP from Agriculture (of which 30% from Livestock)

12. Largest bovine population in world : 300 Mn
Largest milk producer in World :
156 MMT per annum (18.5% of the world’s milk production)
CAGR: 4.3% Per annum (last 10 years)
Market Value of Total Milk produced:
US$ 80 billion annually.
<20% milk comes to organized sector 12 12

13. Dairy is a supplementary source of income for >75 million families
Milk is the largest ‘Agricultural Crop’ of India
Dairy is a supplementary source of income for >75 million families 13

14. Cost of Milk production
In terms of Cost of Milk Production, India is competitive as compared to EU & US and is at par with Oceania

15. Global Prices
Major Dairy trade happens in commodity (SMP, WMP, Butter / Butteroil and Cheese)
Dairy commodity prices are much lower than India
Difficult to compete in Commodity market for India
Australia / NZ controls more than 35% of Global Dairy Trade and more than 50% in RCEP area

16. Current Avg International SMP Price in was $2024/ MT (Rs.130/Kg)
SMP - WORLD PRICE ($/MT)
Current Avg International SMP Price in was $2024/ MT (Rs.130/Kg)

17. Current Avg International Price $6577/ MT (Rs. 420/Kg)
Butteroil - WORLD PRICE ($/MT)
Current Avg International Price $6577/ MT (Rs. 420/Kg)
Fonterra Auctions

18. World Farm-gate Prices
Fig in $/100 Lit Milk

19. Indian Farmer’s income from milk increased 2.5 times in last 10 years
in US- $
in Indian Rupee
Per 100kg 4% fat and 3,3% protein
USD/100kg ECM
Source: IFCN Monthly Real Time Data

20. Farmer’s share in consumer price :
Indian Farmer has the highest share of consumer price

21. Milk and farmers
Milk: “Make in Rural India” is the surest bet for doubling farmers’ income by 2022.
Need to ensure that their income from milk is protected
To ensure availability of market for the milk at remunerative prices

22. RCEP Countries

23. Dairy : RCEP V/s India
China – largest dairy importer of the World – does not allow Indian dairy imports
Indonesia does not allow dairy imports from India (FMD affected), MUEI Halal certification required
Malaysia – Restrictive market, Halal inspection, Very limited plants approved
Vietnam, Thailand, Myanmar, Philippines, Cambodia, Laos etc – Cumbersome procedure

24. Dairy : RCEP V/s India Japan – Large importer but High Tariff
Korea – High duty on normal dairy products but Imports blend products with lower duties
Singapore – Large market but very strict Aflatoxin norms

25. RCEP – Milk Scenario 30.5 80% 1375 Negligible 0 % 4 15 0.79 49 % 260
Country
Milk prodn in MMT
% Self Sufficiency
Population Mil
Brunei Darussalam
Negligible
0 % 4
Cambodia 15
Indonesia
0.79
49 %
260
Japan
7.23
77 %
126
Korea
2.18
68 % 50
Laos 7
Malaysia
0.07
8 % 30
Myanmar/Burma 54
Philippines
0.02
1 %
102
Singapore 6
Thailand
1.12
69 % 68
Vietnam
0.53
33 % 94
China
30.5
80%
1375
INDIA
156
101 %
1300

26. India V/s Oceania Population 24 million 4.2 million 1300 million
Item
Australia
New Zealand
India
Population
24 million
4.2 million
1300 million
Milk Production
15 MMT
22 MMT
150 MMT
Agriculture labour
8 lac
(3.6% of pop)
3 lac
(7% of pop)
62 crore
(52% of pop)
Dairy farmers
6,300
12,000
15 crore
GDP
US $ 1.5 trillion
US $ 0.17 trillion
US $ 5 trillion
GDP from Agri
3.7%
4.1%
17.4%
% of dairy product exported
26%
86%
< 0.3%
Export of Dairy products in Milk Equi
4 MMT
19 MMT
< 0.5 MMT
Market share of global dairy trade 5%
25%
Negligible

27. Indian Dairy : Non Tariff Barriers
Australia classify India as FMD affected country and restrict the import of dairy products from India. Amul group has a sturdy system of veterinary services and the cattle are free from FMD but still dairy products are not being allowed in these countries. Australia also has a specific clause of ‘retorting of dairy products’ for issuance of import license to the dairy products excluding cheese.

28. Indian Dairy: Non Tariff Barriers
Indonesia also classify India as FMD affected country and restrict the import of dairy products from India.
China does not allow import of dairy products of Indian origin
NZ requires many veterinary documentation to clear dairy products

29. Indian Dairy : Non Tariff Barriers
Even in a country like Myanmar, Vietnam, Laos, Cambodia, Thailand etc where domestic production of fresh milk is currently underdeveloped, the country imports large volumes to meet this growing demand. The licensing process is too exhaustive requiring certification of each and every SKU to be exported getting samples analyzed and certified from the local FDA.

30. Expectations from our Government
India is the largest producer and consumer of milk in the world.
Milk is the largest Agricultural Crop with promising returns to farmers consistently since last 70 years
India growing at faster pace then global milk production
Food security and Livelihood are two most important issues for India.
However, need a Cautious approach for FTA and any duty concession for Dairy Imports under Chapter 4
Policy support from Government for import protection

31. India Dairy Success Story : Learnings for RCEP Nations
Value-chain control with farmers
Value for money to consumers
Affordable nutrition
Employment with dignity
Role of dairy cooperatives
Maximum percentage of consumer’s rupee to farmers
Sustainable income
Women Empowerment
Technological & Marketing innovations
Remunerative prices to farmers

32. And Finally . . . “We have traversed a path that few have dared to.
We are continuing on a path that still fewer have the courage to follow.
We must pursue a path that even fewer can dream to pursue.
Yet, we must, because we hold trust in the aims and aspirations of millions of our countrymen.”
- Dr. V. Kurien

33. Thank you
*****