Key Government Schemes for Dairy Development in India

India is the world’s largest milk producer, contributing nearly 24% of global milk output. Yet, for decades, a large segment of dairy farmers – particularly those in hilly, tribal, and backward regions – remained cut off from fair markets, quality inputs, and modern infrastructure. To bridge this gap, the Government of India has rolled out a series of targeted dairy development schemes through the Department of Animal Husbandry and Dairying (DAHD). These schemes address everything from milk collection infrastructure and clean milk production to genetic improvement of dairy animals and the revival of struggling cooperatives. Understanding these schemes is essential for anyone involved in or studying the dairy sector in India.

Intensive Dairy Development Programme (IDDP): reaching the unreached 🔗

The Intensive Dairy Development Programme (IDDP) was launched in 1993-94 on a 100% grant-in-aid basis with a specific mandate: to extend dairy development to non-Operation Flood, hilly, and backward areas of the country – regions that the earlier wave of dairy growth had largely bypassed.

The IDDP was originally called the Integrated Dairy Development Project and was renamed and modified in March 2005 to reflect its broader, more intensive scope. Its primary goal was to build the entire dairy value chain in underserved areas – from collection and chilling to processing and marketing – so that even the most remote farmer could access commercial dairy markets.

Key objectives of IDDP 🔗

The scheme aimed to achieve several interconnected outcomes. According to the Open Government Data Platform of India, these included:

• Developing milch cattle and increasing milk production through technical inputs
• Creating milk procurement, processing, and marketing infrastructure in a cost-effective manner
• Strengthening dairy cooperative societies at the village level to ensure remunerative prices for farmers
• Generating additional employment and improving the social, nutritional, and economic status of residents in disadvantaged areas

Funds under IDDP were released directly to the implementing agencies – State Dairy Federations and District Milk Unions – ensuring local-level accountability. The programme was continued into the 11th Five Year Plan with a total outlay of Rs. 275 crore, by which point it was merged with the Clean Milk Production scheme for more integrated delivery.

Strengthening Infrastructure for Quality and Clean Milk Production (SIQ-CMP) 🔗

One of the persistent challenges in India’s dairy sector has been ensuring that milk reaching consumers is safe, hygienic, and of consistent quality. The Strengthening Infrastructure for Quality & Clean Milk Production (SIQ-CMP) scheme was introduced to directly tackle this problem at the farm and cooperative level.

The scheme’s objectives, as outlined by the Ministry of Cooperation, were to create and strengthen infrastructure for quality milk production, including cold chain infrastructure linking the farmer to the consumer; to train dairy farmers in clean milk production practices; to raise awareness about quality standards; and to support research and development on quality milk and milk products.

In practical terms, this meant funding the installation of milk testing laboratories, bulk milk coolers, and hygienic milking equipment at primary cooperative societies. It also meant training programs for farmers on udder hygiene, proper milking techniques, and safe storage. These may seem like basic steps, but they have a direct impact on reducing bacterial counts in raw milk and improving its shelf life and safety – factors that determine whether Indian dairy products can compete in both domestic premium markets and export markets.

The SIQ-CMP scheme was eventually merged with IDDP, Assistance to Cooperatives, and NPCBB into the National Programme for Bovine Breeding and Dairy Development (NPBB&DD) in 2014, which consolidated dairy development efforts under a single umbrella with a budget provision of Rs. 1,800 crore for the 12th Five Year Plan.

Assistance to cooperatives: reviving struggling milk unions 🔗

Dairy cooperatives have been the backbone of India’s white revolution. But not all cooperatives have been financially healthy. Many district milk unions and state dairy federations have faced significant losses due to factors like poor management, outdated infrastructure, inadequate milk procurement volumes, and volatile market conditions.

The Assistance to Cooperatives (A to C) scheme was designed specifically to rehabilitate such potentially viable but loss-making cooperatives. Under this scheme, as confirmed by the Press Information Bureau of India, a central grant of up to 50% of the rehabilitation project cost was provided, subject to a maximum ceiling of Rs. 5 crore per cooperative. This financial lifeline allowed struggling milk unions to modernise equipment, clear operational backlogs, and restore their capacity to provide steady market access to member farmers.

Beyond financial rescue, the scheme also emphasized institutional strengthening – improving governance, management practices, and financial discipline within cooperatives. Without capable and solvent cooperatives at the district and state level, the entire chain of farmer payment, quality control, and market access breaks down. This scheme recognised that cooperative health is not just an economic issue – it is a social one, since millions of rural families depend on cooperatives to receive timely payment for their milk.

National Project for Cattle and Buffalo Breeding (NPCBB): improving genetics at the root 🔗

Infrastructure and cooperatives can move milk efficiently, but the quantity and quality of milk a farmer produces ultimately depends on the animal. This is where the National Project for Cattle and Buffalo Breeding (NPCBB) plays a foundational role.

The NPCBB was initiated by the Government of India in October 2000 for a period of ten years, implemented in two phases, with an allocation of Rs. 402 crore for Phase I and Rs. 775.87 crore for Phase II. The project operated on 100% grant-in-aid to State Implementing Agencies, recognising that genetic improvement is a long-term, public-good investment that farmers cannot bear alone.

Core objectives of NPCBB 🔗

According to the DAHD’s programme documentation, NPCBB aimed to:

• Deliver improved Artificial Insemination (AI) services at the farmer’s doorstep, removing the need for farmers to travel long distances for breeding inputs
• Bring all breedable cattle and buffalo females under organised breeding – through AI or natural service using high-quality bulls – within a ten-year period
• Undertake breed improvement programmes for indigenous cattle and buffalo breeds to enhance both their genetic quality and their availability
• Conserve and develop important indigenous breeds such as Sahiwal, Gir, Deoni, Hallikar, Jaffarabadi, and Murrah, preventing their deterioration or extinction

A critical operational element of NPCBB was streamlining the supply of liquid nitrogen – essential for storing frozen semen used in AI – by sourcing it from industrial manufacturers and setting up bulk transport and storage systems. This resolved one of the most persistent logistical bottlenecks in field-level AI services across India.

Focus on indigenous breeds 🔗

NPCBB gave special attention to the conservation of native bovine breeds, recognising that indiscriminate crossbreeding with exotic breeds like Holstein Friesian, while boosting short-term yields, poses long-term risks to breed diversity. Breed conservation policies aligned with NPCBB encouraged the formation of breeders’ associations for native breeds and the establishment of gene banks using both in-situ and ex-situ methods. Indigenous breeds like Sahiwal and Gir are not only well adapted to Indian climatic conditions but also produce A2 milk, which is increasingly valued by health-conscious consumers.

Convergence into the NPBB&DD: a unified approach 🔗

In 2014, the Government took a significant policy step by merging the four schemes discussed above – IDDP, SIQ-CMP, Assistance to Cooperatives, and NPCBB – into a single restructured programme: the National Programme for Bovine Breeding and Dairy Development (NPBB&DD). This umbrella scheme has two components: the National Programme for Bovine Breeding (NPBB) focused on genetics and AI services, and the National Programme for Dairy Development (NPDD) focused on infrastructure, procurement, processing, and marketing.

This convergence made practical sense. Genetic improvements from NPCBB deliver better results when combined with strong milk collection infrastructure. Clean milk standards are more achievable when cooperatives are financially viable and well-managed. By integrating these objectives under a single administrative framework with a budget of Rs. 1,800 crore for the 12th Plan, the government aimed to eliminate silos, reduce duplication, and ensure that dairy development addresses the full value chain simultaneously.

The NPDD component, now implemented through State Implementing Agencies and the National Dairy Development Board (NDDB), focuses specifically on creating cold chain linkages from farmer to consumer, strengthening village-level producer institutions, and building training infrastructure for dairy farmers. More recently, Component B of NPDD has brought in JICA funding (Japan International Cooperation Agency) for dairying through cooperatives in states like Uttar Pradesh, Bihar, Punjab, and Rajasthan, adding an international dimension to India’s dairy development strategy.

What these schemes mean for India’s dairy farmers 🔗

Taken together, these schemes reflect a comprehensive, state-supported strategy to make dairying economically viable for India’s smallholder farmers – who own the vast majority of the country’s 300+ million cattle and buffalo. Each scheme targets a specific weak link in the dairy value chain: access to markets (IDDP), milk hygiene and quality (SIQ-CMP), cooperative viability (A to C), and animal productivity (NPCBB).

The schemes also recognise regional diversity. Financial assistance patterns differ between NDP states and non-NDP states, and between hilly versus plain regions, so that support remains relevant to local conditions. The NPDD’s outreach has extended to strengthening dairy cooperative societies and producer companies at the village level, ensuring that development benefits reach the grassroots rather than remaining concentrated at the federation level.

It is worth noting that IDDP, SIQ-CMP, and Assistance to Cooperatives were officially discontinued from April 2017, with their functions absorbed by the NPDD and other successor schemes. This evolution reflects how government policy in dairying continues to adapt – scaling what works, merging what overlaps, and introducing new instruments like the Dairy Processing and Infrastructure Development Fund (DIDF), which provides subsidised loans to modernise milk processing plants and create new value-added product facilities.

What do you think? Given that India’s dairy sector is largely driven by smallholder farmers with 1-3 animals, do you think government schemes that work through cooperatives and state federations are the most effective way to reach them – or are there structural gaps that need a different approach? And with increasing consumer demand for quality and safety in dairy products, how important is it to prioritise clean milk production infrastructure in less-developed dairy regions?

References

1. https://www.data.gov.in/catalog/plan-allocation-and-actual-expenditure-under-iddp-scheme
2. https://dahd.gov.in/schemes/programmes/npdd
3. https://www.gktoday.in/intensive-dairy-development-project/
4. https://www.cooperation.gov.in/sites/default/files/2025-04/USQ-3527-English.pdf
5. https://indiaagronet.com/Livestock-News/National-Programme-for-Bovine-Breeding-and-Dairy-Development-March1.html
6. https://www.pib.gov.in/newsite/PrintRelease.aspx?relid=145191
7. https://www.gktoday.in/national-project-for-cattle-buffalo-breeding/
8. https://spc.tn.gov.in/policy/revised-breeding-policy-for-cattle-and-buffalo/
9. https://www.bighaat.com/kisan-vedika/blogs/national-programme-for-dairy-development-npdd
10. https://www.pib.gov.in/newsite/PrintRelease.aspx?relid=190625
11. https://dahd.gov.in/schemes/programmes/didf