Modern Dairy Development in India (1970-Present)

In 1970, India was still a milk-deficit nation. Per capita milk availability had fallen to just 107 grams per day – well below the minimum nutritional requirement – and the country was dependent on imported milk solids to meet basic demand. Within three decades, that picture changed completely. Today, India is the world’s largest milk producer, contributing around 25% of global milk output. That transformation didn’t happen by chance. It was the result of a deliberate, structured, and visionary effort that began in the 1970s – centred on the cooperative model, the National Dairy Development Board (NDDB), and a programme called Operation Flood.

The context before 1970: A milk-deficient India 🔗

To appreciate what changed after 1970, it helps to understand the conditions that made change so urgent. India’s annual milk production growth rate had declined to just 1.15% through the 1960s, despite the country having the world’s largest cattle population. The dairy sector was fragmented and unorganised. Middlemen dominated the supply chain, buying milk from farmers at low prices and selling it at a steep margin. There were no reliable chilling facilities, quality testing systems, or direct farmer-to-consumer channels. In short, both the farmer and the consumer were losing.

The Anand Pattern: A cooperative model that changed everything 🔗

The solution that eventually transformed India was not a government scheme designed in a ministry office. It was a farmer-led cooperative model that had quietly been working in the Kaira district of Gujarat since 1946. Known as the Anand Pattern – named after the town of Anand in Gujarat – it was pioneered by the Kaira District Co-operative Milk Producers’ Union, later known as Amul. The model was built on a simple but powerful idea: farmers should own and control the entire supply chain, from milk collection to marketing.

The three-tier structure 🔗

The Anand Pattern operates through a three-tier cooperative structure. At the base are Village Dairy Cooperative Societies (VDCS), where individual milk producers bring their milk daily for quality testing and collection. Payments are made based on fat and SNF (solids-not-fat) content, ensuring transparency. These village societies are federated into a District Cooperative Milk Producers’ Union, which procures all the milk from member societies, processes it, and markets fluid milk and dairy products. The district union also provides critical back-end services – cattle feed, veterinary care, and artificial insemination – to keep production growing. At the top is the State Cooperative Milk Marketing Federation, which handles large-scale marketing and policy coordination.

As NDDB explains, the model succeeds because professionals are accountable to leaders elected by producers – and the entire infrastructure, from the village cooperative to the state federation, is owned and controlled by farmers themselves. This gave small and marginal producers a level of market access and economic security that was previously out of reach.

NDDB and the birth of a national mission 🔗

The Anand model’s success came to the attention of Prime Minister Lal Bahadur Shastri during a visit to Anand in October 1964. Impressed by the socio-economic changes the cooperative had brought about, he expressed the desire for a national body to replicate this model across India. That led to the creation of the National Dairy Development Board (NDDB) in 1965, headquartered in Anand. Dr. Verghese Kurien became its first chairman, and under his leadership, NDDB set out to replicate the Anand Pattern in milk sheds throughout the country.

A key technical breakthrough that made large-scale expansion possible was the development of a process to manufacture skimmed milk powder from buffalo milk – a feat that had not been done commercially before. This innovation, developed at Amul, was fundamental to what followed.

Operation Flood: Three phases, one revolution 🔗

Operation Flood was launched on 13 January 1970 – the world’s largest dairy development programme at the time. Its funding model was innovative: Phase I was financed through the sale of skimmed milk powder and butter oil donated by the European Economic Community (EEC) through the World Food Programme. Rather than simply distributing the aid as food, India monetised it to invest in building a domestic dairy industry. This converted external dependency into self-reliance.

Phase I (1970-1980): Linking milksheds to metros 🔗

The first phase focused on connecting India’s 18 premier milk-producing regions – called milksheds – with consumers in the four major metropolitan cities: Delhi, Mumbai, Kolkata, and Chennai. Village dairy cooperatives were set up in these milksheds, and Mother Dairies were established in the four metros to handle processing and distribution. By doing so, Operation Flood created a direct link between rural producers and urban consumers, cutting out the exploitative intermediary layer entirely.

Phase II (1981-1985): Scaling across India 🔗

Phase II expanded the number of milksheds from 18 to 136, and reached 290 urban markets. By 1985, a self-sustaining network of 43,000 village cooperatives, covering 4.25 million milk producers, was operational. Domestic milk powder production rose sharply – from 22,000 tonnes in the pre-programme period to 140,000 tonnes by 1989 – with all of this growth coming from cooperatives established under Operation Flood.

Phase III (1985-1996): Consolidation and rural empowerment 🔗

The final phase added 30,000 new dairy cooperatives, bringing the total to 73,000. The number of milksheds peaked at 173 by 1988-89. Phase III gave greater emphasis to animal health, nutrition research, and women’s participation in dairy cooperatives. Technological innovations introduced during this phase – including vaccines for Theileriosis, bypass protein feed, and urea-molasses mineral blocks – directly improved the productivity of dairy animals. Services like artificial insemination, veterinary care, and quality cattle feed were extended to cooperative members as a matter of routine. Phase III cemented what Operation Flood had begun: a self-sustaining dairy economy independent of foreign aid.

The National Milk Grid: Connecting producer to consumer 🔗

One of Operation Flood’s most impactful outcomes was the creation of a National Milk Grid that links milk producers across India with consumers in over 700 towns and cities. This grid reduced the seasonal and regional price fluctuations that had long plagued the dairy sector. Farmers received fair, transparent prices on a regular basis – and consumers received quality-checked milk at stable prices. The elimination of middlemen meant that a greater share of consumer spending reached the farmer directly.

Production outcomes: The numbers tell the story 🔗

The impact on milk production was dramatic. Milk output in India stood at 21.2 million tonnes in 1968-69, before Operation Flood. It rose to 30.4 million tonnes by 1979-80, and to 51.4 million tonnes by 1989-90. India overtook the United States as the world’s largest milk producer in 1998. By 2022-23, production had reached 230.58 million tonnes, with per capita milk availability rising to approximately 459 grams per day – a complete reversal from the 107 grams per day recorded in 1970.

India’s milk production grew at a CAGR of 6.2% between 2014-15 and 2020-21, well above the global average growth rate of around 2%. Today, dairy is the single largest agricultural commodity in India by value of output – surpassing cereals, pulses, oilseeds, and sugarcane combined.

Post-1996 dairy policy: Building on the cooperative foundation 🔗

After Operation Flood concluded in 1996, the government continued to invest in dairy through a series of targeted schemes. In 2003, restrictions on dairy processing and manufacturing were removed, opening up the sector to private investment and significantly expanding processing capacity. Several major programmes followed.

Rashtriya Gokul Mission 🔗

Launched in 2014, the Rashtriya Gokul Mission (RGM) focuses on genetic improvement of indigenous cattle and buffalo breeds. Under this programme, farmers now have access to technologies including sex-sorted semen, IVF techniques, and genomic selection. Between 2014 and 2022, India recorded a 27.39% increase in bovine productivity – the highest growth rate in the world, ahead of countries like China, Germany, and Denmark. The revised RGM, launched in March 2025, carries a total outlay of ₹3,400 crore.

National Programme for Dairy Development (NPDD) 🔗

The NPDD, operational since 2014, supports state agencies in building infrastructure for quality milk production and for the procurement, processing, and marketing of milk and milk products. Its restructured version (2021-22 to 2025-26) continues to prioritise cooperatives and state dairy federations as the primary implementing bodies.

Dairy Processing and Infrastructure Development Fund (DIDF) 🔗

The DIDF provides affordable financing for upgrading milk processing plants, installing bulk milk coolers, and strengthening the cold chain. This has been especially important in helping cooperative dairies modernise their infrastructure and compete with the private sector, which expanded significantly after liberalisation in the 1990s.

Rural employment and women’s participation 🔗

The cooperative model did more than produce milk – it restructured rural livelihoods. Around 70 million rural households are engaged in milk production in India, most of them landless, marginal, or small farmers for whom dairy income is a critical supplement to agricultural earnings. The dairy sector is frequently cited as India’s largest self-sustaining rural employment generator.

Women have been central to this story. Women make up nearly 70% of the workforce in dairy farming and about 35% of cooperative members. NDDB Dairy Services currently supports 22 Milk Producer Organisations (MPOs), of which 15 have all-women membership, covering over 1.2 million producers across 35,000 villages. By providing regular income, access to veterinary services, and a direct connection to formal markets, dairy cooperatives have created genuine economic agency for rural women – not just as workers, but as decision-makers.

Artificial insemination and genetic improvement 🔗

One of the key technological drivers of India’s production growth has been the systematic use of artificial insemination (AI) to improve the genetic quality of dairy animals. High-yielding exotic breeds like Holstein-Friesian, Jersey, and Brown Swiss were crossed with indigenous stock, improving per-animal productivity significantly. In 2024-25, a total of 565.55 lakh AI procedures were carried out across India, making it one of the largest organised animal breeding programmes in the world. Currently, 33% of breedable bovines in India are covered through AI – though expanding this coverage remains a priority.

Challenges that remain 🔗

Despite these achievements, the Indian dairy sector carries persistent challenges. Productivity per animal, while improving, remains below global benchmarks. The benefits of cooperative development have been unevenly distributed, with states like Gujarat, Punjab, and Maharashtra outperforming eastern and northeastern India significantly. Milk adulteration continues to be a quality concern. The sector also faces increasing competition from a growing private dairy industry, and small farmers – who still account for a large proportion of total production – often lack the scale to adopt new technologies without institutional support. The growing push toward digitisation of the supply chain, cold chain expansion, and value-added product development will determine how well India consolidates its global position in the coming decade.

India’s journey from milk scarcity to global leadership is one of the most significant agricultural success stories of the 20th century. The cooperative model, anchored by the Anand Pattern and scaled nationally through Operation Flood, placed productive resources in the hands of farmers – not intermediaries or corporations. The NDDB provided the institutional backbone, while successive government programmes have kept the momentum going into the 21st century.

What do you think? Given that women form the backbone of India’s dairy workforce but only represent 35% of cooperative membership, what structural changes could help close this gap? And with private dairy companies expanding rapidly, do you think the cooperative model can continue to remain competitive as the sector modernises?

References

1. https://www.pib.gov.in/PressNoteDetails.aspx?NoteId=153455&ModuleId=3&reg=3&lang=2
2. https://www.ibef.org/blogs/development-of-india-s-dairy-sector
3. https://en.wikipedia.org/wiki/Amul
4. https://www.nddb.coop/about/genesis/pattern
5. https://en.wikipedia.org/wiki/National_Dairy_Development_Board
6. https://www.nddb.coop/about/genesis/flood
7. https://www.pib.gov.in/FeaturesDeatils.aspx?NoteId=151137&ModuleId+=+2
8. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2172546
9. https://link.springer.com/chapter/10.1007/978-981-33-4268-2_6
10. https://ddnews.gov.in/en/indias-dairy-sector-driving-rural-livelihoods-nutrition-and-inclusive-growth/
11. https://www.gktoday.in/operation-flood/