India is expected to outpace the European Union and become the largest milk producer in the world, according to the latest Agricultural Outlook produced by the OECD and FAO.

Milk production is projected to grow from its current 140mt to 202mt by 2023, growing at a rate of 3.7% pa.

It says almost the entire Indian production, with a very high share of buffalo milk, is consumed fresh and only very small amounts are further processed. One exception is butter (ghee), the production of which has been growing quickly. Butter production is projected to increase by 4% per year up to 2023. This growth will also provide excess non-fat solids which will result in additional skim milk powder production that will be exported, primarily to Asian markets.

The report also outlines that in the early 1970s, India started the ‘Operation Flood’ programme and since then has increased milk production six-fold. It highlighted that milk production is an important source of income for millions of farmers in India.

Milk yields remain low by western standards, and the size of the cow herd is large, consisting in 2011 of some 45 million dairy cows, 38 million buffalo cows, 32 million goats, for a total of 115 million head. This number is expected to increase to 143 million by 2023.

The report also highlights that labour in rural areas available to agriculture in India is large. India remains dominantly rural with some 68% of its population residing in rural areas, as compared to the world average of 49%.

Milk production India