Dairy Farming Business in India
Dairy farming is a widespread business in India at small level and big level. Commercial and small scale dairy farming in India helps farmers in total milk production and raises their economic growth. There is no doubt that dairy farming plays an important role in economic growth of India for many years. Total milk production has participated hugely in the economy of our country and supported many poor farmers to settle their business. This business can be easily set up in almost all the regions of India if one has some capital in the starting.
It is very common tradition in India to raise milk giving animals at small scale. Some farmers do not know the modern dairy farming methods and improved techniques for more economic growth and development. Because of the absence of knowledge about dairy farming techniques among farmers, sometimes they lose even their investment cost instead of being benefited. It is very necessary to make an effective strategy with proper business plan to manage everything according to the plan in order to ensure maximum milk production and profit from the dairy farming business. Here are some points regarding importance and problems of dairy farming in India:
- Dairy farming is a traditional Indian business, so, no one needs to worry about the milk and other dairy products marketing because they can be easily sold at every place of India. The market of dairy products in India becomes active all round the year.
- It is an eco-friendly business which never pollutes the environment.
- It does not need you to be highly skilled and can be easily setup at small scale with small capital within family.
- It brings great business opportunities to the unemployed educated and illiterate young people. If it is planned with proper plan and management, it gives maximum production.
- It is a most suitable business for farming according to the Indian climate and environment.
- One can easily get the benefits of government schemes regarding dairy farming and apply for loan in NABARD.
What is Dairy Farming
Dairy farming is a most common business in India in which dairy farmers manage to keep dairy cows and buffaloes for milking operations in order to ensure the maximum milk production whether for small or large scale business. This business has some typical responsibilities including monitoring of health, administering required medication, proper feeding, proper use of milking equipment, waste management, managing the herd, etc; however, it is easy to start than other businesses. Some dairy farmers process and distribute milk on their own however some of them supply milk to the dairy processing companies.
Dairy farming is easy to start business however requires some expert knowledge about the farming methods and use of techniques to make it a large scale business. Some educated people start it with complete planning by taking degree in dairy science, agriculture and other related field beneficial to it. For being a successful dairy farmer, one needs to have good experience in this field. Responsibilities of a dairy farmer vary according to his/her sizes and types of farming operations. Smaller dairy operations need huge effort and grow slowly whereas; larger operations need more capital but tend to increase economy of the person and country.
Whether you start this business at small or big level, both require helpers to assist with the herd management, feeding, milking, processing, etc. A dairy farmer must collaborate with the veterinarians as well as animal nutritionists in order to get managed the health and other medical conditions of animals. They are required to formulate feeding plans to maximize the milk production. Rotary and parallel milking parlors are modern milking systems help farmers to milk large numbers of cows or buffaloes in a relatively short period of time. Whereas, older milking systems require much supervision and effort including more labor intense. If everything is managed properly, farmer can do milking three times a day.
Scope of Dairy Farming in India
Dairy farming is a huge level business in India and it is emerging as a global economic power. The economy of India has increased by 8-9% in the last couple of years. Dairy sector has been one of the big industries in India as it is participating hugely to the national economy. It is a business sector offering gainful employment to many unemployed educated people. It is the source of supplementary income to the large number of businessmen. It can be started by any person having some capital and knowledge about dairy farming. It has contributed significantly towards poverty reduction in the rural areas of India because underprivileged family earns their income around 75 to 80% from milk production during drought. It has generated high employment in the country.
This sector can create more dairy entrepreneurs all over India who can effectively contribute to the betterment of society through new employment. They can contribute better in improving the Indian economy by creating new jobs to the unemployed educated youths, a large section in India suffering poverty due to lack of job. It will improve the utilization of non-conventional resources like solar energy, agricultural by products, rain water, biofertilizer, etc. It is improving the demand of new technologies to develop new products from milk. It has contributed in reducing poverty level, fulfilling nutritional hunger, increasing income and equity. The economy of country has also increased through the export orientation of the dairy products and animals. Developments of advanced scientific technologies in the field of dairy farming has reduced the risk of emerging livestock disease, ease the development of breeding policy, positive climate change, and improved sustainability of commercial dairy production. Thus, the scope of dairy farming will increase in the future together with the population growth.
Success/Profit in Dairy Farming
Dairy farming is a successful business in India. We just need to plan, make an effective strategy, and set our mind accordingly before starting the business in dairy farming. It is not too much costly business and can be started by anyone who knows well about it with a small capital, however; needs a lot of manpower and effort. In order to make it a 100% successful business, one need not to run in rush and start this business with closed eyes. One who wants to start this business seriously, needs to open his/her eyes, analyze all the pros and cons, know everything in detail about this business and take proper training if required before starting it. If we start dairy farming with properly planned strategy, surely we can be able to make it a big success.
Currently, there is availability of lots of techniques and technological support which can make our dairy business a successful business. It is a profitable and lucrative business now-a-days in India running by most Indian farmers as well as businessmen as a commercial business. We have varieties of well developed and effective ERP software which can collaborate with the entire process and production. We have all the facilities to set up a state of the art production plant. It is a very time and storage specific business, do not give immediate result however give solid result with time. This business needs a lot of patience, time and loyalty to set up and grow.
Set up the criteria of a business you want to grow it up to and take action accordingly. You can maintain the success in this business by maintaining the quality of milk and discipline of dairy farming business. Dairy farming is a good opportunity for economic growth however one needs to understand the processes and the nature of business. It is quite complex and needs a ground level understanding however gives expected result. It is a business which gives multidimensional profit such as milk, ghee, whey, curd, butter, ice-cream, milk products, cattle dung (generating electricity, biogas, high quality organic fertilizer, etc), cattle itself, etc.
There is a big help as a subsidy from the Government of India to start dairy farming business. Indian government has announced 20-25% subsidies for dairy farming project in India to promote and encourage people towards green energy utilization. Dairy farming cannot be a profitable business unless we determine the quality of milk and healthy calf production. Some dairy farmers also suffer losses due to the lack of proper determination and carelessness. Natural conditions are also responsible for the success or failure of this business however at very little extent. Mainly, it’s success and growth depends on our comprehensive knowledge and experience in the following factors:
- Effective way to use manpower and direct them positively.
- Healthy way of breeding, feeding, care, exchange of unhealthy ones with healthy ones and general management of the animals.
- Efficient way of disposal of farm products.
- Good business plan.
- Comprehensive and sound business practices required in dairy farming.
Failure/Loss in Dairy Farming
Dairy farming industry requires hard work, proper care, alertness, and good management. If the business needs to be started for commercial purpose, it needs several experienced people to manage things. There is no business having 100% surety of success and we all are also well aware that hard work has no any alternate. Every business has its own criteria of work, problems and difficulties. Following are some points which may lead dairy farmers towards failure and they have to face big loss in this business:
- The requirement of good infrastructure and feeding cost.
- Carelessness about total expenditure and profit in business.
- Improper understanding of business and use of all products including cattle-dung.
- Improper breeding process and expectation of high milk production.
- Lack of awareness among farmers about government schemes.
Decide Objectives and Points to Focus
You must have to set strategic objectives, vision, and mission as points to focus in your dairy farming business before starting it. Doing this gives a way to run your business on right path as well as enhances the chance of success over failure. Dairy farming is not an easy field as it belongs to the business of producing food for public. The first and foremost aim of dairy businessmen should be safety and quality of raw milk and milk products in order to satisfy the high expectations of people and food industry. There should be surety of healthy milk from healthy animals including good hygiene practices under acceptable conditions.
People who are employed in this business should be the part of an integrated food safety and quality assurance management system. There is need to follow good agricultural, hygienic and animal husbandry practices. There should be big focus towards care of animals in order to prevent them from diseases. Setting objectives in the start of business help businessmen to cover all those areas that are necessary to manage. Points to focus in dairy farming business are:
- Animal breed
- Animal health and safety
- Milking hygiene
- Animal feeding and water requirement
- Animal welfare and favorable environment
- Skilled and knowledgeable employees
- Effective control measures for animal prevention from diseases
- Total expenditure and profit
- Effective control points to achieve defined outcomes
Plan a Business Friendly Structure and Space for Animals
Before starting the business, one must plan a business friendly structure to get help in day-to-day activities and well ventilated living space for animals. It is better to have professional advice from accountant or other professionals while planning business structure. It should be flexible to fulfill the demands of the challenges in business. Following points must be taken care of while planning appropriate business structure:
- Required capital to start business
- Set criteria to develop business according to capital
- Purpose, nature and objectives of business
- Operating business processes with ease
- Effective ways to manage and control business process
- Good working environment for employees
- Favorable living space for animals
- Simplicity and cost reduction
- Minimizing the taxation liability
- Required level of energy, interest and self motivation to wind up the business
The whole dairy business runs around the health and wellness of animals, so the businessmen must setup a good, ventilated and proper living space for the animals. The living space must be enough, clean, open, and well covered from upside however properly ventilated.
Things to know before Starting Dairy Farm as a Beginner
Following are some important points you need to know and keep in mind before starting the dairy farm as a beginner:
- You must develop a business plan and do SWOT (means strength, weakness, opportunity, and threats) analysis which help you to know available resources and other required resources for the success of business.
- Determine the number of animals to milk and which market you need to target for distribution of milk.
- Ensure the manpower required to start business, how much money required buying animals, making living space, to pay dairy bills, and other expected expenses.
- It is very essential to consult the expert to know things about dairy and learn how to feed, care and milk cows or buffaloes. You can also consult your parents or grandparents to develop business plan and design management system.
- Keep close watch of other dairy farms to find out what strategy has worked well on those farms and what has not.
- Keep contact with other farmers, veterinarians, agronomists, nutritionists, extension educators, bankers, and other required people to start dairy farming and get different perspectives on management of dairy.
- It is good for your business to develop cropping and feeding program including set of nutrients whether you use total mixed ration or grazing method or combination of both.
- Develop diet plan from the nutritionist for the lactating and dry cows and heifers.
- It is good to plan how to do waste management animals produce lots of manure which can also be the economic resource for you.
- Prepare an estimate of the total expense in starting dairy farm as it requires a large capital investment in land, equipment, buildings, cows, buffaloes, etc.
- This business is based on biological system and dependent on animal’s health, their ability to produce milk, health of female calves, reproduction system, and financial aspects. So, create a comprehensive farm plan for positive future.
- Ensure the size of farm which is based on your wish, market needs, resource requirements, and more.
- In order to succeed in dairy farming you must ensure each aspect of management by dealing with trusted consultants while building a business plan. For the further progress of the business you must have a farm management team and profit team to engage consultants as the active participants in the farms success.
- You must develop a strategy to take care of the animals to avoid bad happening such as deaths of animal, outdated husbandry practices, infestation with worms, unvaccinated stock, self-medication of sick animals, developing poor breeding, etc.
- Develop a healthy livestock for the welfare of the nation through healthy milk. It also produces stability to your agricultural-industrial economy.
- You must be sure about the fixed (rent), operating (feeding costs, milk production, feed bills, veterinary bills, etc), variable (fuel, fertilizer, feed, cattle prices for selling culls and bull calves, maintenance for machineries, etc), and depreciation costs (machinery, livestock, building, and equipment).
- You must determine the monthly animal maintenance costs to handle everything positively according to your capital.
- Ensure whether the local government has any licensing fees to start a dairy farm.
- If you want to get only female and healthy calves, you must go for Artificial Insemination (AI) to improve cattle breed and business regularly. Artificial Insemination is very safe with less risk of life to cattle; you only need to hire an AI technician to breed your cattle in timely manner. Breed of cows generated by the Artificial Insemination are capable of producing sufficiently large quantities of milk full of rich protein and butterfat. In America, nine out of every ten dairy cows become is Holstein because of their superb milk constitution.
- Other common breeds are Jersey, Ayrshire, Brown Swiss, Milking Shorthorn, Guernsey, etc.
- Herd first should be the strategy of every beginning dairy farmer as it is a flexible investment and used to earn income while managing debt.
- It is good to have your own land and start business to earn more profit and make it a success.
- You must know the key to your fast equity building which keeping expenses low. A survey of 1996-1999 for more than 300 beginning farmers has revealed that almost 90% of them had less than 75 cows while entered to the business.
- For high milk production you need to give your dairy cows more protein and carbohydrates (around 29 Kg feed per day having clover, alfalfa, alfalfa hay, grass silage, barley, ground oats, ground corn, soybean meal, corn silage, and fuzzy whole cottonseed including minerals and vitamins supplements.
- You must have to arrange proper and clean water system because each cow drinks around 80-180 liters of water per day. Water is also needed to give them bath and clean the living space.
- You must know in detail about cows or buffaloes such as to start milk production she needs to give birth to a child, she becomes reproductive at the age of 15 months and gives birth to her first calf (approximately 40 Kg in weight) after 9 months; means you can produce milk from a baby cow at the age of two years or thereabouts. A cow can produce milk continuously for about 10 months however it gets ceased for two months (known as dry period) in order to precede the birth of next calf.
- Most of the cows can do more than 10 lactations however average productive lifespan of cow is 4-5 lactations.
- You can get an average of 30 liters of milk daily and 2-3 times milking per day. You just need to milk your cow routinely at same time (5 am and 5 pm) each day of the year.
- You must know about milking methods means organic milk production (antibiotic-free means you do not treat cows with antibiotics and give only organic feed) and conventional milk production (milk produced other than organic means).
- In order to improve the early lactation performance of your cow for more milk production, you need to ensure proper nutrition during dry period and postpartum health management, reduce the risk of sub-clinical milk fever, proper feed immediately after calves birth, maintain the good rumen health, avoid anti-nutritional factors, add food having vitamins, protein, carbohydrate, minerals and antioxidants.
How to Start Dairy Farming
In order to setting up dairy farming business in India, you need to take care of many things. It is not so easy process as it needs a lot of attention and care. You need to follow some important steps to set up dairy farming in India. Some of the points are:
- There should be determined aims and objectives of the farm regarding housing, breeding, feeding, number of animals, etc.
- Proper analysis about commercial dairy farms and discuss with experienced people or farm owners about dairy farming system to broaden the knowledge and know success secrets.
- Take proper training in the nearest commercial farm to learn everything in detail.
- You need to arrange everything at place related to the care, health, feed and water for the cattle.
- Plan your business according to your available capital.
- You need to employ hardworking and loyal people having some practical experience.
- Visit the nearest market to ensure regular milk distribution according to the price and demand of dairy products.
- Maintain good relation with consumers in market to get proper value of products as well as purchase necessary commodities.
- Also go through the books to gather experience and make proper business plan to run a successful dairy farming business in India.
What are Requirements to Start Dairy Farming in India
Following are the most important things you must have to start dairy farming business in India:
- Money and good breed of cow or buffalo are most important things to start business.
- An animal friendly and environment friendly space/shelter.
- Good manpower
- Resources for proper nutrition and care
- Selection of more milk giving cattle breeds
- Fodder and water arrangement
- Disease control management
- Resources and effective market to distribute milk
- Waste management
- Proper understanding of reproductive characteristics of animals
- Experienced person to understand sign of oestrus in cattles, best time of breeding, pregnancy diagnosis, etc.
Challenges of Starting a Dairy Farming Business
People, who want to start business in dairy farming, must know about all the challenges they may generally face in the beginning or in future in order avoid all those challenges and get success. Following are the common challenges in dairy farming business:
- Dairy farming business is a capital, labor and proper management intensive business.
- It needs high initial infrastructure cost and medical costs.
- Unplanned dairy farm business without strategies faces many problems.
- A slight mistake and improper care may cause attack of various diseases to the cows or buffaloes.
- You need to have intensive and extensive knowledge about each and every aspect of the business.
- It needs to maintain high production efficiency
- Unfavorable weather and climatic conditions affect to a great extent.
- Marketing of milk or its products is quite challenging.
- It requires high skilled and competitive labor.
- Most of the female calves do not conceive at time.
- It is quite tough to maintain the quality and cleanliness of the milk produced.
- It is very challenging to start this business in an urban area or city as it costs more.
- It is quite difficult to increase scale of operation
- Starting this business with cows has tight profit margin because maturity period of the cows to start milk production takes time.
- After 4th or 5th lactation, milk production gets reduced and even does not sufficient for its maintenance.