India’s dairy sector is facing mounting pressure from rising feed costs, increasing production expenses and slowing milk production growth, according to former Gujarat Cooperative Milk Marketing Federation (GCMMF) Managing Director and former Indian Dairy Association President R.S. Sodhi. He has warned that unless farmers receive 70–80 percent of the consumer price of milk, the industry could face serious challenges in the years ahead.
Sodhi noted that while milk prices have increased by about ₹6 per litre over the past three to three-and-a-half years, feed, packaging, fuel and labour costs have risen much faster. Feed costs alone account for nearly 70 percent of milk production expenses, yet the increase in procurement prices received by farmers has remained limited. As a result, many dairy farmers are cutting back on animal nutrition and delaying investments in expanding their herds.
He pointed out that India’s milk production growth has slowed considerably in recent years. While the country recorded growth rates of around 5.5 percent annually over the previous decade, recent growth has fallen to around 3–4 percent. According to Sodhi, shrinking profitability is discouraging farmers from investing in dairy farming and threatening future production growth.
The former Amul chief also highlighted concerns over rising cattle feed costs, particularly after the removal of export restrictions on de-oiled rice bran (DRB), a key feed ingredient. He urged policymakers to address feed affordability and ensure that dairy farmers are not burdened by escalating input costs.
Sodhi observed that private dairy companies are increasingly focusing on value-added products such as ice cream, cheese and flavoured milk, where pricing flexibility and margins are better. At the same time, cooperative dairies continue to prioritise liquid milk supply, creating an imbalance within the sector.
Emphasising the success of the Anand Pattern model, Sodhi said India became the world’s largest milk producer because farmers traditionally received 70–80 percent of the consumer milk price. Today, their share has fallen to around 55–65 percent. He stressed that improving farmer remuneration, reducing feed cost pressures and allowing market-driven milk pricing are essential to maintaining growth and ensuring the long-term sustainability of India’s dairy industry.