Expanding Circularity in the Dairy Sector – Beyond Dung Processing

Context:

• Union Home Minister Amit Shah called for achieving 100% circularity in the dairy sector, stressing that it should extend beyond dung-based initiatives.

• He urged the National Dairy Development Board (NDDB) to explore cooperative-led processing of cattle by-products such as skin, bones, and even dairy machinery production.

• The aim is to build a farm-to-factory value chain within rural India, ensuring higher income and sustainability for marginal farmers.

Key Highlights:

• Government Initiative / Policy Direction

  • Amit Shah directed NDDB to develop village-level cooperative models for processing cattle by-products.

  • Circular economy approach in dairy should include:

    • Dung → biogas and manure

    • Skin and bones → industrial raw materials

    • Machinery manufacturing → export potential

• Utilisation of Cattle By-products

  • Currently, cattle by-products often go to the unorganised market, limiting farmer benefits.

  • Processing within cooperatives can ensure:

    • Better price realisation

    • Formal market integration

    • Reduced wastage

  • Farmers could profit by selling processed skin directly to industries such as shoe manufacturers.

• Enhancing the Role of Dairy Cooperatives

  • Cooperatives were encouraged to expand beyond milk procurement into:

    • Dung-based biogas production (supporting even private dairies)

    • Manufacturing dairy machinery such as:

      • Milking equipment

      • Chilling units

      • Processing tools

    • Exporting dairy machinery globally, boosting India’s rural industrial footprint

• Building a Farm-to-Factory Value Chain

  • Vision: Establish complete dairy value chains within villages.

  • Objective: Enable marginal farmers to transition from:

    • Local production → organised processing → global markets

  • This reflects a collective cooperative model ensuring inclusivity.

• “Profit for People” Model

  • Cooperatives should balance:

    • Economic growth

    • Social welfare

  • Ensuring that benefits reach rural communities rather than intermediaries.

Relevant Prelims Points:

• Issue: Expanding circular economy practices in India’s dairy sector.

• Causes:

  • Underutilisation of cattle by-products

  • Dominance of unorganised markets

  • Need for rural income diversification

• Government Initiative:

  • NDDB-led cooperative expansion into by-product processing and machinery production

• Benefits:

  • Increased rural income through value addition

  • Waste reduction and improved sustainability

  • Employment generation in villages

  • Boost to dairy exports and rural manufacturing

• Challenges:

  • Need for infrastructure and technology in villages

  • Organising informal by-product markets

  • Ensuring environmental and ethical safeguards

• Impact:

  • Strengthening rural economy

  • Promoting self-reliance in dairy-related industries

  • Supporting India’s circular economy transition

Relevant Mains Points:

• Conceptual Clarity: Circular Economy

  • A system where waste is minimised and resources are reused through recycling and value addition.

  • Dairy circularity involves full utilisation of cattle outputs, not just milk.

• Role of Cooperatives in Rural Economy

  • Cooperatives enhance:

    • Farmer bargaining power

    • Inclusive growth

    • Collective processing and marketing

  • Example: NDDB’s contribution to Operation Flood and dairy revolution.

• Economic and Sustainability Dimensions

  • Processing dung into biogas supports:

    • Clean energy transition

    • Reduced dependence on fossil fuels

  • Processing skin and bones ensures:

    • Higher value capture for farmers

    • Reduction in rural waste and pollution

• Way Forward:

  • Government support through:

    • Credit access and subsidies

    • Modern processing infrastructure

    • Skill development in cooperative enterprises

  • Strengthen export-oriented dairy machinery production under Make in India.

  • Develop a structured farm-to-factory ecosystem linking villages to global markets.

UPSC Relevance (GS-wise):

• GS 3 (Economy): Cooperative sector, rural industrialisation, dairy value chains, exports

• GS 3 (Environment): Circular economy, waste-to-energy, sustainability

• GS 2 (Governance): Role of NDDB and cooperatives in inclusive rural development