India could become milk importer if output shortfall grows

New Delhi, Feb 25 (PTI) Expressing concern over the risein milk prices, the Economic Survey today warned that therates may increase further and the country could even turn outto be a net importer if domestic production is not enhanced.

"Recent hikes in prices of milk and milk products havebeen a matter of concern. The gap between domestic demand formilk and production of milk has put upward pressure on milkprices," the survey pointed out.

Milk prices have increased by 20 per cent in retailmarkets in the last one year and it has been a majorcontributor, along with vegetables, to pushing up foodinflation into double digits. The Centre had recently bannedexports of milk powder to boost domestic availability andcontrol prices.

The survey pointed out that domestic demand for milk isgrowing at about six million tonnes per year, whereas annualincremental production over the last ten years has been about3.5 million tonnes per year.

It indicated that milk prices can only be stabilisedthrough "a strong supply response with focus on production andproductivity".

Considering that milk demand in 2021-22 is expected to be180 million tonnes and output is currently 112 million tonnes,the survey said that the production must increase by 5.5 percent annually over the next 12 years to bridge the gap.

"If the country fails to do so, India may need to resortto imports from the world market," it warned. The survey feltthat if a large milk consumer like India enters the globalmarket (for imports), global milk prices could spurt.

The report observed it was natural for demand for milkand milk products to rise on the back of high economic growth.

Though the country''s milk production has grown more thansix times since Independence, the average annual growth ratein output in recent years has been close to 4 per cent.

The report noted that despite appreciable growth in milkproduction in the last six decades, the productivity ofanimals is still low.

In addition, India''s marketing systems are also notmodernised or developed to a satisfactory level.

The survey noted that India''s per capita milkavailability, at 263 grams per day, in 2009-10 fell short ofthe world average of 279.4 grams per day.