Circular economy in India’s dairy sector
Table of Contents
Source: The Hindu
Relevance: GS Paper III – Economy / Agriculture
Important Key Concepts for Prelims and Mains:
For Prelims:
Circular Economy (CE),Bio-CNG & Bio-Fertiliser Plants. White Revolution 2.0, Banas Dairy Model, Mission LiFE (Lifestyle for Environment)
For Mains:
Waste-to-Wealth Approach in Agriculture, Cooperative Federalism in Dairy Sector, Resource Efficiency & Sustainable Rural Livelihoods, Women-led Dairy Value Chains
Circular Economy Mission & Atmanirbhar Bharat
Why in News?
At Banaskantha (Gujarat) the Union Home and Cooperation Minister inaugurated Banas Dairy’s bio-CNG and bio-fertiliser plant and laid the foundation for a milk-powder unit. He highlighted how a circular-economy model in dairying can raise farmers’ incomes by about 20% over five years — positioning Banas as a national model for “White Revolution 2.0”.
What is a circular economy (CE)?
A Circular Economy shifts from the traditional “take–make–dispose” model toward:
India’s Milk Production Profile
- Dairy is India’s largest agricultural product, contributing 3.5% to GDP.
- Milk production (2023–24): 239.3 MMT, ~25% of global production → World’s largest producer.
- Producer-level consumption: 88 MMT (37%).
- Marketable surplus: 150 MMT.
- Organised sector handles only 32% (47 MMT).
- Unorganised sector handles 68% (102 MMT).
- Cooperative share in organised sector: 56% (~26 MMT).
Milk Yield (per animal per day)
- Exotic/crossbred cattle: 8.55 kg
- Indigenous/nondescript cattle: 3.44 kg
Per Capita Availability
- India: 459 g/day
- Global average: 323 g/day
Top 5 Milk Producing States (BAHS 2023)
- Uttar Pradesh (15.72%)
- Rajasthan (14.44%)
- Madhya Pradesh (8.73%)
- Gujarat (7.49%)
- Andhra Pradesh (6.70%)
Contribution by Species
- Indigenous buffaloes: 31.94%
- Crossbred cattle: 29.81%
- Nondescript buffaloes: 12.87%
- Indigenous cattle: 10.73%
- Nondescript cattle: 9.51%
- Goat milk: 3.30%
- Exotic cows: 1.86%
- Reuse
- Repair
- Refurbish
- Recycle
This approach aims to keep resources in use longer, eliminate waste, and regenerate natural ecosystems.
Key Features of CE
- Closed-loop system
- Designs out waste
- Regenerates natural resources
- Contrast with Linear Economy
- Moves beyond simple extraction → production → disposal
- Key Activities
- Sharing, leasing
- Repairing, remanufacturing
- Organic recycling, waste-to-energy
Why apply CE to dairy?
India’s dairy sector is vast and rural-deep: it links millions of smallholders, sustains livelihoods, and is central to rural economies and women’s income. Applying CE in dairying can:
- Create additional farm income streams (bio-CNG, organic fertiliser, milk-powder and value-added products).
- Reduce dependence on chemical fertilisers and fossil fuels, improving soil health and energy security.
- Strengthen rural MSMEs, cold-chain and processing capacities, and boost export potential.
- Promote cooperative federalism by scaling cooperative-led models across districts and states.
Practical elements of the dairy circular model
- Waste-to-wealth: Cattle dung → anaerobic digestion → bio-CNG + bio-manure.
- Product diversification: Expand beyond fluid milk into milk powder, nutraceuticals, specialty cheeses and other value-added products for domestic and export markets.
- By-product utilisation: Leather from naturally deceased cattle (regulated), whey & other dairy residues for food/industrial use.
- Energy & storage: On-site renewable generation and battery/storage systems to firm up variable renewable supply.
- Institutional integration: Cooperatives as nodal implementation units for technology, finance, marketing and capacity building.
Banas Dairy— a scaling blueprint
Banas Dairy (Asia’s largest dairy cooperative) demonstrates integrated CE features: bio-CNG plant, organic fertiliser production, large-scale milk processing and upcoming milk-powder capacity. Its strengths include cooperative governance, integrated value chains, and capacity to absorb technology and finance — qualities that make it suited for replication across other major dairy cooperatives.
Policy & institutional enablers
- Cooperative strengthening: Support to federations and primary societies for project finance and technical know-how.
- Financial instruments: Affordable credit, targeted grants, concessional loans for bio-CNG and processing plants (NABARD, cooperative banks).
- Market & standards: Export promotion (APEDA), quality certification for organic fertiliser and value-added dairy products.
- Convergence with national missions: Aligns with White Revolution 2.0, Doubling Farmers’ Income, Mission LiFE and Circular Economy Mission.
- Women empowerment: Direct bank credit, SHG/‘Lakhpati Didi’ linkages and women-led dairy entrepreneurship.
Benefits (economic, environmental, social)
- Farmer income rise via sale of bio-CNG credits, fertiliser and higher-value dairy products.
- Energy security: Reduced fossil fuel consumption and stable local energy supply.
- Soil health & reduced chemical use from organic manures.
- Job creation in rural processing, logistics and bio-energy sectors.
- Gender inclusion through women-centred cooperative models.
Role of Women in the Circular Dairy Economy
Women in Gujarat’s dairy cooperatives have demonstrated exceptional:
- Entrepreneurship
- Financial discipline (direct bank transfers)
- Leadership in SHG-led dairy models
This becomes a strong example of women-led development, aligning with the G20 theme.
Key challenges
- Capital intensity of waste-to-energy and processing infrastructure; small societies may lack finance.
- Technology access & skills gap for operation and maintenance of digesters, storage and value-addition units.
- Cold-chain & logistics deficiencies in remote regions limit product diversification.
- Market linkages and export readiness for niche dairy products need strengthening.
- Regulatory & ethical issues around leather from naturally deceased cattle require clear norms.
Way forward
- Scale modular CE units: Promote cluster-level bio-CNG and fertiliser plants that serve groups of villages/cooperatives.
- Blended finance: Use public funds for social cushions and de-risking; mobilise private capital for infrastructure. District Mineral Foundation and Green Transition funds can be repurposed in mining/dairy belts.
- Capacity building: Large-scale skilling for cooperative managers, women entrepreneurs and technicians; knowledge exchange visits to Banas.
- Market creation: Support branding, quality certification, cold-chain PPPs and export promotion for value-added dairy goods.
- Policy nudges: Tax/credit incentives for waste-to-energy, standardisation of organic fertiliser, and faster approvals for cooperative projects.
- Women-centred programs: Prioritise women’s control of income flows, leadership in SHGs and access to micro-workspaces (Sakhi Niwas/Shakti Sadans).
Conclusion
A circular economy in dairying is not merely waste management — it is a structural reform that links climate action, rural prosperity and cooperative empowerment. Banas Dairy’s model shows the roadmap: integrate waste-to-energy, product diversification and cooperative financing to make dairying more resilient, climate-friendly and income-generating. With targeted finance, market support, skilling and regulatory clarity, India can scale this model nationwide — delivering higher incomes to farmers while advancing its clean-energy and sustainability goals.
UPSC PYQ
Q. Operation Flood’ is also popularly known as (CAPF 2022)
(a) The Green Revolution
(b) The White Revolution
(c) The Blue Revolution
(d) The Yellow Revolution
Correct Answer:(b) The White Revolution
- Operation Flood (1970) was the world’s largest dairy development programme.
- Led to India becoming the world’s largest milk producer.
- Architect: Dr. Verghese Kurien (“Father of the White Revolution”).
- Implemented through NDDB (National Dairy Development Board).
CARE MCQ
Q. Arrange the following States in descending order of milk production as Basic Animal Husbandry Statistics (BAHS) 2023:
- Gujarat
- Uttar Pradesh
- Andhra Pradesh
- Rajasthan
- Madhya Pradesh
Select the correct answer using the codes below:
(a) 2-4-5-1-3
(b) 4-2-1-5-3
(c) 2-4-3-5-1
(d) 4-1-5-2-3
Correct Answer: (a) 2-4-5-1-3
Explanation :
As per BAHS 2023, the top five milk-producing States and their percentage contribution are:
- Uttar Pradesh (UP) – 15.72% → Highest
- Rajasthan – 14.44%
- Madhya Pradesh (MP) – 8.73%
- Gujarat – 7.49%
- Andhra Pradesh (AP) – 6.70%
