For transforming India into the world’s largest milk producer and helping to kick-start the country’s nascent economy
India was home to the most cattle in the world in 1970, but even that wasn’t enough to prevent a dairy industry crisis. Milk production had dropped to among the world’s lowest, and the country’s impoverished farmers needed relief. Government leaders responded with one of the largest rural development programs ever, transforming the dairy sector—and millions of lives in the process.
Operation Flood created a vast grid that connected rural farmers directly to consumers. In the process, India’s National Dairy Development Board generated massive employment opportunities and enabled farmers to earn a greater percentage of profits. The results were astonishing: Within two decades, India ranked as the world’s largest milk producer.
The 26-year project was also a boon to India’s up-and-coming economy. It ensured financial security for millions of people and created a template for how a highly decentralized population can band together to deliver big results.
India’s per capita milk consumption had fallen by nearly 14 percent between 1955 and 1970. Quality also decreased, with some farmers watering down milk while still charging high prices.
Operation Flood set up dairy cooperatives at the village level, which were then connected to a national network. From there, milk producers could procure, process and market their own milk to consumers in four major cities: Mumbai, Kolkata, Delhi and Chennai. The World Bank, the World Food Program and the European Economic Commission provided funding and support.
“The secret of Operation Flood’s success is that commodity aid was used to invest in dairy infrastructure instead of dumping it on the market, which would discourage production,” says Bruce Scholten, PhD, author of India’s White Revolution: Operation Flood, Food Aid and Development. As a result, milk prices were high enough to stimulate supply. Ultimately, the cooperatives were able to return 80 percent of the retail price of milk to farmers, offering them the capital needed to grow.
With some 1.5 million farm families taking part in the first phase, rural procurement rose from a pre-project level of 460,000 liters (121,600 gallons) per day to 2.2 million liters (581,000 gallons). A second phase, from 1981 to 1985, increased the number of milksheds and established a self-sustaining system of 43,000 village cooperatives that covered 4.3 million milk producers. The final phase, which ended in 1996, added 30,000 new dairy cooperatives, strengthened the procurement and marketing infrastructure, and bolstered veterinary care, feeding and breeding.
By 1996, the project was able to secure income for nearly 10 million farmers supplying an average of 10,900 metric tons of milk daily through roughly 75,000 village cooperatives. The movement has been India’s largest sustainable employment initiative—even doubling the income of some of the most impoverished farm families.
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