A paradigm shift is underway in the Indian dairy sector, with “relationship farming” emerging as a critical model for sustainable growth and competitiveness. According to a recent analysis by The Hindu Business Line, this approach—built on long-term, trust-based partnerships between dairy processors and farmers—is moving beyond transactional milk procurement to a mutually beneficial ecosystem that enhances quality, traceability, and income stability.
In contrast to price-driven sourcing practices that dominated the 1990s and 2000s, modern dairies are realizing that investing in farmer success leads to better milk yields, lower rejection rates, and stronger loyalty. Companies are now providing farmers with veterinary support, AI services, balanced feed, digital payment platforms, and access to clean milk production protocols.
This model is gaining traction among both cooperatives and private dairies such as Amul, Hatsun, Parag, and Godrej Jersey, especially in southern and western India. Some players are even experimenting with micro-entrepreneurship models where farmers are given shareholding rights or profit-linked bonuses.
The article emphasizes that such integrative supply chain practices will be essential as India’s dairy industry prepares for greater global competitiveness, climate change impact, and stricter food safety norms. The success of relationship farming lies not just in milk procurement—but in creating shared value.
Industry Insight:
For dairy businesses, building relationship capital with farmers can be as crucial as physical capital. It offers strategic advantage in ensuring quality control, loyalty, and supply continuity—key pillars for long-term profitability in domestic and export markets.
Source : Dairynews7x7 July 28th 2025 Hindu BL