Can dairy growth come only through expanding cooperatives, or does India need a farmer-centric ecosystem where every processor competes to serve producers?
India’s dairy transformation is one of the greatest examples of rural economic development. The cooperative movement, inspired by the vision of Dr Verghese Kurien, created a unique model where millions of small farmers became owners of a value chain that was earlier controlled by traders and intermediaries.
The success of the Amul model demonstrated that when farmers are organised, they can create global-scale institutions while ensuring better price realisation, transparency and social development.
Dr Kurien’s concerns about private sector participation in dairying were also shaped by the realities of his time. During the early years of organised dairy development, many private players were primarily engaged in milk trading, with limited commitment towards long-term farmer development.
However, the Indian dairy landscape has changed significantly.
Over the last few decades, several private dairy companies have invested heavily in creating farmer networks, village collection systems, quality improvement programmes, animal nutrition services, veterinary support and digital payment systems. Companies such as Hatsun Agro Product, Heritage Foods, Dodla Dairy, Parag Milk Foods, Madhusudan Milk Products, Gyan Dairy, Lotus , Sonai , Lactalis, Nestle and many others have created strong linkages with farmers.
Therefore, the debate today should not be about cooperatives versus private sector.
The real question is:
How can India build a dairy ecosystem where farmers remain the primary stakeholders and every institution — cooperative or private — works towards strengthening farmer prosperity?
India has ambitious targets for dairy growth. There are discussions around increasing milk production growth to around 6% and expanding organised procurement networks by strengthening cooperative institutions and increasing the number of dairy societies.
The objective is undoubtedly important. India needs higher productivity, better farmer incomes and a stronger dairy economy.
However, achieving rapid growth in milk production will require looking beyond procurement expansion.
The dairy sector is entering a challenging phase. Climate variability, increasing heat stress, fodder constraints and uncertain rainfall patterns are becoming important factors affecting animal productivity. In such an environment, milk production growth will depend on farmer confidence to invest in animals, feed, genetics and technology.
Farmers invest when they have three things:
- Reliable market access
- Competitive milk prices
- Long-term services that improve productivity
This is where a farmer-centric approach becomes essential.
The future model could be built on two principles
First, farmer organisations — including cooperatives and Farmer Producer Organisations (FPOs) — should become the foundation of milk aggregation. Farmers should collectively own their marketable surplus, quality systems and bargaining power.
Second, these farmer institutions should have the freedom to choose their buyers based on price, services, trust and performance.
A cooperative should win farmer loyalty because it provides better value. A private dairy should win farmers because it offers better services and returns.
History has shown that institutional ownership alone does not guarantee farmer empowerment. Several state-led cooperative federations, despite receiving substantial public support, lost farmer confidence when governance weakened, accountability reduced and farmer interests became secondary. The cooperative model succeeds only when it remains truly owned, managed and trusted by farmers.
The best institution should succeed through performance, not because of preferential support.
Government’s role should be to strengthen farmers rather than promote one buyer category over another. Public investment should focus on animal health, breed improvement, climate-resilient dairy farming, fodder development, infrastructure and capacity building.
A competitive dairy market does not mean weakening cooperatives. In fact, healthy competition can make every institution more accountable and farmer-focused.
Many successful dairy economies have evolved through strong farmer institutions combined with market discipline. New Zealand’s cooperative-led model shows the strength of farmer ownership, while countries like the United States and the United Kingdom have developed systems where organised farmer suppliers play a central role in determining market relationships.
India does not need to copy any one model
India needs a model where the farmer remains at the top of the dairy pyramid and all processors — cooperative or private — remain accountable to the farmer.
The biggest transformation will happen when farmers do not merely supply milk to institutions but become the owners of the milk economy.
The next White Revolution should not be about expanding the power of any single institution.
It should be about expanding the power of farmers.
Because sustainable growth is created not by controlling markets, but by empowering those who produce.
At the end I would like to say that if the first White Revolution liberated farmers from traders. The next White Revolution 2.0 must liberate farmers from dependence on any single institution.
Source : Editorial by Kuldeep Sharma Chief editor Dairynews7x7 June 14th 2026