Dairy farming is a growing sector in India but still, it has some issues. First of all dairy farmers said the government does nothing for them and the rates of feeds and other products are so high. And there are some other facts available which affect the competitiveness in the dairy sector.
No doubt, the dairy sector is growing India these days, but if we look back then we realize the situations were too different than these days. In the past years, the government did not give proper support to farmers so that they can grow their dairy business. And they perform all the works with their hands, but nowadays almost every work in the dairy plant is done by dairy machinery. These include ghee plant, paneer plant, lassi making machine, and so on.
As we mentioned above these days all the dairy products are made with the help of machines. With the rise in dairy farming, competition is also increased. Because there are so many new dairy products are available in the market of various companies. These competitive factors affect small businesses more than large ones because they only make a few products with milk. But large companies make so many dairy products which are liked by people as well.
Factors that affect the competitiveness in the Dairy industry
In order to examine the dairy industry’s competitiveness, we looked at demand conditions and market structure because these both factors are main which affect the competitiveness in dairy farming.
Demand conditions
Well, in the past years, dairy products were not in demand but these days the demand for dairy products is increasing. Because people know how effective and healthy these products are. With the growing demand for dairy products, the dairy product making companies are also increasing. In addition to this, in the last years only a few companies make dairy products in India such as Verka and Amul, but these days some other are available in the market such as Nandini, Super, Kwality, and Karnataka Co-operative Milk Federation.
This happens due to the high quality of dairy products which are made by machines and carefully packed so that people can store them for days. But still, the majority of people prefer unpacked dairy products such as milk, ghee, and paneer due to less costly.
Market structure
The market structure includes two types of marketing such as formal and informal. Formal include packaged food and high-quality products, whereas informal means local vendors deliver milk and some other products you directly. This happens because vendors reveal the truth behind this is the low cost of milk. And people in the rural areas are not able to bear the cost of expensive milk.
