Source: The post “Circular Economy in Dairy Sector” has been created, based on “Circular economy to boost dairy farmers’ income by 20% in 5 years: Amit Shah” published in “The Hindu” on 09th December 2025.
UPSC Syllabus: GS Paper-3- Indian Economy
Context: The circular economy model focuses on maximizing the reuse of resources and minimizing waste. In the dairy sector, it involves innovative approaches such as converting cattle dung into biogas and bio-fertilizers, as well as producing leather from hides of cattle that die naturally. Recently, Union Home Minister Amit Shah expressed confidence that the implementation of this model will increase dairy farmers’ income by 20% over the next five years. This initiative is a part of broader efforts to strengthen India’s dairy sector under the White Revolution 2.0.
Key Aspects of the Circular Economy in the Dairy Sector
- Cattle Dung to Biogas and Bio-fertilizers: Cattle dung, a waste product in dairy farming, can be converted into biogas and bio-fertilizers. This reduces dependency on chemical fertilizers and promotes sustainable farming practices. By selling the biogas and bio-fertilizer, farmers can earn additional income, thereby increasing their overall earnings.
- Leather Production from Natural Death Cattle: Another facet of the circular economy involves producing leather from cattle that die a natural death. This prevents the waste of hides and creates an opportunity for value-added products, offering farmers an alternative source of income.
- Global Market Potential: The dairy sector can expand its product range beyond traditional items like milk, curd, and paneer. By focusing on specialty dairy products, the sector can tap into global markets, further increasing farmers’ incomes.
Government Initiatives to Promote Circular Economy in Dairy
- Support for Dairy Cooperatives
- The government has worked to strengthen cooperative dairies across India, focusing on increasing the income of dairy farmers by providing better facilities and access to markets.
- Banas Dairy in Gujarat is an example of how the circular economy model has been implemented successfully, with income generated from biogas and fertilizers being shared with the farmers.
- The Prime Minister’s initiative, under White Revolution 2.0, aims to ensure finance and technology for the adoption of circular economy practices in the dairy sector.
- Women Empowerment in the Dairy Sector
- The contribution of women dairy farmers has been recognized, particularly in regions like Gujarat, where women have played a key role in the sector’s growth.
- Women dairy farmers have been central to creating direct bank account systems for income distribution, thereby ensuring financial inclusion and empowerment.
- White Revolution 2.0
- The White Revolution 2.0 focuses on increasing dairy production, improving the quality of dairy products, and ensuring better income for farmers.
- By supporting cooperatives and the adoption of new technologies, the government aims to increase milk production and farmers’ earnings.
Impact on Dairy Farmers’ Income
- Additional Revenue Streams
- The circular economy model provides farmers with additional income streams through the sale of biogas, bio-fertilizers, and leather products.
- By making use of waste materials such as cattle dung, farmers can diversify their income sources, reducing their reliance solely on milk production.
- Sustainability and Cost Reduction
- The shift to biogas as an energy source can reduce energy costs for dairy farms, while bio-fertilizers can help in reducing the need for costly chemical fertilizers, leading to better cost management.
- The circular economy promotes a more sustainable and resilient farming model, making the sector more future-proof.
- Boosting the Local Economy: By adopting global best practices in dairy production, Indian dairy farmers can tap into international markets for value-added products, which will further elevate their earnings.
Challenges and Considerations
- Infrastructure and Investment
- Implementing the circular economy model requires significant investment in infrastructure, such as biogas plants, fertilizer production units, and leather production facilities.
- The initial investment required may be a barrier for small-scale farmers, and support from both the government and private sector is essential.
- Training and Awareness
- Farmers need to be trained in the technologies and processes involved in the circular economy model, such as biogas production and the use of bio-fertilizers.
- There needs to be awareness about the potential financial benefits, which can be facilitated through government outreach programs.
- Market Access for Leather and Other Products
- The circular economy model’s success in generating leather products from cattle that die naturally depends on market access and demand for such products.
- Establishing market linkages for leather and other value-added products is critical for ensuring farmers’ financial success.
Conclusion: The circular economy model offers a significant opportunity to increase dairy farmers’ income in India by providing them with additional revenue sources beyond traditional dairy products. The government initiatives under White Revolution 2.0, the promotion of dairy cooperatives, and the focus on sustainability are steps in the right direction. However, for successful implementation, infrastructure development, training, and market access must be prioritized, with continued support from both the government and the private sector.
Questions: Discuss the concept of the circular economy in the context of the dairy sector. How can its implementation improve the income of dairy farmers in India? Highlight the role of government initiatives, particularly the White Revolution 2.0, in promoting this model.
