1. Background

The state of Uttar Pradesh is the largest milk-producing state in the country, contributing approximately 16 percent of the total milk production of India. However, only about 10 percent of the milk surplus available in the state is currently processed through the organized sector, whereas the national average milk processing level is around 17 percent. This indicates a significant gap between the existing milk processing capacity and the available marketable milk surplus, creating a large opportunity for investment in the dairy processing sector.
With changing socio-economic conditions, awareness regarding balanced nutrition is increasing among the population. Additionally, the disposable income of consumers is rising, which is leading to higher demand for processed and value-added dairy products.
At the same time, modern technologies, equipment, and processing facilities required for dairy processing and production of value-added products are readily available. These advancements provide significant opportunities for investors and entrepreneurs to address the challenges in the dairy sector and expand dairy-based industries.
To achieve this objective, it is necessary to increase the existing processing capacity, adopt modern technologies, upgrade infrastructure, and utilize information technology effectively. In order to ensure balanced and integrated development across all sectors of the dairy industry, the Uttar Pradesh Dairy Development and Milk Production Promotion Policy – 2022 has been formulated by the Government of Uttar Pradesh.
This policy aims not only to promote investment in the dairy sector but also to generate employment opportunities, strengthen nutritional security, and contribute to the state's goal of becoming a trillion-dollar economy.

2. Objectives

The key objectives of the Uttar Pradesh Dairy Development and Milk Production Promotion Policy – 2022 are as follows:

• (a) To promote the establishment of milk-based industries in the state.
• (b) To attract capital investment of approximately ₹50,000 crore over the next five years in the dairy sector.
• (c) To ensure remunerative and market-driven prices for milk producers based on prevailing market conditions.
• (d) To increase the level of milk processing in the state from the present 10 percent to 25 percent, and to enhance the installed processing capacity from 44 percent of the marketable milk surplus to 65 percent.
• (e) To make high-quality processed dairy products easily available to consumers.
• (f) To promote market development and increase exports of dairy products to other states and countries.
• (g) To generate employment opportunities in the dairy sector and strengthen the skills and capabilities of the available human resources.
• (h) To encourage the adoption of modern technologies and information technology-based solutions in the dairy sector.
• (i) To develop and manage government databases for market intelligence, enabling effective technical dissemination and expansion of the dairy sector.
• (j) To reform and strengthen primary dairy cooperative societies, milk unions, and the Provincial Cooperative Dairy Federation (PCDF).
• (k) To simplify procedures for investors in order to facilitate ease of doing business in the dairy sector.

3. Eligible Areas for Financial Assistance and Subsidies in the Dairy Industry Sector

• Financial incentives and subsidies under the policy shall be applicable to Farmer Producer Organizations (FPOs), Milk Producer Companies (MPCs), cooperative institutions of the state, and private entrepreneurs for establishing and expanding dairy-related units.
• The following areas have been identified for support:

• (a) Establishment of new Greenfield dairy processing and dairy product manufacturing units.
• (b) Expansion of existing dairy processing and dairy product manufacturing units (Brownfield projects) with a minimum capacity enhancement of 25 percent.
• (c) Establishment of new units for manufacturing cattle feed and cattle nutritional products, or expansion of existing units with a minimum capacity increase of 25 percent.
• (d) Establishment of new units for manufacturing value-added dairy products such as cheese, ice cream, and similar products under the MSME and small-scale industry sectors.
• (e) Installation of modern dairy technologies and information technology-based systems, including Traceability systems and supervisory control systems such as SCADA.
• (f) Development of cold-chain infrastructure, including procurement of equipment for Milk Chilling Centers, Bulk Milk Coolers, Refrigerated Vans, Milk Tankers, and Ice Cream Trolleys.