The low growth rate in the country's milk production which has fallen from 7.1 per cent to around 4.1 per cent in the last 20 years has contributed to this scarcity, the report says.

If the domestic dairy industry fails to improve the current growth rate, India would face a shortage of over 20 million tonne per year by 2005, the study says adding the trend reflects a serious crisis in the segment. The study was conducted by Initiatives, a Mumbai-based non-governmental organisation and Nashik-based Purushottam Academy, a rural research institute.

Costly maintenance of low yielding milch animals, growing water shortage, inadequate supply of vaccinations, lack of farmer education et al, seem to be contributing to the looming milk crisis within the next 5 to 10 years.

The report says, ``the misery of India's milk producer is going to increase substantially in the years to come''.

The poor condition of dairy farmers has resulted in low productivity and low quality of milk. As a result, India finds it difficult to export milk and milk products. Despite a global trade of $ 10,000 million, country's export earning from this sector is a mere $10 million.

Another serious problem is low productivity, which is below 1,000 litres per animal per year as compared to 3-4000 litres in other developing countries and over 10,000 litres in Israel and other developed countries.

The report further states that India's milk economy supports a perverted value system where hard work (of farmers) is not rewarded and dishonesty and fraud are encouraged.

It also urges for a restructuring of government policies to persuade the processing companies and co-operatives to invest in this sector. Additional investment would help farmers to have capacity for professional farm management and optimum herd size.