Dairy sector is characterised by the different types of linkages between the milk
producers and dairy processing industry. Dairy processing industry is backed by a few large
cooperatives/companies, which mainly focus towards the urban consumers whereas large
market share is still captured by the unorganised small processors. The impact of policy
reforms was different on organised and unorganised dairy processing industry. In fact, a
major thrust of the dairy development policy, since the initiation of the planning process way
back in the 1970s, was to foster ‘balanced’ regional dairy development. Indian dairy
processing industry is more concentrated in the states where it has favourable environment
for milk processing. Unit level data of NSS, ASI was used (1994 to 2008 period) with the
following objectives: 1). To estimate the growth and performance of dairy processing industry
2). To examine the factors contributing to the growth and performance of dairy processing
industry 3). To study the state-wise concentration pattern of dairy processing industry over
the time 4).To identify the determinants for differential concentration pattern in dairy industry.