India: Effects of Tariffs and Nontariff Measures on U.S. ... - USITC

Consumption
<strong>India</strong> is the largest sugar-consuming country in the world in terms <strong>of</strong> absolute numbers,
though not in per capita terms. 47 Per capita sugar consumption in <strong>India</strong> was 24 kilograms
in 2003 versus 8 kilograms in China, 56 kilograms in Brazil, <strong>and</strong> 70 kilograms in the
United States. In higher-income urban centers, however, <strong>India</strong>n per capita consumption
<strong>of</strong> refined sugar is as high as that <strong>of</strong> many developed countries. 48 Sugar is an important
part <strong>of</strong> <strong>India</strong>n culinary <strong>and</strong> cultural practices <strong>and</strong> is mixed into everything from syrupy
tea to dense sweets. A basic staple <strong>of</strong> most households, it is consumed in various forms:
the traditional, unrefined sugar called kh<strong>and</strong>sari, typically used by sweets makers; gur, an
unrefined lumpy brown sugar, mainly consumed in rural areas; <strong>and</strong> white, refined sugar.
As levels <strong>of</strong> income <strong>and</strong> urbanization have risen, consumption <strong>of</strong> refined sugar has
increased, with a corresponding decrease in consumption <strong>of</strong> kh<strong>and</strong>sari <strong>and</strong> gur. 49
Industrial consumption <strong>of</strong> refined sugar by the food processing sector is rising as well.
Dairy
<strong>India</strong> is the largest milk producer in the world, at approximately 114 mmt in 2008. 50 In
1970 the <strong>India</strong>n government <strong>and</strong> the World Food Program began a campaign to
encourage the growth <strong>of</strong> the dairy sector as a rural poverty alleviation program as well as
a dairy production program. 51 Almost 40 years later, the l<strong>and</strong>less, unable to grow crops,
are still attracted to dairying, as alternative paid employment is not generally available in
rural areas. 52 Even for marginal l<strong>and</strong>holders, dairying provides regular, more immediate
cash flow than crops, <strong>and</strong> livestock has become a side business to cropping. 53
The industry consists <strong>of</strong> mainly smallholder farmers with one or two cows or buffaloes
<strong>and</strong> some dairy farms—large, by <strong>India</strong>n st<strong>and</strong>ards—with about 30 cows. Smallholder
farmers, who mainly milk cows by h<strong>and</strong>, have advantages over “commercial” or full-time
farmers because <strong>of</strong> unpaid labor <strong>and</strong> low dry fodder costs. 54 Part-time dairy farmers in
rural areas account for the vast majority <strong>of</strong> production, which is largest in Uttar Pradesh,
Rajasthan, <strong>and</strong> Punjab. Productivity rates in <strong>India</strong> are very low at the farm level: milk
production per cow is only one-eighth the U.S. average, though it is growing at 5 percent
annually. 55 The increases in milk production have occurred mainly because <strong>of</strong> new
entrants into dairying, rather than yield increases.
Approximately 85 percent <strong>of</strong> total milk production is marketed through the informal
sector, i.e., consumed on the farm by the farmer’s household or sold <strong>and</strong> possibly
47 FAO, Food Outlook, November 2008.
48 <strong>India</strong> Infoline, Sector Database, “Sugar,” n.d.
49 Ibid.
50 The second-leading global milk producer, the United States, produced about 86 million metric tons <strong>of</strong>
milk in 2008. P<strong>and</strong>it, “Amul Ranks Among Top 21 Global Dairy Biz Cos,” June 25, 2009; USDA, NASS,
2009.
51 U.S. Dairy Export Council, <strong>India</strong>: Dairy Industry, March 2006.
52 Ibid.
53 Ibid.
54 Ibid., 15.
55 Overgrazing on public l<strong>and</strong>s <strong>and</strong> the use <strong>of</strong> crop residues for animal feed, rather than high-quality
grains, severely restricts milk productivity. U.S. Dairy Export Council, <strong>India</strong>: Dairy Industry, March 2006,
25.
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