India's DDGS Import Deal with US to Cut Feed Costs, Boost Dairy Margins
The Indian Dairy Association (IDA) has endorsed the government's decision to permit duty-free imports of dried distillers grains with solubles (DDGS) from the United States under an interim trade framework. This move is projected to lower feed expenses for dairy farmers, enhance milk production profitability, and alleviate a significant protein shortfall in the animal feed sector.
Addressing Feed Affordability and Deficit
IDA President Sudhir Kumar Singh emphasized that affordability remains a critical issue for small and marginal dairy farmers, with fodder constituting nearly 60% of milk production costs. The import agreement, which caps duty-free DDGS imports at 500,000 tonnes, could lead to cheaper compound feed, directly reducing input costs and boosting margins for farmers.
India, as the world's largest milk producer supporting around 80 million farmers, faces a 30% deficit against its annual animal feed requirement of 170 million tonnes. DDGS, a high-protein by-product of ethanol production from maize, serves as an energy-rich feed ingredient. The US, the leading global DDGS producer, primarily utilizes genetically modified (GM) corn for ethanol, making DDGS a GM-based feed for cattle, poultry, and fisheries.
GM Crop Controversy and Political Opposition
The decision has reignited debates over genetically modified crops in India. The opposition Congress party, led by former environment minister Jairam Ramesh, criticized the move as a "backdoor entry" for GM crops into the food chain, noting that India has not approved transgenic technologies in food crops beyond GM cotton.
Farm experts and groups, including Sudhir Panwar and Balbir Singh Rajewal of the Bharatiya Kisan Union, warn that DDGS imports could depress incomes for sorghum and maize farmers, threaten biodiversity, and weaken the rural economy. They argue that agriculture and dairy should have been excluded from the trade pact.
Industry Support and Economic Impact
In contrast, IDA asserts that DDGS imports will benefit the dairy sector by providing a cost-effective feed alternative, reducing pressure on domestic corn and soybean markets, and stabilizing supply during shortages, particularly in drought-prone regions. Singh clarified that genetic modification effects are neutralized once corn is processed into DDGS.
India's dairy industry, valued at ₹18.97 trillion in 2024, is poised for growth, with milk output estimated at 247.87 million tonnes in 2024–25. The country accounts for a quarter of global milk production, projected to rise to 45% by 2047. Per capita milk availability has increased to 485 grams daily, surpassing the global average of 322 grams.
Domestic Production and Future Outlook
Despite record maize production of 43.4 million tonnes and soybean output of 15.2 million tonnes in 2024–25, the feed deficit persists. Some dairy experts, like Jaswinder Singh Bhatti, question the need for imports, citing sufficient domestic production. However, IDA views DDGS as a strategic intervention to enhance feed security and support the livelihood of millions in dairy farming.
Dairy cooperatives are awaiting detailed guidelines before making decisions, while advocates stress that imports should complement domestic production with strict quality and phytosanitary safeguards. Singh concluded that careful implementation could strengthen India's dairy sector, ensuring nutritional security and sustainable growth.
