Structural Changes and Growth Dynamics in the Dairy Economy of India: Evidence from Structural Break Analysis

Abstract

India’s dairy sector has undergone significant structural transformation from a traditional subsistence activity to a modern, market-oriented and technology-driven enterprise, contributing substantially to rural livelihoods, agricultural growth and national economic development. This study investigated the growth dynamics in the dairy economy of India through an analysis of structural changes in milk production over the period from 2000 to 2024. The Bai- Perron multiple structural breakpoint test was employed to identify significant shifts in the milk production series. The results revealed three statistically significant structural breaks in 2007, 2014 and 2019, indicating major changes in the growth trajectory of milk production in India. The compound annual growth rate (CAGR) of milk production across the identified structural regimes revealed considerable variations in sectoral performance. The results further showed that the period 2015 - 2019 recorded the highest growth in milk production, suggesting a phase of accelerated expansion. This most dynamic growth phase in this study aligns with the resultant effect of various dairy development initiatives especially Rashtriya Gokul Mission and National Livestock Mission. The variations across regimes reflected the influence of changing policy interventions, institutional support mechanisms and broader developments on the long term evolution of the dairy economy.