author(s)
BH Nagoor and Prasanna S

abstract
India’s dairy sector is under mounting pressure as climate change, rising input costs and structural vulnerabilities converge on smallholder producers who supply most of the country’s milk. This article examines the evolving cost structure of milk production in India, with particular focus on the dominant role of feed and fodder, the incidence of distress cattle sales, and the interaction between production economics and subsidy schemes. Evidence from recent farm‑level and national studies shows that feed and fodder typically account for 55-70 percent of the total cost of producing a liter of milk, while labor, veterinary services, power and fixed costs together form the remaining 30-45 percent. Climate‑induced fodder scarcity and water stress are raising these feed shares further, eroding margins and forcing asset‑poor farmers to liquidate cattle herds at distressed prices, which undermines long‑term productivity and household resilience. At the same time, state‑level milk incentives and cattle‑feed subsidies partially offset these pressures by lowering the effective cost per liter or augmenting the price received, although they do not change the underlying economic cost of resource use. By integrating cost‑of‑production evidence, climate impacts, emerging trends in trade, and policy responses, the article argues that future dairy viability and nutrition security in India hinge on a “fodder‑ and water‑smart” transformation that reduces feed costs per liter while protecting smallholders from climate and market shocks.