The Indian government has announced detailed plans to replicate a successful circular economy model across all major cooperative dairies nationwide. The goal is to boost the income of dairy farmers by 20% within the next five years.

Asia's largest dairy cooperative, Banas Dairy in Gujarat, is serving as the national model. Union Minister Amit Shah recently inaugurated its new large-capacity bio-CNG and organic fertilizer plants, which convert cattle dung into valuable resources.

Circular Economy (CE)

The circular economy is a production and consumption model that replaces the linear "take-make-dispose" approach with restorative, regenerative systems emphasizing resource efficiency, waste elimination, and sustainability.​

Core Principles

Three interconnected principles—reduce, reuse, and recycle—form the foundation. Reduce minimizes resource use and waste generation; reuse extends product lifecycles through repair, refurbishment, sharing, or resale; recycle transforms waste into new materials, closing the loop.​

Key Features

• Closed-loop systems that keep products, materials, and infrastructure in use longer via leasing, remanufacturing, and upcycling.​
• Design-focused innovation to eliminate waste before it occurs, decoupling economic growth from finite resources.​
• Regenerative practices that restore natural systems, reducing pollution, emissions, and biodiversity loss.​

National Initiatives

• NITI Aayog's Circular Economy Cell coordinates 11 sectoral committees for action plans on municipal solid waste, e-waste, batteries, solar panels, and end-of-life vehicles.​
• Swachh Bharat Mission 2.0 promotes waste segregation, zero-waste cities, and public-private recycling hubs.​
• Waste-to-Wealth Mission fosters scientific disposal, urban mining zones, and extended producer responsibility (EPR) mandates.​
• Production Linked Incentives (PLI) schemes support recycling tech in solar, batteries, and steel sectors.​
• Mission LiFE and Green Credit Program incentivize eco-positive businesses and startups via grants and funding.

The Circular Economy Model in Dairy

• The Circular Economy Model in the Dairy sector is a regenerative approach that transforms waste and by-products into valuable resources, shifting from the traditional "take-make-waste" linear model.
• This model aims to maximize resource efficiency, minimize environmental impact (especially methane emissions), and create diversified income streams for farmers. 

Core Principles and Strategies

The model applies key circular economy principles, including designing out waste, keeping materials and products in use, and regenerating natural systems. Key strategies include: 

• Waste-to-Energy: Converting cattle manure into biogas (methane) or bio-Compressed Natural Gas (bio-CNG) through anaerobic digestion. This renewable energy source can power farm operations or be fed into the grid, reducing reliance on fossil fuels.
• Waste-to-Fertilizer: The digestate (nutrient-rich residue) from biogas production is used as organic bio-fertilizer, improving soil health and reducing the need for synthetic chemical fertilizers, which have high environmental costs.
• By-product Valorization: Utilizing other by-products that were traditionally considered waste.
• Whey and Buttermilk: By-products of cheese and butter production are processed to recover high-value proteins and lactose for use in sports nutrition supplements, infant formulas, and other food products.
• Bioplastics: Lactose-rich streams can be fermented into biodegradable bioplastics for sustainable packaging, offering an alternative to conventional plastics.
• Leather Production: Hides from naturally deceased cattle can be processed into leather within a regulated, cooperative system, adding another revenue stream.
• Water Recycling: Implementing advanced filtration systems to treat and reuse process water within the dairy facility for cleaning and other non-potable uses, significantly reducing freshwater consumption.
• Resource Efficiency: Optimizing feed-to-milk conversion, implementing precision farming, and ensuring water and fertilization autonomy to minimize external resource inputs. 

Benefits

The implementation of this model offers significant environmental and economic benefits: 

• Increased Farmer Income: Diversified income streams from selling biogas, bio-fertilizer, and other value-added products can increase farmers' overall income by an estimated 20% in some regions.
• Reduced Environmental Impact: Capturing methane from manure significantly lowers greenhouse gas emissions. The use of bio-fertilizers also reduces water pollution and improves soil health.
• Energy Autonomy: Farms and processing plants can become energy self-sufficient by using the biogas they produce, leading to long-term cost savings.
• Enhanced Sustainability: The closed-loop system reduces reliance on finite resources, aligning the dairy sector with Sustainable Development Goals. 

Role of Banas Dairy as a National Model

Banas Dairy in Gujarat serves as Asia's largest cooperative dairy model with a ₹24,000 crore annual turnover.

• Bio-CNG and Fertilizer Plants: Processes dung into renewable energy and bio-fertilizers, reducing waste and creating new revenue streams for farmers.​

• Diversified Production: Includes milk powder, baby food, paneer, and animal feed production at cooperative levels, ensuring profits flow directly to farmers' accounts.​
• Resource Self-Sufficiency: Shifts from market-bought feed to in-house production, enhancing economic viability and sustainability.

Way Forward

Scale Banas Dairy's model nationwide through MP study tours and cooperative leader visits in January 2026, backed by skill training, PPPs for cold chains, and APEDA promotion of value-added products like whey protein. Prioritize women-led cooperatives under Lakhpati Didi for empowerment and direct bank credits. Secure dedicated funds and technology to achieve self-sufficient feed, fertilizer, and energy production.​
This approach positions India's dairy sector as a global leader in sustainable growth, merging economic resilience with environmental regeneration.
 

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