A few related points
A recent research in North Gujarat, which is known for intensive dairy farming, has shown that dairying is the most water-inefficient production system, taking a lion's share of the precious groundwater resources in the region.
Dairying is emerging as a major livelihood option in rural areas of semi-arid and arid regions facing water stress like North Gujarat, Kolar District in Karnataka and Alwar District in Rajasthan.
Research conducted in North Gujarat had shown that dairying is highly water intensive, with estimated values of net water productivity in economic terms remaining far less than that of several conventional field crops.
Buffalo milk & milk of a crossbred cow generate only Rs. 0.19 & Rs. 0.17 per m3 of water. This compares to
- Cash crops: highest - castor (Rs.7.21/m3) / lowest - cotton (Rs.0.68/m3)
- Food grains: highest - bajra (Rs.4.82/m3) / lowest - wheat (Rs.1.08/m3)
The water intensity of milk production is inversely related to its water productivity. Low water productivity means high water intensity. Water productivity in milk production is analyzed using the concept of 'embedded water', i.e., the amount of water depleted by the crops that are used as animal feed and fodder through evapotranspiration. The reason for this is that direct water consumption by cattle is low, whereas growing fodder and feed cereals need large quantities of water.
When farmers depend merely on these crop residues for feeding animals, water productivity will be high. But, intensive dairying would force farmers to grow fodder crops for this purpose, as crop residues won't be enough.
A standard approach to improve water productivity in agriculture (in order to save groundwater used in irrigation) would be the replacement of low water-efficient crops by those which are highly water-efficient. For North Gujarat, this would mean replacement of dairying by highly water-efficient crops such as orchards and cash crops like cumin.
It is low water-intensive in regions where cereal production compliments low levels of dairy production, which minimizes the amount of irrigated green fodder used. The case of Punjab demonstrates this. When dairying is practiced intensively, production of irrigated green fodder becomes compulsory to sustain such high levels of inputs required to maintain high levels of production. This makes dairy production highly water-intensive as demonstrated by the North Gujarat case.
In semi-arid and arid areas where intensive dairy farming is practiced, replacement of dairy farming by highly water-efficient orchards and cash crops would be the major route to enhance water productivity in agriculture and also save some of the water used in agriculture, without adverse consequences for the economic prospects of farming.