Sunday, March 03, 2013

The dire crisis of dairy farmers

India is the largest producer and consumer of the dairy milk in this world producing around 130 million tonnes and the total world production estimates 730 million tones.  FAO estimated 85% of all milk worldwide was produced from cows and the rest is from other species ( 11% Buffalo ,2% got and 2% others.). USA is the second largest producer of milk and the first largest producer of cow's milk. Israel dairy farms are very productive with an yield of 12,546 kgs of milk  per cow per year.

Indian Dairy farmers are in crisis with increased cost of production and non remunerative prices. Return on investment for dairy farmers are very less due to increased costs of feed and medical expenses for animals. Earlier, the cattle used to depend on grazing, natural resources and crop residue for fodder which are decreasing now. The milk farmers are forcibly depend on the packaged cattle feed to increase the milk production, eventually the cost of production has increased. Feed cost has been increasing up to 30- 50 percent from past four consecutive years, but the milk procurement prices have not increased comparatively. Health care also big burden, vaccination and De-warming costs have been increased.

The productivity of the cattle is based on the caring and managing, farmers are slowly decreasing their non performance animals and switching over to efficient breeds like Jersey and Holstein Friesian. Investment on these exotic cattle is heavy burden for the farmers and these breeds need more feed, water and caring since they are not native animals. Farmers are struggling to get loans for milking animals and also the bank charges are very high up to 12% interest rate and insurance cost is additional. With the increased cost of production including  expensive breeds the dairy farming is not remunerative, so the farmers are slowly decreasing their herd size and some of the farmers have giving up the dairy farming.

The procurement prices have not increased comparatively with milk market selling prices, in fact the procurement prices have reduced in Oct and Nov months of 2012. The Andhra Pradesh farmers have faced a bitter experience called "MILK HOLIDAY" due to the false market analysis by milk marketing companies. They have imported low-priced Skim milk powder by estimating that the milk production is going to be less for this year but there is a  consistent growth in milk production. Most of the milk marketing companies including Co-operative sectors have reduced the procurement prices and some of them have stopped to collect the milk from farmers. Animal fodder is the biggest problem for the farmers, decrease in grazing land, natural resources and drought situations  leads tough time for animal fodder. Last year, the dry forage was sold at Rs.2.00 per kg in some arid districts of  Andhra Pradesh. The loan facilities for cattle are too tough for small farmers, a rural poor woman who wants to buy a buffalo she gets the loan with high interest rate up to 14%  with a great struggle, where as in the cities the car loan get approved with 7-8 percent  interest rate without any hurdles.

Our Indian Dairy Industry is in chaotic situation, India is the largest milk producer in the world, ironically...

whereas chemical mixed adulterated milk is widely available in the market.

whereas milk consumption is very less and 68.72 Kg/capita/year.

Whereas The Food and safety standards authority of India ( FSSAI) has announced the 68% of the bulk milk supplies have found to be unsafe and substandard quality.

Indian government has opened the gates to FDI's and excited to enter in free trade agreements, already France's DANONE is aggressively marketing it's dairy products in Indian market associated with Dynamix Dairy- Baramathi ( Maharashtra), New Zealand's FONTERRA and DANONE  are interested to acquire major stack in  Hyderabad based Tirumala Dairy products. As we know that all largest milk producing countries are keen to enter in Indian market, most of the developed nations' dairy farming is massively funded and heavily subsidized by the governments with various income support plans like  i.e.  Milk income loss contract payment, Market loss assistance, Dairy Income loss assistance programs, dairy Indemnity, milk marketing fees and so on. Such huge subsidies keep the International milk prices down which are going to affect very badly on our Indian dairy industry. we should oppose as strong as possible to protect our Indian dairy Industry against dumping.

In order to protect our dairy farmers, the milk procurement prices should be fixed based on the cost of production as the practice where implemented in crop farming. The banks should liberalize the policies in cattle loans for Individual farmers to buy one or two animals and Government should  arrange interest free loans to the dairy farmers. Government should invest in co-operative dairies and allot matching grants of subsidies for remunerative milk procurement prices. The government need to take some steps on milk promotion programs by offering small quantity of milk to school going children, lactating women and pregnant women to boost milk consumption. The Indian milk marketing companies including co-operatives all together should run a united advertising campaign which shall create an importance of milk in our daily life.. like by California Milk processor  Board.

We shall have to try all possible options to rescue our milk farmers, if not they will give up dairy farming, therefore India may encounter serious milk shortage which leads to malnutrition.