Milk woes

While retail prices of milk in Maharashtra have been hiked thrice in less than a year,the state govt is struggling to keep dairy farmers in business

Retail prices of milk in Maharashtra have been hiked thrice in less than a year. The reason: Repeated increase in procurement prices the price at which a farmer sells milk to dairies by the government.

The state government argues that the procurement prices have to be raised in order to keep dairy farmers in business. It says the farmers,especially the new generation,are disenchanted as the business is increasingly becoming less lucrative.

The claim is not unfounded as is proved by the numbers.

In the last decade,while states like Andhra Pradesh and Gujarat successfully raised their milk yield,Maharashtra has failed to match their pace.

The state produced 57.07 lakh tonnes of milk in 1999-2000,which reached 76.79 lakh tonnes in 2009-10. Andhra Pradesh,which produced 51.22 lakh tonnes in 1999-2000,almost doubled its production at 102.49 lakh tonnes in 2009-10. Gujarat produced 88.44 lakh tonnes in 2009-10,Rajasthan 95.48 lakh tones and Punjab 93.89 lakh tones much more than what they did a decade ago.

A COSTLY AFFAIR

Observers say the main reason for milk production becoming an unattractive enterprise is the increasing cost of inputs that include fodder and supplementary foods,and labour and the general inflation.

One can expect a good yield only when the animals are fed a quality diet in adequate quantities. The prices of green and dry fodder and supplements have almost doubled in the last few years. Hybrid cows and buffalo,though high yielding,are voracious eaters. A farmer ends up spending Rs 110-120 every day on feeding the animals. Count labour and medical expenses,and it touches Rs 130 per day.

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At the current rate of Rs 17 a litre,a farmer gets Rs 170 per cow a hybrid cow yields around 10 litres of milk,thereby earning only Rs 30 in a day from every animal, said Shamrao Sonawane,a dairy farmer at Malangi village in Karjat taluka of Ahmedngar district,who owns four cows and two buffaloes.

While every dairy farmer in Maharashtra has on an average two to four milch animals,he doesnt earn much.

The younger generation,it is said,is also not okay with the restrictions that come with the trade. Having animals at home means going out for a holiday is impossible. At least one member has to be at home to feed and milk the animals. Young farmers dont want to do this seven days a week, said Prakash Kutwal,Secretary,Maharashtra State Milk Entrepreneurs Association.

GOVT EFFORTS

Maharashtra,which currently ranks sixth in the country in milk production and has around 20 lakh diary farmers at present,is making efforts to catch up.

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While the young generation isnt much enthusiastic about dairy farming,we cant afford farmers giving up on milk production completely. We will have to lure farmers to meet the growing demand, said Madhukar Chavan,Minister of Animal Husbandry,Maharashtra.

Besides increasing the milk procurement rates,the government has also come up with other sops like providing a subsidy of 50 per cent to farmers belonging to SC and ST categories and 25 per cent for others.

The government has also launched a pilot project under the Rashtriya Krishi Vikas Yojana RKVY of Centre under which each district will get two well-equipped dairy farms in which the government will invest Rs 50 lakh.

Organising the rearing and processing will cut the cost of production. According to the current plan,each plant will have 50 beneficiaries dairy farmers with two cows each. They will be also be trained in clean milk production,healthcare and other aspects of animal husbandry. The project would also be taken to taluka level later, said R D Shinde,Commissioner,Animal Husbandry,Maharashtra.

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Though the current procurement rate of the farmer is Rs 17 per litre for cow milk and Rs 25 for buffalo milk,the Maximum Retail Price MRP in the state is Rs 29 for cow and Rs 40 for buffalo milk, respectively.

While this gap is one of the major hindrances in giving farmers higher prices,dairy owners allege that most of the money is being kept by the agents and milk collection agencies.

I have been trying to narrow down this gap but the transporting,processing,packaging and marketing costs have also gone up and the Rs 12-15 gross margin including the commission is justified, said Animal Husbandry Minister Chavan.

Kutwal,however,feels that a lot more needs to be done. Till the milk procurement rates are increased as high as Rs 25 for cow milk and Rs 30 for buffalo milk at the current cost of production,there is little incentive for dairy farmers to remain in business.