India’s Dairy Farmers Face Another Harsh Summer – But Not Because of the Heat

The summer of 2021 has been particularly cruel to dairy farmers. There is ample production but dismal procurement, thus leading to an alarming drop in sales. 

State Milk Producers and Processing Professionals’ Welfare Association Secretary Prakash Kutwal told SabrangIndia, “Milk producers were comparatively better off in 2020 considering the long summer and heat. Now, in 2021, Maharashtra’s milk sales have reduced by 40 percent.” 

Kutwal recounted how milk sales dipped yet again during the second wave of Covid-19, despite great sales observed in March, 2021. The unofficial lockdown caused by the surging Covid-deaths quashed farmers’ hopes of reviving the dairy sector this summer.

With rains coming in early, and eateries shutting down, the demand for cold products like ice-cream was much lesser than last year resulting in lesser sales for milk. Hostels and tea shops were also closed down in the city. Accordingly, procurement decreased by 10 percent. Kutwal said that due to the sudden impact on the food sector, milk producers got Rs. 22 per litre when they should have received at least Rs. 25 per litre.

Recently, two farmers unions: Milk Producers Farmers Struggle Committee and All India Kisan Sabha, called for a state-wide agitation on June 17,2021. In their joint statement they condemned private milk companies and co-operative milk unions for reducing the purchase price of milk by Rs. 10 to Rs. 18 per litre. This is in sharp contrast to pre-lockdown prices of Rs. 30-38 per litre.

“Private milk companies and co-operative milk unions have collectively pushed down rates and made huge profits. The state collects 13 million litres of milk every day. Of this, 40 lakh litres are used for making milk powder. The remaining 90 lakh litres of milk is distributed for domestic use by pouch packing,” said the statement.

Leaders emphasised that domestic consumption has remained stable through it all. Therefore, there is no need to consider 30 to 40 percent milk as excess; an alleged rumour promoted by milk companies to reduce milk prices.

A similar situation persists in neighbouring Gujarat. Sumul Dairy Director and farmer leader Jayesh Delad told SabrangIndia that milk sales decreased from Rs. 11 lakh in January, 2021 to Rs. 9 lakh during the second wave. In 2020 sales had fallen as far as Rs. 8 lakh following Rs. 11 lakh sales in May, 2019. On a positive note, he mentioned that sales were slowly recovering to Rs. 10 lakh in June. However, the possibility of a third wave still leaves dairy farmers with an uncertain future. State-wide, 1,50,000 tonne milk powder remains unused.

Even in case of small-scale farmers, companies like Amul do not change their prices while dealing with non-cooperative farmers, he said. At the same time, production costs keep increasing due to sky-high prices of diesel and petrol.

“In last few days, fuel prices have increased while milk prices haven’t increased in two years. So we have to increase prices,” said Delad.

Covid-19 lockdown caused a drop in the market demand due to closure of the outlets selling livestock products. A large number of private dairies were impacted and they stopped milk procurement from the farmers. This resulted in the farmers diverting their milk to the cooperatives.

As a result, milk procurement in the cooperative sector increased because, as per their mandate, they could not reject milk supplied by the farmers. The cooperatives are faced with liquidity problems due to higher conversion into milk powder and white butter caused by higher milk procurement.

Milk producers’ demands to state governments

When asked about preventive measures for measures in light of a third wave of coronavirus, Delad demanded subsidies from the government for the export sale of milk powder. In October 2020, the Gujarat government gave a Rs. 150 crore subsidy for powder. Delad suggests increasing this subsidy to Rs. 180 crore. Yet, no such schemes have been declared for the powder or butter lying unused.

According to Kutwal, milk companies like Gokul and Warna have made similar demands to the government and also gave money to dairy farmers albeit with no receipt. Maharashtra’s Milk Producers Farmers Struggle Committee and AIKS demanded a purchase and sale audit of milk of all private milk companies and co-operative milk unions during lockdown period by the state government.

It accused private workers of looting the milk producers and as such asked that the government obtain objective statistics on how much milk companies actually bought, sold and at what rate.

“Laws should be enacted for private and co-operative milk companies. An 80-20 revenue sharing policy should be implemented in the milk sector, strict measures should be taken to curb adulteration in milk, and a brand policy should be implemented,” they said in a press note.

Centre’s contribution in helping milk producers?

As per the Economic Survey 2020-21, milk and products was the only item in terms of protein-rich food inflation (not including vegetables) that declined continuously from 9.4 percent in April 2020 to 4.0 percent in December 2020.

Accordingly, the central government boasted of several measures to increase the productivity of livestock and, by extension, milk production such as the ongoing scheme State Dairy Cooperative & Farmers Producers Organization (SDCFPO), inclusion of livestock in Kisan Credit Card (KCC) scheme and a stimulus package of Rs. 15,000 crores under the Prime Minister’s Atma Nirbhar Bharat for animal husbandry infrastructure.

However, when asked about the various initiatives announced by the government since 2019, the Maharashtra leader Kutwal said there is no government presence on the field. In fact, he said some money from past schemes was still pending. Similar responses came from Gujarat and Uttar Pradesh as well.

As for the KCC scheme, of the 1.5 crore or so dairy farmers associated with 230 milk unions and milk producing companies during June 1 to December 31, 2020, 47.81 lakh applications were collected. Out of those, 36.18 lakh applications were forwarded to banks by October 3, 2020.

Persisting despite troubles

West Bengal’s Kangsabati cooperative milk producers’ union has begun selling its produce to Covid-19 hospitals and stay-at-home patients in an effort to keep sales afloat. However, as the epidemic continues in waves, experts call for effective moves to improve the milk sector.

The situation persists even in regions of Uttar Pradesh, the leading state in terms of milk production. Speaking to SabrangIndia, Chandra village resident Dilpreet from Amroha district said farmers have been suffering since last year under the dual burden of the pandemic and the three farm laws forcibly passed by the central government.

“On top of that, when products are stopped because of the Covid-19 virus, we face a lot of problems. Farm loans hit us with double or even triple interest. Meanwhile, last year prices were around Rs. 30 per bag of milk. In January 2021, this increased to Rs. 40 thanks to farmers body Samyukta Kisan Morcha’s intervention,” he said.

Despite this increase in prices, Dilpreet only noticed a significant increase in village deaths rather than profits. When asked about government schemes, he says he too has seen no impact on the ground-level. A few years ago, the ruling party provided cows. However, following elections, dairy farmers lost the party’s attention and the cows too died.

“Every dairy farmer has a side business because they cannot keep their animal alive and household running by simply selling milk,” he said, emphasising the need for the government to not only procure grains but also find a solution for dairy farmers, whose future is marred by looming uncertainty.

Courtesy: Sabrangindia