There are more serious and pressing issues the nation is facing on the milk front. The white revolution seems to be ebbing out. India is faced with a milk shortage that has been building up almost imperceptibly. Covid led to a crash in milk prices due to dwindling demand and with it the inability of dairy farmers to invest in the upkeep of their cattle.
The Amul-Nandini controversy has come at a time when the Karnataka Assembly polls are just a month away. It has come handy for the opposition to bludgeon the Bommai government of the BJP with. The charge of sell-out to the Gujarat lobby is bound to stoke parochial sentiments with the Bruhat Bengaluru Hotels Association throwing its weight behind the local brand Nandini and exhorting its members to use only Nandini.
Amul on its part has already indicated that it is targeting only the ecommerce market that knows no borders and it has no intention of joining the price war. Nandini is selling at Rs 39 a litre whereas Amul sells at Rs 54 in Bangalore. But then, milk like other perishables sells at a higher price away from the production centres. Therefore, it is not surprising that Nandini milk is more expensive in Mumbai vis-à-vis Amul.
There are more serious and pressing issues the nation is facing on the milk front. The white revolution seems to be ebbing out. India is faced with a milk shortage that has been building up almost imperceptibly. Covid led to a crash in milk prices due to dwindling demand and with it the inability of dairy farmers to invest in the upkeep of their cattle. To compound the dairy industry’s woes, lumpy skin disease beset the bovines has wreaked havoc. The official death count of 1.9 lakh cattle could well be an underestimate given the official proclivity to underplay catastrophic news. The government claims that a third of bovines have already been vaccinated against this dreaded disease.
Fodder inflation at 30 percent has been adding fuel to the fire with fodder and feed accounting for 70 percent of the cost of milk. Fodder development does not figure prominently in our animal husbandry budgets. For a sector that supports more than 80 million dairy farmers plus some 120 million small farmers, it is surprising that fodder and other bovine feed does not attract the attention of policy wonks and agriculture economists. Lalu Prasad Yadav’s infamous fodder scam is the only discussion one gets to witness on this score. Indeed, agriculture curiously has remained an unknown fodder to the grist of the talking heads in our media. Be that as it may.
The problem is so acute that the Centre has reportedly been considering import of butter and ghee which for example has vanished from Aavin stores in Chennai. The Union Animal Husbandry Secretary Rajesh Kumar Singh recently said that cooperatives reported a milk production increase of 1-2 per cent in 2022-23, while the data from other players in the organised and unorganised sector point to stagnant output. This is distressing in the light of the annual growth trend of 5-6 per cent witnessed earlier on the dairy front.
Amul has been the leader in milk revolution by bringing milk farmers under the revolutionary banner of milk producers’ cooperative. A producers’ cooperative needs replication across a wider front on the farm front. It is good that Nandini was quick to be inspired by the potentials of the Amul model thus becoming the number 2 in the milk production race next only to Amul. A producers’ cooperative is what the doctor had ordered for the farmers including dairy farmers. Local farmers form themselves as a cooperative which in turn becomes a part of the state-wide cooperative i.e., cooperative of cooperatives a la fund of funds in the mutual fund industry. Only producers are allowed to be their members thus ousting middlemen and moneybags from the sweepstakes. There is a perfect synergy----profit from sale of milk is distributed as dividend to milk farmers.
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India needs to have a second milk revolution just as there is a need for a second green revolution. The Amul-Nandini lead should percolate across the nation. Milk is a perishable product and has a limited shelf life. Thus, it by definition has a captive local market unless the brand power is highly overwhelming. To wit, aashirvad brand atta sells at much higher prices in South but connoisseurs nevertheless buy it relegating price considerations when faced with palate pleasure. Karnataka opposition should thus not whip up parochial sentiments and instead should endeavour towards working in the direction of lifting the dairy sector from the challenge it is facing today.
Amul has done well to minimise wastage by converting milk beyond normal requirements into byproducts such as ice-cream, lassi and yoghourt. But the private sector has not allowed grass to grow under its feet. As the 2022-23 Annual Report of the Ministry of Animal Husbandry and Dairying has pointed out, the private dairy sector has “surpassed the combined capacity of the dairy cooperatives and government dairies in the past 20 years”. Private players have wrested some market share from cooperatives by offering higher prices in a buoyant market. The lesson is while producers’ cooperatives is a good idea, its members are likely to break ranks if they perceive that the price paid by private players exceeds the price paid by cooperatives plus the dividend.
The producers’ cooperative idea should go beyond sale of milk and think and act in terms of providing bovine feed at reasonable prices and looking after the health of cattle. Jaan hai tho jahaan hai is a Hindi aphorism that should resonate in the dairy sector also as its fortunes are tied with the robust health of the bovines.
— The author, S Murlidharan, is a CA by qualification, and writes on economic issues, fiscal and commercial laws. The views expressed are personal.
Read his previous articles here
(Edited by : C H Unnikrishnan)
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