High cost of fodder led milk price hike

First pulses, now milk. The common household is compelled to give up on its easy sources of protein. RAVLEEN KAUR found rise in fodder prices, not rise in demand, is pushing up the cost of milk

By Ravleen Kaur
Last Updated: Sunday 07 June 2015

High cost of fodder led milk price hike

Birmashri Rathore knows exactly how much water to add to milk so that it can still be accepted as milk.

As the price of this essential commodity shot up across the country over the past two years, so did the level of dilution in the family’s daily milk. Three years ago, Rathore bought two litres every day from the Mother Dairy outlet near her slum cluster in West Delhi’s Vikaspuri area; today she buys only 250 ml, which occasionally goes up to 500 ml. Half the milk is used for making tea which her family of six has twice a day (her husband died five years ago); the rest she mixes with two glasses of water and gives her five children to drink. She does not boil the milk because that reduces the quantity, she said. But her younger children won’t be fooled that easily. “It’s just water, where is the milk?” Kiran, 11, asks her mother.

“For people like us whose monthly income is not more than Rs 1,500-2,000, the budget for milk cannot go beyond Rs 600,” Rathore said; her 17-year-old son, who works in a shoe factory, is the breadwinner of the family.

imageBetween January 2007 and March 2010 the price of milk rose seven times in Delhi. “In the past one year, prices went up from Rs 17 to Rs 22 a litre. First we stopped eating pulses because it became so expensive and now even milk is becoming difficult,” Rathore said. On a year-on-year basis, the inflation in pulses was 32.60 per cent and in milk 21.12 per cent.

“A growing child of 10-15 years of age needs at least 500-750 ml (two glasses) of milk per day while an adult body needs a minimum of 250 ml per day,” said Kumud Khanna, principal of Institute of Home Economics. The government must make milk available for mid-day meal programmes, said Veena Shatrugna, retired from the National Institute of Nutrition in Hyderabad. “If the government can build massive airports, why can’t it subsidize milk?” she asked.

Rising price drove Rathore’s neighbour Guddi and her husband to change their line of business from selling kulfi to selling vegetables. “Time was when we would get about 10 litres of milk every day at Rs 3 per litre. Now, with both sugar and milk prices soaring, there is simply no money to be made by selling kulfi,” Guddi said.

First we stopped eating pulses, and now milk too is costly
Mother of five
“There is a gap of 1.8 million tonnes (MT) between demand and the current milk supply,” Sharad Pawar, Union agriculture minister, told a conference of state ministers for animal husbandry and dairying in January. On March 17, the Centre allowed duty-free import of up to 30,000 tonnes of milk powder and 15,000 tonnes of butter oil. Milk powder imports till now attracted 60 per cent customs duty and butter oil 30 per cent. The imported milk powder and butter oil were for reconstitution as milk meant for supply in the summer months when shortage peaks because that is when livestock produce very little milk, informed N R Bhasin, president of Indian Dairy Association in Delhi. The import was allowed because Mother Dairy and other dairies in north India were facing a crisis.

More demand, less supply

“The demand for milk is rising with increase in salaries of government employees after the sixth pay commission in 2008,” said Amrita Patel, chairperson of the National Dairy Development Board (NDDB). The demand rose in rural areas too after the government wrote off farm loans in February 2008 and introduced the National Rural Employment Guarantee Scheme (NREGS), she explained. “Rising demand in rural areas means there is less milk available in urban areas,” Patel added. “We were quite comfortable with the milk available till about three years ago. A 4 per cent growth rate in milk production, double the growth rate of the world, was good enough because demand was more or less the same as supply,” Patel said.

The demand for milk is rising with the rise in government salaries, the demand has gone up in rural areas too after NREGA
chairperson, National Dairy Development Board
But that is changing. “Families that did not add milk in their tea because they could not afford it, now give their children at least one or two glasses a day,” said Kailash Yadav, founder of Jaipur’s milk mart. This happy development makes Patel’s task that much more difficult, but it is not rise in incomes that is tipping the balance in milk supply.

Rising cost of production is. The main reason behind the rise in milk prices is the increasingly higher cost of fodder. “Inflation has been high in the last few years, the cost of fodder too increased. Yet milk prices remained where they were. Only in last two to three years, have the prices shot up,” said B M Vyas, managing director of Gujarat Co-operative Milk Marketing Federation.

The drought in north and northwest India in 2009 made matters worse. A low agricultural yield led to low fodder yield, and prices hit the roof. About 70 per cent of the cost of milk production goes into fodder; this includes dry wheat, millet or paddy stalks and green fodder. Then there are concentrates like de-oiled cakes and molasses, among others. The remaining 30 per cent are medical and labour costs.

“There are reports that some milk producers find it more profitable to sell their animals for meat instead of continuing with milk production,” said Amrita Patel in her address to the Dairy Industry Conference held in Bengaluru in February this year. This is because there is a 4-6 per cent incentive on the export of buffalo meat.


Dairy factfile

  • imageMilk production in India went up from 20 million tonnes in 1960 to 106 million tonnes in 2007, so did consumption. According to Food and Agriculture Organisation (FAO), it increased from 57.7 kg per person per year in 1995 to 65.2 kg in 2005.
  • Dairying engages 18 million people, 5.5 per cent of the national work force. Milk is the main source of income for the landless, holding 1.5 to 2 animals per household.
  • India followed a mixed farming system. Crop residue went to livestock while it gave manure in return. The transition to a commodity specific system is underway because of increasing demand. According to FAO, this has led to more puchased inputs and less non-traded ones.

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  • Ravleen, The growth in

    The growth in livestock sector has been untill now been propelled by its own momentum. But no more. Unless more investment and efforts are put in, we cannot realize the potential of this sector. The apathy of the state govts. in recognizing fodder as an important input in livestock production system has resulted in the hike of milk and meat in the last few years. The Animal Husbandry departments in States are only concerned with the treatment aspect beacuse here lies the money. Investing in fodder sector will benefit the livestock owners, but who cares? There is an uregent need to create a separate department for fodder development separate from Vety. dept. The Vety. professionals have little inclinations to serve and develop the fodder sector because they lack training in it and it lacks the aura of being a doctor. Fodder is link between Animal Husbandry and Agriculture, and is more inclined towards agriculture. Unless a radical measure is taken in this regard, development of fodder resource will continue to be talked about without any real work at ground level.
    We thank you for highlighting the real cause of escalation in milk prices.

    ÔÇóHigh cost of fodder led milk price hike
    ÔÇóWhy is fodder so expensive?
    ÔÇóFood security for livestock

    Posted by: Anonymous | 10 years ago | Reply
  • Dairing in India being an

    Dairing in India being an ancilliary occupation of rural people is taken for granted by the Govt.Departments and the cosuming public when the issue of increasing milk production is considered. Cow rearing is ,in fact,an economic activity and the input-output ratio certailnly is important. Will any body rear a cow unless it earns him a living ?. Govt. is just silent or turning a blind eye to the rising cost of inputs and the poor price of out put, the milk.The high cost of concentrate feeds, whether home made or factory made,and also the fodder,is the major deterrent factor in the busuiness.Then comes the cost for treatment, insemination etc. If the Govt. can control the price of feed ingredients,fodder, clical assiatance,market price of cows and all other cost components, the dairy business in this country will grow, for the people in India regards cow rearing a sacred act too,though not by all but by the majority,and part of their culture.
    The factor that the veterinary Doctors pay least attention to the production aspect ,thinking that cow rearing is anybody's job and Doctors need not intervene. Doctors behave like humam Doctors, prescribing medicines or attending to the sick, at the clinics or at the farmers premices.Govt. must make these DOCTORS feel that they are field level multifunctionary Extension personnalas, giving all assistance to the Dairy farmers.
    I have seen the functioning of Vety.Institutions inmany states,they are poor in terms of the role they play in this sector.

    Posted by: Anonymous | 10 years ago | Reply
  • May be we should also look at

    May be we should also look at the breeds of cow too.
    Speaking to farmers I got to know that the 'desi' breeds
    (taller than normal cows and the bull has a hump)are hardly available now and all we have are hybrids.

    Some of those hybrid breeds were chosen with no regard to milk production, and the cows are more suitable for meat. It is not possible to find pure local breed bulls to mate cows with and the local government veterinary doctor and other sources also do not have any facilty for artificial insemination.(Haryana & Himachal Pradesh)

    Indian breeds of cow can make do without green fodder which the hybrid and western breeds need all through the year or milk production plummets.

    The desi breeds could be revived and hybrids when chosen, should be suitable for local conditions.

    Posted by: Anonymous | 10 years ago | Reply
  • The blanket recomendation to

    The blanket recomendation to go for crossbreeding in the seventies has resulted in loss of some of our prized native cattle breeds. Crossbreeing per se is an important tool to improve the genetic potential of animals for milk production. But it should have been applied more judiciously. The crossbred animals are input demanding in terms of green fodder, housing and management. It is ok to go for crossbreeing to improve the native cattle where irrigation facilities are available and round the year fodder production can be ensured and also in cool salubrius climate where local breeds do not have much of potential. But going for cross breeding in hot semi arid regions like Bundelkhand region, is a sheer waste of resources. Visit any district hospital and the Vet officer will show you the containers having semen of exotic breeds! Doesn't these people know that crossbreds can't survive in the temp. over 45 C with acute fodder scarcity.
    We have stopped talking to the people who matters. A livestock farmer in such harsh climate knows which breed suits him. They all ask for Tharparkar, but doesn't where to get it. If the govt. wants its money to be properly utilized and show its impact, it should distribute the bulls of indigenous milch breeds like Tharparker, Sahiwal etc. not in a random fashion but through in a well thought plan for next 20 years. This would be the most important investment of the govt. because the flow of milk creates a chain of livelihood opportunities- no factory can ever match. There is also need to create bull mother farms for such prized indian milch breeds because there are very few animals left in the field.

    Posted by: Anonymous | 10 years ago | Reply


    Posted by: Anonymous | 10 years ago | Reply
  • Thanks for the comment

    Thanks for the comment Dr.Anil. We have tried to highlight this issue in the story. NDDB is working on a plan for fodder security but I think more energized efforts are required. And as dairying is so totally linked to agriculture, some practises in agri too need change. And we cannot avoid the growing scarcity of water which effects both agriculture and green and dry fodder as a result.

    Posted by: Anonymous | 10 years ago | Reply
  • Thanks Mr.Sivaraman for the

    Thanks Mr.Sivaraman for the inputs. Veterinary departments are, as u rightly said, quite lax in many states, possibly because less importance that has been given to them as compared to other health departments. Government vets blindly recommend artificial insemination of cows with foreign breeds without assessing the climate situation in the area and there is no incentive for them to take initiatives. As a result, they have been reduced to just distributing medicines from the government stocks and injecting the cows wit AI.

    Posted by: Anonymous | 10 years ago | Reply
  • Hi, the National Dairy Board

    the National Dairy Board is taking an initiative now to revive indigenous breeds. They have started a programme as part of which cows are artificially inseminated with the semen of hardy and good Indian breed bulls, so that the cos can survive the hot weather as well as produce a good quantity of milk too. This, if successful, would also mean less medical cost for milk producers.

    Posted by: Anonymous | 10 years ago | Reply
  • 1. I had a chance to study

    1. I had a chance to study the dairy sector in Vidarbha region of Maharashtra. Farmers had ample fodder two decades back when crops like traditional Sorghum, Maize etc were grown in their fields which was a fodder crop for animals and food for humans. These were replaced by hybrid sorghum later which can not be consumed directly by cattle. Palatability was an issue. Later much of the Sorghum area was converted to commercial crops like cotton and soyabean and the cattle slowly migrated to slaughter houses. Adding salt to the injury, Govt started giving free cattle under the PM package. But where is fodder and where is water in Vidarbha? Farmers started taking more money from pvt lenders which aggravated the situation and rest is history.

    Lesson from the above case is that dairying was an integral part of Indian agriculture and both were mutually interdependant. This linkage was broken when commercial crops and hybrids took centre stage. No harm in adopting high yielding hybrids but care should have been taken by the govt to sustain the traditional fodder.

    2. Till now we have witnessed QUANTITY revolution in milk but QUALITY revolution is just about to enter Indian dairy sector. Today there is no regard for the quality aspect of the milk. Irrespective of the brand, all milk in India costs same. Rs. 26-28 per litre. And most of the times, the milk pouch sold by many dairy companies contain not pure milk but reconstituted milk from SMP and butter oil. Though chemically we can pass it as same as fresh milk, the taste parametres are entirely different.

    3. India can not depend on its traditional milk procurement practice of collecting from small farmers alone as it has its limitations in logistics and cold chain infrastructure. As the demand increases, dairy companies would need to invest more and more in efficient way of collecting small amounts of milk from far off places which would eventually increase the price of milk. New innovations in dairy farms and integrated milk production and processing are required now.

    Posted by: Anonymous | 10 years ago | Reply
  • I wonder whether National

    I wonder whether National Dairy Development Board has in its charter to address soya-milk and tofu issue. If not, might be worth considering a discussion on the subject. Right soya-milk products may well be healthy for diabetic patients.

    During my recent visit to India, I did consume a plenty of soya-milk at a price many a times more than that for the milk! Though here in USA, both of them are available at a comparable price. In India, in the mega city that I visited, many supermarket type grocery stores carried tofu (as a healthy substitute for Paneer) and I made a practice of giving a small packet of tofu as a gift to folks I visited socially.

    In addition, soya production could be more carbon friendly than animal-based milk products. Of course right marketing needs to be done and diffusion could happen from urban to rural area.

    I consider soya-milk as adjunct to milk rather than its replacement. Like milk coop, we can also envision soya-coops. I am sure volume production will bring the price for soya-milk lower.

    Posted by: Anonymous | 10 years ago | Reply
  • Cost and Quality of the feed

    Cost and Quality of the feed given to the animal is major factor for getting output from animal husbandry sector.
    Green fodder makes & should be the major portion of the diet, but lack of availability of green fodder is taking farmers away from this sector.

    Conserving green fodder i.e. Silage making is the only solution to this problem.
    Silage making is a process of conserving green fodder like maize, Sorghum etc.

    1.Farmer can have one fodder crop in between Rabi and Kharif Crops i.e Maize or Sorghum. So no need to keep extra land for the fodder.
    2. Fodder can be cut and conserved for the future at its optimal stage of nutrient content.
    3. Harvesting of fodder will not be required daily so it will save the labor cost which is second major cost factor.
    4. Silage can be made at a time when fodder is available at low price in the market and we can prevent loss of fodder in days of abundance.

    Agencies linked to Dairy Development at state or national level should provide extension services to the farmers to encourage Silage Making. Other help can be with good quality seeds, subsidy on Silage making machines and even on construction of silo pits.

    Commercial dairy farming in states like Punjab is developing at a good pace which is a very good sign and major credit of their success goes to Silage Making.

    Posted by: Anonymous | 10 years ago | Reply
  • Nothing compares to the

    Nothing compares to the goodness of milk. With 15 essential nutrients, milk is the best source for calcium and vitamin D ÔÇô two nutrients essential for building strong bones. CanadaÔÇÖs Food Guide to Healthy Eating recommends 2 to 4 servings of dairy products such as milk every day.* And dietitians agree ÔÇô for growing kids and teens alike, milk is the number one source for these nutrients. You can visit pdfpal.net for more information about this product.

    Posted by: Anonymous | 10 years ago | Reply