Union Budget 2021: Focus on engineering a new milk revolution – scaling the productivity everest

December 31, 2020 2:34 PM

Union Budget 2021 India: Indian government’s focus on reforming the agricultural sector has been strong and fairly resolute.

Budget 2021-22, Union Budget 2021The gowshala architecture largely run on the charity funds requires an overhaul to make them more efficient and self sustainable. (Photo credit: Gaugau.co)

By Vivek Kuttappan, 

Indian Union Budget 2021-22: We stand at an interesting cross point in the Indian agricultural evolution – just over an year ago India walked out of the Regional Comprehensive Economic Partnership(RCEP) over some fundamental issues, around agriculture and dairy, which existed in the proposed structure of RCEP. And now its going be close to a month when farmers mainly from Punjab are protesting at the borders of the capital asking for a rollback of the farm bills introduced earlier this year. Indian government’s focus on reforming the agricultural sector has been strong and fairly resolute. There is a potential realisation that as a nation India is unlikely to see a mass migration of labour from agriculture to manufacturing or services – the path conventionally taken by the western countries in the last 2 centuries or more recently by China. Our best bet for uplifting the poor marginal farmers in the country to middle class track has been articulated through the path of domestic consumption and self reliance (Atma-Nirbhar Bharat) – eventually paving a path for becoming a stronger Agri-export nation.

Dairy has been one of the most successful agricultural commodities where we have engaged a large pool of farmers and the one in which farmer gets a reasonably high share of the end consumer price coming to him. But given that a large part of the focus during the milk revolution initiated in the 70s and 80s was on the distribution of milk from the rural hinterlands to the urban agglomerations – we were able to achieve growth in the total output of milk but have largely lagged behind much of the world in the per cattle productivity.

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The dairy companies and the government have made their own isolated efforts to work on the productivity problem. Dairy companies have largely worked on providing feed inputs to the farmers in their procurement network and some amount of veterinary support – but this still hasn’t solved the problem at scale. Governments – both central and state have done their bit by working on improving access to credit through the subsidy and loan schemes. In addition governments have supported cross breeding programs which has resulted in yield improvement in a few states. While states like Punjab, Haryana have scaled the 10 litres per day per milking cattle mark on an annualised basis – most other large milk producing states continue to languish at 5-6 litres per cattle per day. Contrast this with the major dairy production countries like US, New Zealand, Australia, Continental Europe – where the milking cattle average is over 25 litres per day.

For India – the challenges remain in developing a holistic approach to solve this productivity conundrum and delivering the solutions to the farmers in a cost effective and efficient way. Brazil is often looked upon by some dairy experts as a standard to aspire to – given their work with cross breeding our own indigenous breed Gir with the much venerated Holstein Friesian(HF) – to get the best characteristics of temperature and disease resistance from the indigenous side and high milk yielding capacity from the HF side. The advantage for a country like Brazil also lies in the massive meat industry which allows for the low genetic profile and lame animals to be culled and not be a productive drag on the industry.

There lies the unique challenge for our dairy industry esp for Cows – that the we don’t have a clear solution for lame or unproductive animals at the end of their useful life and they become a drag for both the society and the individual farmer. The gowshala architecture largely run on the charity funds requires an overhaul to make them more efficient and self sustainable.

There has been a gradual shift of milk production from a marginal dairy farmer to a more focussed commercial dairy farmer – who depends on the dairy economy as his main livelihood source. But this architecture works till the time the farmer and his family are fully engaged in farming without meaningful engagement of outside labour.

Large commercial dairy farms with more than 100 animals in India have a mortality rate of 10-15% per annum mainly because the cost structures and relying on co-operatives or private dairies to buy milk isn’t viable for most farms depending on their labour costs and feed costs. The most viable means for survival for such farms is to engage in breeding and selling as an additional source of income besides milk sale income.

Some potential solution themes for solving India’s conundrum for productivity problem are :

1. Create a standard for good quality milk which prices the milk besides the traditional measures of Fat and SNF (Solid not Fat) content but also on the quality parameters like microbial count and somatic cell count in the milk

2. Enable commercial dairy farmers to improve genetics rapidly by subsidizing the cost of modern technology like sex sorted semen and embryo transfer.

3. Allow entrepreneurs to develop platforms to facilitate diffusion of these genetics to local marginal farmer through cattle sale from these commercial farms

4. Make these commercial dairy farms also the key information and knowledge dissemination centers to the local dairy farming community. Aid them to online content and knowledge repositories – access to best experts in India and across the world

5. Encourage development of low cost frugal innovations to automate labour intensive processes and also address issues like long inter-calving periods

6. Bring information and dairy technology to the Gaushalas to create a better self sustenance architecture so that the farmer can avoid the expenses involved in bringing an unproductive animal to a gaushala

7. Use technology stack to create exhaustive data sets on animals and farmers to improve credit access and insurance penetration so that farmers are better equipped to handle the risks involved in livestock rearing and boom bust cycles of milk prices.

The pace of change in improving productivity has perhaps also been hampered by the marked bias of the successive governments towards the dairy co-operatives. There was a historical reason behind this tacit support but to usher in a new wave of productivity growth perhaps government needs to consider a more pro-active support for new enterprises and start-ups to use technology and deliver more rapid productivity improvements.

Platforms are needed to facilitate engagement between different stakeholders in the space to solve this productivity conundrum – it is not just the question of improving livelihoods – it is ultimately the question of creating a space for our dairy industry on the world stage.

The last budget saw aggressive target milestone setting for the remaining part of the term for the current government. These included amongst other milestones : Increasing coverage of Artificial Insemination in Cattle from 30 to 70 percent , Elimination of animal diseases such as Foot and Mouth Diseases and Brucellosis and Using MNREGS programme to develop fodder farms to reduce cost of input for Dairy farmers. In addition government also announced allocation of Rs.15,000 crores towards bolstering animal husbandry and livestock sector as part of the “Pashudhan” program as a continuing measure to support livestock farmers in the aftermath of Covid pandemic. The forthcoming budget should continue to see more active implementation of these schemes and drive micro-initiatives along with the states to ensure the subsidies and the interest subventions get maximum penetration. In addition, there should be additional support given to startups and SMEs working in this space to accelerate the adoption of modern livestock farming practices through use of technology.

The author is Founder and CEO of Gaugau, A Livestock Trading Platform. Views expressed are personal)

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