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Agriculture economics: The next big farm solution - cutting production costs -Harish Damodaran
-The Indian Express

In a scenario of depressed crop prices, a unique PPP model in milk shows the way out.

Coimbatore: For roughly a decade from 2004-05 to 2013-14, Indian farmers experienced rising incomes from higher crop prices year after year — something they pretty much took for granted. That party ended with the crash in global commodity prices, hitting agricultural exports hard and translating into lower farm-gate realisations for most crops.

But there has also been a second, domestic, factor: the adoption of ‘inflation targeting’ by the Centre and RBI, entailing a formal commitment to limit the annual rise in the consumer price index to not more than six per cent. Since the target is based on an index in which food items have a combined 45.86 per cent weight, it inevitably leads policymakers to grant lower minimum support price hikes, impose export and stockholding restrictions on farm products, and open up to duty-free imports. We’ve seen a lot of these in the last two years or more.

That, then, leaves farmers with the only other way to protect margins and incomes: cutting costs. Some work in this direction is thankfully already happening on the ground, at least in milk.

Farmers now tend to give animals too much of costly compound cattle feed (CCF) and de-oiled cake/meal from groundnut, mustard or cottonseed. An adult cow requires about 800 grams of crude protein (CP) daily for its basic body maintenance and mobility. In addition, 100 gm is needed for every litre of milk production. So, for 12 litres, the total CP requirement is 2,000 gm or 2 kg/day.

CCF with 18 per cent CP content is today priced at Rs 20-21 per kg. De-oiled groundnut cake, containing 40 per cent CP, costs twice as much. The cost/kg of CP through either of these, thus, comes to Rs 100-115 or Rs 200-230 for 2 kg. Since 12 litres of milk sold at Rs 25/litre only brings in Rs 300 revenue, no sane farmer would obviously supply the cow’s entire 2 kg CP requirement through CCF or de-oiled meal. What he does, instead, is supplement costly feed/meal with some green fodder or straw. Alternatively, he may over-feed the cows in milk and ignore the calves, though that is counterproductive: A calf should ideally come to puberty and be ready for insemination in 13 months, for it to start giving milk after 22-23 months. An underfed calf will not only take 5-6 months longer to lactate, but also grow into a cow with reduced milking potential.

This is where an alternative approach — of farmers growing high-yielding proteinaceous green fodder — can make a difference. Tamil Nadu Agricultural University (TNAU) in Coimbatore has developed ‘Co-5’, a bajra-napier hybrid grass yielding an average 360 tonnes per hectare (145 tonnes/acre) of green fodder with 22 per cent dry matter and CP content at 12 per cent of the latter. The annual cultivation cost of this hybrid — a perennial grass that can be harvested 75-80 days after planting with subsequent cuttings at 40-days interval for the next six years — is estimated at around Rs 30,000 per acre.

“The cost of CP from Co-5 cultivation works out to not even Rs 8 per kg. An animal’s 800-gm daily CP requirement for body maintenance-cum-mobility can practically be met by giving 30 kg of this fodder, while CCF is needed mainly for milk production,” said R G Chandramogan, chairman and managing director of Hatsun Agro Product Ltd.

The Chennai-based private dairy has been promoting cultivation of fodder grass hybrids bred by TNAU, in what is a rare instance of university-industry public private partnership. “For us, lowering farmers’ milk production costs is a priority. One way to do it is to reduce their reliance on CCF, which is why we have taken the trouble of sourcing stem cuttings of TNAU hybrid fodder for multiplying and distributing to our farmers,” noted Chandramogan, whose company procures an average 27 lakh litres of milk daily from over 3 lakh producers.

Delivering 800 gm CP to cows from Co-5 fodder grown by farmers themselves would hardly cost Rs 6.3, as against Rs 80-plus through purchase of de-oiled cake or CCF. That, on 12 litres of milk, translates into savings of Rs 6-6.5 per litre.

Co-5 is basically a cross between indigenous fodder bajra (Pennisetum glaucum) and exotic napier grass (Pennisetum purpureum) largely of African-origin.

“They belong to the same Pennisetum genus, but different species. Napier’s advantage is its high biomass (250-300 tonnes/hectare), ruggedness and capacity to yield fodder round the year. Bajra yields only 20-25 tonnes fodder annually in a single cut. But it is easily palatable and digestible unlike napier, which has serrated leaf margins and spines that animals don’t like. When you cross the male napier with the female bajra, the resultant hybrids express the enhanced traits of both parents and also yield 350-400 tonnes per hectare,” explained C Babu, head of TNAU’s Department of Forage Crops.

Prior to Co-5, TNAU had released Co-4, Co-3, Co-2 and Co-1, which were all bajra-napier hybrids. Between Co-1 (released in 1992) and Co-5 (2012), average green fodder yields have increased from 300 tonnes to 360 tonnes per hectare. Moreover, the CP content has gone up from 10 per cent of dry matter in Co-3 to 10.7 in Co-4 and 12 in Co-5.

“All this is a result of improved breeding, but the credit for propagating and taking these to the farmer goes to Hatsun,” admitted Babu.

“Till last year, I was giving my animals 30 kg of Co-4 fodder and 5 kg of CCF daily. But now, I feed 30 kg of Co-5 and have reduced the CCF ration to 3 kg. Yet, they are yielding the same 15 litres with more fat and SNF (solids-not-fat) content,” claimed Vijayalakshmi, who has 80 cows and grows Co-5 on seven out of her 30 acres land at Agrahara Nattamangalam, a village in Salem.

According to John Henry Niezen, a Canadian animal husbandry specialist engaged with Hatsun, India should leverage its tropical country advantage that allows round-the-year fodder cultivation. This is something that New Zealand or European countries having extended winters cannot easily do. If farmers take to growing good-quality green fodders – thereby reducing, but not replacing, expensive CCF — it will help significantly bring down milk production costs.

“We are recommending feeding of 40 kg of green fodder per animal per day. That includes 30 kg of grasses/cereal fodders and 10 kg of legume forages (desmanthus, lucerne and cowpea). Doing that will reduce the requirement of concentrate feeds by 50 per cent,” added Babu.