Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 150
 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]
Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 151
 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]
Warning (512): Unable to emit headers. Headers sent in file=/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php line=853 [CORE/src/Http/ResponseEmitter.php, line 48]
Warning (2): Cannot modify header information - headers already sent by (output started at /home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php:853) [CORE/src/Http/ResponseEmitter.php, line 148]
Warning (2): Cannot modify header information - headers already sent by (output started at /home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php:853) [CORE/src/Http/ResponseEmitter.php, line 181]
LATEST NEWS UPDATES | The Liquid Alternative: The ultimate antidote to farmers' debt woes - dairying -Harish Damodaran

The Liquid Alternative: The ultimate antidote to farmers' debt woes - dairying -Harish Damodaran

Share this article Share this article
published Published on Sep 16, 2016   modified Modified on Sep 16, 2016
-The Indian Express

Again, going by NSSO data, while 11.9 per cent of an average Indian agricultural household’s monthly income comes from “farming of animals”, it is well over 24 per cent for Gujarat.

Gujarat has a relatively low per agricultural household debt of Rs 38,100, as against the all-India average of Rs 47,000, according to the National Sample Survey Office’s (NSSO) data for 2012-13. Also, 79.2 per cent of the state’s average outstanding loan amount was owed to banks, cooperatives and other formal lending institutions, whereas the corresponding all-India figure was 59.6 per cent.

The Gujarat farmer, in other words, is not just comparatively less indebted, but also not as reliant as his counterparts in most other states on moneylenders, shopkeepers/ traders and other “non-institutional sources” who typically charge far higher interest rates. That better situation can be ascribed to two four-letter words: Milk and Amul.

Again, going by NSSO data, while 11.9 per cent of an average Indian agricultural household’s monthly income comes from “farming of animals”, it is well over 24 per cent for Gujarat. The ratio may be a tad higher for Jharkhand and Odisha, but in their case 94 per cent and 81 per cent of the respective average monthly receipts from this activity was derived from “sale of live animals”. In Gujarat, by contrast, production of milk constituted 94.6 per cent of the average receipts from farming of animals.

Milk is a ‘crop’ that is harvested and marketed daily, unlike wheat, cotton or sugarcane that take between four months to nearly a year for farmers to be able to sell. While the daily sale of milk may be in litres — as opposed to quintals in most ‘regular’ crops — what it does, however, is provide liquidity which can take care of the household’s day-to-day expenses and reduce dependence on the moneylender to that extent.

The NSSO data, in fact, shows the contribution of “farming of animals” to the average monthly income of the bottom-five expenditure decile agricultural households in Gujarat, at 26.6 per cent, to be higher than the 23.1 per cent share for those belonging to the top five deciles. It only points to the inherently pro-poor character of dairying, whose potential hasn’t really been harnessed, more in regions with high incidence of farmer indebtedness or Maoist insurgency.

In 2015-16, the district dairy unions affiliated to Amul — the Gujarat Cooperative Milk Marketing Federation — procured about 144 lakh litres per day (LLPD) of milk from 34.5 lakh producers, who would have covered nearly 88 per cent of Gujarat’s estimated 39.3 lakh households. Farmers received an average purchase price of Rs 640 per kg fat. That would have translated into a rate of Rs 39.55/litre for full-cream milk containing 6 per cent fat and 9 per cent SNF (solids-not-fat) and Rs 28.58/litre for toned milk with 3 per cent fat and 8.5 per cent SNF. Taking an average of Rs 35/litre, the Amul unions would have pumped in roughly Rs 18,400 crore or Rs 50.40 crore daily to Gujarat’s milk producers in 2015-16.

The Amul unions currently follow a two-stage payment system. The first step involves the unions (there are 18 of them) making payments to the primary village cooperatives societies (18,545 in all) for the milk they deliver after collecting from farmers. These are made through RTGS (real time gross settlement) fund transfers to the concerned society’s account on the 11th, 21st and 31st of every month against the preceding ten days’ procurement. The village society, in turn, pays farmers directly in cash, with the secretary/manager withdrawing money from its account as and when required.

“We want to move to a system of direct payments into farmers’ bank accounts, as opposed to routing through the society. It will require integrating all the societies into a common AMCS (automatic milk collection system) application software that provides real-time information on the quantity of milk, along with fat and SNF content, poured by each producer-member. Our target is to finish this process by March 2017, so as to implement direct payments in the coming fiscal,” said K Rathnam, managing director of the Kaira District Cooperative Milk Producers’ Union.

Interestingly, the Chennai-based Hatsun Agro Product Ltd, India’s largest private sector dairy firm, claims to have already introduced a system of direct payments to its 3.1 lakh-odd farmers who supply an average 27 LLPD of milk.

The Rs 3,444.59 crore-turnover company has installed ‘Ekomilk’ analysers at all its 8,880 purchase centres in Tamil Nadu, Andhra Pradesh, Telangana and Maharashtra. The person at the centre draws a 90-ml sample of the milk brought by each farmer and places it on the ultrasonic analyser, even as his/her producer code is entered on a keyboard. The analyser gives the fat and SNF content within a minute’s time, after which the farmer’s entire milk consignment is taken to a connected electronic weighing scale. At this point, the keyboard is punched again and the analyser display screen now indicates the total quantity poured, the rate corresponding to the fat/SNF content in the sample and the payment to be made, besides the date and time of supply.

“The entire system is transparent, as the farmer gets to see everything and obtain a print-out of whatever is displayed for every transaction. We transfer the money against all these invoices once in ten days. So, if a farmer is supplying, say, 9 litres daily at an average of Rs 26/litre, an amount of Rs 2,340 would reach his bank account on the tenth day,” explained R G Chandramogan, managing director, Hatsun Agro.

The biggest advantage with milk, he pointed out, is that it ensures round-the-year cash flow for the farmer without price fluctuation of the sort witnessed in tomatoes, turmeric, cotton or coconut. And with direct payments, when real money starts coming into his account, the farmer’s creditworthiness, too, goes up. For the bank, he then becomes a customer to be wooed rather than a social obligation burden (think zero-balance Jan-Dhan accounts). And access to formal bank finance also means not having to borrow at usurious rates, be it from the sahukar or microfinance institutions.

Ultimately, there can be few better antidotes to farmers’ debt than a crop that has a ready market in a country where people love to consume milk — and will increasingly do so with rising incomes. A farmer selling 14-15 litres daily throughout the year from three animals – one freshly-calved producing 10-12 litres; the second, 5-6 months pregnant giving 3-4 litres; and the third about eight months that’s already gone dry and ready to calve just when the previous one stops lactating — to an Amul or Hatsun is unlikely to get drowned in debt.

The Indian Express, 15 September, 2016, http://indianexpress.com/article/business/business-others/the-liquid-alternative-the-ultimate-antidote-to-farmers-debt-woes-dairying/


Related Articles

 

Write Comments

Your email address will not be published. Required fields are marked *

*

Video Archives

Archives

Im4Change.org हिंदी वेबसाइट का परिचय. Short Video on im4change.org...

Im4Change.org हिंदी वेबसाइट का परिचय. Short Video on im4change.org...

"Session 1: Scope of IDEA and AgriStack" in Exploring...

"Session 2: Farmer Centric Digitalisation in Agriculture" in Exploring...

"Session 3: Future of Digitalisation in Agriculture" in Exploring...

Objectives | About Us | Workshops | Disclaimer
share on Facebook
Twitter
RSS
Feedback
Read Later

Contact Form

Please enter security code
      Close