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Livelihood/ Employment | Amul's not so marginal farmers -Sohini Das

Amul's not so marginal farmers -Sohini Das

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published Published on Oct 27, 2015   modified Modified on Oct 27, 2015
-Livemint.com

Large dairy farms are critical for the next stage of India's white revolution

Nagara (Anand): Sunil Patel hardly looks like a dairy farmer in his loafers, sleek glasses and cotton trousers. As he guides me to his farm of 110 cows through the narrow lanes of Nagara, a small village around 60 km from India’s milk capital, Anand, I notice most of the houses have piped natural gas connections. Nagara, like most villages in the Petlad taluka of Anand district of Gujarat, is affluent because of milk.

Patel, a third-generation dairy farmer, says of the 1,500-odd families in Nagara, almost all have taken to dairy farming as their primary source of income. His farm, one of the largest in the region, started with a herd of 20 cows in the year 2000, when he had invested Rs 5 lakh to start his own dairy business.

His grandfather, Shankarbhai Desaibhai Patel, was a small farmer. He had entered dairying with only one cow 80 years ago and the family has stayed in the business since. Today, Patel’s son is studying medicine in Germany, and he invested Rs 2 crore in 2013 to set up a large shed on the outskirts of his village, complete with Swedish milking machines and bulk milk coolers, to house his herd. During the lean months, his farm produces 150 litres of milk a day. During the flush winter months, it goes up to 800 litres.

Patel fetches Rs 600 per kg of fat, the highest procurement price in the country for milk. While he shies away from sharing his profit figures, highlighting that fodder and labour costs have surged, rough calculations show his annual income is not less than Rs 50 lakh. Profits, however, depend on productivity of the herd.

“I come to the farm early every morning. Cows feel at home when they see the owner,” he says patting one of his Holstein-Friesians cows, all tagged in their ears with yellow number plates. Cows, as I come to understand, are sensitive animals. They need to be fed, cleaned, and their productivity goes down with the slightest stress in their environment, which could range from fluctuations in temperature to a stranger in the cowshed. The average productivity per cow in Patel’s farm is 20 litres a day. It can go up to 30 litres during winter.

What started in 1946 as a protest against middlemen exploiting marginal farmers has gone on to become India's largest milk cooperative, with a turnover rivalling multinational food giants. The Gujarat Cooperative Milk Marketing Federation (GCMMF), the Rs 20,733-crore behemoth that markets the Amul brand of milk products, is witnessing a gradual churn among its 3.6 million farmer base, a shift towards commercial, large-scale dairy farming.

The number is still small, about 5-10 per cent of farms at the moment, but is rising steadily. “About 20,000 farms are looking at becoming large-scale commercial farms. People are trying to evolve from family-based dairy farms to commercial dairy farming by investing in technology, herd and breeding. Many are open to taking bank loans,” explains R S Sodhi, managing director of GCMMF.

What has triggered this churn? Two things primarily — an assured market for milk and a good procurement price. GCMMF’s procurement prices have gone up from Rs 337 per kg fat in 2009-10 to Rs 600 per kg fat now. And, there is a third factor, of rising aspirations among dairy farmers. “Most farmers visit the city often; their children are now educated. The youth have aspirations to rise above traditional dairy farming,” Sodhi says. The growth of these large farms is critical for the growth of GCMMF itself. The National Dairy Development Board estimates demand for milk in the country will rise to 180 million tonnes by 2022 from 140 million tonnes now. The country’s milk production has to increase by 5.5 million tonnes every year. The GCMMF, on its part, has spread its wings beyond Gujarat. From 9.09 million litres a day in 2009-10 when sourcing from other states was negligible, procurement has risen to 14.9 million litres a day. GCMMF now procures nearly two million litres a day, or 13 per cent of its milk, from states other than Gujarat.

GCMMF’s entry into other states like Uttar Pradesh  and West Bengal, where it is setting up processing plants, is expected to institutionalise and organise the markets there. “Wherever Amul has entered, farmers have benefited as it sets a benchmark for procurement prices,” says Sodhi.

Punjab, for example, has large farms. But, as GCMMF officials point out, most of the farms there focus on breeding animals, rather than dairy. This is because Punjab has a huge unorganised market for milk. The Punjab State Cooperative Milk Producers’ Federation, which sells milk under the Verka brand, procures 1.2-1.4 million litres a day, three to four per cent of the state’s milk production. The rest is procured by private dairies and small players. “Gujarat’s farms have an assured market. They are free to sell milk to anyone. However, since Amul pays a good price and also subsidises fodder costs and helps with breeding animals, most farmers remain loyal,” says a GCMMF official. Officials stress if farmers here turned their attention to breeding animals as well, it would not only increase productivity but also open a new source of income.

Patel's farm, for example, started with an imported dosage of semen and a herd of 20 cows. It has swelled to 110 cows, including 51 calves, all Holstein-Friesians.  As GCMMF aims to be a Rs 30,000-crore federation by 2020, large dairy farms are going to become critical for its growth.
 
Business Standard, 23 October, 2015, please click here to access

Business Standard, 23 October, 2015, http://www.business-standard.com/article/companies/amul-s-not-so-marginal-farmers-115102300023_1.html


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