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The great lockdown gums up animal farms

Residents buy milk from milkmen sitting along a road in Kolkata on Tuesday.  (Photo: PTI)Premium
Residents buy milk from milkmen sitting along a road in Kolkata on Tuesday. (Photo: PTI)

  • India’s cattle are on an enforced diet, milk’s value is on the slide and chicken farmers are in deep despair
  • The livestock sector contributes 30% to India’s agricultural GDP and is valued at over 9 trillion. Yet, during the lockdown, policy and remedial interventions have largely focused on crops

NEW DELHI : Shravan Kumar Yadav often wakes up in the middle of the night these days. The incessant mooing and grunting from the adjoining cattle shed sounds like a rebellion brewing next door. Yadav knows the reason: his animals are hungry. Yadav, who lives on the outskirts of Lucknow in Uttar Pradesh, is struggling to feed his 40-strong herd of cows and buffaloes.

As the Indian government has extended the lockdown to contain the spread of covid-19 up to 3 May, Yadav is facing unprecedented economic hardship and uncertainty. Cattle feed is hard to procure and prices have shot up. Milk prices, meanwhile, have plunged. Much of Yadav’s regular business—delivery of liquid milk to confectioners and tea shops—has come to a grinding halt. Worried households, which used to be regular customers of fresh milk delivered to their doorstep, now prefer to buy packaged milk.

Even out-of-milk buffaloes which are usually sold for slaughter—Yadav’s neighbour and friend Vinod calls them “free ka khanewala" or freeloaders—have to be fed daily. “The losses are piling up," said Yadav, for whom dairying is the only source of income, over the phone.

During the ongoing lockdown, milk supply to consumers across India has been smooth, unlike perishables like fruits and vegetables which witnessed recurrent price volatility. That is largely due to the excellent supply chain developed by organized dairy cooperatives such as Amul and Mother Dairy, among others. However, only about a quarter of India’s milk production is handled by these organized players. For farmers disconnected from these established networks, the lockdown has led to a sudden surfeit of unsold milk and rising losses.

Earlier this month, farmers from Kerala and Karnataka were seen dumping milk into canals and roads. Rajendra Patidar from Mandsaur district of Madhya Pradesh has been distributing milk for free among farm labourers and making butter from the excess milk, after the Sanchi cooperative dairy stopped procuring milk. Another farmer, Pushpendra Singh from Bareilly in Uttar Pradesh, said that dudhiyas or local middlemen who purchase milk and supply to sweet shops and dairies have stopped visiting since the lockdown was announced. “Farmers who live next to urban areas may be getting a better price but no one is paying us even 30 for a litre of buffalo milk (which is usually procured at over 50 a litre by milk cooperatives)."

Milk is again selling for less than the price of bottled water, said Sharad Markad, a young dairy farmer from Ahmednagar, Maharashtra, recounting an earlier price collapse in mid-2018. The 40 litres of cow milk which Markad supplies to local collection agents is now selling at 15-20 for a litre, barely enough to cover the cost of feed. “Many farmers in my village are dumping milk, distributing it for free or feeding it to calves when local agents refuse to purchase."

Farmers are prone to exploitation in states like Uttar Pradesh and Maharashtra where the dairy cooperative network is weak, said R. S. Sodhi, managing director at the Gujarat Milk Marketing Federation Ltd., which markets its products under the Amul brand. Demand for dairy products used by hotels, restaurants and catering sector has collapsed, Sodhi said, adding, “if we get working capital at lower interest rates, we can purchase excess milk and convert it to milk powder or white butter."

On a positive note, Sodhi assures the problem is temporary. Milk production is set to fall as summer intensifies across the country. A gradual easing of lockdown rules is also likely to unlock demand. But how many animals and their bankrupt owners will survive the intervening months?

End-of-life woes

Hundreds of kilometres away from Yadav’s cattle shed in Lucknow, Mohammad Akhlaq, a dairy farmer and cattle trader from Bhatinda in Punjab, sounded troubled during a brief telephone conversation. Akhlaq’s 50 buffaloes are “drying up" (producing less milk) due to a lack of feed. An added worry is his 30 spent buffaloes—unproductive end-of-life animals—which he purchased from local farmers, paying them over 20,000 per animal, in order to supply them to slaughter units.

“The milk I used to sell for 50 a litre is fetching me half the amount. I have spent over 1,00,000 just to keep the spent buffaloes alive... if the lockdown stretches anymore, I will go bankrupt," he said.

Akhlaq has run up a debt of 13 lakh, most of it accumulated over the past few months. Since 25 March, when the countrywide lockdown was enforced, buffalo meat exporting units also downed their shutters. The closure of the 25,000 crore export industry means farmers are not only unable to sell their spent buffaloes, but they are also incurring the added cost of feeding them.

Buffalo meat exporting units lost business worth 4,000 crore since February, said an industry insider who did not want to be named. This translates into an income loss of 3,000 crore for farmers who sell spent animals and reinvest the amount to replenish the herd. In February and March, export units also lost business due to the shutdown in major markets like China which was in the middle of a lockdown. The Chinese and South East Asian markets have opened up since, and the approaching month of Ramzan means higher demand from West Asia—but a strict lockdown in India may force export units to stay shut.

Export units and all agricultural activities have been allowed to function from 20 April but buffalo meat exporters are yet to resume production. Even if they operate, cattle markets and transport of spent animals has to be allowed for the industry to function. “Right now, we are scared to deliver buffaloes to export units even if it is allowed," said a supplier from Uttar Pradesh, where cattle traders have often faced the ire of vigilante groups, even though unlike cows, the slaughter of buffaloes is legal in India.

Why livestock matters

The significance of livestock for farmer incomes is immense. The sector (excluding fisheries) contributes 30% to India’s agriculture gross domestic product (GDP) and is valued at over 9 trillion. India is the largest producer of milk in the world; around 70 million rural households are engaged in dairying—a regular source of income for them unlike crops where earnings are seasonal. India is also the second-largest exporter of bovine meat in the world after Brazil.

Yet, during the ongoing lockdown, policy and remedial interventions by the government have largely focused on crops. The churning in the livestock sector is yet to come to the fore, but signs of distress are palpable. Farmers are feeding livestock lesser than normal quantities not just due to lower feed availability but also as a way to lower milk production. Organized dairies are procuring less milk from farmers. Sales of value-added products like cream, cheese and ice-cream has plunged since retail outlets are open for fewer hours, and hotels and restaurants are shut.

Even established players have slashed milk procurement rates. Mother Dairy, which has an extensive network of retail outlets in the national capital region and is owned by the National Dairy Development Board, recently slashed milk procurement rates by a staggering 10 per litre, said Ramchandra Chaudhary, chairman of the Ajmer dairy cooperative in Rajasthan.

According to Chaudhary, any further slide in milk prices will force farmers to abandon some of their low yielding cattle—adding to the troop of strays roaming the countryside—and sell buffaloes for slaughter. “The Rajasthan state government is providing us a support of 2 per litre of procured milk, but the Centre is yet to take stock of the ground situation."

The milk union stopped supplying to Mother Dairy and is instead manufacturing milk powder, expecting a shortfall in the commodity in the summer. “Mother Dairy did not reduce retail prices ( 56 for a litre of full cream milk) but it is paying farmers less. Where will the farmer go if a government body acts this way?" asks Chaudhary.

“The contraction in demand and rules around what qualifies as an essential commodity has severely impacted farmers," said T. Nanda Kumar, former chairman of the National Dairy Development Board. The animal husbandry sector comprising of dairy, poultry and fisheries is extremely valuable for farmers’ income security but its current woes have escaped the government’s attention, added Kumar.

He listed a few remedial steps: provide financial support to dairy cooperatives enabling them to purchase excess milk from farmers and convert it to milk powder. Open up the livestock trade. Strongly dispel rumours that consuming poultry products raises the risk of covid-19 infections. “This is also an opportune time to modernize, adopt and enforce strict hygiene standards in India’s wet markets," Kumar said.

Meat worries

While the current downturn in the dairy sector is largely driven by restrictions on retail trade and restaurants, the lockdown impacted sales of livestock products like chicken and mutton in different ways. In February, even before the novel coronavirus got a toehold in India, the poultry industry valued at over 1 trillion was hit as consumers shunned chicken. The fear was driven by social media rumours that consuming poultry items raises the risk of covid-19. The health and agriculture ministry stepped in to quell the misinformation but the damage was already done.

Farmers in many states were forced to dump chicken as prices crashed to as low as 10 per kg. Many used JCB machines to dig trenches and bury chickens to save on feed costs. A month later, demand is picking up but the poultry sheds are empty.

Prices have recovered to 90-100 per kg in the wholesale markets but it is too risky to invest right after a round of heavy losses, said Jagdeep Aulakh, a poultry farmer from Karnal in Haryana.

Aulakh lists several risks to the trade. Poultry feed prices are rising due to difficulties in transporting maize, soy and fish meal from Bihar, Madhya Pradesh and Andhra Pradesh, respectively. Supply disruptions are imminent if the covid-19 case count rises unabated and states like Delhi mark more areas as containment zones, stalling retail sales. In the 40 days it takes to rear a broiler chicken, demand may also take a hit due to falling consumer incomes, especially among low-income groups dependent on daily wages.

Large states like Uttar Pradesh will likely continue to discourage consumption of poultry products and meat, and not help the business revive. Given the lockdown, it is also uncertain when pushcarts and roadside eateries selling boiled eggs and chicken will resume business.

While the poultry business is limping, mutton shops in the national capital region are facing an acute supply crunch. Retail prices have nearly doubled—selling upwards of 800 per kg in Delhi; in Noida, where retail outlets are shut, home-delivered red meat can cost up to 1,000 per kg. Most retailers said supplies have dried up from the back end.

Unlike poultry, goat rearing is a scattered rural enterprise where traders purchase animals roaming across villages in states such as Rajasthan, Uttar Pradesh and Haryana, which cater to the northern Indian market. “Ever since (the) lockdown was announced, traders have been unable to move around and local weekly markets are shut as well," said Jamaluddin Khan, owner of a goat breeding farm in Ajmer, Rajasthan.

Transport is a hassle since state borders are sealed and suppliers are unwilling to risk police intimidation. There is confusion too: the home ministry has exempted animal husbandry farms from the lockdown list but unlike milk, the ministry did not specify if collection and trade is allowed. From an average of 10,000 animals per day, supplies are next to nil now, said Gulfam Salahuddin, president of the Ghazipur goat and sheep market, Delhi.

Be it fish or meat, whatever you’re getting in Delhi is due to the resourcefulness of some, said a supplier. “To move a truck loaded with fish, we are paying bribes at each and every inter-state checkpoint. These added costs (around 40,000 for a truck loaded with 300-400kg of fish) are often more than what the fish costs."

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