NEW DELHI: India's almost-indelible perch atop global milk-producing nations is showing the first signs of cracks with farmers increasingly preferring to rear livestock for meat, lured by lucrative prices and a friendly government policy.
The country’s average milk yield of 917 kg per annum is now ranked a lowly 35th among 44 select countries, though India continues to be the world’s largest milk producer, a position it has clung to for many years. Still, there are clear signs of worry as farmers in north India, the country’s top milk-producing region, are up against squeezed margins after a 90 per cent rise in fodder prices between 2006 and 2009. The sharp increase in fodder prices is driving farmers to send animals to abattoirs.
In contrast, the value of meat exports has doubled in four years to Rs 5,000 crore in 2008-09 , according to industry estimates. India shipped around 20,000 animals in 2008-09. Indeed, the two segments present a picture of contrasting fortunes.
According to state-run Agricultural and Processed Food Products Export Development Authority, the per-kg realisation of meat (meat extracted for processing) rose 57 per cent to Rs 115 in 2008-09 from a year ago. Meat realisation for a buffalo weighing around 500 kg is about 275 kg.
Farmers selling milk, in comparison, have gained little due to the surge in fodder prices, though the wholesale price index for milk has shot up by 14 per cent from a year ago. The change in farmers’ practices is palpable.
A recent report of the advisory committee on animal husbandry and dairying said there were chances of a drop in the annual growth target of milk production to five per cent from the 6-7 per cent projected in the current Five Year Plan (2007-12).
National Dairy Development Board chairperson Amrita Patel said if milk production persistently flagged, imports would become the order of the day. The culprit, says the Indian Dairy Association (IDA), the apex body comprising members from cooperatives, MNCs, corporates & PSUs, among others, is a government policy lopsided towards meat exporters.
Farm animals producing 10 litres of milk a day require at least 675 kg of crude protein a year. But raw cattle feed exports have more than doubled between 2006 and 2009, mounting pressure on fodder prices. Fodder ingredients sufficient to feed 3,300,826 animals, which could have translated into 10 per cent of India’s annual milk production, were also exported.
"The abnormal rise in the cost of feed and maintenance has made it highly uneconomical for farmers to keep a dry buffalo (which ceases to produce milk). So when a buffalo becomes dry, it is sent to a slaughterhouse," said a New Delhi-based dairy sector executive. "This has become the trend in all peri-urban areas."
Buffalo meat exports between April 2008 and January 2009 leapt 45% from a year ago, boosted by government incentives such as Vishesh Krishi Aur Gram Udyog Yojana and duty entitlement passbook scheme, which give refunds and duty exemptions to exporters.
The Centre’s meat export incentives in 2008-09 alone were an estimated Rs 484 crore. Ironically, the BJP’s stringent opposition to animal slaughter forced the Planning Commission in 2002 to backpedal proposals such as withdrawal of the beef export ban and a hike in meat and leather exports.
The incentives have not gone down well with the dairy sector, which allege that the government’s skewed policy is likely to accentuate a severe milk shortage. The IDA says these incentives mean more and more high producer animals are heading to slaughterhouses.
Source : The Economic Times