Sunday, 9 July 2017

Dairy farming for milk production is not profitable

  • Milk is a farm produce that is nearly essential in diet for its nutrient value.
  • Producing milk for sale is not always profitable. But the produced milk provided nutrition to the farmer's household who also earned through sale of calves and dung. Subsistence motivation also justifies the choice of this business.
  • Sale of milk to traditional traders and direct sales remains popular. Traders are most dominant purchasers of milk.
  • In cooperative markets, milk producers gets about 60% of the final price.
  • Animal feed is a major component of the cost of milk production apart from medical costs and artificial insemination mostly several trials.
  • Food price management is known to be double edged in nature - a higher price is a gain and incentive to producer while lower price is a relief to consumer. 
  • Average milch animal produced milk for 28 days in a month and 8 months in a year.
  • Dry fodder and green fodder are cultivated in rural areas, and purchased in urban areas.
  • Milk price is dependent on its fat content, always. Milk pricing based on fat content is critiqued as unscientific and lowering prices of milk was protested by producers/farmers and high prices were stridently opposed by urban consumers.
  • The compounded pressure on land to produce more food, urbanization, industrial growth, and environmental conservation is making access to increased feed challenging. This led to poor farmer let cattle loose to graze. The excessive use of artificial insemination has led to the genetic dilution of the local breeds that are more adapted to the Indian conditions and feed availability and are resistant to many deadly diseases compared to hybrid varieties.
  • At the time of independence milk production was low though number of animals was very large. Operation flood implemented by NDDB is 1960's is celebrated for its success in instituting cooperative movement across India. It also resulted in the phenomenal increase in milk production, hybridization of Indian cattle, with more productive exotic varieties responsible for the revolution.
  • The cooperative movement though seen to be an ethical practice is clearly under challenge and transition. Bridging the gap between rural produces and urban consumer was a challenge that operation flood addressed successfully.
  • Post operation flood, market reforms have enabled the entry of profit oriented private enterprise into the sector.
  • In conclusion, dairying as a commercial enterprise is not economically viable. The investment and scale of business appeared important for commercial success. Subsistence and family nutrition are the strong justification for the pursuit of dairy occupation. Global factors may result in stagnant prices of milk and even decline.
My View:
In small dairy farms, with no mechanization, labour component and its associated problems are paramount. Cattle insurance costs, consumer resistance for higher prices for quality milk are some other issues. Growing green fodder cultivation and seasonal purchase of dry fodder and stocking are a must for profitability. In rural and semi urban localities adulteration is rampant, which at times is a health hazard. However, dairy farming with at least 100 milching hybrid buffaloes, near total mechanization and direct sales to consumers/ sweet shops/ hotels are the keys for its success. 

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