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Dairy Farming in India


Sharad Bailur

India is often described as a land of contrasts. Nowhere in this vast land of 970 million people is this more true than in dairy farming. The pressure of population ensures that the land remains the property of millions of farmers who own plots which are tiny by world standards. There is, in addition, a sizeable population of labourers who work on the land but who do not own any. The size of the population also makes it necessary that the land is used to grow food crops for the growing needs of the people, not merely because their numbers continue to grow but because their economic condition is improving and they can afford better and more food.

This clearly means that very little land can be diverted to the growing of fodder for cattle. Cattle therefore have to make do with the residues left over after food crops have been grown namely, straw, rice polish, bran and de-oiled groundnut (peanut) cake and cereal concentrate. Not for the Indian cow or buffalo those acres of green carpet that is the privilege of cattle in New Zealand, Europe and elsewhere. Each dairy animal therefore typically produces no more than three or four litres of milk a day. But since the cattle is fed only crop residues, the levels of energy efficiencies achieved would be impossible in a developed world dairy setting.

According to Food Outlook 1997 produced by the Food and Agricultural Organisation of the United Nations, India is the largest producer of milk in the world along with the United States at the end of 1997 with a total production of 70.8 million tonnes. It is expected to overtake the US and go on to produce 74 million tonnes in 1998. How has this been accomplished?

The dairy industry in India suffered from all possible disadvantages, save one, when India became independent in 1947. India, almost alone among non- European cultures, is a milk drinking nation. This, coupled with a large population, ensured a constant and growing demand for milk. But the economic policies then being followed had ensured that the production of milk languished at less than 20 million tonnes and was falling. The best cattle was taken to the cities to meet the demand for milk and when they went dry they were either slaughtered or abandoned. This was responsible for eroding alarmingly the genetic potential of dairy cattle in the country. Farmers in the villages, involved in dairying as an occupation, were compelled to sell milk to middle men at derisory prices because the government had given them the monopoly of purchasing the milk. Producing milk also involved high risk because it could not keep beyond three hours in India's tropical climate. The result was evident in the falling production of milk.

In this worsening scenario the farmers of one district, Kheda in Gujarat, decided to seek the advice and help of one of India's greatest men - Sardar Vallabhbhai Patel who later became Deputy Prime Minister of independent India. He suggested to them that the only way they could save themselves was to form a dairy cooperative and sell the milk directly to the markets instead of through the middlemen route. Forming a cooperative offered its own difficulties. Here was an illiterate farming community being told to form a modern cooperative and market their milk in one of India's most modern and sophisticated cities - Bombay. It also met with opposition from all quarters - from the British Indian government's Milk Commissioner in Bombay to the local privately owned dairy in Kheda, to the middlemen that it employed.

The cooperative struggled against all odds for years - and it survived, and eventually it thrived. By 1965 this cooperative calling itself AMUL (meaning priceless) but also an acronym for Anand Milk Union Limited, had acquired a name for itself as the best run and most modern dairy cooperative in the country. It provided fortified fodder for the cattle of its members and veterinary services on a 24 hour basis. It offered artificial insemination facilities using the best breeds to improve the dairy potential of the farmer's cattle and it bought all the milk that the farmer produced at fair prices all year round. It sold the pasteurised and treated milk in the big cities and it regularly distributed profits to its members over and above the good prices it paid each day twice a day to them.

In 1965 the Prime Minister of India, then on a visit to the district decided that the example of Amul could be replicated all over the country. This resulted in the setting up of the National Dairy Development Board which was given the primary task of replicating the Amul experience, in what came to be called the Anand Pattern of Dairy Cooperatives, all over India.

The plan, called Operation Flood, was to initially build four metropolitan dairies one for each of India's biggest cities and to develop twenty seven cooperative dairying areas - termed milksheds - in ten states. The European Economic Community then played a pivotal role in ensuring that the Anand pattern replication plan went on to succeed. It donated milk powder and butter oil to India. This was reconstituted into liquid milk and sold in the metropolitan markets. The money, generated from the sale of the gift commodities, was then used to set up the four dairies. In the second phase help came from both the EC and the World Bank. This helped set up a national milk grid which ensured that major cities all over the country received their milk supplies by rail and road tankers from places often as far as 2000 kilometres away. The third phase expanded the effort made to embrace the entire country. Today there are 9.7 million farmers who are members of 75,000 village dairy cooperatives societies each of which is affiliated to 170 district level cooperatives which in turn are part of a federal cooperative marketing structure at the level of each state within the country. There are 22 state level federations which offer dairy and other products in competition in the open market among themselves and with the private dairy sector that runs side by side. The industry as a whole today produces enough milk and milk products to ensure that the country imports virtually no dairy products.

While the vast population makes for a per capita consumption of milk which is still rather low the fact that there are none of the severe shortages which were endemic only two decades ago, goes to suggest that the strategy followed by India to make itself self sufficient in dairy and dairy products has paid off handsomely. From a total production of 20 million tonnes in 1970 the production has gone up to more than 70 million tonnes in these last twenty five years or so. This means that even if the price of milk is calculated at just Rs 10,000 ($ 250) per tonne something like Rs 50,000 crores more ($125 billion) is today flowing back into the rural economy each year to directly benefit the poorest of India's farmers than it did in 1970. This clearly makes India's dairy effort one of the best attempts in economic development any where in the world, ever. It must also be remembered that it is one of the largest rural employment schemes in the world generating employment for some 18 million farmers spread over 22 states of the country. And most important of all, it is completely voluntary.

At the centre of the entire effort in dairy farming in India is the farmer, the owner member of his cooperative who takes every day decisions on the running of his society. He is a small farmer, or a labourer who works on someone else's land, and probably owns no more than one or two cows or buffaloes. He typically brings to the cooperative perhaps just about four or five litres of milk each time. The cooperative elects its own Chairman and other officials who are bound to do what their members tell them. It also employs its own staff. This staff pays farmers on the basis of the quantity of the milk they bring in and on its quality tested on the basis of the fat content. The cooperative very often runs its own milk chillers, very important in a tropical country, and elects those who will represent it at the level of the district. At the district level they run their own milk processing plants many of which are huge even by world standards. The district level elected officials then go on to elect a state level managing committee for their federation. The federation in turn coordinates the entire marketing effort. The Gujarat Cooperative Milk Marketing Federation for instance is the largest food business in the whole of India, far larger than any of the multinationals operating in the field. All the state level federations have got together and formed a national federal structure called the National Cooperative Dairy Federation of India.

All this teaches India's farmers an everyday lesson in taking control of their own lives not just economically but politically as well. It teaches them to think and question because each of their actions, they now know, has an effect on their futures. They look forward to education, not just literacy. They now understand the meaning of democracy at an everyday level. In a country beset by age old tradition, religious and caste prejudices the democratic functioning of their cooperatives gives dignity to those who have had none for the whole of India's history spread over thousands of years.

Another aspect ignored, but just as important, has been the role of women. Agriculture involves the growing of one or two or at the most three crops a year. These fetch the farmer money as and when the crop is harvested and sold. But if he has just one or two cows or buffaloes they provide milk throughout the year. This milk once sold goes to keep the home fires burning. Since the number of animals in his home is so few, it is the woman of the house who looks after them. This gives her a level of economic independence she has never before had. In a largely male dominated society this has helped change cultural attitudes set over the centuries. Women now run their own village dairy cooperatives - more often than not, better and more efficiently than men. Most women do not harbour higher political ambitions and are content to run their cooperatives efficiently and well. This has ensured that the dairy cooperative movement now has members who are steady and who will not abandon their farms for the glitter of the cities. Their literacy levels have shot up. Since female literacy and education has proved itself to be the best contraceptive ever devised by man, the fecundity levels of the population have been dropping steadily.

The dairy cooperatives of India have attracted the attention of other less developed countries as well. Sri Lanka, India's neighbour to the south, has gone into collaboration with the National Dairy Development Board of India to set up the Kiriya Milk Industries of Sri Lanka. The intention is to make Sri Lanka independent of milk imports in the next ten years. Kyrghyzstan, a former Soviet republic has had a dairy set up for it by the Dairy Board of India. Other countries which have expressed interest are Thailand, Vietnam, Iran and Pakistan.

As mentioned in the beginning India's dairy industry is a study in contrasts - the world's largest milk producer which gets its milk in driblets of three or four litres from each of its nine million farmers both men and women twice a day and ensures prosperity to them in one of the most successful economic and social development programmes ever devised by man.