Farmers in Akole have been forced to sell cows and take loans, with the cost of producing a litre of milk being higher than its procurement price.
At around 7 pm every day, Sangeeta Dadapatel Tikande milks her four cows in a shed located at the back of her home in Akole tehsil in Maharashtra’s Ahmednagar district.
When we met her on June 9, Sangeeta, 36, was starting the process with a cow who was two months pregnant and produced three litres of milk – just half of her usual yield. The low yield is not just because the cow is pregnant, Sangeeta said, but also because she’s being fed less these days.
“She is eating for two now and we should be feeding her extra. But due to financial constraints, we are feeding her less,” Sangeeta said, adding that the quantity of milk produced by a cow is directly proportional to how much she eats.
These constraints have put Sangeeta in the upsetting position of having to identify which of her cows provides the highest yield and feed that animal more than the others. Money is tight, she said, and her family of four struggles for food on some days. Her quiet sobs joined the cacophony of mooing in the shed.
Across Maharashtra, dairy farmers like Sangeeta have been forced to cut costs for the last three months since the second wave of the Covid pandemic has led to a decrease in the procurement price of milk.
Milk is procured from dairy farmers by cooperative or private dairies twice a day, which is then processed. It is then either sent to a powder processing plant to be converted to milk powder, or processed into butter, cheese, etc, or sent in its direct liquid form in packets for distribution.
Earlier, dairy farmers would get Rs 35 on average for a litre of milk. This dropped to Rs 20 during the lockdown. In May, when the pandemic was at its peak, the rate per litre dropped further to Rs 18.
In contrast, dairy farmers spend on average Rs 29 to produce one litre of milk.
With no scheme to cap the price of milk, dairy farmers in the state are bearing the brunt of this loss of income by selling their cows and taking loans. The frustration has culminated in a statewide protest scheduled for today, where thousands of farmers are expected to participate.
In 2019, Maharashtra produced 11.66 million metric tonnes of milk. According to Prakash Kutwal, secretary of the state milk producers and processing professionals’ welfare association, milk procurement in Maharashtra’s organised sector is 1.3 crore litres per day. This fell by 10 percent during the lockdown as cows were being fed less cattle feed. The unorganised sector, meanwhile, procures 1.1 crore litres of milk per day.
During the lockdown, Kutwal said, milk product sales decreased by 40 percent. Dairies claim the demand for milk reduced because restaurants and hotels, which buy a lot of milk byproducts, were closed. However, the price of cattle feed went up from Rs 1,200 per 50 kg to Rs 1,800. It lasts only eight days.
Sangeeta has four cows and three calves. Each cow produces up to 13 litres of milk a day on average. The family also owns an acre of land but they don’t grow anything to sell – it’s all for the cows. Sangeeta also works as a daily labourer for Rs 170 a day, but the pandemic has slashed work opportunities since people are hesitant to interact with outsiders. In May, she only worked for only 15 days.
Her husband Dadapatel Haribhav Tikande also works as a farm labourer and an electrician. Both professions were badly hit by the pandemic. Desperate, the family took a loan against their gold ornaments and jewellery for the first time in May from Bank of Baroda. They also availed of a Rs 15,000 crop loan for their acre of farmland, used a microfinancing scheme in Sangeeta’s name, and borrowed money from relatives.
“The rates of milk need to be increased,” Sangeeta said. “We pay Rs 10 for a litre of water and we get just Rs 20 for milk?”
Her husband added, “There are so many troubles. Everything was dependent on the milk business. Now, we are just getting by.”
Selling cows, throwing milk
Across Akole, farmers told Newslaundry that they are compelled to sell their cows to make ends meet.
Two months ago, Somnath Narayan Nawale’s herd of four cows was reduced to two. He sold them for Rs 15,000 and Rs 20,000, well below the market rate of Rs. 50,000, which increases to Rs 1 lakh when the milk procurement rates are high.
“People say there is no market now for milk,” said the 40-year-old. “So, I sold the cows at a lower price.”
Dairy farming has been Somnath’s main source of income for 15 years, until the pandemic came along in 2020. “We don’t even get back what we invest,” he said.
The costs also add up. Cows frequently need medication and hospital visits, perhaps every couple of months, he explained, and a hospital visit for a single cow costs him Rs 1,000.
A few kilometres away from Mangal’s home, Vishal Navle told Newslaundry that he had to throw 700 litres of milk in two months during the lockdown last year. “During that period, there were times when the dairy wouldn’t even take the milk,” he said. “They would sometimes come after three or four days and we had to throw away the milk since it gets spoiled in 24 hours.”
“Our milk purchase rate is according to the rate in the market,” said Vaibhav Pichad, chairman of the Amrutsagar Doodh Sang in Akole, a dairy cooperative where a large number of farmers from the tehsil send their milk. “The demand has become 75-80 percent less during the lockdown. Hotels, tea stalls outside offices were closed. The demand for byproducts is also affected.”
Vaibhav, who is also a former Nationalist Congress Party MLA from Akole and a current member of the Bharatiya Janata Party, added that even though Maharashtra was “unlocking”, the demand for milk products has not gone up.
Protesting against the ‘loot’
Last year, dairy farmers in the state protested against the low procurement rate for milk in different ways: bathing cows with milk, blocking roads, refusing to send milk to the dairy for a day, spilling milk on the ground. During the lockdown this year, protests were restricted to online campaigns.
But with Maharashtra opening up, the farmers have planned a statewide protest for today. According to Ajit Nawale, leader of the All India Kisan Sabha, their demands include the reversal of the procurement rate to what it was before and an investigation into the low procurement rates and the “loot”.
“The cost of production for one litre of cow milk is Rs 29,” Ajit said. “With the rates down to Rs 20, farmers are not even able to cover the cost of production. If you compare it with the pre-pandemic cost, it is a loss of Rs 15 per litre.”
The dairy farmers also want an audit to understand the costs of milk procurement, selling and the effect of the lockdown, Ajit said. Long-term demands include setting a fair and remunerative price, similar to what was implemented for sugarcane, and revenue sharing.
“Last year, a Rs 5 subsidy per litre was given after we protested,” Ajit said. “But this was given to dairies and milk conversion industries. We don’t want it via them. Give it directly to the farmers.”
The reduced demand for milk during the lockdown is a fact. But the onus on regulating the prices lies with the government, said Bhau Patel Navle, 61, a dairy farmer in Akole. And he does not think the government has done anything for the farmers.
“There is no difference between God and the government,” said Bhau, who is also a director at the Amrutsagar Doodh Sang. "What is happening right now is in the government's hands. All they have to do is say 'import' or 'export'. They don't even have to do it, just say it. Saying export makes a difference to the rate and it won't fall. But this only works if the government says it."
Bhau sold at least eight cows during the first lockdown last March. But unlike other dairy farmers, he has stopped relying on the profession for income. He has expanded into regular farming and also runs a clothing business. He has four cows left and plans to sell them too. “There is nothing we are getting out of it.”
“Dairy farmers have been finished,” he said. “Even if we do make losses, how much can we bear? There is a limit and this went beyond ours.”
Once upon a time, Bhau said, he had 12 cows with a yearly turnover of nearly Rs 2.5 lakh. Now, he loses Rs 1 lakh a year, spending Rs 5,000 per cow every month on food, medicine and other costs.
“Since these expenses don’t balance with the money being received for the milk,” he said, “it is always a loss.”
‘They are taking advantage of the lockdown’
A few houses down the road lies a seemingly unremarkable building belonging to Navnath Navle, 54. But when you walk through the gates, you see infrastructure to hold and shelter 500 cows. Yet only five cows are present.
Navnath’s cow empire started in 2002. In 2018, he had 200 cows yielding 25,000 litres of milk per day and an average annual turnover of Rs 2 crore until 2014. His infrastructural setup includes living quarters for labourers and a milking parlour.
But from 2014 onward, he said, milk procurement rates began to fall. He sold all 200 cows in 2018 and still has loans worth Rs 3.5 crore to pay off. Navnath’s cow palace lay vacant for two years until he bought five cows in December 2020, encouraged by the fact that the milk procurement rate had increased from Rs. 18 in April to Rs. 32- 35 per litre.
But now, his losses have resumed.
“Rates have fallen below 50 percent,” he said. “Lockdown and milk have no relation but they use it as an excuse to reduce the rates. Even if it has a little effect, they are taking advantage of the lockdown. The customer's rate hasn’t gone down, right? So where is the loss?”
According to Navnath, political leaders refuse to pay any heed to their woes due to “internal politics”.
“If the government would do fair and remunerative prices like for sugarcane workers, farmers would be able to bear it. Even if there are no profits, at least there would not be such losses,” he said, adding, ”We want MSP. There’s no focus of the government on this, but it’s such a small problem that if they want, they can quickly solve it within eight days. But their politics work against it.”
Rajendra Kokane, a dairy consultant based in Mumbai, said that exports of butter and milk powder, purchased by dairies during the lockdown, were affected by international restrictions, leading to an excessive stock of the products with the dairies.
Rajendra, who works in the field of dairy technology, said there is also a problem of storage and conversion of milk during the lockdown. “That’s why the rates had to go down, although it resulted in some loss for the farmers,” he said. “But except for marriages and restaurants, the milk consumption during the lockdown was almost the same.”
Sunil Kedar, state cabinet minister for husbandry and dairy development, remained unavailable for comment. A set of questions has been sent to him and this copy will be updated if he replies.