Dr Dinesh Kumar, Dr R.K. Bhardwaj
Prime Minister Narendra Modi had made a mention of his dream to see farmers’ income double in 2022, on February 28, 2016, while addressing a kissan rally in Bareilly, Uttar Pradesh. The Ashok Dalwai Committee made it clear that the target of doubling farmers’ income was in real terms and the goal was to be achieved over 7 years with the base year of 2015-16. In Jammu and Kashmir, Agriculture and allied sector is the mainstay of the rural economy. With a majority of the population living in rural areas, this sector contributes up to 16.18 percent towards state gross domestic product a significant portion of which is contributed by the livestock sector with milk as a leading agricultural commodity. The dairy sector plays an important role in achieving food security, reducing poverty, generating employment opportunities for women, and providing a regular source of income for rural households. This agricultural subsector acts as a growth engine for the rural economy by providing alternative employment opportunities throughout the year for landless, marginal, and resource-poor farmers from plains to difficult and hilly terrains of the UT. The total cattle and buffalo population of Jammu and Kashmir is 25.33 lacs and 6.91 lacs respectively. The respective population of in-milk cattle and buffalo is 8.42 lacs and 2.55 lacs. The majority of the dairy producers are smallholders having an average herd size of 2-3 milch animals. The union territory of Jammu and Kashmir produces 70 lakh liters of milk per day. The per capita availability of milk is 507g per day against the national average of 406g per day. The daily procurement of milk by the cooperative is 28 thousand kilograms per day out of which nearly 90 percent is marketed as fluid milk. The cooperative in the state has a cold chain infrastructure capacity of 1 lac litres per day. Out of the total marketable surplus milk only a meagre 2 percent is handled by the organized sector.
Typical rural dairy scenario
The rural dairy industry of Jammu and Kashmir is largely traditional, local, and unorganized. Like the rural smallholder communities in other parts of India, the dairy producers of Jammu and Kashmir are predominantly smallholder farmers characterized by a small volume of marketable surplus milk in numerous scattered holdings and lack access to the market. Many villages are not connected by good roads, and many more are inaccessible during the monsoon rains. Availability of collection centers and facilities for cooling or refrigeration are almost nonexistent at the village level. The rapid transport to a processing center is hampered by a lack of facilities and infrastructure. Under these conditions, the disposal of milk of suitable quality by individual dairy farmers in a condition fit for processing into marketable products is a formidable organizational task and economically not viable. Owing to these logistics and structural constraints, the incidences of transaction costs tend to be particularly high among small-scale rural dairy producers. Further, the lack of local marketing avenues forces farmers to keep prices down to a level where their revenues go below the breakeven point. This is, however, economically not sustainable but it usually goes unrealized by the farmers as the majority of them grow their own feed and fodder resources and utilize family labour. Expenditure incurred on feed and fodder combined with labour constitutes up to 85 percent of the total recurring costs of dairy production.
Poor market access and low milk prices deter farmers from increasing their investment in dairy production and thus these challenges constitute the key hurdle to the sector’s growth. The perishable nature of milk induces more likely opportunistic behavior of the buyer in comparison with products which can be stored. For these reasons, some of the farmers keeping livestock lack genuine interest to engage in commercial dairying as it is not considered an important economic activity except for supplying milk to the household. Furthermore, the dairy production is a risky venture with potentially high transaction costs arising from fluctuations in production prices and seasonal demand of milk. Spoilages are usually high during glut periods. Similarly, the demand of milk surges during festivals and wedding seasons as most of the people choose some predetermined dates thought to be auspicious which converge to a particular few days of the year leading to a rush in demand for liquid milk and milk products. The dairy producers in the rural areas are poorly organized and suffer from severe handicaps in marketing their milk. The scenario in turn has led to a situation in which the potential of this sector remains unrealized.
The way forward
The dairy sector in Jammu and Kashmir holds key to economic growth for the rural masses. An analysis of the Situation Assessment Survey (2018-19) released by NSSO indicates a positive impact of a larger investment in the livestock sector on improving the standards of living of livestock farmers, especially the smallholders. Despite milk being an important part of the diet, India was a milk deficit country post-independence. This situation led India to launch “Operation Flood” – the world’s largest dairy development programme and a landmark project to alleviate poverty, increase inclusive growth and livelihood generation. Today, India is not only self sufficient but occupies a numero uno position in the world in milk production besides being a marginal exporter. The programme emphasized establishing channels to integrate scattered village smallholder communities to larger urban demand centers across the country. In Jammu and Kashmir where organized sector handles a nominal share of milk production, this model needs to be emulated not only in the major milk shed areas but throughout the union territory – thereby benefitting all stakeholders across the value chain. Unlike other major agricultural commodities, the use of milk is not limited to consumption as fluid milk only but the dividends from surplus milk production are even higher when it enters value-added segment which is growing at 15 percent to 20 percent year on year with a large array of product portfolios. The organized dairy sector is witnessing a paradigm shift with its focus consistently drifting towards value added segments with the diversification of products to cater to the varied needs of consumers. To replicate this long growing national dairy saga in our case necessitates drastic augmentation in procurement infrastructure and processing line from widely dispersed smallholder communities across the union territory. At a time when government aims to double farmers’ income in real terms, it is opined that guaranteeing investment in the dairy sector would be the right approach. The department of animal husbandry has taken many initiatives for the economic development of dairy farmers. Integrated Dairy Development Scheme (IDDS) is one of them. Besides providing direct financial assistance for the establishment of a dairy unit, the scheme has a provision for supporting a dairy producer throughout the value chain like collection, chilling, transportation, and value addition of milk. The scheme is gaining traction among unemployed youth and farming communities and as on date more than 430 units (one unit comprising 5 dairy animals) of high yielding dairy animals have been inducted from outside the state. To harness this growing potential a renewed focus on last-mile linkages is needed which will also complement the dairy development initiative of larger rural masses leading to commercialization and scale economies in the dairy sector. The expansion of organized dairy value chain will not only eliminate intermediaries by strengthening direct supply chain but will also facilitate standardization of product quality. Given the multitude of long term and short term benefits of procurement of milk through organized sector many state governments like Telangana and Karnataka extended additional subsidies of Rs 4-5 a litre to rope in more producers. In addition to bringing transparency, efficiency, and accountability in the system, the organized sector with strong procurement network will put curbs on the menace of unabated and rampant adulteration of milk prevalent in the informal sector. Given a favorable policy environment from the government backed by bottom-up and actor-oriented approaches and investments from organized sector players the rural dairy landscape of Jammu and Kashmir can surely usher in a new era of economic prosperity.
(The author are Veterinary Assistant Surgeon in Department of Animal Husbandry, Jammu and Senior Asstt. Professor SKUAST, Jammu)
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