Why is commercial dairy farming losing sheen in Punjab

Vijay C Roy

Tribune News Service

Chandigarh, October 30

Commercial dairy farming, which used to be most sought-after mode of farming by young and educated farmers in Punjab till 2016, is losing sheen these days. The growth has been marred by high input costs, diminishing returns and lack of mechanisation. Progressive dairy farmers said many farms closed operations in the past three years as they didn’t find it a viable proposition anymore. 

According to Punjab Dairy Development Board (PDDB), the number of such farms is stagnant at 10,000 for the past three years. 

According to experts, farmers of Punjab have worked hard in the dairy development. However, their produce is not fetching adequate price, thus making dairy farming a non-lucrative business.

“In the past three years, the input cost has risen significantly. However, the farmers were not paid accordingly. There was a marginal increase in procurement price of milk as compared to increased cost of feed, putting a strain on their viability. For example, farmers were getting Rs 530 per kg fat in March 2016 and Rs 580 in March 2017. In March 2018, it was Rs 540 and Rs 560 in March 2019,” said Inderjit Singh, Director, Punjab Dairy Development Board. Currently, farmers are getting Rs 650 per kg fat.

Commercial dairy farming contributes 25% to the total milk produced in the state. The average daily milk production in the state is around 360 lakh litres. Out of the total milk produced in rural and semi-urban areas, 190 lakh litres is marketable surplus. Of this surplus, around half of the milk sold is handled by the organised sector, comprising dairy cooperatives such as Milkfed’s Verka and private dairy companies and the rest by the unorganised sector such as milk vendors and sweet shops.

According to Singh, the commercial dairy farming is viable only if a farmer has more than 20 animals. The farms having less than 10 animals are unviable.

Echoing similar sentiments, Daljit Singh, president, Progressive Dairy Farmers Association, said: “There are around 4,000 commercial dairy farms run by progressive dairy farmers, with each farm having animals ranging between 25 and 500. In the past two years, around 40% farmers of the total commercial dairy farms have either shut their operations or on the verge of closure due to high input costs and diminishing returns.”

“Last year we were getting Rs 25-Rs 26 per litre compared to input cost of Rs 28 per litre but the price of maize has risen significantly. As a result, many of the farmers found it unviable to sustain and closed operations,” he added.

Inderjit Singh said there is a need to set up price stabilisation fund to compensate farmers in case of loss.

Secondly, farmers believe dairy farming is labourious and not much mechanisation has been explored in this sector. As a result, the younger generation is not willing to venture into dairy farming and prefer migrating to other countries.