Input cost pressure | Business Standard Editorials

Clipped from: https://www.business-standard.com/article/opinion/input-cost-pressure-122122701069_1.html

Cattle feed shortage is pushing up milk prices

The dairy sector, which has maintained steady high growth ever since the advent of the White Revolution in the 1970s, seems to have run into a rough patch due largely to the short supply and high cost of cattle feed and fodder. Multiple upward revisions in the prices of milk by major cooperative as well as private dairy companies this year in the National Capital Region of Delhi, including the one that came into effect on Tuesday, is a clear sign of that. What is worse, this has come about during the post-monsoon flush season when, typically, milk supplies outstrip demand, allowing dairy firms to build stocks of skimmed milk powder, butter and other products for use in the subsequent lean season. This year, cattle feed prices are estimated to have surged by an unprecedented 28 per cent, pushing the wholesale price-based fodder inflation to its highest level since 2013.

Consequently, the milk procurement cost of dairy firms is said to have soared by 24 per cent. The effect of intense heat and other climate change-induced stresses on the feed-worthy farm produce is also believed to have contributed to the scarcity and high prices of fodder, forcing farmers to under-nourish their cattle, thereby reducing their milk yield. Dairy experts are, therefore, not ruling out further worsening of the situation in the coming months, especially during the summer. Going by the Jhansi-based Indian Grassland and Fodder Research Institute’s estimates, the present deficit of green fodder, dry fodder and the grains-based concentrated animal feed is as high as 12 per cent, 23 per cent and 30 per cent, respectively. Though the government seems reluctant to admit such a steep scarcity of fodder and the projected shortage of dairy products, it does acknowledge the spike in the cost of milk production owing to high fodder prices.

The root cause of the current woes of the dairy farmers and milk-based industry is the abysmal neglect of the fodder sector. Most of the natural pastures and common grazing grounds, the main source of forage for the animals owned by small and marginal farmers and landless rural people, have either disappeared or shrunk in size due to unchecked encroachments. Their vegetative cover, too, has deteriorated for want of necessary upkeep. Besides, the damaged and substandard wheat, maize and other grains normally fed to the cattle are now being used for the production of ethanol, starch and other products. The area under cultivated fodder crops has remained stagnant at just around 4 per cent of the total cropland for decades, even though the cattle population has surged several fold. Moreover, the replacement of traditional tall crop varieties with dwarf high-yielding ones has lowered the availability of plant stalks and other residual biomass for use as dry fodder.

The need, therefore, is to ensure better management of grazing grounds besides incentivising growing of nutritious forage grasses and trees under agro-pastoral and horti-pastoral systems of cultivation. Also, the good old, but virtually forgotten, proposal of setting up fodder banks to preserve the surplus green vegetation available during the monsoon season for later use needs to be revived and implemented. Unless a stable supply of feed and fodder is ensured, the gains in milk production might be hard to sustain.

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