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Retail consumers are expected to face the heat as the Punjab government increases the procurement price for milk, following a protest by dairy farmers.

Chandigarh, Punjab: The Punjab State Cooperative Milk Producers Federation Limited, popularly known as Milkfed, currently sells its packaged full-flat milk at Rs 60 per litre, medium fat milk at 54 per litre and low-fat milk at Rs 44 per litre.

However, the chances of a revision in the rates appear imminent, given that the Punjab government has increased the procurement price for its four lakh milk suppliers, as a direct result of the spike in the cost of fodder.

The hike at the rate of Rs 55 per kg of fat, which translates to a per litre procurement rise of Rs 3 to Rs 4, was introduced after hundreds of milk producers — under the banner of the Progressive Dairy Farmers Association (PDFA) — protested in Mohali district on May 21, demanding an increase in Milkfed’s procurement rate.

The federation, which sells packaged milk and other dairy products under the label ‘Verka’, gets nearly 20% of its milk supply in the market — 30 lakh litres per day — through some 4 lakh milk producers associated with 7,000 cooperative societies, reveals government data.

While Punjab Cooperation Minister Harpal Cheema clarified that they would not pass on the hike to retail consumers, a senior Milkfed official, requesting anonymity, said it would not be possible for Milkfed to withhold the hike for long.

“Sooner or later, we will have to increase the price of our retailed milk. Otherwise, Milkfed will be left in a major financial crisis and not able to maintain its quality,” he added.

Why are milk producers in trouble?

Atma Singh, a dairy farmer from Punjab’s Bathinda district, owns 25 buffaloes and 20 cows. He told 101Reporters that his dairy business had been unprofitable for over six months now.

“An increase of over 200% in fodder expenses is the primary cause of concern,” he said, highlighting that the price of wheat straw fodder, which he mainly uses to feed his milching cattle, began to rise in November last year. “I was hoping that the rate would drop once new stock of wheat fodder would become available in the market after the harvest in April, but this did not happen.”

Wheat fodder that was available at Rs 350 per quintal (q) at the same time last year, Atma Singh said, is now being sold at over Rs 1,000 per quintal.

“I need roughly 100q of wheat fodder to feed my cattle. My earlier expenditure was around Rs 40,000 per month, but that’s increased to over Rs 1 lakh a month now. I never experienced such a volatile market in the past. This has killed my whole profit margin,” the dairy farmer rued.

According to PDFA President Daljit Singh, the overall input cost of dairy farmers had doubled in the past eight to 10 months — primarily because of the increase in the cattle feed expenses.

And this extends beyond wheat fodder. Soybean, another stable diet of cattle, was available for Rs 3,200 per quintal a year ago, and its market rate today is Rs 6,500 per quintal.

“The cost of maize, which is also used as cow feed, has risen from Rs 1,500 per quintal in the past season to Rs 2,500 per quintal today,” the PDFA chief added. “We want a hike of at least Rs 7 per litre in Milkfed’s procurement price. Hopefully, they will revise the rates soon, as the minister assured us during our meeting on May 25.”

Moreover, according to the Department of Agriculture of Punjab, the increase in the cost of wheat fodder is directly related to the decline in wheat production.

Agriculture Director Gurvinder Singh told 101Reporters that the yield of wheat in Punjab was significantly affected by the high temperatures in March and April, which caused a drop of at least 20% in wheat and wheat fodder production.

“Besides, a huge quantity of wheat fodder is being sold to Rajasthan, as well. This added to the scarcity of fodder in the local market and hence, increased the market rate,” he explained.

A volatile unorganised market

To provide a clearer picture with data, Milkfed Director Kamaldeep Singh Sangha said that every day, Punjab produces between 3 to 3.5 crore litres of milk. Of the total production, the milk that’s available for sale in the market is approximately 1.5 crore litre per day. Large agencies like Milkfed and Nestlé purchase half the supply, while the remaining 50% is sold to the unorganised sector, including households, hotels, restaurants, dhabas, etc.

However, the dairy farmers who deal in the unorganised sector, are in major trouble, as Rajpal Singh, a dairy farmer from Ludhiana, explained to 101Reporters: “The market rate in the unorganised sector is at the mercy of wholesale milk purchasers… I produce nearly 1 quintal of milk. I am compelled to sell it within a few hours at any cost because milk is a fragile item. There’s no provision for me to store it for two days and wait for the right purchaser who would pay me more.”

“That’s why we are at the mercy of market forces who exploit the end-users and may even charge them more,” he further explained their plight, adding that there must be some mechanism put in place “where the interest of dairy farmers working in the unorganised sector are also protected”.

","postTitleURL":"Latest_effect_of_persistent_wheat_fodder_crisis_in_Punjab_rise_in_cost_of_milk","mainCat":["agriculture"]},{"postImg":{"cover":{"webp":"https://assets.ramen.101reporters.com/imgs/2020/12/826*532/101RPT816139/gurpal_singh's_cattleshed.webp","original":"https://assets.ramen.101reporters.com/imgs/2020/12/826*532/101RPT816139/gurpal_singh's_cattleshed.jpeg"},"largeCard":{"webp":"https://assets.ramen.101reporters.com/imgs/2020/12/724*425/101RPT816139/gurpal_singh's_cattleshed.webp","original":"https://assets.ramen.101reporters.com/imgs/2020/12/724*425/101RPT816139/gurpal_singh's_cattleshed.jpeg"},"smallCard":{"webp":"https://assets.ramen.101reporters.com/imgs/2020/12/333*138/101RPT816139/gurpal_singh's_cattleshed.webp","original":"https://assets.ramen.101reporters.com/imgs/2020/12/333*138/101RPT816139/gurpal_singh's_cattleshed.jpeg"},"metatags":{"whatsappUrl":"https://assets.ramen.101reporters.com/imgs/2020/12/300*200/101RPT816139/gurpal_singh's_cattleshed.jpeg","facebookUrl":"https://assets.ramen.101reporters.com/imgs/2020/12/1200*630/101RPT816139/gurpal_singh's_cattleshed.jpeg","twitterUrl":"https://assets.ramen.101reporters.com/imgs/2020/12/4096*4096/101RPT816139/gurpal_singh's_cattleshed.jpeg"}},"_id":"5fcb80c839e96906ced73edd","postId":"101RPT816139","postTitle":" How Covid-19 affected Punjab's dairy farmers","postDate":"2020-12-05T04:30:00+05:30","content":"

Chandigarh, Chandigarh: With the disruption of supply chains and drop in demand for milk and dairy products during the COVID-19 lockdown, the dairy farmers in Punjab were heavily impacted . Experts say that though the lockdown measures have been relaxed, dairy farmers are yet to get back on their feet.

According to a study by the National Dairy Research Institute (NDRI), Karnal, the dairy supply chain has been at the receiving end of the COVID-19 lockdown, but the preliminary analysis showed that dairy farmers have suffered higher losses primarily owing to the failure of adjusting the supply as per the demand.

Even the big suppliers including Verka (flagship brand of Punjab State Cooperative Milk Producers' Federation Limited - MILKFED) had stopped purchasing milk supply in bulk.

Inderjeet Singh, who recently retired as director of Punjab Dairy Development Board, a nodal agency for the welfare of dairy farmers in Punjab, told 101Reporters that COVID-19 affected most of the six lakh dairy farmers in the state one way or another.

He mentioned that Punjab’s total per day milk production comes to 360 lakh litres. About 50% of this is sold to households, 30% is used in commercial establishments like restaurants and tea shops, and the remaining 20% is used by milk powder manufacturers and other dairy products manufacturers.

He said that owing to the sudden lockdown, Punjab had an excess of 40-50 lakh litres of milk per day and thus, its market rate crashed by 30%. He asserted that the industry is yet to come out of the depression phase, and mentioned that though the milk sales to households have stabilised, the sales to hotels, restaurants, dhabas and dairy products manufacturers is still down.

Inderjeet fears that many small dairy farmers, who have less than 10 milch animals, will eventually leave the dairy business, while the expansion plans of the medium and big farmers will stop.

Jasbir Singh, a farmer from Sekha village in Barnala district, had 30 domestic animals as cattle before COVID-19 outbreak in March. Now, he is left with just 12 animals and claimed that the 40-day COVID-19 lockdown “ruined him financially”.

He mentioned that he had to sell animals that he had bought for Rs 70,000-Rs 90,000 at Rs 25,000-30,000 to sustain the increasing losses. He stated that even the milch cattle (source of easy profit) need a proper feed of Rs 200-250 per day, otherwise they stop providing any milk. During the lockdown, his sale was down by about 70%, and the market rate had fallen by 20-30%, he mentioned.

He mentioned that he had taken a loan of Rs 9 lakh to set his farm up, but the COVID-19 lockdown made it difficult for him to pay the instalments on time.

Ripple impact

Happy Singh, a milkman from Sangrur’s Kunberwal village, stated that COVID-19 had a ripple impact on the milk industry. Owing to low occupancy and footfall in hotels, restaurants and other such establishments, the sales in the sector went down by 60-70%.

Even during the winters, which is the wedding season in the state, the curbs on gathering have limited the number of guests. In October, the state government relaxed the norms, allowing less than 100 persons and a maximum of 200 in big wedding halls with open areas. However, in a state where the average wedding crowd is 400-500 people, “How do you expect milk sales to go up in such conditions,” argued Happy.

He asserted that though Diwali provided some relief, the condition returned to the same soon after.

Gurpal Singh at his cattleshed. Credits: Vivek Gupta\n

Gurpal Singh, a dairy farmer from Namol village of the Sangrur district, has 54 animals, but he has put 22 of them on sale. Ever since COVID-19 broke out, the price of the milk has gone down by 20%, he mentioned.

Last year, skimmed milk used to be sold for Rs 35 per litre, but now it has come down to 29, while the price of full-fat milk was Rs 50, now it is Rs 40, he informed. To add to the woes, the rate of cattle feed has increased by Rs 3-4 per kg, and it increased the input cost, he mentioned.

Earlier, he used to earn around Rs 15,000 per day, but now it has come down to around Rs 10,000, but increasing costs of cattle feed and veterinary expenses have decreased his revenue to half.

‘Sentiments to remain low’

Atma Singh, a Bathinda-based dairy farmer, who is also the president of Malwa Dairy Farmers’ Association, told 101Reporters that the dairy farmers, who supply milk to households, managed to survive, but dairy farmers supplying milk to big wholesale suppliers were worst-affected by the pandemic.

“If we try to bargain with wholesalers, they ask us to sell it somewhere else,” he commented.

He has 80 cattle animals and sells about 500 litres of milk every day. He added that many farmers have even curtailed the diet of their cattle, but predicted that it would end up affecting the overall health of the animals.

“Sometimes, I feel like selling my entire farm, but [I know] that it’s not the solution either,” he commented.

He asked the administration to step in and help farmers, especially those with limited resources

Karnail Singh, director, Punjab Dairy Development Board, told 101Reporters that the sentiments are likely to remain low till the COVID-19 threat is mitigated.

He explained that the demand and supply model dictates the milk business, and when the demand has gone down, it’s natural for the prices to crash.

“We can only hope that the vaccine [for COVID-19] comes soon and normalises the situation. Otherwise, one can’t really hope the demand to pick up any time in the near future,” he commented

(This article is a part of a series on Covid's impact on India's marginal farmers. The series has been funded by Internews Europe.)

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Punjab: Since the 2017-18 session, Dalit students in Punjab haven’t been able to seek benefits under a centrally sponsored scheme, forcing many students to drop out.

According to the Post Matric Scholarship Scheme for Scheduled Castes, the government is supposed to waive 100% of the tuition fees of Dalit students, but the intended benefits have not reached the eligible beneficiaries since the Centre put the maximum burden to fund the scheme on state governments. Apart from it, there is a direct payment of monthly maintenance charges, Rs 1,200 for hostellers and Rs 550 for day scholars.

Punjab is already battling fund crunch and couldn’t manage the scheme’s financial burden as the fee waiver bill of the Punjab private and government institutions crossed over Rs 1,850 crore for imparting free education to approximately 2.5 lakh beneficiaries in the last four years.

Rashpinder Jimmy, a member of Punjabi University student union, said the public-funded universities and government institutions are still not denying fee waiver to the SC students, but the situation is not the same in private institutions.

He alleged that a number of private colleges have denied fee waivers to Dalit students despite their eligibility under the scheme.

One such student Gurvinder Singh from Ferozpur, who had enrolled in a local private college in the Bachelors of Science course in the 2017-18 session, said that despite eligibility, the college didn’t waive off his tuition fee.

He had to do jobs to earn his tuition fee since his father being a daily wage labourer couldn’t afford his fee, he added.

Surinder Singh from Dhuri town in Sangrur district stated that he got the fee waiver during his diploma in electronics from a private college in Sangrur between 2014-2016, but he didn’t get a similar waiver to pursue further studies as the college authorities said that they are not getting funds from the state government.

Parasdeep Namol, a final year student of Bachelor in Arts from the government college in Sangrur, said that although his annual tuition fee was not charged, the college continues to charge exorbitant parent-teacher association funds on regular basis. Then, there has been no reimbursement of the maintenance charges despite the state government’s commitment under the scheme, he added.

Gurvinder Bhagat, press secretary, Punjab radical students union, told 101Reporters that there is a big struggle even to apply for the scheme.

He explained that while students have to obtain an income certificate, the officials take weeks for the same. Many students weren’t able to procure an income certificate in time owing to which they could not be enrolled under the scheme, he pointed out.

He added that there are several students, whom he knows, who were forced to drop their education at private colleges since they stopped this scheme.

Centre-state tussle

The scheme has been considered a great social equaliser, helping SC students to get higher education and then secure jobs in the private and public sector, experts say.

As per the 2011 census, Punjab has the highest percentage of SC population among all the states of the country. As far as the literacy rate is concerned, the literacy rate of 65% for SCs in Punjab is lower than the state's literacy rate of 76%.

Former registrar of Patiala-based Punjabi University, Manjit Singh Nijjar, who retired on July 5, told 101Reporters that the scheme ran smoothly till the 2016-17 academic session since maximum funding for the scheme was centrally sponsored. However, he pointed out, the problem began when the Centre made revisions in the funding pattern in 2017 under which the maximum part of the financial burden was put on state governments.

He said Punjabi university and its 11 constituent colleges gave admission to approximately 20,000 students during the last four years but hasn’t received in return from the state government despite spending Rs 67 crore.

The state government must release funds under the scheme since the state social welfare department has verified the beneficiaries, he said.

In 2019, the Ministry of Social Justice and Empowerment proposed a new fund-sharing pattern under which the Centre would bear 60% and the state governments would bear 40% of the scheme‘s financial burden.

However, Punjab is stuck to its demand to the restoration of old funding pattern as indicated in Punjab chief minister Captain Amarinder Singh’s official statement in which he rejected the Centre's proposed funding sharing pattern as inadequate and demanded the restoration of the old funding pattern, under which states had to finance about 10% only (about Rs 75 crore per annum) while 90% responsibility was upon on the central government.

Earlier this year, the state submitted a blueprint to the Centre seeking funds as per old fund sharing pattern but the Centre has not responded positively so far. There is also no approval to social justice’s ministry’s proposed funding at 60:40 ratio too, said sources in the state government.

The Centre in March this year released Rs 309 crore to Punjab against the pending dues till 2016-17 session before the revision of its rules. However, it’s grossly insufficient against the state's mammoth arrears.

According to Hindustan Times, Kirpa Shankar Saroj, additional chief secretary (social justice, empowerment and minorities), stated that it’s not possible for the state government to clear all the arrears from its resources. “It is primarily a central scheme and therefore we have taken up the issue with the central department for settlement of payments,” he said.

Speaking to 101Reporters, Devinder Singh, director, department of social justice, empowerment and minorities, stated that they have written to the Ministry of Social Justice and Empowerment numerous times, but they won’t budge from the 2017 guidelines.

He said the ministry has fixed the state's committed liability of Rs 780 crore per annum, which was the total annual expenditure spent under the scheme for the 2016-17 session.

He said that the Centre will pay them if the annual expenditure of the scheme crosses Rs 780 crore. But the entire execution of the bill would come under the state government as the annual bill is usually Rs 600-700 crore.

Private institutes likely to discontinue scheme for next session

As the state government isn’t committing to anything to clear the present arrears and the Centre’s proposed fund share pattern is not decided, the prevailing situation is likely to snowball further in the coming admission session, experts say.

Rajinder Singh Dhanoa, secretary of Joint Action Committee, an association of 1,650 private colleges, stated that there are chances that unaided colleges might discontinue this scheme from the 2020-21 session, unless the state government releases pending dues.

There were still engineering, management colleges that were imparting free education to the beneficiaries despite a rising backlog of dues, he added. However, things have reached a stage where our existing finances have made it difficult to continue giving them free education when neither the state nor the Centre is paying us, commented Dhanoa.

He mentioned that in the Bachelor of Education, Industrial Training Institutes and Elementary Teacher Training courses, the state government has already capped the fees and it’s impacting a number of Dalit students.

A rough estimate released to media on July 5 by Punjab Unaided Colleges Association (PUCA) & Federation of Self-Financed Technical Institutions (FSFTI) revealed that the state government owes a Rs 1,850 crore to educational institutions, both government and private, since the 2016-17 academic session. It includes Rs 415 crore for 2016-17 sessions, Rs 567 crore for 2017-18; Rs 437 crore for 2018-19 and 2019-20 session.

Dr Anshu Kataria, president of the PUCA & FSFTI, urged the Centre and Punjab government to release the dues to the educational institutions. He pointed out that states like Maharashtra and Rajasthan have already paid the dues under the scheme despite the Centre’s revised funding sharing pattern.

Many students have completed their studies and colleges are still waiting for their dues from the Punjab government, he added.

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Himachal Pradesh: The apple orchards of Himachal Pradesh are facing a crisis brought on by the Covid-19 lockdown and a shortage of labourers from Nepal.

According to data from the state horticulture department, Rs 4,000 crore of apples were sold while 6.64 lakh tonnes of apples were produced in the 2018-19 season. However, owing to the lack of solutions and intervention from the state government, the stakeholders are worried they might face unprecedented losses.

Local growers are concerned that the July harvesting season would be a failure owing to the scarcity of Nepalese labourers. According to estimates by the horticulture department, the return of around four lakh Nepalese labourers, who have been the backbone of the industry for over half a century, is blocked during the Covid-19 pandemic.

Chand, a labourer contractor, stated that though many labourers want to come back, the quarantine measures and other measures have discouraged many as they don’t have money, place or food to sustain themselves during the period.

Earlier, Chief Minister Jairam Thakur had announced that the state government would bring Nepalese labourers. However, the recent diplomatic strain between India and Nepal over boundary issues could also play spoilsport in return of Nepalese labourers, even as the director of the state horticulture department Madam Mohan Sharma informed that the Union External Affairs Ministry and the Union Home Ministry have been requested to look into the matter.

Sharma added though no records are maintained, about four to five lakh Nepalese come to HP in May and then leave after the harvesting season ends in October.

Growers fear crop rotting

Kunaal Chauhan, an apple grower from Kotkhai near Shimla, stated that Nepalese labourers are adept at working in high altitude and difficult terrain, making them an integral part of the apple industry.

Prashant Sehta, another apple grower from Shimla, believes that it would be impossible for their product to hit the market if the Nepalese labourers don’t return.

“In the past, we tried with labourers from Assam or Jharkhand but they couldn’t adjust to the conditions here. If labourers from Nepal don’t return, I fear we will leave our produce rot over the orchard. In that situation, HP apple will not leave for other Indian cities,” he commented.

Kullu-based-cultivator Shri Kant appealed to the government to intervene and believes that unless the government comes to their rescue, there will be a severe impact on the industry.

Big orchards hit

Yashwant Chauhan, the owner of Jai Estate, one of the largest apple orchard estates in Shimla district, mentioned that the apple industry is the backbone of the state's agriculture economy and if it goes into losses, the entire state would be impacted.

Lokinder Singh, president of Progressive Growers Association, estimated that only 10% of Nepalese labourers, who couldn’t return when the lockdown was imposed in March, are in the state. He urged the government to facilitate their return.

The growers also apprehend the increase in production cost since there is a shortage of wooden packing cartons and these are being sold at a higher value than last year. Tray makers used in packaging too face labourer shortage.

On June 13, the members of the Federation of Apple Growers (FOGA) met to discuss the issue. FOGA press incharge Rajesh Dhanta stated that though CM Thakur has made a statement, nothing can be seen on the ground.

He added that the price of trays should be regulated.

Crop shrink another worry

Apart from labourer shortage, the state horticulture department has predicted shrinking of state’s latest apple production to almost half in comparison to last year, according to director Sharma. He explained that the temperature did not rise to an optimum level during flowering and pollination stage in May, while untimely rains also impacted the yield.

Quoting internal data, Sharma said that they expect the sale to come down from four crore boxes in 2019 to two crore boxes.

Buyers face own issues

Shrinking produce may lead to a hike in retail prices of the apples in the open market but major apple buyers from potential markets like Mumbai, Ahmedabad, Chennai, Delhi and Kolkata face a number of hardships.

Rajesh S. Shinde, the owner of MD fruits from Chennai, said that each year his firm buys Rs50 crore worth of apples from Himachal Pradesh, but the town's main mandi (community market) is lying closed for over a month.

“The local government made a temporary mandi outside the city but it could not accommodate all traders. In that situation, procuring apples from HP and selling them here appears very difficult right now,” he said.

Prem Rohra, the owner of Ahmedabad-based HC Agrifresh Private Limited, stated that he used to procure apples worth Rs 24-25 crore, but there is major compression of demand in the market as people don’t have extra money due to the COVID-19 pandemic.

Deepak Gupta, owner of a Mumbai-based fruit trading firm, stated that they might not be able to make fresh procurement from HP because the old stock is already lying in their stores.

Sunny Chelani, the owner of Jaipur-based Jhura Mal Traders, believes that the demand in his region hasn’t gone down, but is wary of the obstacles he would have to face in procuring it.

When contacted, Naresh Thakur, managing director of HP State Agriculture Marketing Board, stated that though the apple season might not be profitable like last year, they will ensure adequate buyers for local growers produce. “Our season for cherry and pears went well. Growers even got good prices for their produce. We will make similar arrangements for apple growers as well,” he said.

He added that if the apple crop doesn't sell, they will make the provision of storing the produce in cold storages so that it can be sold as and when demand is generated. However, apple growers worry that the state has only 10 cold storages where only 10%-15% of the total yield can be stored.

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