72
S
tate
of
I
ndia
’
s
L
ivelihoods
R
eport
2015
return on investment (ROI) appears better.
However, many farmers do not keep a
detailed account of costs and benefits arising
out of dairy farming. Theymention that such
calculations are a proof of the unviable prices
that they get and will force them to consider
winding down the business. One trendwhich
is clear is that the younger generation of
farmers is not keen to continue this business.
Ashok More, a small farmer in Pune taluka
who had a few indigenous cows since the
1970s, commenced cross-breeding of his
animals when it was introduced in the
mid-seventies. He benefitted from the
increased milk production of cross-bred
cows at 10 litres a day and hence increased
his herd size gradually. In the early 1990s,
he had as many as 15 cross-bred cows.
However, during 1993–95, there was a
business downturn since the local coopera-
tive was not able to procure all the milk
due to glut in production in Maharashtra.
Since milk marketing became an issue, he
decided to decrease the herd size. When in
2000s, milk was again in demand and he
wanted to increase the herd size, his sons
did calculations of income and expendi-
ture of the dairy business and refused to
join saying, “it was not profitable.” At
present, he has only five animals and he
and his wife carry out dairy farming. He
engages one labourer for milking. He sells
raw milk locally at
`
26 per litre and meets
the demand for pure milk from consumers
who want to buy from him directly instead
of buying packaged milk. At this price,
according to him, he is not making any
profit. However, he is using dung for farm
manure and cow urine is collected and
sold to a trader for Ayurvedic preparations.
If the value of these is calculated, then
profitability improves. He feels that unless
farmer gets a minimum of
`
30 for cow’s
milk, the dairy business is not profitable.
Incomes from dairy farming are a sig-
nificant source in smallholder farms. At the
lowest class of landholdings, incomes from
livestock form almost 25 per cent of total
revenues (Table 4.7). Across all farmhouse-
holds, income from livestock formed about
12 per cent of the total income. Viability
of dairy farming is critical to most farm
households and critically so for small farms.
The question of cost and incomes from
animal farming was addressed by the NSSO
in its 70th round national survey. The survey
results indicate that there is a cash surplus
when income and expenditure is compared
in all the major states (Table 4.8). The non-
cash expenditure in the form of own labour
and captive sources of feed and fodder are
perhaps not part of the reckoning. Dairy
farmers in some states such as AP, Haryana,
Gujarat, Orissa and Tamil Nadu seem to
produce higher surpluses per rupee spent
compared to other states.
Table 4.7:
Average monthly income of farm households from different sources 2012–13
Size class of
land possessed
(ha)
Income from
wages/salary (
`
)
Net receipt
from
cultivation (
`
)
Net receipt from
farming of animals (
`
)
Net receipt
from non-farm
business (
`
)
Total
income (
`
)
(1)
(2)
(3)
(4)
(5)
(6)
< 0.01
2,902
30
1,181
447
4,561
0.01–0.40
2,386
687
621
459
4,152
0.41–1.00
2,011
2,145
629
462
5,247
1.01–2.00
1,728
4,209
818
593
7,348
2.01–4.00
1,657
7,359
1,161
554
10,730
4.01–10.00
2,031
15,243
1,501
861
19,637
10.00 +
1,311
35,685
2,622
1,770
41,388
All sizes
2,071
3,081
763
512
6,426
Source:
Key Indicators of Land and LivestockHoldings in India, NSSO70th round, December 2014, NSSO, MOSPI; GoI.
