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Harish Damodaran

New Delhi , Nov. 7

SLOWLY but steadily, Nestle India Ltd (NIL) is transforming dairying into a pure, stand-alone commercial farming business, as against being a mere subsidiary occupation to `regular' crop-based agriculture.

The fact that dairying is emerging as a mainline agricultural activity is borne out by the changing profile of the 85,000-odd farmers who supply milk to Nestle's plant in Moga, Punjab. Nearly 32 per cent of Nestle's suppliers today comprise farmers who pour more than 10 kg of milk per day and these `average-to-very large' farmers account for more than 70 per cent of the total milk collected by the Moga plant.

Compared with this, the proportion of such farmers stood below 10 per cent in 1980-81, with their share in milk procurement being only 34 per cent (see Table). Further, even as the total number of suppliers to the Moga plant has gone up from 7,934 in end-1970 to 85,413 in end-2002, the average milk poured per farmer has also risen from 6.4 kg to 10.7 kg per day.

According to Mr K.S. Dhaliwal, Manager, Agricultural Services, NIL, although there are still very few suppliers who are `pure' dairy farmers, "we are definitely seeing an expansion of herds and a graduation to large-scale, mechanised, commercial dairying".

While increased herd-sizes are an indication of farmers viewing dairying as an investible proposition by itself, the other major pointer in this direction has been the pronounced shift from rearing buffaloes to high-yielding cross-bred cows. Farmers in Punjab traditionally maintain buffaloes, which give milk with 6-7 per cent fat content, even though yields rarely exceed 1,800 kg per lactation. Against this, the improved Holstein-zebu (local) cross-bred cows yield 3,500 kg over a 300-day lactation period, despite the milk having only a 3-4 per cent fat content.

Till 1985, 98.1 per cent of the milk collected by the Moga plant was from buffaloes. This ratio has now fallen to 56 per cent, following Nestle's conscious move to encourage farmers to replace buffaloes with cows.

"The yields from cross-breds are not only higher, but more uniform through the year unlike buffaloes, who give 40 per cent less milk during the lean summer months. Also, for our products (infant/baby foods), we require only 3-3.5 per cent and not 7 per cent fat," Mr Dhaliwal pointed out.

The third key Nestle-promoted commercialisation initiative has been in mechanisation and bulk cooling at primary collection point.

The company sources its milk through a network of 1,100-odd commission agents, who collect the milk from farmers spread across 7,360 sq km of the Moga milkshed. Since 1995, Nestle has been implementing a programme for installing farm cooling tanks of 1,000-2,500 litre capacity at the primary agency-level.

So far, 560 such tanks have been set up, some of them covering more than one commission agent.

"Earlier, it used to take 2.5-3 hours for the milk collected from the agents to reach our four chilling centres. As a result, by the time the milk would reach the plant, the bacterial load would range between 10 million and 40 million per ml. But today 90 per cent of the milk we get is chilled within half-an- hour of leaving the udders and much of it has total plate count below one million," Mr Dhaliwal said.

The company hopes to have up to 750 cooling tanks installed by the next couple of years, covering all its agents and involving a cumulative investment of roughly Rs 50 crore.

"Additionally, we are making available milking machines to farmers, who keep more than 20 cows and supply 200 kg per day. While the farmer would have ordinarily paid Rs 65,000-70,000 for these machines, we are bulk purchasing them at about Rs 50,000 and further providing a 25 per cent subsidy. The remaining 75 per cent (of Rs 50,000) would be recovered by adjusting against their milk price over three years," he added.

During the year ended December 31, 2002, the Moga plant procured 237.78 million kg of milk, representing aggregate payments of Rs 218.40 crore to farmers.

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