Dairy industry can offer incomes on par with industry and a dairy farmer can support workers with competitive wages throughout the year.
The dairy companies, which should be measured on performance, do not need support but the dairy farmers do. This is the view of Mr R.G. Chandramogan, Chairman and Managing Director, Hatsun Agro Product Ltd, the largest private dairy in the country, as he outlines his expectations of the Budget.
More than any sops, he says, the dairy industry only needs consistent policy without unexpected Government intervention.
The Government should encourage dairy farming, which can enable value addition in agriculture, augment farmers' income, and increase agriculture's contribution to GDP, according to him.
The dairy industry contributes to a fourth of agriculture's contribution of 25 per cent to the GDP. With a majority of the population in agriculture, its contribution to GDP is low because value addition is low. Dairy industry addresses this gap - it is high value, remunerative and contributes to export earnings.
Ban on exports hit industry
Government intervention like the ban on exports affects dairy development and makes the farmer vulnerable, he said.
International prices of milk powder are at ideal levels for exports and are an incentive to the farmer to increase production. Choking off exports to tackle inflation is a drastic step, which affects industry and the farmer. Export ban actually hits the majority of the population that is dependent on agriculture.
A consistent policy, support to animal husbandry along the lines of that given to farming, will help address the major problems in rural areas such as urban migration and rural poverty.
The private sector, which plays a significant role in the dairy industry, has to be consulted. Amul continues to be the leader in the co-operative sector but everywhere else co-operatives are `a mess.'
The private sector needs to be heard. Exports cannot simply be shut off and turned on at will, Mr Chandramogan said.
Rising land prices
With land prices escalating farmers are cashing in on the land value and exiting farming. Land is being taken up by the industry and towns. Agriculture labourers are opting for construction work or other daily wage labour.
Making agriculture profitable is key to retaining people in the rural areas.
Dairy industry can offer incomes on par with industry and a dairy farmer can support workers with competitive wages throughout the year. But dairy farmers do not have the benefit of subsidy support in buying equipment like milking machines.
A farmer with five acres land under a fodder crop can run a dairy farm with 30 heads of cattle. This will give gross earnings of Rs 11 lakh a year with profits of Rs 2.5-3 lakh.
The farmers can provide employment at competitive wage levels. Under most crops including sugarcane, the income would only be on par with a semiskilled worker, he said.