May 22, 2022

On Crop Wise Mobilisation of Farmers in the Dairy Sector

P Krishnaprasad

THE first-ever all India dairy farmers’ workshop jointly organised by All India Kisan Sabha and P Sundarayya Memorial Trust was held at Kozhikode, Kerala, on May 14-15, 2022. It was attended by 71 delegates from 17 states. Ashok Dhawale, president of AIKS, inaugurated the workshop, while AIKS joint secretary, Vijoo Krishnan chaired the inaugural session. Reception committee chairman and secretary of CPI(M) Kozhikode district, P Mohanan Master and state secretary of Kerala Karshaka Sangham Panoli Valsan also spoke.

The different sessions were addressed by Sudheer Babu, Dinesh Abrol, Vijaymba R Inderjit Singh,  Ajit Nawale, Ranjini Basu and Nidheesh Johny Villatt. Delegates from across the country participated.

The various papers presented in this workshop deals with the details of the dairy sector in India and helps to develop a concrete understanding of the degree of exploitation taking place in this sector and explores possible policy alternative. A visit to Kozhikode dairy under MILMA was arranged, and interaction with K S Mani, chairman of Malabar union of MILMA, and the leading officials and workers was beneficial.

Dairy is the largest single crop in India that provides considerable income presently to around eight crore households. Women's workforce constitutes 70 per cent of the labour in livestock farming. The dairy sector plays a vital role across the country regarding rural livelihood, with India being the largest milk-producing country in the world for the last 22 years.

As per National Account Statistics 2019, the value of the output of milk in 2017- 18 is Rs 7,01,530 crore (at current prices), surpassing the total value of output from the top two food grains – Rs 2,72,221 crore (paddy) and Rs 1,73,984 crore (wheat). India’s agricultural and allied sector’s output value is estimated at around Rs 28 lakh crore, implying that milk's contributions are more than 25 per cent of the total output value.

The pandemic saw an unprecedented crisis in the dairy sector, and it severely affected small and marginal farmers with a clear gender and caste angle. Women and farmers belonging to the lowest social strata with minimum social support mechanisms were the worst hit. For instance, before the lockdown, dairy farmers in Maharashtra used to get Rs 35 for a litre of milk. At the height of the pandemic, this dropped to a meagre amount of Rs 18. It is estimated that the average cost of production of a litre of milk in Maharashtra was Rs 29. This grim situation forced farmers in Maharashtra to go for a movement demanding procurement and MSP in the dairy sector. AIKS, as the leading organised movement of the peasantry in the state, was very active in this movement.

According to reports received by the AIKS centre, states like UP and MP also witnessed crises like Maharashtra. Both states reported procurement prices below Rs 20. Interestingly, private dairies dominate in all these three states. The crisis also shed light on the shallow claims of the neoliberal regime that a deregulated dairy sector will nourish small and marginal farmers. A closer look into the situation would tell us that neoliberal policies were killing the dairy farmers in myriad ways, and the lockdown accelerated it.

The Kerala dairy cooperative, MILMA gives Rs 38 per litre, while in other parts of the country, the price is in the range of Rs 17 to Rs 35 for cow milk. For MILMA, such a price is possible since 83 per cent of the income generated from milk sales is earmarked for the milk producers. On the other hand, the majority of farmers are not getting the cost of production and have to even bear losses.

The large-scale entry of private dairy corporate companies and the import of foreign dairy products threaten the existence of dairy cooperatives. Many foreign companies have merged with Indian dairy companies and dominate the market today. Dairy cooperatives cannot compete with the foreign corporate companies enjoying a heavy subsidy from their governments. The union government must withdraw from its plan to open the Indian market by permitting free trade on milk and milk-based products under the pressure of imperialist forces.

The Modi regime’s policy formulations have been favouring private production. This was clear when the NDA government approved the setting up of the Animal Husbandry Infrastructure Development Fund (AHIDF), worth Rs 15,000 crore. This is significant because in the history of independent India, “the first time the government has announced a special fund for the private sector in expanding dairy and processing infrastructure in the country,” a FICCI report said. It is pointed out that “AHIDF would facilitate incentivise investments in the establishment of infrastructure for dairy and meat processing and value addition infrastructure and establishment of animal feed plants in the private sector." The increasing clout and monopoly of big capital in the dairy sector -—which is always willing to collaborate with foreign capital—at the cost of cooperatives can adversely affect the livelihood of farmers, as we have seen in Maharashtra during the lockdown.

To counter the juggernaut of finance-driven corporate capital in dairy, AIKS believes that possibilities of producer cooperatives in financing, production and marketing shall be explored. By working on the inadequacies of existing dairy cooperatives, we propose to develop a model where industrial surplus be shared with the primary producers. Traditional and successful cooperatives like Amul—which controls 45 per cent of the total procurement of milk by all cooperatives— fail to share the industrial surplus with the primary producers. By procuring milk at reasonable prices and providing essential veterinary and fodder support, traditional cooperatives ensure a procurement system for small and middle farmers. Amul or state monopoly companies like Mother Dairy in the dairy sector, by their ingrained character, cannot avail credit from the farmer/worker producer, in the form of their crop and impart a share of the surplus value generated in the process of production, both in the primary stage of quality addition and the higher stages of food processing with the aid of advanced technology. This is because their structure is not designed to take crops in credit and consider primary producers as stakeholders in the total production. They are designed to work as companies with the apparel of cooperatives.

The AIKS 34th conference report in 2017 held at Hisar says, "The crop-wise mobilisation is crucial as far as to prepare the peasantry to gather collective strength and tactically advance towards modernisation of agriculture production by converting petty production into large scale production without which the petty producers cannot sustain and overcome the corporate exploitation and the resultant pauperisation. Crop wise mobilisation and advancing towards the establishment of agro-processing industries for both inputs and outputs and marketing facilities under the collective ownership of peasant social cooperatives are essential tasks ahead of the peasantry. This helps to take advantage of the scale of production by facilitating input supply, collective cultivation, procurement, storage and wear housing, processing, value addition, marketing, surplus sharing and research and development."

In such a context, it is very important for AIKS to organise a crop-wise/sector-wise resistance. Based on the programmatic understanding of the AIKS, we should struggle for a new and restructured regime of producing cooperatives owned and run by producer classes, well-knit in consortiums that suit their producing and marketing needs. Consortiums are important for enhancing industrial capacity, which will enable the producer cooperatives to go for advanced value addition and explore all possibilities of building national level consortiums of cooperatives. Experiments done by the Brahmagiri social cooperative project —a government of Kerala initiative actively supported by AIKS— in Wayanad to alter production relations can be a model and possibilities elsewhere.

The workshop also strongly condemned the communal mindset of RSS-BJP, which, through various state governments, banned the cattle trade (which provides 27 per cent of rural household income) and demanded that they immediately open the cattle trade markets or let the respective state governments pay the market price for cattle and procure and rear them in the cow shelters.

The workshop has insisted the union government ensure fair and remunerative prices for all the dairy farmers. The union government shall enact a law to ensure sharing of an industrial surplus of value-added milk products by the cooperatives and the corporate companies with the milk producers as additional price as per the ratio of the milk procured from them.

The model implemented by the LDF government of Kerala through the Ayyankali Urban Employment Guarantee Scheme (AUEGS) releases Rs 32,400 per year - 100 days of wage to all the dairy farmers in the urban region who own a minimum of two milk animals and give milk to the cooperative society helps to reduce the cost of production. The workshop demanded the union government extend this provision across the country by amending Mahatma Gandhi National Rural Employment Guarantee Act. That will bring significant development in the dairy sector and milk production in India and enhance the livelihood security of people in rural areas.

The workshop decided upon an organising committee with P Krishnaprasad, Ajit Nawale, V S Padmakumar and Mohammed Ali as coordinators and representatives from all states and representatives of the dairy cooperatives.

A similar workshop at the state level will be conducted in July-August 2022. The formation of an all India dairy farmers' federation will take forward the struggles in this sector for interventions to improve dairy cooperatives and protect the interest of farmers. A memorandum and charter of demands will be submitted to the union minister in charge of dairy. On November 26, 2022, the birth anniversary of Verghese Kurien will be commemorated and observed as a dairy farmers' day.