What’s the news?

• India, the world’s leading milk producer for decades, faces a concerning dilemma as milk prices soar to all-time highs.

Central Idea

• India is grappling with an unprecedented milk crisis, despite accounting for a quarter of global milk production. In 2021–22, the country produced a staggering 221 million tonnes of milk, as reported by the UN Food and Agriculture Organization (FAO). However, the situation on the ground paints a different picture, with milk prices reaching record highs.

The price surge

• The Department of Consumer Affairs reveals a sharp 18.08 percent increase in the average retail price of milk over the past two years.
• A liter of milk, once priced at Rs 49.18 in 2021, now costs upwards of Rs 58. This dramatic price rise, commencing in 2022–23, has been the chief driver of food inflation across the nation, as highlighted by the National Bank for Agriculture and Rural Development (NABARD).

Underlying factors behind India’s milk crisis

• Lumpy Skin Disease (LSD):
• One of the primary factors contributing to the milk crisis is the outbreak of lumpy skin disease (LSD) among cattle and buffaloes.
• This disease, first reported in Odisha in 2019, has since spread to almost all states in India. Between July 2022 and 2023, more than 3.2 million cattle and buffaloes contracted LSD, with 0.2 million of them succumbing to the disease.
• LSD has not only caused significant mortality but has also led to a substantial drop in milk production, ranging from 20 to 50 percent, depending on the breed.
• COVID-19 Pandemic Impact:
• The COVID-19 pandemic had a severe impact on India’s dairy sector. During the lockdowns, many farmers reduced the size of their herds in response to disrupted milk demand.
• This exodus of dairy farmers, even during the flush season from October to March, when animals naturally produce more milk, has affected the country’s overall milk production.

• Fodder Inflation:

• Dairy farmers who continued their operations despite the pandemic faced an acute shortage of dry fodder in 2022. This shortage was partly caused by a decline in wheat stocks due to an unusually hot March in 2022.
• As a result, farmers have been grappling with steadily rising fodder prices, affecting both the quantity and quality of the feed provided to their cattle.

• Changing Preferences:

• Dairy farmers are increasingly opting for crossbred cows over buffaloes.
• While buffalo milk typically has a higher fat content (7–10 percent), crossbred cows have a higher milk yield, averaging 8.52 kg per day in 2021–22, compared to a buffalo’s average of 5.96 kg per day.
• This shift in preference has led to a significant increase in the population of crossbred cows, while the population of female buffalo and indigenous cows has grown at a slower rate.

• Cost Considerations:

• Buffaloes tend to be more expensive than cows, with the average cost of a good-breed buffalo ranging from Rs 1.5 lakh to Rs 3 lakh.
• In cases where dairy farming experiences losses, it becomes challenging for farmers to recover their investments.
• Additionally, buffaloes have been perceived as less productive compared to cows in certain scenarios, particularly when it comes to maintaining consistent milk production.

Hidden Crisis: Artificial Insemination

• Role of Artificial Insemination:

• Artificial insemination plays a pivotal role in enhancing milk production in India.
• While the adoption rate of this technology in the country is around 30 percent, it has led to the development of high-yield crossbreeds and improved indigenous breeds.
• These high-yield animals significantly contribute to the overall growth of the dairy sector.

• Missed artificial insemination:

• The COVID-19 pandemic and associated lockdowns and restrictions had a profound impact on the practice of artificial insemination.
• Between 2020 and 2022, as lockdowns and movement restrictions were imposed, India likely missed conducting approximately 16.84 million artificial insemination.
• This represents a significant setback in efforts to improve breed productivity.

• Impact on Milk Production:

• The missed artificial insemination have had a cascading impact on milk production.
• Before the pandemic, India was steadily increasing its adoption of artificial insemination, with over 80 million insemination conducted in 2019–20.
• However, the subsequent drop in insemination numbers means that India potentially missed the chance to add 2.97 million high-yield female cattle to its livestock inventory between 2020 and 2022.

• Economic Consequences:

• Each missed artificial insemination results in both milk loss and additional maintenance costs until a successful conception occurs.
• The estimated loss per missed conception is approximately Rs 7,948.50. This loss quickly accumulates, resulting in a national loss of Rs 824 crore in just the month of April 2020.

Far-reaching Consequences of India’s Milk Crisis

• Economic Impact: The sharp rise in milk prices coupled with supply constraints can lead to reduced incomes for dairy farmers, potentially pushing many into financial distress.
• Food Inflation: As milk and dairy products are dietary staples for a considerable portion of the population, their increased prices can strain household budgets and lead to higher food costs for consumers.
• Nutrition and Food Security: Milk is a vital source of nutrition, particularly for children. Rising milk prices can reduce access to this nutritious food source for vulnerable populations, potentially affecting the nutritional status and food security of millions.
• Rural Livelihoods: Dairy farming serves as a primary source of income for numerous rural households in India. The ongoing crisis directly impacts the livelihoods of these families, causing economic instability and necessitating alternative income sources.
• Agricultural Productivity: Dairy farming often complements crop production, so disruptions in the dairy sector can have ripple effects on overall agricultural performance.
• Global Trade: As one of the world’s major milk producers, India’s domestic dairy challenges can have implications for the global dairy market. Disruptions in production and trade can impact international dairy prices and trade dynamics.

Way forward

• Disease Control: Implement robust disease control measures, including vaccination programs, quarantine protocols, and veterinary support, to prevent the further spread of diseases like lumpy skin disease (LSD) affecting livestock.
• Fodder Management: Develop strategies to increase fodder production, conservation, and distribution to ensure a consistent supply for dairy cattle and buffaloes, addressing challenges posed by fodder shortages.
• Artificial Insemination Programs: Renew the focus on artificial insemination programs to recover from the setbacks caused by missed insemination during the pandemic. This includes technology adoption, training for insemination technicians, and incentives for farmers.
• Genetic Improvement: Continue efforts in genetic improvement through artificial insemination to boost milk production, focusing on enhancing the productivity of high-yield dairy cattle and buffaloes.
• Price Stabilization: Consider measures to stabilize milk prices, potentially involving price support mechanisms or policies to balance supply and demand.
• Government Policy Review: Assess and update existing government initiatives in the dairy sector as necessary, making policy adjustments to address evolving challenges faced by dairy farmers.

Conclusion

• India’s dairy sector, once a beacon of success, now faces multifaceted challenges that threaten its stability.  As the nation endeavors to restore its dairy glory, policymakers, researchers, and farmers must collaborate to navigate these challenging times and secure the future of India’s dairy industry.

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