Rs 17 000 Crore Bull from NDDB

Article Source: DNA (Mr. RN Bhaskar)

In July this year, NDDB spoke to select media about its plan to create 900 super bulls in five years time. The idea was to cross-breed the best Indian strains of milch cows with the best yielding cows from overseas and create 900 super bulls to help transform India's milk production. To ensure that this super breed of offspring would produce more milk, high-grade feeding centres are also being planned. The idea is to double India's milk production in around 15 years' time.

What the news reports did not mention is that NDDB is trying to woo the World Bank to fund this bull of a project with an incredible Rs17,000 crore. No details about how this money is to be spent has been shared with the media. And the few cooperatives DNA has spoken to have also confirmed that none of them has seen the project report.

However, just hours before going to press, NDDB's chairman, Dr Amrita Patel clarified that "Rs17,000 crore required for 900 super bull centres is totally incorrect." She has clarified that the money is required for a variety of purposes (see table on project cost details)

But the costs appear to be prohibitively high. True, NDDB did submit its plans to the Planning Commission, which, in December 2008, gave its "in-principle approval" to the preliminary project report (PPR) to what is now known as the National Dairy Plan (NDP). At the same time, a draft Bovine Breeding Bill is under the consideration of the central government aimed at ensuring production of quality disease-free semen and delivery of quality doorstep artificial insemination service. According to NDDB, "Once this Bill is made into a law, it will have to be followed by all agencies and institutions involved in breeding activities."

But it is also well known that Dr Verghese Kurien had already begun work in this direction before he relinquished charge in 1998 as the head of NDDB. By the time he stepped down, he had already set up more then 70 feed mills to ensure cattle feed is available for feeding and helped set up a large number of artificial insemination stations and bull mother farms for productivity enhancement. All this was achieved with an outlay of just around Rs2,000 crore (over a 25-year period). By 2003, India already had 123 lakh cross-bred milch cows (of over 2.5 years in age).    

These comprised almost 10% of India's total bovine population. Today, according to NDDB, this share has gone up to 20%.

However, by March 2009, the Department of Economic Affairs (DEA) had forwarded the PPR to the World Bank for favourable consideration.

Unfortunately, it is not yet known, and there has been no public debate on, how these huge costs will push up the costs of cattle ownership in India. Nor is it known if the marketing and institutional building funds will also be available to other cooperatives that currently do not work with NDDB.

But there is another issue at stake. India's per capita cattle ownership is terribly low at 0.15 (According to The Economist) compared with Brazil which boasts of 1.07. According to figures obtained from government sources, the figure for India could be even lower at 0.1. Ownership of cattle is far lower in eastern and northeastern parts of India where land is fertile, feedstock abundant, and malnourishment great.

In fact, say some milk experts in the cooperative sector, doubling India's milk production will be cheaper and faster by merely focusing on states that have poor cattle ownership. Of course, there will be people who will wonder where the food for such cattle will come from. But at such times, it is important to recall Dr Kurien's dictum that India was meant for production of milk by the masses, and not just mass production of milk. It was a philosophy even Dr Amrita Patel, the current chairman of NDDB, espoused in 2003.

Dr Kurien always believed that India was destined to become the world's largest milk producer (which it is today), even in those years when India was nowhere among the top five. His reasoning was simple.  "Every government's first objective is to ensure that its people get food," he used to say. "Fortunately, most Indians consume rice and wheat, much of which is grown domestically. As it happens, for every kilo of rice or wheat you produce 4-5 kg of chaff, which is consumed by cattle. Thus, in terms of marginal costing, India can become the cheapest producer of milk in the world. Western countries have to grow cattle feed. We get it free. The only other country which enjoys this advantage is China. Once again, fortunately, China does not consume much of milk because many Chinese cannot digest milk. So it is advantage India."

As luck would have it, even the Ministry of Agriculture believes that the future grain growing areas will be the East and the North East. Ideally, NDDB should be promoting more cattle ownership there. True, there will be a problem of finding markets for this milk, and that is where more cooperatives need to be created to collect the excess milk produced (some of it is consumed by the cattle rearing family itself). This is what Dr Kurien did, and at far lower costs. Today, even the International Farm Comparison Network acknowledges that milk costs just around $25 per 100 kg of milk in India compared to $43.7 for the rest of the world. 

This is what made North Kanara a very prosperous district. It was how Dr TMA Pai, first persuaded an impoverished fishing population in the village of Malpe (in Karnataka) to save small amounts, then persuaded them to own cattle to improve the health of their children, and then offered to buy back their milk for which he formed the North Kanara District Co-operative which is today one of the biggest milk producers in the region.

Obviously, increasing milk production needs more vision than money. And it needs recognition of the strategic strengths that India has, instead of making it high cost producers of milk. NDDP's NDP could push up input costs for milk a lot higher, and adversely affect even rural incomes.

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