Even while studying at the Hyderabad-based Indian School of Business, Gautam Aggarwal, a resident of Punjab's Pathankot, had decided to pursue, what he calls, "social entrepreneurship". After passing out of the premier business school in 2010, Gautam joined microfinance company BASIX to train himself for the venture he was to launch. Two years and a few months later, in February 2013, he started directly collecting milk from farmers and delivering them to urban consumers.
"On day one, we collected eight litres from five farmers. Today, we collect 800 litres from more than 100 farmers every day. As our network expands, we are in the process of installing a chilling machine in each of the farmers' households we procure milk from. That is important because we want to procure fresh milk and deliver it as such," says Aggarwal. His company, Grameen Networx, is in the process of designing a chilling machine. Once that is ready, Aggarwal expects a rapid expansion of his network as he claims he pays a premium of at least 20 per cent to farmers for the milk they sell to his company. Small and marginal farmers constitute his target group.
If Aggarwal is focussed on what is known in Punjab as "backyard dairy", Rajpal Singh, a resident of Ludhiana's Kolan village, is one of many commercial dairy owners who sees automation as a necessity and also as the launchpad to scale up business. "I went for full automation in 2012 and the results are astonishing. These are early days, but my labour requirement has reduced by 50 per cent and the instant productivity gain has been in excess of 10 per cent," says Singh with a sense of pride while taking us through his herd of 150 cattle in his sprawling farmhouse.
There are machines to prepare cattle feed. There are machines to milk cows and directly send it to a large container outside. Cow dung is cleared by machine. Then there are sensors attached to each animal monitoring body temperature and vital parameters in real time. "The only work left for labour is that of cleaning and maintenance of the machines," says Singh. He has employed three workers to take care of 150 cattle, 90 of them lactating cows. He had to keep many more employees before he started buying machines.
Punjab is one of the top five milk producing states in the country. Punjab's per capita milk availability at 937 gm is nearly four times the national average of 252 gm. And the state's average yield is much higher than the national average. But a falling cattle population because of unviable backyard dairies and a labour shortage impacting commercial dairies posed a serious challenge to the growth of the dairy industry in the state.
That is set to change now with Singh, one of 6,000-odd big farmers, going in for full automation. They have formed an association known as the Progressive Dairy Farmers' Association (PDFA). Together, they produce nearly 800,000 litres of milk a day. The average yield of a cow is nearly 8,000 litres in a lactation cycle against the national average of 1,500 litres, claim PDFA functionaries. And nearly 40 per cent of PDFA members have gone in for automation. The association owns a high-tech processing unit located 50 km away from Ludhiana city. And it has launched its own milk brand, La Pure Milk, which is marketed in Ludhiana.
"I went to Israel in 2006 and saw cowsheds being built there. Upon enquiry, I got to know that a model cow shed should have a height of 35 feet and width of 120 feet. Such a shed allows proper ventilation and reduces the temperature inside by 4-5 per cent," recalls Daljeet Singh Gill, president of PFDA. He also happens to be a member of the Punjab State Farmers' Commission's advisory committee.
Association members learnt about feeding techniques in France and Sweden and about fodder quality in New Zealand. PFDA helps members import machines and provides training to farmers on running them. Veterinary help, too, is extended quickly. The association is in the process of fixing marketing requirements of its members.
Running a commercial dairy needs an initial investment of Rs 50 lakh and it can become viable only if the herd size is in excess of 100. But there are thousands of farmers who cannot afford such investment. The National Bank for Agriculture and Rural Development (Nabard) launched a scheme in August 2012 to help small and marginal farmers through a network of NGOs and self-help groups. "We offer training to farmers, help them procure quality fodder, teach them how to keep records and help them market their produce," says Nalin K Rai, the Ludhiana-based assistant general manager of Nabard.
Business Standard visited one such village, Jalaldiwal, in Ludhiana district and found that small and marginal farmers had started their own Vachan Dairy. Being run by a veterinary doctor, Harminder Singh Sidhu, ghee produced by the dairy commands a 100 per cent premium over the market price. "The demand for our products is so high that we are unable to meet it. In addition to adopting modern best practices, we are working towards developing an indigenous breed of cows," says Sidhu.
However, the biggest challenge for the development of the dairy industry in the state is the rising cost of fodder. "The rent for an acre of fodder used to be Rs 2,800 last year. This has gone up alarmingly to Rs 4,000 this year," says Singh. "Blame it on the end of crop diversification in the state. Now farmers only grow crops which can be easily sold in mandis and for which government fixes the minimum support price. Maize and jowar have vanished from the farms of Punjab. And excessive use of pesticides has killed natural grass that was used for animal fodder," observes Sidhu with a sense of anguish.
Rising fodder cost has the potential to undo most of Punjab's recent gains in dairying achieved with the help of modern technology.
THE NEW HELPING HANDS
n There are machines to prepare cattle feed
n There are machines to milk cows and directly send it to a large container outside
n There are sensors attached to each animal monitoring body temperature and vital parameters in real time
n The only work left for labour is that of cleaning and maintenance of the machines
n Punjab is one of the top five milk producing states in the country