"We are earning next to nothing given the high cost of production," he says about the country's largest agricultural commodity that provides bread and butter to the weakest sections, including most of landless agricultural labourers. And if the earnings are more than Rs 1.5 lakh for a cooperative, then there is a 35 per cent income tax that is charged on the cooperative, says Jaiprabhu.
Jaiprabhu is, however, keeping the show going, just like his other 100 million counterparts across the country.
Last week, when inflation hit 7.41 per cent, food and milk prices went up by 1 per cent on the wholesale price index, but fodder prices went up by 4 per cent. The slow climb in milk prices and the rising fodder prices are pinching the small and marginal farmers in the country, who own 75 per cent of the livestock. In the last five years, prices of food grains (wholesale price index) have gone up 11.24 per cent, the price of milk has appreciated by 2.3 per cent and that of fodder by 8.35 per cent.
Fodder prices have shot up since 2000, thanks to exports and central excise duty on molasses, which is used to make fodder. The recent inflationary trends have only added to the woes.
The molasses used by the cattle-feed industry attracts central excise duty at the rate of Rs 500 per MT since 1998. The organised feed industry consumes around 300,000 MT of molasses annually, which is meager compared with the total production of 60,00,000 MT annually. "The levy has increased the animal feed cost by 60-75%," says the Indian Dairy Association. The farmer is unable to bear this burden and hence many farmers have discontinued using compounded feed. This ultimately results in low milk production and affects the poor and marginal farmers.
Agriculture scientist M S Swaminathan says: "Today, a bottle of mineral water costs as much as milk. The rise in prices affects all consumers and two-thirds of them are producers. So, unless their incomes grow, anti-inflationary measures make no sense."
The Mehsana story repeats itself in Nalgonda of Andhra Pradesh. Narsi Reddy, who supplies 120 litres milk to the Nalgonda-Ranga Reddy Coop Milk Producers' Union Ltd, says that the average price that he gets is Rs 15 to Rs 16. The price is dependent on the fat content, which in turn depends on the fodder.
According to him, husk, which cost Rs 600 a quintal a few months ago, is now priced at Rs 1,000,
