When milk turns sour for Kashmir’s dairy farmers

Tajamul Islam Salroo writes about the reasons behind the recession in Kashmir’s otherwise recession-proof dairy sector, and the measures required for tackling it.

The dairy sector is considered a recession-free industry, a cash business with a good rate of return and always in demand. But what has happened this year, the demand for milk and milk products in Kashmir has plummeted to an extent, which was never expected. It is really disturbing to see farmers dumping their produce down the drain for no demand. The question remains if it is because of the rise of COVID19 that this business is showing such a slump or there are some other possible reasons for disturbance in the daily cycle. Being associated with this industry I have made an analysis based on my own observations.

The first and foremost reason for this issue seems to be the sharp rise in both domestic-level as well as commercial-level dairy farms in the last year across the Kashmir valley. We should know that the youth have been attracted towards dairy farming owing to subsidy schemes put in place by the Department of Animal Husbandry to make the UT self-sufficient in milk production. Envisaging it a daily-need, profitable business, people established a considerable number of dairy farms mostly at the commercial scale, with five to 20 cows, not knowing the fact that without proper market analysis or a backup it was going to put them in troubled waters soon. The milk production, as it seems, is surplus this year and that too in the very lean season of milk production while this has, unfortunately, happened for the first time in the history of Kashmir. The whole of the dairy cycle has got disturbed, right from the producer to the consumer because on one hand, the production has tremendously increased by incorporating high yielding cows in the dairy sector while on the other hand, the consumption has got reduced to a certain level. The agitation of dairy farmers is, therefore, obvious because their produce is hardly in demand. Having limited or no options available to sell their produce, dairy farmers feel dejection at all levels.

The other reason for the dairy business slump in Kashmir is the increased consumption of ultra-high temperature (UHT) milk that comes in Tetra Paks of 100 ML, 200 ML, 500 ML & 1000 ML. A large chunk of the population consumes this type of milk as well owing to its extended shelf life and now all-time availability in nook and corner of the valley.

With the rise of COVID19, milk by-products like Dahi, Paneer, Cheese, Ghee, sweets etc are in the least demand, which has really contributed to the dwindling dairy market. The demand for Dahi, Ghee and Paneer has gone down to an all-time low this season while cheese and sweets have negligible demand, and the most probable reason is COVID19. This fall-off in dairy demand due to the shutdown of tea stalls, hotels, restaurants, and confectioneries have given rise to unprecedented recession in the dairy industry. A survey conducted by the milk processing plants has shown that the milk revenue has plummeted by 30-35% between January 2020 to January 2022. It reveals that every stakeholder is hit by the situation, be it a milk producer, a milk agent, a milk vendor, a milk plant holder, a milk distributor or a milk retailer.

The input costs of milk production have gone high at all levels, and it is hard to pass on the higher costs to consumers due to challenging economic conditions. Thus, undesired anxiety looms over. This is also one of the reasons that smaller businesses have wound up their operations while large ones are struggling. In fact, everyone associated with the milk industry is under stress at present.

The other reason for the dairy business slump in Kashmir is the increased consumption of ultra-high temperature (UHT) milk that comes in Tetra Paks of 100 ML, 200 ML, 500 ML & 1000 ML. A large chunk of the population consumes this type of milk as well owing to its extended shelf life and now all-time availability in nook and corner of the valley. I think the consumption of tetra packed milk has increased to a greater extent over the last couple of years.

Undoubtedly the present dairy times are tough, but it is not permanent, I must tell it to all of my readers based on my experience and expertise in this field. The situation will change. Covid will not last long. People will again switch to dairy products, the consumption of which they have reduced. But the efforts must be made to keep the Dairy Cycle moving always and ever in future. If the government has put in its efforts in making Kashmir self-sufficient in the milk, they must also take proper measures to balance it as well and the only solution is to establish a Milk Powder Plant that is what Milk Balance Cycle actually refers to. The establishment of UHT Plants is another solution to this problem besides the manufacturing of by-products like cheese, ghee, chocolates, dairy-whiteners, flavoured milk, cream etc. The sooner the government takes initiatives in this regard better it is going to be for dairy farmers across the valley, in particular, and the dairy sector, in common.

An MBA, Tajamul Islam Salroo has 15 years of experience working in dairy and other food processing industries. You can reach him at tajamulsalroo@gmail.com