Recently the Reserve Bank of India’s interest-rate-setting committee said milk prices are causing high inflation.
It is ironic at best. A country that worships cows and also has the largest milk production in the world is going through a downturn in cow economy if one can call it that. Growth rate has dipped to less than one percent after the past eight years of robust growth of 5-6 per cent. Experts point out that the major reasons are the Covid-19 related supply disruption, the skyrocketing price of fodders, and the deaths of over lakhs of cattle due to Lumpy Skin Disease (LSD) – a reduction in milk production and making animals weak. Since 2021, LSD has killed over 2.5 lakhs cattle.
“The supply chain of dairy industry was disrupted by Covid-19, which further disrupted the breeding cycle of the cattle,” says a senior official at the Department of Animal Husbandry and Dairying explaining the reason. “The pandemic-related mobility restrictions impacted the implementation of artificial Insemination and Breeding programme, which affected herd maturation add yield,” he said.
The fodder crisis has also emerged as another challenge for dairy farmers. Fodder constitutes 70 per cent of the milk cost. “Dry fodders price increased 300 per cent and green fodder price increased up to 200 per cent had further worsened the condition of dairy farmers which further either reduced the milk production or left the dairy farming profession,” says Harinder Singh, Punjab-based fodder expert.
Recently the Reserve Bank of India’s interest-rate-setting committee said milk prices are causing high inflation. Milk has a weightage of 6.6 per cent in the consumer price index basket. In the last one year, the milk price has increased by over 15 per cent as demand for dairy products grew by 8-10 per cent in the same period because of a rebound in post-pandemic demand. Hence, it contributed to high inflation.