As Covid-19 cases rise, dairy industry plummets

Bangalore Capstone COVID-19 COVID-19 Diary Food Uncategorized

Bangalore: K Ravishankar, the founder of Green Dairy Farm, recalls the days when he saved up every penny possible to kick start his cheese factory in the year 2009. The factory he built with soaring ambitions, blood, sweat, and tears is on the verge of shutting down owing to the pandemic. The resurgence of the Covid-19 pandemic caused disruptions in moving milk by-products within supply chains, worker shortages, and decreased procurement rates. The one agricultural sector that suffered the most is the dairy industry, as dairy products are easily spoilt and rely on a time-sensitive supply chain. 

“The resurgence of Covid-19 has once again hit an already battered dairy industry with all its might. “

Dr Srinivasa, Deputy Manager at Bangalore Milk Union Ltd

The Green Dairy Farm started as a small unit of factory workers and administrative employees. Today, the same factory established in Bangalore supplies cheese and other by-products to neighbouring states like Kerala and Tamil Nadu. The government-induced lockdown brought in many challenges for important players like cheese factory owners. Cheese, a yummy product considered a rich man’s choice in this country, has almost lost its presence due to the ongoing pandemic. K Ravishankar, founder of Green Dairy Farm in Gollhalli, said, “Cheese is a high-end product, and its sales have drastically come down due to the pandemic. Mainly because we depend more on institutional sales, like restaurants and hotels that remain closed today.”

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Unfortunately, the current demand for cheese in the Indian market has close to vanished due to the pandemic. Cheese factories had to face operational challenges like transportation of material and transport of workers during the nationwide lockdown. Different milk Co-operative societies were given special passes to transport milk from one place to another, cheese was and continues to be an ignored commodity that got no such privileges. 

“For the last eight months, my factory has been running on losses. Even outstation sales have gone down drastically. In Tamil Nadu we used to sell over 2-3 tons, now it has come down to 500 Kilos,” said K Ravishankar. “In the year 2019, our factory’s turnover was 1.2 crore, now we have only made close to Rs 50,000/-,” he added.

While the cheese industry continues to try and revive itself, dairy farmers bear the brunt of surplus milk production, decreased demand and low procurement rates.

When the pandemic began in 2020, dairy farmers across India threw litres of milk simply because there was no one to buy it. Even as milk was sold at grocery stores as an essential item, the need to stay home in the fight against coronavirus took away institutional sales from schools, restaurants, weddings, and other functions. The Bengaluru Milk Union Limited (BAMUL) has more than 8000 registered dairy farmers, of which 3500 farmers from five districts supply milk to various milk societies in a year. Dr Srinivasa, the Deputy Manager of BAMUL, stated that the turnover per month, before the pandemic, was around INR eight to nine crores. Currently, the turnover has fallen to INR six crores per month. From 70-80 tons, BAMUL only produces 30-40 tons per day.

Even as the Bangalore dairy saw an increase of 1,70,845 KGs in milk production in the year 2020, the demand for the same has been at an all-time low. Due to the low demand and surplus milk production, the Bangalore dairy reduced the procurement rate for farmers by Rs 2/- i.e., from Rs 28/- per litre our farmers now get Rs 26/- per litre. According to Naggappan, a dairy farmer in Kumbalgodu, “They have brought down the procurement rates. I do not even have enough money to feed my cattle. I had borrowed money to buy my cattle. I must pay back Rs 70,000/- in instalments. I even spend close to Rs 1000/- per cow on vaccinations and other hospital-related expenses. How will I sustain this?” Large scale farmers who produce 50-60 litres of milk a day have been affected the worst. Every month they suffer from losses of close to 6000 rupees.

When the nationwide lockdown was announced in March last year, the demand for milk fell drastically. Even as the same amount of milk was produced, there was no one to buy it. To avoid waste, BAMUL converted all that surplus milk into milk powder. Dr Srinivasa, Deputy Manager of BAMUL, said, “We have more than 6000 tons of milk powder ready to hit the markets. However, there is no demand for it. We are trying our best to avoid wastage.” The Karnataka Milk Federation (KMF) received the licence to export milk products to other countries in the month of February 2021. The surplus hit union will finally be able to find a market for its products.


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