• Friday, Sep 25, 2020
  • Last Update : 07:54 pm

Supply chain disruption adds to woes of dairy farmers

  • Published at 09:14 pm April 30th, 2020
Dairy farmers dump milk as their demands go unfulfilled
File photo of dairy farmers dumping their produce in front of National Press Club, Dhaka on June 22, 2019 Courtesy

Supply chain disruption for milk distribution during the lockdown has had spillover effects such as oversupply and low prices in villages, with high prices in urban and city areas with delivery constraints

The nationwide shutdown to stop the spread of the deadly coronavirus infection is threatening the livelihood of thousands of dairy farmers who cannot sell a good deal of their milk production.

Supply chain disruption for milk distribution during the lockdown has had spillover effects such as oversupply and low prices in villages, with high prices in urban and city areas with delivery constraints, said several farm owners. 

The Bangladesh Dairy Farmers’ Association's statistics show that even with reduced production, each day approximately 0.11 -0.12 million litres of milk worth Tk57-60 crore are being destroyed during the shutdown. 

Marginal farmers fear a collapse in the dairy industry. 

“I used to sell 60 litres of milk each day, delivering door to door, but now my sales have come down by 50% as I can no longer go to every house due to the lockdown,” said Shaowkat Osman, a dairy farmer in Jatrabari.

The reduced sales are resulting in a lost revenue of Tk1,800 on a daily basis for Osman. 

“Without enough sales, I still have to feed my 30 cows. Even then I often face police obstacles when I go outside to buy food for my cows,” informed Osman.

Managing the oversupply

Companies cannot buy enough milk during the pandemic and are no longer producing food products like they used to, before the shutdown. 

The lion's share of milk was used by sweetmeat shops, ice cream factories, hotels, confectionery shops, shelters, and eight large producers of pasteurized liquid milk. 

The typical daily demand for liquid milk is 17 million litres per day, according to the Palli Karma-Sahayak Foundation, of which 12 to 14 million litres, or approximately 70% of the demand, is locally met from the country’s 70,000 farms. 

Even with reduced production, each day approximately 0.11 -0.12 million litres of milk worth Tk57-60 crore is being destroyed during the lockdown, according to the Bangladesh Dairy Farmers’ Association. 

In some cases, about 90% of the produced milk is wasted while citizens are not getting milk for their infants, said Said Shah Emran, the general secretary of the association. 

The produced milk could be kept in cold storage, capacity that needs to be built in certain areas to save rural farmers in such crises, said Emran. 

Emran talked about introducing cream separator machines to produce ghee or cheese that can be  stored more easily than liquid milk. 

He added: “If the farmers cannot sell milk and feed their animals then they will be forced to sell their cows to the butchers. Our challenge is to keep the cows alive or else the industry will be destroyed.

“We want to make a cooperative based powdered milk plant under our association so that rural farmers don’t suffer and we can utilize all their milk. All farmers are ready to give land but need the government’s financial or infrastructure support,” he added.

Middlemen syndicates and high fodder prices

Several farmers in rural areas have blamed middlemen syndicates that force them to sell at low prices since they do not have access to sell directly to milk processors and consumers in the city during the pandemic.

Talking to Dhaka Tribune, many farmers said milk prices are now at Tk15-20 a litre in rural areas from Tk50-70 for each litre before the shutdown, compared to the stable price of Tk80 per litre in Dhaka City. 

The claim was verified by Abdur Rahim, project director (joint secretary), Livestock and Dairy Development Project at the Department of Livestock Service.

Middlemen are telling farmers that no one is interested in buying milk, creating an artificial crisis in the city to sell at a higher price, said Rahim. 

He added: “We are discussing this with the ministry and the Directorate of National Consumer Rights Protection to grab and punish the culprits.”

The price of cattle feed has also increased by 20-30%, intensifying the suffering of farmers. Here too a syndicate is at work, said several farmers to Dhaka Tribune.  

All animal feed including wheat husk and corn increased by Tk 400-500 for each 35kg sack. 

“Without being able to sell milk alongside high fodder prices, it is impossible for me to maintain my 20 cows,” said Ripon Hasan, a dairy farmer in Khilgaon. 

He added: “If the current situation continues, then we will have no choice but to sell our cows,” he added.”

Steps taken by the government

The government has announced a financial incentive fund of Tk72,750 crore, of which Tk5,000 crore has been specially allocated to the agricultural sector which includes dairy farms. 

There is an interest charge of 4% per annum on the funds that dairy farmers are demanding be waived and be given as a financial grant. 

“There is some demand for milk from dairy farms to beat this crisis, and we are also discussing providing some grants on top of the financial incentive funds announced earlier,” said Rawnak Mahmud, Secretary at the Ministry of Fisheries and Livestock. 

The World Bank has also undertaken a project to help 17,69,733 rural dairy farmers with a grant of Tk500 crore, which will be distributed in cash or through logistical support, according to the Department of Livestock Services.

The director general of the department, Abdul Jabbar Sikder, said: “We have taken some steps with locals to gradually reopen some sweetmeat shops in a few areas and also gave farmers the opportunity to deliver milk by vans to local houses.” 

“There has been some progress since last Thursday. The price of milk has increased from Tk15-20 a litre to Tk30-40 per litre in rural areas,” he added.

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