Agenda for the govt – #1. If it is willing to listen

Dairy, leather and beef – these three industries account for almost half the employment and much of nutrition

This article has two recommendations. The first is that the current health minister must go. He has promoted neither truth nor good science that is imperative for management of the Covid-19 crisis.

The second is more crucial. It is saddening to note the transformation of Narendra Modi from chief minister of Gujarat to Prime Minister. As chief minister, he championed the milk industry. But as PM, he forsook the sector. He even allowed this sector to be harmed. That, in turn, has harmed India.

He should immediately roll back the cattle slaughter ban.

Or, if the ban is still needed, compensate farmers @Rs 20,000 for each old bovine they were not allowed to sell to the trade. They could use that money to part-finance the purchase of young milch cattle. Fortunately, milk production has not faltered as yet because of genetics and good cattle feed.

Moreover, the state should take away the old cattle from the farmer, so that he does not have to pay for its upkeep.

In fact, the cattle slaughter ban was a key factor which promoted India’s economic slowdown.

Killing purchasing power

To understand this, please remember three things:

• Almost 10 crore families depend on milking cattle.

• Almost 70 per cent of them are marginal farmers, with no land. They can, with good feeding practices, earn a profit (income less all expenses) of at least Rs 100 per cattle per day for 300 days a year. That is big income. But that depends on whether state governments have allowed dairy farmers to get a decent price of Rs 26 per litre or more. Uttar Pradesh pays Rs16-18 a litre. It promotes poverty and illiteracy because it is easier to convince them to vote for the local strongman.

• Only 24 per cent of the milk is sold through organised channels. If the remaining 76 per cent could also be brought under the organised sector, India’s GDP could go up by at least 6 per cent additionally. Clearly, ministers like Piyush Goyal did not understand this when they agreed to sell away India’s milk industry to New Zealand a couple of years ago. A huge outcry from cattle farmers made the government scuttle such moves. But now, the government is trying slow poison by using the subsidy route instead.

• Be warned, if the milk sector collapses, India will lose at least a third of its consumption market. The game of subsidies needs to be stopped immediately. It protects the inefficient and cripples the efficient. And imports will ruin this industry, as domestic market prices for agriproducts cannot be allowed to fall.

Milk alone accounts for Rs.8.4 lakh crore of output each year. According to a FICCI report of July 2020, titled ‘Development of Dairy Sector in India July 2020’, milk surpasses the total value of output from the top two food grains by at least three times.

If the government allows this industry to grow along the lines recommended by Dr Kurien, this industry could generate an output of over Rs 15 lakh crore. It could become the milk supplier to the world.

Milk remains the fastest route to rural purchasing power, which, in turn, triggers economic growth elsewhere.

Leather

The government tried banning even trading in cattle (till the courts stepped in). But it was killing the leather trade. This trade is a big foreign exchange earner and employment generator (4.42 million people).

India is the second largest producer of footwear, the second largest exporter of leather garments, the fifth largest exporter of leather goods and the third largest exporter of saddlery and harness items.

This industry has survived only because the milk industry ensures a steady supply of hides which it can then cure, value-add, and then export. India can become the world’s largest exporter of this item as well, and thus create more jobs and more wealth for the country.

Beef

A large percentage of beef is exported. When it comes to buffalo meat – known as carabeef, India is the world’s largest exporter.

This is because the cost of meat production is among the lowest in the world. India does not have to grow cattle to meet meat demand. It is a by-product.

India has always been the largest or second largest meat exporter and its market share has been improving. But the cattle slaughter ban has hurt its growth. Like leather, it is labour-intensive, though reliable employment numbers for this sector are not available.

Prime Minister Narendra Modi should immediately roll back the cattle slaughter ban. Or, if the ban is still needed, compensate farmers @Rs 20,000 for each old bovine they were not allowed to sell to the trade

Hail to the triumvirate

Together, these three industries account for almost half the employment and much of nutrition.

If India has to see economic revival, it must start with improving purchasing power in rural areas, because that is where 50 per cent of the population resides. That triggers a growth in other sectors as well. Hurt this sector, and you slow down the country’s growth, both as an exporter and as a generator of wealth and nutrition.

There are other strategies that the government should pursue. But those will be taken up in subsequent articles.