Cattle trade rules: In Maharashtra’s milk district, dairy farmers say it’s the end of their business

In the last week of May, as news channels and newspapers reported that the Central government had notified new rules prohibiting the sale of cattle in animal markets for slaughter and to non-agriculturists, Nanda Shelke was dismayed.

“With this order, milk will be finished for us,” said the 55-year-old landless dairy farmer from Yesgaon in Ahmednagar’s Kopargaon taluka. “We will have to stop keeping cows if we cannot sell them to traders anymore.”

In 2015, soon after the Bharatiya Janata Party had come to power in Maharashtra, the state government had banned the slaughter of cows, bulls and bullocks. This had caused a massive disruption in the livestock economy in the state.

The Centre’s notification of new rules for animal markets will further strangle the livestock economy, say farmers. For one, the new rules apply to all kinds of cattle – not just cows, bulls, bullocks but also buffaloes and camels. Cattle cannot be sold to those who are not agriculturists, which excludes traders from the market. Both the seller and the purchaser of the cattle in the market are prohibited from selling the animal for the purpose of slaughter. The notification also mandates that these animals should not be re-sold for another six months, requiring the seller to maintain the paperwork for this.

“The only people who will benefit from these rules are those who run slaughterhouses because instead of giving us Rs 15,000 [for an animal], they will give us Rs 5,000, knowing we cannot go elsewhere,” said Shoaib Sayyad, a resident of Dauch Khurd, another village in Kopargaon.

But it isn’t just the meat trade that will be affected. Even the dairy business will be hit, since farmers say they will no longer find it economical to keep cattle.

The dairy business in Maharashtra

Maharashtra is the seventh-largest producer of dairy in India, with several cooperatives based in its western region. Farmers and farm workers here often keep milk-giving cattle to supplement their unsteady agricultural income.

Ahmednagar is the state’s highest milk producing district, according to a 2015 National Dairy Development Board report. It produced 14 lakh megatonnes of milk in 2013-2014, accounting for over an eighth of the state’s production that year. The dairy board report said that Ahmednagar had 5.9 lakh bovines producing milk, the highest number in the state, followed closely by Kolhapur and Pune. Only around a lakh of those animals were indigenous cattle, less than a lakh buffalos and the remaining four lakhs crossbred cows.

This entire ecosystem is built around the cooperative structure, which in turn is based on the hugely successful Amul model of Gujarat. Farmers keep their cattle at home, tending to their daily food and water requirements. Dairy collection centres in each village send out representatives to villagers they have contracts with, pay them according to the quantity and quality of milk they have, and transport this via trucks to larger milk processing headquarters.

Shelke supplies to the Godavari Khore Sahakari Dudh Utpadak Sangh Limited, a milk cooperative based in Kopargaon, 6 km away. Half of her income is dependent on her three cows, with each giving around 10 litres of milk a day. The other half comes from the work she does on others’ farms.

Shelke was at home on a Wednesday afternoon when the cooperative’s representative accompanied this correspondent to her village. Although the representative claimed in her presence to pay her an average of Rs 30 per litre, Shelke said she gets around Rs 20 to Rs 21 a litre from day to day. In all, she earns Rs 600 to Rs 630 daily, an amount she almost entirely spends on fodder at Rs 200 per cow. The almost non-existent margin in between is her net profit from dairy.

The calculation made more sense until two years ago, when Shelke had five cows. But a drought hit the region and she was forced to sell two of the animals to traders for Rs 30,000 and Rs 25,000 – a far cry from the Rs 80,000 each she paid for them.

“We used to be able to sell our old cows to traders,” Shelke said. The first cow she had came 40 years ago when she got married. “Now if we cannot sell them, how will we marry off our daughters or educate our children? This is all we have.”

The importance of the trader

If they have the capital, people like Samir Nikole do not keep cattle for more than a few years. “Nobody but the traders buy our cows when they get old,” said Nikole, who runs a stable with around 20 Jersey cows in the same village as Shelke. “But for these sales, the traders generally come to our houses directly and we do not go to the market.”

Farmers sell their cattle to traders either at local taluka markets or through their own networks, with the traders coming to their homes to buy their cattle. They usually do not transport the cattle themselves as it costs Rs 500 to move two animals 15 km to the nearest market. In case of an unsuccessful sale, they would have to bear the additional cost of bringing them back.

The traders take the cattle either to larger markets, such as the Loni animal market in Ahmednagar, or transport them to slaughterhouses – in the case of cows, bulls and bullocks, such activity is done clandestinely because of the ban on slaughter. If farmers are unable to find traders willing to buy their cattle, they have no option but to either continue to care for the animals at home or abandon them where they can.

Since the Bharatiya Janata Party government in Maharashtra banned the slaughter of cows, bulls and bullocks in 2015 soon after coming to power, the trade of cows and bulls had already become fraught – no one wanted to be seen as the last person to sell the animal to a trader before it is sent for slaughter.

A new cow from the market might cost Rs 50,000 to Rs 60,000. Unlike Shelke, who had to make a distress sale, Nikole said the average rate he expects from a trader for a milk-giving cow can go up to Rs 40,000 – as against Rs 10,000 for one that no longer gives milk. A buffalo, which gives more milk but also requires a higher attendant cost, might cost around Rs 80,000.

Making buffaloes uneconomical

The 2015 ban did not include buffalos but the Centre’s new notification does. For those who keep buffalos, what was once a fairly safe and straightforward supplement to their income has suddenly become fraught with risks.

“Only if we sell at the end of a buffalo’s life cycle are we able to recover costs,” said Shoaib Sayyad, the resident of Dauch Khurd, whose family keeps three buffalos. “The trader might give us Rs 15,000 at the end because they know we do not have another option, but at least that is something with which we can buy a new buffalo at around Rs 80,000 to Rs 1 lakh.”

Buffalos, said Sayyad’s mother, declining to give her name, have to be fed six times a day. They require a varied diet that includes sugarcane, makai, jowar, dry fodder, alfalfa and cotton husks. A young buffalo will give birth to a calf at the age of three. That is when she starts producing milk, which continues till she is around 15 to 20 years old, after which she is sold.

“The only people who will benefit from these rules are those who run slaughterhouses because instead of giving us Rs 15,000, they will give us Rs 5,000, knowing we cannot go elsewhere,” Sayyad said.

Under the notification, the sale of cattle for slaughter is banned in animal markets but not outside the markets, where people still have the option of selling to slaughterhouses via traders they might know.

Milk prices might rise

The new rules may also lead to a rise in milk prices and a decline in milk production, said people at the top of the dairy chain.

“If the farmer cannot sell his cows when he cannot even feed himself, he will leave dairy altogether,” said CS Gadhave, managing director of the Godavari unit at Kopargaon, which collects 1.5 lakh litres of milk from 50,000 households in 112 villages each day. “Or if he stays in dairy, he will only be able to afford the cheaper indigenous cows, which does not make economic sense.”

Only cattle that give more than 10 litres of milk a day make sense, Gadhave pointed out. Jersey and Holstein-Friesian cows give 30-45 litres daily – as opposed to the 10 litres a typical indigenous cow might give – and though they are more expensive, they have the potential to make their owners comfortably well off.

“They should have kept these rules only for indigenous cattle,” Gadhave said. “That way everyone is happy.

This was a sentiment broadly echoed in the villages.

“These rules make sense for indigenous cattle,” agreed Nikole. “For others, the government should let us sell them freely in the markets.”

The new rules might temporarily bring down the milk surplus, said Gadhave, which in turn might end up stabilising milk prices for a short period. But once the surplus gets over, he added, if it is a permanent contraction, prices will then shoot up owing to an overall shortage in milk. An Indian Express report on falling milk prices in 2016 pointed out that as private companies had contracted milk procurement owing to a global drop in milk prices, the state had obliged cooperatives to step in and procure the shortfall.

“In the last 15-20 years, more farmers in this area have started to keep cattle,” Gadhave, who has worked at Godavari for 42 years, said. “Where do they get rates for any of their crops? Onions are not selling, no other crop is selling. This is the only source of profit for them. These people sitting on the top should see whether they are really concerned for the economic growth of farmers.”

End of supply chain

Although cow slaughter has been illegal in Maharashtra since the enactment of a law in 1976, it has gone on surreptitiously in parts of the state. Farmers and traders are reluctant to come on record or even speak off record of how they dispose of cattle once they stop giving milk.

“We sell them to traders and we do not know what they do with them after that,” said Sayyad, uncomfortably. “We know there are people who take them to the north but we do not know how or where to.”

Imtiaz Kapata, a bull trader at a cattle market in Yeola in Nashik district, explained, “If farmers cannot sell their old cattle to traders, the circle will not rotate.” He added, “They will not get the money to buy new cattle and will go deeper into debt from private moneylenders. And if the farmer does not get his price, then everyone else is in trouble.”

Another small trader, who asked not to be identified and denied any involvement with slaughter, said that traders themselves might no longer be willing to take risks with cattle. “There are no slaughterhouses in Ahmednagar,” he said. “But there are big ones still running in Aurangabad. Those who want to take the risk could take cattle there for cutting. They could also go outside the state but this has become more difficult since the beef ban.”

The trader said he was considering leaving the business altogether, fearing government and local persecution. If he had to keep his cattle for six months before selling them again in the larger market, it would make no economic sense, he explained.

“It is not as if we have been traders for so long,” he said. “My father was a small farmer and became a trader after he had to sell his land. We made our way in this business and now we will find another if we have no other option. What else can we do?”