Collective feed procurement by women dairy farmers reaps rewards

Dindigul, January 23, 2018: Around 300 women small-scale dairy farmers, in Kannivadi region, Tamil Nadu, are benefiting from collective procurement of concentrate cattle feed through its Farmer Producer Organization (FPO). This has led to 15% savings in milk production costs.

In Kannivadi, Dindigul district, Tamil Nadu, dairy is the major livelihood option for small and marginal holders in which women play a dominant role in production and management. In dairy farming, especially small farmers who own 2 to 3 animals, 40% of total expenses incurred are on concentrate cattle feed. The higher cost in feed makes dairy an economically unviable enterprise for small-scale farmers. Commonly, small-scale dairy farmers do not have adequate cash flow to buy cattle feed on full cash payment. Due to this they mostly rely on local milk vendors for cattle feed. The vendors, who supply feed on credit, adjust this while making payment for milk procured from farmers. Here the vendor makes profits from feed sale by fixing an extra margin over the prevailing market price, which ultimately increases the feed cost.

To overcome the challenge of increasing production cost due to higher feed cost and reduce dependency of women dairy farmers on local milk vendors, for feed and forced milk sales, the Kulumai Milk Producer Company, a women dairy producer company – nurtured by MSSRF – has now obtained a dealership to sell reliable cattle feed in the region.  Since each of their own members buys at least two bags per month, through this collective purchase they save Rs 50 to 70 per bag, on the market rate of feed per bag. Collectively the 300 women producers saved Rs 30,000 per month on concentrate feed. This is significant, since apart from individual member benefits, the collective purchase of cattle feed through the FPO helped earn monthly gross profit of Rs 38,000.  This was additional income for the FPO. Feed is also supplied with an instalment payment option for members’ benefit.

Thus, the collective action through FPO supported the small-scale dairy farmers in reducing the cost of milk production by savings in cattle feed by 15%. In addition, it helped the members to contributeto the company’s business and avail the subsequent benefits in profits through bonus. It motivated the members to think of the option of establishing an own concentrate feed manufacturing facility and increase their margin on profits. It is aimed to reach out to the over 2000 women farmers across this region. A similar model could potentially help benefit several lakh people involved in dairy farming across Tamil Nadu.