For marginal farmers, finding an alternative to farming is not an option any more. It has become a question of survival. Lurking among success stories are the tales of struggle — those first few tentative steps when the risk of falling looms large just before you break into a sprint.
Gurvinder Kaur, a graduate from Rupnagar married in Kohara near Ludhiana, is taking those first steps. A few years after her marriage when her father-in-law died in 2012, the subsequent division of the family landholding left her husband with a mere acre. The only work the family had ever done or knew how to do became unsustainable suddenly. Her husband picked up the job of a foreman at this village-turned-town but his earnings were too small to run the household. “We sold our village house and came to live on the 1 acre. Then we started thinking of selling the land to gather money to last us some years; but that would have rendered my husband and all of us without work; and what when the bank balance finished?” she recalls.
Gurvinder, most educated member of her family, made some quick and firm decisions, surprisingly with the complete support of her mother-in-law. With the two cows that the family had kept for its milk requirement, she decided to set up a commercial dairy. “My mother-in-law had as a young woman seen her father rearing cows and she was the one taking care of those two cows,” she said. Barely three years later, her efforts are showing good results. “These are those first few years where we are just breaking even. We now have 10 cows and buffaloes and four calves. The cattle have been bought on credit and though we pay a heavy mortgage every six months to the bank, we are able to stow away enough money to buy better breeds,” says Gurvinder.
The latest prized possession in her dairy is a cow bought for Rs 1.25 lakh last month. “We sold one for Rs 20,000 and bought another that gives us 13 litres of milk a day,” says Gurvinder’s husband, Amanpreet Singh. “Since the requirement for fodder increased, we took another three acres (other than their 1 acre) on lease. The grain and fodder from 4 acres is enough for the household as well the cattle. There is no profit at all in agriculture,” says Shinder Kaur, Gurvinder’s mother-in-law.
Read earlier parts of the series: Futuristic farmers-1: Riding pigs to prosperity
By tilling just 1 acre, the family would have earned Rs 60,000 a year at the most but from the dairy, it makes an annual profit of about Rs 2 lakh even in these years of struggle. “The cattle give us almost 30 litres of milk a day, which we sell for anything between Rs 40 and 50 a litre to either the Milkfed co-operative collection centre or a private co-operative. We also sell a small part of the milk from our house. The co-operatives pay us by the fat content in the milk. Initially, the Milkfed rate was more than Rs 50 a litre but now it is Rs 40. Private co-operative offer us a better rate of Rs 54 per litre,” says Amanpreet Singh.
While a large part of total yearly income of almost Rs 4.5 lakh goes into repaying the bank, a substantial amount also goes into paying the lease money for 3 acres. “The lease rate is in this area is Rs 35,000 per acre. Together the credit and the lease payment mean a cut of almost Rs 2 lakh from the total earning. But since the grain for our consumption and the fodder for the cows are taken care of, there is little expenditure on other things. And whenever we go beyond our annual budget and need money, we sell a calf and that brings in ready cash,” explains Gurvinder.
In the backyard, the family built a shed of less than a kanal, which is big enough to hold 15 cows, and every member takes care of the cattle. Other than Gurvinder Kaur, her husband, and paternal uncle, the family has the assistance of a worker. “Cows are sacred creatures. They understand us, follow our commands and are easy to handle. We channel the cattle waste into land as manure and also use it as fuel. To inseminate the cows artificially, veterinary doctors are only a call away. The bank has insured the cattle but we have arranged for its regular medical examination. After all, they are the family’s breadwinners,” says Gurvinder.
A good-quality cow or buffalo costs anything between Rs 60,000 and 1 lakh. Even though the Punjab government has tied up with some national banks to offer farmers cattle loans, capping the cost at Rs 60,000 per cow, but the interest rate, 2 to 2.5% over the base rate, is not encouraging. “The money has to be paid back in seven years,” explains Punjab animal husbandry director HS Sandha. There are loans are also for building cow sheds and buying machinery.
Gurvinder Kaur, who bought six cows, pay the bank six-monthly instalments of Rs 60,000 each on a total credit of Rs 5.6 lakh (Rs 3.6 lakh for cattle and Rs 2 lakh for the shed). “It pinches. It might take us a few years to repay the loan, but once it is over, the buffaloes will mean only profit. We have four calves from them already and another cow is ready to deliver. Once we have 20 cows, the dairy will flourish,” says Amanpreet Singh.
The family is trying to renegotiate the deal with banks. “The interest rate cannot be changed but we are asking the banks not to charge farmers any principal amount in the first year of cattle purchase, which is when farmer invests a lot in other things as well to start a dairy. We also want the repayment period extended to nine year, to reduce farmers’ mortgage,” says animal husbandry director Sandha.
Attached to land
In the period of struggle, Gurvinder Kaur has done well to resist the temptation to sell off the 1 acre by the main road. “Property dealers are offering good price and almost all families at Kohara have taken the offers, but they have nothing to do now. What is the point of having money and then sitting idle at home?” asks Shinder Kaur. Kohara on the Chandigarh-Ludhiana road is fast developing into a small town and cost of land on either side of the main road is quite high. “We could have got more than `1 crore easily for 1 acre, but that would be rendering ourselves unemployed. We are attached to the soil that feeds us,” she says.
The attraction that remains is of using this land as a source of rental income. Most owners still attached to their land are building hostels on the space for industrial workers moving in to settle around Ludhiana. “We could look at that option once we make enough from the dairy to buy fodder and grain,” says Gurvinder Kaur, on planning ahead.
Used as farm, fetches farmer Rs 60,000 a year
Used as dairy farm, fetches farmer Rs 2 lakh annual profit even in struggle period
The economics of it
Price of good-quality cow or buffalo: Rs 60,000-1 lakh
Average milk yield from cattle: 20 litres a day
Bank loan cap: Rs 60,000 per cow
Interest rate: 2 to 2.5% over the base rate
Time given to repay loan: 7 years
Loans available for: Cattle, shed, machinery
Other major requirement: Land to grow fodder
Average annual cost of land on lease: Rs 35,000 per acre
20 cows: Enough to make a dairy flourish
Side benefits: Animal waste can be used for making fuel and manure
Milk buyers, what they pay
Milkfed (co-operative collection centre): Rs 40 a litre
Private co-operatives: Rs 54 a litre