The dairy sector is reeling from an unprecedented financial crisis brought upon it by the coronavirus pandemic.
A bulk of the demand for milk comes from restaurants, tea vendors, hotels and government schools for the midday meal program. Now, with all sectors closed for several months, demand for milk has plummeted by 25%, say, traders.
A. Srinivas, a retailer of Dodla Dairy, used to sell over 160 liters of milk a day from a small outlet in Anantapur city. Now, he manages to barely sell over 100 liters a day, as shops are being allowed to remain open only between 6 a.m. and 11 a.m., leading to a drop in customers.
Vijaya Dairy defunct
In an indication of the crisis that the sector finds itself in, the Andhra Pradesh Dairy Development Cooperative Federation Limited milk processing unit (Vijaya Dairy) has seen its entire market of 3,500 litres a day getting almost wiped out.
“We are currently processing only 400 litres a day from its capacity to process about 1 lakh litres a day,” said Dairy Development Deputy Director Sasankadhara. “Milk supply to schools was the mainstay of the unit since 2016, but COVID-19 has dealt a body blow to even this source of income,” he said.
During the initial days of the lockdown, the district administration had asked Vijaya Dairy to supply milk to the people living in containment zones, which kept their business going for two months. However, when the government stopped the supply of essentials in those areas, the Federation stopped procurement of milk altogether.
The milk processing unit, which used to process about 80,000 litres a day till 2016, stopped procurement completely after it lost its entire market in Telangana. The government is now in talks with the Gujarat Cooperative Milk Marketing Federation Ltd. (GCMMF) that sells products under the brand name Amul to revive Vijaya Dairy in six districts of Andhra Pradesh.
Vijaya Dairy currently has 27 permanent staff in the six districts of Anantapur, Chittoor, Kadapa, East Godavari, West Godavari and Krishna, but none of them are being paid their salaries for the past eight months. Only the outsourced staff working on those processing units were paid for some time, but even their salaries are pending for the last two months, it is learnt.