HYDERABAD: Rajab Ali Leghari, a small-scale livestock farmer in a Tando Allahyar village, is deeply worried like his fellow farmers across the province over plummeting demand for milk because of closure during lockdown of tea shops, restaurants and sweetmeat stores — major consumers of his commodity.

He too tried to reduce considerably retail price of milk like others to arrest the drop in supplies and prices by selling off the highly perishable commodity but it has had little effect so far.

Leghari is one of several million small traders and shop owners who are bearing the brunt of the current lockdown in the province which had been imposed by provincial government to help contain spread of highly contagious Covid-19.

Leghari’s fellow farmer, Pehlaj Kolhi, who lives in Saleh Dal village near Hyderabad, faces the same problem after he had to stop supplies of around 40 kilogramme of milk to his consumers in the city due to ban on movement of public transport under the lockdown.

Rate in major cities comes down to as low as Rs50 a litre against pre-lockdown price of over Rs100

“Where do I take my milk as I am not able to transport it to my customers,” says a worried Kolhi. According to Leghari, since hotels and tea outlets around his village near Tando Allahyar that consume milk for their products remain shut, “I am selling pure and unadulterated milk for Rs50 to 55 per litre”.

Marketing tactics

The hiccups in milk supply have led to a somewhat interesting situation in the city. “1.5 litres milk for just Rs100!” reads one of the several banners that dot Hirabad locality in the middle of the city. It is apparently fallout of the lockdown, something that was not even experienced during curfews imposed on the city in the wake of ethnic riots during late 1980s.

One such banner was conspicuous at a dairy shop where Khamiso Khan works. “These guys have upset our business in the locality so we too had to reduce the milk price from Rs100 per litre to Rs100 per 1.5 litres,” says Khamiso pointing towards a vehicle whose driver was selling milk in the middle of the road at the same price just paces away from his shop.

“It’s 100 per cent pure, sir, 1.5 litres for just Rs100!” announces a milk seller to attract buyers. Besides the lucrative package of “100 rupey main 1.5 litre doodh” others had offered milk prices ranging between Rs70 and 85 per litre to avoid storing huge quantities of milk in dairy farms. Some have started selling milk across the city from makeshift shops to do away with the perishable product.

But Prem, a milk shop owner who also runs a cattle pen, believes that the price cut offers look attractive only on the surface. “There must be some amount of adulteration in it as it is not possible to sell pure milk at this low a price,” he says and adds that now his pen owner has also decided to reduce price to Rs70 per litre from Rs100 because a great bulk of his supplies that he used to transport to a milk processing plant in Karachi has been suspended. “So we don’t have any option but to go for price cut,” he explains. “I can even send you 80 litres of milk free of charge, if you like, to give it away to the needy,” he offers.

Almost all milk shop owners have reduced the price by Rs20 to 25 per litre to grapple with the situation. They claim they had to reduce the retail price to avoid losses and save milk from being wasted.

Supplies disrupted

Bhains and cattle colonies located on the outskirts of the city meet needs of Hyderabad and send the extra supplies to Karachi. “Supplies to Karachi have also been undermined in present conditions,” says a farmer, Abdul Rauf Jahejo.

He says that it has forced farmers to review price for their regular supplies to dairy shop owners. A number of farmers took the decision after meeting dairy owners on Friday and declared the reduced price would be effective till April 5.

“We will now be selling milk for Rs77 per litre or Rs3,080 per 40 litres to our regular customers [dairy owners]. It will also be a great relief for consumers as we have reduced our farm gate cost from Rs3,680 to Rs3,080, a cut of Rs600 per 40 litres,” says Jahejo.

He believes the demand for milk has been intact but it has been temporarily scuttled by suspension in transportation. “How can such a big quantity be stored or preserved by each diary owner or farmer is mindboggling hence the major price cut,” he says.

Earlier, a self-proclaimed action committee of farmers met on Jan 30 and announced fixing retail price of milk for dairies at Rs100 per litre effective Feb 1 in opposition to district administration’s proposed price of Rs96 per litre. But the committee could not go ahead with its decision.

Farmers had argued that since their cost of inputs like oilcake, fodder etc had increased it necessitated the raise in farm gate price of milk but the administration did not allow it.

Sweetmeat shops, hotels, restaurants and caterers are bulk consumers of fresh milk while general public buys in smaller quantities for domestic consumption.

Cattle pen owners supply milk on contract — called banddi — to retailers. Banddi is an agreement under which farmers supply certain quantity of milk to dairies throughout the year and according to Rauf Jahejo, a dairy owner makes payments after every seventh or tenth or twelfth day as agreed upon mutually.

“If the situation persists milk will start flowing in streets,” remarks Mohammad Aslam, owner of a shop on Miran Mohammad Shah Road, referring to the fallout of the lockdown that has been in place since March 23.

“It is a lockdown-driven drop in demand as the buyer is missing and other related businesses are shut,” he says.

Published in Dawn, March 29th, 2020