India - Livestock sector review

Report No. 785-IN FILE COPY India Livestock Sector Review June 13, 1975 South Asia Projects Department Not for Public Use Document of the International Bank for Reconstruction and Development International Development Association This report was prepared for official use onl'y by the Bank Group. It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report.   INDIA LIVESTOCK SECTOR REVIEW TABLE OF CONTENTS Page No. SUMIMARY .........................................i-i I. INTRODUCTION .......................... .......... II. THE AGRICULTURAL BACKGROUND ......................1 II. LIVESTOCK PRODUCTION .............................3 Stock Numbers and Production ..............3 The Cattle of India ........................4 The Buffalo of India .......................4 Milk Production .................5..... Draft Animals . ...... ................. 5 Small Ruminants, Pig and Poultry Production .6 The Feed Supply ............ ............... 7 The Feed Industry ........................8 IV. MARKETING AND PRICES ............................ 8 Mllk ... .............. 8 Live Animals . .... ........................ 9 Foreign Trade in Livestock Products .. ....... 11 V. SUPPORTING TECHNICAL SERVICES ............... o .... 11 Veterinary Services ........... ....... 11 Artificial Insemination .......... . 12 Livestock Extension ............. .. .......... 12 Livestock Research ...... ......... .. ........ 13 Education and In-Service Training . .......... 14 Dairy Cooperatives ..... ........... ........... 14 IDC, NDDB and State Dairy Corporations ...... 15 VI. LIVESTOCK DEVELOPMENT PROGRAMS .............. .... o 16 The Five Year Plans . .... o... . ...... .. ....... 16 Bilateral and Multilateral Support ........ .. 19  Page No. VIi. TILE POTENTIAL OF IMPROVEMENT ..... ................ 19 The Basic Proposition ........... .. .......... 20 Specifics of the Potential ......... ......... 22 The Importance of Flexibility ............... 23 A Balanced Approach ............ .. ........... 23  INDIA LIVESTOCK SECTOR REVIEW SUMMARY i. The traditional function of cattle on the small farms of India is the provision of draft power for the primary agricultural objective of sub- sistence crop production, and for transport. Milk production from cattle is, at present, largely a byproduct of the breeding of draft animals. Under the low input - low output livestock and cropping system in common use, al- most all male calves born are required to maintain the national herd of draft animals, and young male cattle are given preference over females in the use of limited feed supplies. In regions with access to markets and where ade- quate roughage from cereal cropping is available, buffalo and specialized dairy cattle breeds are kept primarily for milk production and, contrary to the position with draft cattle, female calves are the selectively reared. ii. The major problems of the livestock industry are reflected in an insufficiency of draft power for land cultivation, and inadequate production and distribution of milk, the most acceptable and important source of ani- mal protein in the national diet. India's first five year plans sought to improve draft capacity by expanding State breeding farms and the distribu- tion of bulls. With increasing acceptance of mechanization in the nore recent plans, the primary emphasis on draft cattle improvement has given way to a concentration on increasing milk production, particularly by the use of cross breeding with exotic dairy bulls and the organization of farmers into AMUL 1/ type cooperatives to supply the health, breeding, extension, feed supply and market services essential to cattle improvement. iii. The likely success of the technological aspects of this recent policy change hinges on two factors; the acceptance by small farmers of AI using exotic dairy sires, and a major increase in legume fodder production. In the eyes of the small farmer, cross breeding at present represents a gamble: not only must he ensure the adequate replacement of his draft animals, he must also either grow or purchase the incremental feed required by the higher yielding crossbred heifers he expects Al to produce for him. Effective demonstration at the village level of the financial and produc- tion advantages of the new technology is therefore a key element in the success of the five year plan proposals. iv. In many villages, conventional cooperatives of various types have not been successful as they have traditionally served the interests of the fewer, larger and more influential farmers. The clear cut success of the AMUL Cooperative in Gujarat State, the accepted model for future dairy co- operatives in India, does, however, lead to optimism regarding the dairy 1/ Kaira District Cooperative Milk Producers Union Ltd.  - ii - cooperatives now being promoted. The experience of AMUL is truly impres- sive, particularly as the majority of the milk producing animals in this cooperative are owned by small and marginal farmers. v. In AMUL the technology for increased milk supply rests on buf- falo, and not cross-bred cattle. In this context it should be appreciated, that, where roughage is readily available, buffalo offer a number of ad- vantages to the small farmer. They appear to withstand a diet of poor fod- der better than cattle of comparable milk yield, and because of their lesser importance as draft animals, farmers are less reluctant to consider the use of AI and superior dairy sires on buffalo cows. The high fat content of their milk also favours ghee production. Buffalo do, however, also present disadvantages; they are heavier and require more fodder for maintenance purposes, they have a longer intercalving period, and they require a higher initial capital outlay. On balance it appears likely that buffalo will maintain their role in areas where coarse roughages are relatively plentiful, and that cross-bred dairy cattle will dominate where leguminous fodder pro- duction and fresh milk marketing are feasible. vi. In a country as large and diverse as India it is important to emphasize that there is no single operational strategy which suits all rural strata and all farming conditions equally well. Programs which are flexible in regard to technology, institutions and marketing, and which are designed for specific groups under specific circumstances need to be promoted if livestock development is to provide a significant mechanism for ameliora- ting the poverty of the small farmers of India. vii. Although cattle and buffalo dominate the livestock sector in India, large increases in poultry, fine wool and mutton production as well as draft- power, are practical objectives. As with dairying, production improvements in these sectors depend on community efforts, particularly in relation to the use of communal land and water points, and in modifying a rural structure that inhibits the provision of institutional credit, market and extension services to small farmers. viii. The potential of the livestock sector in India resides in an immense population of animals presently subsisting at maintenance feeding levels and whose productivity could be greatly increased by even small improvements in feed availability. Such an improvement could be brought about by: (1) The promotion of an export trade in bovine meat. This step would favour a price increase for cattle and buffalo, a greater offtake and increases in body weight, draft capacity and productivity; (2) The enlargement of simple research, demonstration and extension facilities in rangeland and pasture improvement, in leguminous fodder production and in mixed crop- livestock farming systems;  - iii - (3) The promotion of semi-intensive poultry rearing in deep litter systems using mixed feeds containing less than 25% grain; (4) The initiation of a stratification of the sheep and goat industries whereby young stock are removed from range areas at an early age and fattened under more intensive feeding conditions; (5) The encouragement of the formation of producer cooperatives for dairying based on the AMUL concept, particularly where small areas of leguminous fodder crop can be grown for each productive animal. ix. Quantification of the likely rate of progress in livestock production is beset by many unknowns and progress will lack uniformity and be slower than hoped for. Nevertheless many lessons have been learned in recent years and successful production programs are under way. In these circumstances the goals of the livestock sector of the current five year plan represent objectives which are not impossible to attain.   INDIA LIVESTOCK SECTOR REVIEW I. INTRODUCTION 1.01 India has about 17% of the world's cattle and 50% of the world's buffaloes. Yet these animals make a small monetary contribution to the nation's economy. In 1972-73 the direct share of livestock was about 18% of the value of the output of the agricultural sector, which contributed about 45% of net national product. Agricultural commodities make up about 35% of the annual exports and of this only 5% were livestock products, mainly hides and skins. The annual value of livestock imports, mainly dairy products, fine wool and tallow, now approximates US$80 million. 1.02 Draft cattle are the main source of power for the nation's agri- culture, an insufficiency of which constrains crop yields and the expansion and intensification of land cultivation. The imbalance between available fodder, stock numbers and draft power is the most critical issue in the livestock sector, while a decline in the availability of milk and the continuous degradation caused by overgrazing of communal land and range pasture are major causes of concern. 1.03 Livestock development receives relatively high priority in the present Five Year Plan and is looked to by GOI as one means of attaining a greater degree of social justice for the small farmer. Dairy development in particular is being encouraged, in part with World Bank assistance. More recently, difficulties arising from much higher energy costs have highlighted the importance of attaining greater efficiency in the productivity of draft cattle. In these circumstances it is important to attempt an overall review of the livestock sector in the Indian economy, with the particular objective of assessing the livestock potential of the country, especially in relation to the situation of the smaller farmer. 1.04 This paper represents a first attempt at this assessment. It is based on a desk study of the Indian Livestock Sector made by the FAO/IBRD Cooperative Program at World Bank request, together with the observations and information collected by Bank Staff. The particular emphasis adopted focuses principally on two of the many aspects of the livestock sector, namely dairy production and draft cattle. These specific aspects of the industry are considered the most important in relation to both external payment perspectives and to the strategy of overall agricultural develop- ment. II. THE AGRICULTURAL BACKGROUND 2.01 The land area of India covers 3.27 million square kilometers and contains about 580 million people, 240 million cattle and buffalo, 100  - 2 - millien sheep and goats in addition to smaller numbers of other livestock such as poultry, pigs, camels, donkeys, mules and horses. The bulk of this livestock population is engaged in a perennial struggle to meet its sub- sistence food requirements, for the cultivable land area is almost fully utilized and agricultural productivity and population pressure are pre- cariously balanced in an equilibrium that modern technology is only barely maintaining. 2.02 Some 80% of the Indian people live in rural areas and about 70% of the total labor force of about 190 million are employed in agriculture. Small-scale farming predominates; the average size of farm holdings is less than 2.5 ha (1971 Census). Only 4% of the farmers have holdings larger than 10 ha, 11.3% farm from 4 to 10 ha, 15% farm from 2 to 4 ha, and nearly 70% farm less than 2 ha of land. Many of the smaller farms contribute little to the commercial market; rather they are principally concerned with the subsistence production of the basic food crops of rice, wheat, sorghum and millet. 2.03 The total land area cultivated each year approximates 164 million ha of which about 25 million ha are multiple cropped. Land use and types of farming differ widely among regions because of differences in climate, topog- raphy and soils. Most land cultivation, particularly on smaller farms is carried out by oxen. 2.04 The gross irrigated area has increased by about 10 million ha in the last decade and is now believed to be about 40 million ha of which about 7 million ha are double cropped. Irrigated land accounts for about 22% of the cultivated area. The water resources of India are such that a potential 82 million ha could be irrigated from surface and ground water sources. Of the present usage of irrigation water about 34% is derived from wells. Oxen are an important source of power for drawing well water for irrigation pur- poses, one pair of bullocks being generally capable of lifting sufficient water to irrigate about 0.5 ha. Although the number of diesel and electric pumps in India increased from about 100,000 in 1965 to 2.7 million in 1971/72, periodic power shortages, limited rural electrification and sharply increased fuel prices have caused a setback to the mechanization of water pumping, and to a renewed interest in the use of bullocks for drawing well water. 2.05. The growth of agricultural production in India between 1961 and 1971 averaged about 3% per year, but most of this increase was offset by a population growth of 2.2% per year over the same period. To bolster performance of the agricultural sector GOI has, since 1966, adopted a policy of concentrating development efforts in priority areas: high yielding crop varieties, development of irrigation resources, increased use of fertilizer, pesticide and improved seed and more recently, improved dairy cattle production. The improvements in productivity brought about by the use of new agricultural technologies in India are substantial and over- all production in the agricultural sector increased almost twice as rapidly  during the last decade as it did during the previous ten years, but ineqtial- ities in the distribution of benefits in the rural sector, as well as a slow rate of progress in relation to population growth, are causing increasing concern to GOI. New National Guidelines for a land ceiling program, and special rural programs such as the Drought Prone Area and Intensive Village Cattle production projects, directed to the poorer sections of the community, are specific GOI responses to present shortcomings in respect to the distri- bution of benefits of improved technology. III. LIVESTOCK PRODUCTION Stock Numbers and Production 3.01 Although the financial contribution of livestock to the economy is relatively small, farm animals play a key role in the agricultural economy. They are the major source of farm power, rural transport, manure and cooking fuel, as well as frequently providing the onlv source of cash income on subsistence farms, and of insurance of family purchasing power in the event of crop failure. The likely structure of the present livestock population may be summarized as follows: (1972 Census) Total Adult Adult Young Likely Rate of _Iale Female Stock Annual Increase - -------------------millions-------------------- Cattle 179 75 56 48 0.7% Buffalo 58 9 29 20 1.2% Sheep 46 6 27 13 0.6% Goats 70 6 39 24 1.9% Camels, donkeys mules, horses 3 n.a. Pigs 5 n.a. Poultry 120 2.3% 3.02 The contribution of meat from India's large bovine population to the protein diet is small. Because of low average incomes, of the sentiment towards cattle from the predominantly Hindu population, and of bans (or se- vere restrictions) on their slaughter in most States, very little beef is consumed. Most bovine meat eaten comes from buffaloes because there are fewer restrictions on their slaughter. About 600,000 are slaughtered annu- ally (equivalent to about 120,000 tons of meat or 0.2 kg per capita). Most of this is consumed locally although some is now being exported to the Mid- dle East and some to the US for pet food. With a view to ensuring better utilisation of livestock by-products, the Government of India have formulated programs for setting up modern slaughter houses in different parts of the country under their five year plans.  - 4 - 3.03 Milk and milk products are by far the most important sources of animal protein in India and are acceptable to practically all segments of the population. The productivity of milk animals is, however, particularly low and daily per capita availability is only about 114 grams compared with 730 grams for the US. The availability of eggs averages 5 per capita per year and that of meat in all forms about 2.3 kg. The Cattle of India 3.04 The indigenous cattle of India are zebus; many of heterogeneous origin and nondescript type. The specialized and improved breeds, of which there are 26, are classified into the 3 main categories of dairy, draft and general utility. The major draft breeds include the Amritmahal, Bachaur, Bargur, Dangji, Hallikar, Kangayam, Kenkatha, Kherigarh, Khillari, Malvi, Nagore, Namari, Ponwar and Siri. The major dairy breeds are Deoni, Gir, Red Sindhi and Sahiwal while the dual purpose breeds are the Hariana, Kankrej, Mewati, Ongole, Rathi and Tharparkar. 3.05 The performance characteristics of average village cattle reflect the nutritional stress they are subject to, especially a deficiency of protein in the dry season. Age at first calving is about four years and calving intervals approximate 2 years. The growth of young stock is par- ticularly slow. The average weight of mature oxen is estimated at about 300 kg, and 220 kg for cows. Mortality rates between birth and one year of age are reputed to be of the order of 30%, a consequence of the se- lective rearing of male cattle calves;mortality of older stock is about 5%. Lactation yields approximate 500 litres with one lactation per cow of about 200 days each 2 years. 3.06 The body size and performance of the specialized indigenous breeds of cattle (probably 25% of the total cattle population) are appreciably superior to those of average village cattle. Milk yields as high as 4000 kg per lactation have been recorded on research stations while body weight of the specialized draft breeds may exceed 600 kg. As with nondescript cattle the breeding, growth and lactional performance of the specialized breeds is impaired by nutritional constraints, but the owners of such cattle tend to provide better overall management and feeding, thereby improving performance. 3.07 Cross breeding with European cattle was initiated some 70 years ago, principally with the Jersey and Friesian breeds and mainly for pro- ducing cross bred animals for specialized milk production. The superiority of the cross bred for this purpose, under adequate conditions of feeding and management, is now well documented. During the period 1961-72 approxi- mately 2,600 head of exotic cattle were imported. The Buffalo of India 3.08 The buffalo of India have almost twice the liveweight of average cattle and a correspondingly greater work capacity and food requirement. They are more suited to the wet lowland areas and are reputed to be better  - 5 - able to subsist on poor quality fodder. Seven major breeds of buffalo are recognized in India (the Bhadawari, Jaffarabadi, Mahsana, Murrah, Nagpuri, Nili, and Surti) but, as with cattle, a large percentage are of nondescript type. Their use in India emphasizes milk production rather than draft (the ratio of adult males to females in the buffalo population is 1:3, in cattle it is 1.3:1, Para 3.01) and female calves are selectively reared. Average milk yields per lactation are in the 1500 kg range with top yields being about 4000 kg of milk containing 5% to 8% butterfat. Breeding performance is similar to cattle with slightly higher rates of mortality being observed in buffalo calves than in cattle calves. Milk Production 3.09 Some 60% of the national milk production of 23 million tons is believed to originate as a byproduct of the production of draft cattle whose feed supply is almost entirely cereal straw and other crop byproducts. The residual 40% comes from landless farmers and city milk producers who usually keep their animals, often of specialized dairy breeds of cattle or buffalo tied near their houses or shops and who purchase all feed and fodder used. There is about 1 dairy cow or buffalo to every 10 persons in urban areas with city milk producers commonly owning 10-20 cows. Increasingly, State Governments are attempting to shift these urban dairy units to rural areas, the Aarey Milk Colony of Bombay (containing 15000 buffalo and one thousand crossbred cows) being an early pioneer in this field. 3.10 Traditionally, there has been a degree of specialization between the buffalo and cattle, in the sense that most buffaloes are primarily kept for milk production and most cattle for provision of draft power. In terms of milk yield, the buffalo is superior to most of the Indian cattle breeds. Its milk also has a high fat content commanding a price premium because its fats are used to make ghee (a cooking oil). For draft purposes the buffalo finds favor only in the paddy areas and where roughages are plenti- ful as the maintenance feed requirements of buffalo are substantially higher than for cattle. With the exception of the milk breeds of northwest India female cattle are kept primarily for reproduction of draft animals and the small amount of milk produced is fed to calves, particularly the males, and consumed within the household (see para. 3.21). Draft Animals 3.11 Draft males,, both cattle and buffalo, are castrated when almost mature. As better grown young bulls are selectively castrated for draft purposes some degree of negative genetic selection for size is usually pres- ent, particularly as mating is largely indiscriminate. Young cattle and buffalo calves are suckled by their mothers and are required to induce milk "letdown" in the cow for hand milking purposes. 3.12 Draft animals perform about 90% of all seedbed preparation work (there are about 100,000 50 H.P. tractors in use) and haul almost all ma- terials to fields and local markets. The total number of draft animals in India is about 80 million, slightly more than the number of rural households. Draft animals are invariably used in pairs in a traditional shoulder yoke  - 6 - harness. Land preparation with a simple peg plough commences once sufficient rain has fallen to enable easy soil cultivation. Each pair of bullocks is used for 5 to 6 hours daily. The draft pull of bullocks approximates 0.35 H.P. and the area that can be ploughed with a bullock pair in a day is about 0.10 ha. About 125 million ha are cropped at least once each year using 40 mil- lion pair of oxen, roughly 3 ha per pair and requiring 30 days of ploughing and a further 20 days for 3 harrowings. In a strictly rnonsoonal climate in which traditional crop varieties are photosensitive and decrease in yield with late planting, the constraint that limited draft power provides to full use of seasonal rainfall is formidable. Small Ruminant, Pig and Poultry Production 3.13 Sheep and goats typically occur in mixed flocks of 20-50 owned by landless families. About 70% are in the Himalayan region, 20% in the north- west and 10% in the southern region. Many are migratory and pooled flocks travel long distances mainly between alpine mountain summer pasture and winter lowland forest grazing. Lambing rates approximate 60% and lambing occurs at the onset of the dry season. Average greasy wool yield is 0.8 to 1 Kg per head per year. The sheep of the southern region produce medul- lated hair rather than wool. Mobility and high rates of survival under adverse conditions are the most important traits of all Indian sheep breeds. Because of seasonality and marginality of feed supply, systematic improvement for mutton production has not taken place, although differences in final weight exist between various breeds. Recently, some public programs to improve fine wool production have been taken up, particularly in Rajasthan and Haryana, involving crossbreeding to exotic breeds and the organization of wool markets. 3.14 The goats of India are categorized into about 19 specialized milk and hair types, although the bulk of the goats, as with sheep, are of non- descript mutton type. They typically exhibit high prolificacy and show a considerable variation in mature liveweight. They are normally associated with dry, hot and badly eroded areas of rangeland, the proportion of goats to sheep in an area reflecting the degree of degeneration of the pastoral resource. Some breeds have good hair and milk production, but the bulk is for meat production. Exotic breeds have been imported for milk and mohair improvements through cross-breeding programs. 3.15' The traditional base for poultry production is the rural village where farmers raise small flocks of indigenous chickens to supplement farm income. These birds scavenge for feed and receive household scraps. Pro- duction is about 40 small eggs per hen per year. In the peri-urban areas commercial poultry production using exotic breeds has expanded considerably in recent years and now accounts for about 5% of total poultry production. Commercial farms raise imported stock and produce 180 eggs per hen per year using moderate to high energy rations prepared in modern feed mills. Cross- bred chickens adequately vaccinated against Newcastle Disease are now being introduced in deep litter systems at the village level. When reared under confined conditions the fertilizer value of the manure of these chickens is capable of raising average grain yields sufficiently to provide the 25%  grain component of their concentrate diet, the residual 75% being largely mill by-products such as bran supplemented with a protein concentrate. The Feed Supply 3.16 The single most important constraint to an increased size and productivity of the livestock population is the inadequacy of forage and pasture supplies. Almost all feed for livestock in India is the byproduct of agricultural cropping, and to a lesser degree the grazing available from village communal land, waste area vegetation and forest reserves. 3.17 A rough breakdown of the availability of national feed and fodder supplies indicates cereal straw and natural grazing are the two feed sources of overwhelming importance to the Indian Livestock industry and that cattle and buffalo account for about 90% of national livestock feed requirements. 3.18 The annual feed requirement of a mature working bullock or in- digenous village type cow is the equivalent of approximately 2.5 tons of straw and 5 tons of green fodder, while a cow yielding some 1500-2000 kg of milk requires an additional ton of concentrate mix or its equivalent in good quality green feed. In terms of land areas, each ha of crop produces about 1-2 tons of straw and each ha of grazing land produces about 8 tons of green fodder. A 4 ha dryland farm with dry season stubble grazing and access to common grazing might reasonably expect to provide a sufficient quantity of feed for 2 oxen, a low yielding cow and a calf. With a total bovine population of about 240 million, and 164 million ha of cropped land, the pressure on the quantities of feed available in India for livestock is obvious. Cereal straw has a cash value of Rs 300 - 400 per ton, fresh cut berseem or lucerne Rs 100/ton and concentrate mixtures cost about Rs 1000/ton. 3.19 The grazing available to livestock, be it on public land, on private land abandoned to cropping because of repeated crop failure and erosion, or on village common lands, is invariably of poor quality par- ticularly in the dry season. The main grass species found vary with climate, soil and altitude and intensity of grazing. Heteropogon and Aristida species are common but are poor producers. To date the little attention that has been given to pasture development has centered largely on grazing land protection, but as overgrazing for so long has depleted the more palatable species, reseeding techniques are also likely to be re- quired. There are several grasses and legumes which show promise for im- proving much grazing land -- particularly Cenchrus and Stylosanthes species. Intensified development efforts to improve the productivity of grazing lands are of high priority. 3.20 In the absence of adequate supplementation by protein rich feeds, the heavy dependence of livestock production in India on straw and stubble imposes a qualitative, as distinct from a quantitative, constraint on animal productivity, and particularly on milk production; a relatively modest sup- plementation of the basic straw, stubble and rough grazing diet can have a  - 8 - marked effect on milk yields and farm profitability. The energy requirement of the low yielding (500 litre) village cow, taking into account the needs of ancillarily young replacement stock, is of the order of 9000 m. calories per year, that of a crossbred dairy cow capable of producing 2000 liters of milk (plus replacement stock) is only 25 percent greater. The high yielding crossbred requires, however, the incremental protein and minerals found in about 6 tons of berseem or lucerne, or in a ton of 15% protein concentrate. Where it is practical to provide this supplement, net income per cow can be greatly increased, an observation which explains the great interest in dairy production in those areas where adequate support services to dairying exist and where supplemental feed can be grown or purchased. 3.21 Large differences in feed availability exist between regions and states, and movements of stock occur from surplus to deficit, and rural to urban areas. Movement of migratory stock is also based on regional and seasonal differences in feed availability and market outlets. The type of animal found in a particular region also reflects the overall availability of feed, the specialized breeds of cattle and of buffalo generally occurring in areas of greater fodder availability. Thus the Punjab, a productive wheat area of medium population density with larger than average farms, has a high proportion of buffalo to cattle. By con- trast West Bengal, with a higher rain fall, a rice based agriculture, and greater population density has a greater proportion of cattle. The Feed Industry 3.22 Virtually all cereal grains produced are used for human food but milling and processing by-products (mainly bran), cracked and split grain, as well as some reject maize and barley are available as feeds for livestock. In addition, some oilseed cake is also used for this purpose. As the grains and by-product feeds are not sufficiently well balanced in nutrient content to permit their most efficient use when fed singly, they are better fed as components of compounded and balanced concentrate mixtures. The Indian farmer presently feeds a relatively high proportion of single feeds, par- ticularly rice and wheat bran and considerable scope exists for increasing the efficiency of feed utilization. The total installed capacity of all the compound feed factories in India, both public and private, is about 8.5 million tons annually. Only about 50% of this capacity is utilised however. This is mainly due to the high price of basic feed ingredients caused by fluctuations in production and availability of food. IV. MARKETING AND PRICES (a) Milk 4.01 In rural areas lacking a fresh milk market, surplus milk is com- monly converted into ghee worth about Rs 15 kg at the farmgate. Thus the farmer realizes a minimum price equivalent to about Rs 0.60 kg for cow milk and Rs 1.15 for buffaloes milk. The residual boiled curd is used for home consumption. A large variety of milk sweets, using the fat, protein  - 9 - and sugar fractions of milk in various combinations, are also produced. These sweets result in high utilization values of milk, often exceeding Rs 3 per litre of milk. 4.02 Specialist milk producers in and around urban areas traditionally sell fresh milk twice daily to middlemen who supply fixed groups of cus- tomers. Often milk is diluted with water which results in price differen- tials even among the customers of the same middleman. Retail prices vary considerably with season, being highest during the hot part of the year from March/April to September. Typical retails prices of slightly adul- terated milk would be: April-September November-March Rs Rs Cows' milk per litre 1.70-2.00 1.30-1.60 Buffaloes' milk per litre 2.20-2.50 1.80-2.00 Producer prices are usually Rs 0.2 - 0.4 less, Rs 0.10-0.15 going to the middleman, and a further Rs 0.10-0.20 for transport costs. 4.03 Many modern dairy plants, often initiated by Government and hopefully anticipating an increase in production, are now being constructed. They emphasize the provision of high quality but low priced milk for the urban masses. 1/ This, however, results in conflicting interests. To meet this welfare objective, the selling price of distributed milk is set substantially (about one-third) below that charged by the traditional trade. These dairies have generally attempted to procure milk in areas beyond the traditional fluid milk supply regions, and purchase prices have been fixed at low levels, reflecting the expectations that by going farther afield they can develop a production response to a new marketing outlet at lower prices than prevailing in the vicinity of cities. Experience has shown, however, that a low price policy provides little incentive for the farmer to sell milk or to increase production. Milk reconstituted from imported gift milk products has supplemented the supply available from Government dairies and has also discouraged the growth of local production. Recently there has been a change towards a more rational and higher incen- tive price-policy in some regions which has had a substantial effect on milk supply for these particular regions. (b) Live Animals 4.04 Cattle are marketed through a system of cattle fairs and weekly "shavdies" or "country markets." These are occasions for buying and selling 1/ Daily wage rates of unskilled labor approximate Rs 4 and two thirds of the population has a per capita income of less than Rs 20/month.  - 10 - stock for both draught and milk purposes. It is also at these markets that slaughter agents procure most of the animals presently moving into "recog- nized" slaughter. 4.05 Because of deeply rooted convictions and because of a broad economic concern for the maintenance of milk production and agricultural power resources, widespread sentiment exists for the restriction or elimina- tion of cattle slaughter in India. Many farmers, however, appear in- creasingly pragmatic about the disposal of surplus stock. Official sta- tistics indicate that "recognized" slaughter has always been quite small and has declined in recent years. In the 1960's the matter arose as a national political issue, and while Government of India took a firm and unyielding stand against any national action to allow cattle slaughter, the issue subsided by a decision that the matter was one of State rather than national jurisidiction. 1/ Individual States have acted differently to impose controls on slaughter. Generally, the restricted slaughter princi- ple has been recognized; but, based on a 1951 Supreme Court Decision that individuals cannot be deprived of the right to their accustomed means of livelihood, laws were established that butchers and traders in slaughter cattle may continue to operate. Slaughter quotas are established for the major slaughterhouses by the directors of Animal Husbandry Departments, taking into account the demand for meat and for the preservation of "useful" animals. "Useful," by definition, means any animal suitable for draught, milk production or breeding. In consequence, each animal officially slaughtered must be certified as "useless" by a veterinarian. 4.06 There are substantial movements of cattle over long distances from surplus to deficit areas. Recognized migration routes for cattle lead from the north of India south and south-west through Maharashtra and Karnataka States. Cattle procured in the north are moved by dealers and traded along the routes. The number of animals diverted to slaughter depends essentially on the demand for slaughter purposes which is a result of local consumption habits, local price controls on meat, local slaughtering fees, etc. and many animals used for draught are less fitted to that purpose than the cattle at abattoirs. The availability for slaughter is often a matter of price, not of "usefulness." There is also a continuous flow of good quality milk ani- mals to milk producers in large cities and a large proportion of these cows are slaughtered at the end of their lactations rather than being rebred. 4.07 Draught oxen are usually sold in pairs at an average price of about Rs 1,500 per pair. The value of dairy cows and buffalo varies with their milk yield, usual values are Rs 150 per litre of milk yielded in 24 hours. Cull cows are sold for about Rs 50, i.e. the value of the hide. Owners sell 1/ Chapter 3, Section 4, Article 48 of the Indian Constitution asserts that the States should take steps for preserving and improving the breeds, and prohibiting slaughter of cows and calves and other milk and draught cattle.  - 11 - buffaloes for slaughter at about Rs 1.00 per kg liveweight in village markets. The retail prices of buffalo beef is about Rs 3.00/kg, that of cattle beef Rs 2.5/kg. 4.08 Goats and sheep can be slaughtered in registered abattoirs; which are always managed by municipalities. The slaughtering is carried out by staff of the abattoir for a fee paid by the retailer to the municipality of about Rs 0.50 per sheep or goat. Farmgate prices for sheep vary between Rs 2.00/kg liveweight for culled ewes and Rs 4.00/kg liveweight for male weaners. Their price in village markets goes up to about Rs 5.00/kg live- weight. Retail prices of mutton in the large cities vary between Rs 8.00 and 10.00/kg. Nearly all wool is marketed through middlemen; the wool grading and marketing centres which have been established in some States have not been able to obtain a significant market share due to administrative inflexibility. Producers obtain about Rs 5.00/kg of coarse wool and up to Rs 15.00/kg of fine wool. 4.09 Most poultry is sold in live form at the farmgate or during the village fairs. Live poultry are then marketed by middlemen/traders at the cities' wholesale markets by type, age and sex. Poultry prices have re- mained stable in the last year and in the main centres; a chicken with a carcass weight of about 0.5 kg is retailed for about Rs 7.50. Eggs reach the urban centres in the same way as poultry; average retail price is about Rs 5.50 a dozen. Commercial peri-urban production accounts for about 5% of total poultry production. Foreign Trade in Livestock Products 4.10 Meat exports in 1974 were valued at about US$3.5 million, an in- crease of about 35% since 1969. Wool exports are limited by GOI in order to encourage local manufacturing; coarse wool exports declined from US$19.8 to US$11.2 million in 1974, while fine wool imports increased to US$27 million. Hides, skin and leather exports represent 90% of the value of exports in the livestock sector and were valued at US$240 million in 1974. Imports of live- stock products comprise mainly tallow (US$15.0 million in 1974) fine wool, and milk products. The value of milk product imports in 1974 is estimated at US$33.3 million, 90% of which represented food aid at negligible cost. V. SUPPORTING TECHNICAL SERVICES Veterinary Services 5.01 A large number of cattle diseases are endemic to India. Important among these are foot and mouth disease, rinderpest, theileriasis, anaplasmo- sis, piroplasmosis, brucellosis, anthrax and black quarter. Disease control involves the Central Government, Governments of the States and Union Terri- tories, the Indian Council of Agricultural Research (ICAR), the Indian Veter- inary Research Institute (IVRI) and the various Veterinary Colleges through- out the country. In the Central Government a Livestock Health Section under  - 12 - the direction of a Joint Commissioner in the Animal Husbandry Division of the Department of Agriculture has responsibility for: (a) epidemiological studies to determine the incidence of mortality and morbidity caused by the important diseases in the country, (b) coordination, liaison and guidance in the operation of a centrally sponsored scheme for the eradication of rinderpest, (c) establishment of animal quarantine and certification services, and (d) strengthening of the 15 Biological Production Centers in the country. Veterinary aid for carrying out the necessary prophylactic and curative di- sease control measures is made available to livestock owners by the State Governments through a network of about 9,500 (1973/74 estimates) veterinary hospitals, dispensaries and mobile units. These services are supported by diagnostic laboratories at district, regional and state levels. The IVRI at Izatnagar is the primary center for the production of veterinary bio- logicals. It is also a major institution for training and research in veterinary science and animal health. A number of research projects financed by the ICAR are carried out at the Institute. All of the 21 Veterinary Col- leges in India provide training in veterinary science and many of these offer opportunities for post-graduate studies and research. Artificial Insemination 5.02 Artificial Insemination services are widely available throughout peri-urban India. Most inseminations are carried out through the 62 Inten- sive Cattle Development Projects and the 536 Key Village Blocks. These programs cover a breeding cow and buffalo population of about 12 million and provide about 1.4 million inseminations a year. Most inseminations involve liquid semen. Data on conception rates are limited but appear to range from about 20% to 70%, reflecting considerable variability in man- agement and technique and indicating great scope for improvement, especially with respect to timing of inseminations. The conception rate in buffaloes in the Kaira District Milk Producers Cooperative Union, Gujarat State, is said to be 58%. Al programs have been particularly progressive in the States of Karnataka, Andhra Pradesh, Kerala, Tamil Nadu, Uttar Pradesh and West Bengal, and are gaining momentum in Bihar, Maharashtra, Orissa and Madhya Pradesh. Livestock Extension 5.03 Agricultural extension in India, including livestock extension is carried out through the Community Development Program which is a program of aided self-help planned and implemented by the villagers with Government technical guidance and financial assistance. The program is implemented in blocks units of over 100 villages. Each block has an average area of 250 square miles and a population of about 80,000. Extension is the responsi- bility of the State governments with overall coordination by the Central Ministry of Agriculture. A block development officer and eight extension officers specializing in various fields, including animal husbandry, operate at the block level. Each block is divided into groups of about 10 villages, for which a village level worker acts as a multi-purpose extension agent. The extension workers at the block and village levels disseminate knowledge  - 13 - of practical importance to village farmers and they transmit village prob- lems back to the various research organizations for study and solution. At present there are some 4,500 block development officers, 55,000 village level workers, and 6,000 animal husbandry extension officers engaged in community development work. While considerable progress is being made in some areas of rural development, extension workers in animal husbandry have not been generally effective in bringing about major improvements in live- stock production. In the Intensive Cattle Development project areas which are linked with the dairy plants and the areas covered by Operation Flood, the dairy extension work is carried out by the Animal Husbandry and Dairy Development department staff. Periodical in-service training programs are organized to keep staff up to date with improved technology. Livestock Research 5.04 Coordination of Livestock Research is the responsibility of the Indian Council for Agricultural Research (ICAR). Research into various aspects of livestock production is carried out by a number of major insti- tutions, particularly the Indian Veterinary Research Institute (IVRI), the National Dairy Institute centered on Karnal. the Indian Agricultural Re- search Institute, the Allahabad Agricultural Institute and the Indian Grassland and Fodder Research Institute. 5.05 Considerable emphasis in animal research in India has been placed on animal breeding. Early work in this field emphasized basic studies with the Indian and imported dairy breeds and a number of cattle breeding farms were established to provide improved bulls for distribution to farmers. After preliminary studies indicated the potentialities of crossing the indigenous cattle with exotic dairy bulls, the major research effort has been devoted to crossbreeding as a method of producing high yielding dairy cattle suitable for India's conditions. To accelerate this process the All-India Dairy Cattle Coordinated Breeding Project was initiated in 1972. The object of the All India Co-ordinated Research Project on Cattle is to produce a "dairy type" animal by cross-breeding, utilizing 3 exotic breeds, namely Holstien Friesian, Jersey and Brown-Swiss. The local cattle are used as base for the cross-breeding programme. The production and breeding efficiency of different levels of cross-breeding are being evaluated and a new "dairy type" animal having a minimum yield of 3,000 kg of milk in 300 days is being developed. The centres of this project are located at Indian Veterinary Research Institute, Izatnagar, Haryana Agricultural Univer- sity, Hyderabad, Mahatma Phule Krishi Vidyapeeth, Rahuri and the Cattle Breeding Research Station, Harringhatta. There are several other centres also where cross-breeding for development of Indian cattle is being carried out. The results obtained to date have been dramatic. Compared with their indigenous dams, and subject to reasonable levels of feeding and management, the Fl crosses mature more quickly, produce their first calf at an earlier age, yield double or triple the amount of milk, and are more efficient utili- zers of feed of reasonable quality. Breeding programs to establish and main- tain the appropriate proportions of exotic blood in subsequent generations  - 14 - are currently underway. Recently the N.D.R.I. announced the development of a so-called new strain of dairy cattle, the Karan Swiss, which combines inheritance from Brown Swiss bulls and Sahiwal and Red Sindhi cows. Efforts to improve productivity in buffaloes are also being made through the All-India Buffalo Coordinated Research Project as well as by Kaira Cooperative Dairy Union. 5.06 With the increased use of high producing crossbred dairy animals, fodder research is now receiving more attention. The Grassland and Fodder Research Institute at Jhansi, and the Central Arid Zone Research Institute at Jodhpur are the main centers for most of this research. Work is con- centrated on production systems for irrigated conditions utilizing peren- nial grasses such as the Pennisetum hybrids, and the multiple cropping of annual forages such as maize, sorghum, oats and berseem. The grasses are grown alone or in combination with temperate zone leguminous forages. Under such conditions the total annual yield of fresh material is high (100- 200 tons per ha). Little work has been done to develop a system of fodder production under rain-fed conditions or where supplemental water is minimal. Detailed studies to determine the comparative economic advantage of growing leguminous forage as an alternative to cash crops, or in rotation with such crops, have not been carried ouit, but the operational research programs that are being taken up by ICAR will be production oriented taking into account the economic implications of the program. Other areas in which research is urgently needed include the persistency of Alfalfa on black cotton soils, the optional use of high quality forages as supplements to cereal straw and the potential of Stylosanthes species for improving communal grazing lands. 5.07 Work on nutrition research has been carried out at a number of research centres in the country. The work inter alia includes determination of the chemical composition of different feeds, their nutritive value, work- ing out of maintenance and production requirements of Indian cattle, research on large numbers of subsidiary feeds including agricultural by-products and industrial wages. Other important items of research have been studies on efficiency of feed conversion in relation to milk production and egg and meat production in poultry. In addition, research on trace elements has been in progress and several nutritional and deficiency diseases have been inves- tigated. A number of items of agricultural by-products and industrial wastes have been incorporated in the cattle, poultry and other livestock rations to replace grains and cereals. The Indian Grassland and Fodder Research Institute and the various other Central and State research units have also been engaged on research on fodder production and utilization. The nutritive value of large number of fodders have been investigated and their role in enhancing milk production have been investigated. Education and In-Service Training 5.08 India has 19 agricultural universities, 72 agricultural colleges (including those functioning at the university campuses), and 21 veterinary colleges. In addition a post-graduate school is operated by the Indian  - 15 - Agricultural Research Institute. The NDRI at Karnal provides both under- graduate and postgraduate training in dairying. The Institute's regional station at BanRalore provides postgraduate training but has no undergraduate program. Both institutions offer the two-year Indian Dairy Diploma course as well as specialized in-service training courses. Additional facilities are being planned to provide training for a much larger number of farmers. A working group in Agricultural Administration and Training has worked out the requirements of technical personnel in different fields including Animal husbandry and dairying, and more recently a working group has defined the requirements for the fifth five year plan. There is virtually no teaching or traininR on animal husbandry as part of the farming system; the main emphasis now being on livestock nutrition and on production technology. Drooeratives 5.09 The successful Kaira District Cooperative Milk Producers Union Ltd. (AMUL), with its headquarters at Anand in Gujarat State, provides a develop- ment model for dairy activities that appears well adapted to India's circumstances. The core of AMUL's success is the organization of many thousands of small farmers into hundreds of cooperative milk producers' societies and the federation of these societies into a Union of Societies. A typical member owns one buffalo cow and tills one to two hectares. The union of cooperatives owns and operates its own milk and feed processing. collection and distribution facilities and provides all members with a full range of technical services. AMUL now embraces about 225,000 families in 785 village cooperatives, and processes about 150 million kg of milk an- nually. The Union is governed by a farmer-elected board and operated by a market-oriented management group of hired professionals. Responsible for setting milk prices, it never refuses to buy milk in any quantity from mem- bers, thus assuring the farmer of a year-round outlet for his milk at fair prices. AMUL has constantly upgraded its services and now provides a pack- age of services, including routine veterinary coverage, AI, training facili- ties, concentrate feed and fodder seed. Buffalo sire selection for AI purposes based on computer analysis of dam and daughter milk records has been introduced. Following the success of the Kaira Union, five other unions have been formed in Gujarat and these were recentlv amalgamated into a Feder- ation of Unions. The success of the Gujarat experience, based on buffaloes, has encouraged GOI and a number of State Governments to foster the establish- ment of similar programs with cross bred cattle in other parts of the country. The AMIL model provides the basis of organization of the dairy development projects now being supported by World Bank financing. Other forms of coopera- tive dairy development and of State Government support for dairy development have been initiated, but none to date match the success of the AMUL approach in providing attractive financial and social incentives encouraging dairy production among small farmers.  - 16 - TDJj NDDB and State Dairy Corporations 5.10 The Indian Dairy Corporation (!DC) is the organization responsible for promoting, financing and monitoring GOI supported dairy projects and for handling centrally all imports of dairy products. It was established in 1970 to serve as the commercial arm of GOI with respect to dairy development. It is financed in part by GOI grants and in part by the funds generated from the sale of reconstituted milk made from imported dairy products. The Na- tional Dairy Development Board (NDDB) was created in 1965 by GOI as the main technical agent for dairy development. It is financed mostly by funds ob- tained from dairy consultancy activities. Both organizations, the head- quarters of which are located in Gujarat State, derive from the AMUL experi- ence and have a close inter-relationship. 5.11 NDDB has developed a particularly competent and well trained staff, with expertise in milk collection, marketing and processing. It assists in most of India's dairy development planning and helps many States in the execution of dairy projects. NDDB offers a full consultancy service which includes siting, planning, construction and equipping of processing plants as well as the training of plant personnel. It also trains "spearhead" teams to help organize village cooperatives of the AMUL type and form these into viable unions. 5.12 In some States, Dairy Development Corporations (Karnataka, Rajas- than, Madyha Pradesh) have now been established to implement dairy develop- ment projects using cross bred cows, and based on the establishment of village milk producers' cooperatives and their incorporation into self- governing dairy Unions. VI. LIVESTOCK DEVELOPMENT PROGRAMS The Five Year Plans 6.01 During the first three plans (1954-1969) GOI expended Rs 22.1 mil- lion for all agricultural programs. Of this amount about 8% was spent on animal production activities with considerable emphasis being placed on the need to improve draft cattle. Although modest in terms of production increases, the developments achieved in the animal husbandry field over this period were important in providing a basis for future GOI and State development policies. The main achievements were: (a) expansion of state breeding farms, particularly for the production of improved bulls for *.raft cattle improvement; (b) establishment of about 500 Key Village Schemes and about 60 Intensive Cattle Development Projects incorporating breeding and feeding programs aimed at raising milk pro- duction at the village level;  - 17 - (c) creation of the National Dairy Development Board in 1956; (d) organization of milk supply to the cities of Bombay and Calcutta (this was the forerunner of Operation Flood, para 6.03); (e) construction of 37 liquid milk plants; and (f) increased capacity of refrigerated rail transit for milk. 6.02 Under the Fourth Plan, which terminated in mid-1974, the funds allocated for dairy development were significantly increased. By the end of the plan period expenditures on animal husbandry amounted to about Rs 780 million and on milk processing and distribution about Rs 820 million. In addition to the expansion of on-going programs begun under previous plans, important new programs were commenced to: (a) encourage crossbreeding of native cows with high producing exotic bulls using imported frozen semen; and (b) establish a foot and mouth vaccine production center in Bangalore, Karnataka State. 6.03 In the milk processing and distribution programs of the Fourth Plan most of the effort was concentrated on Operation Flood. This program aims at improving milk processing facilities and increasing milk supplies to India's four largest cities (New Delhi, Bombay, Calcutta and Madras). Under the program WFP is providing 126,000 tons of skim milk powder and 42,000 tons of butter oil which is recombined into liquid milk at the processing plants in these cities. The profits from the sale of this milk is used to finance dairy development programs within Operation Flood. Operation Flood is managed by the Indian Dairy Corporation (IDC). 6.04 While the achievements of past efforts are significant the reali- zations of the first Four Plans have fallen short of projected objectives. Many of the dairy plants erected under the plans are operating at less than half of their through-put capacity as a result of shortfalls in supply. This shortfall is symptomatic of a more serious problem, a growth rate of only about 2% per year in milk production since 1951, whereby daily per capita availability of milk and milk products declined from 130 grams in 1951 to 114 grams in 1970. Government planners have realized that this trend cannot continue Without serious consequences, since milk is the most important source of animal protein for much of the Indian population. It is now generally recognized that the village farmer has had little econo- mic incentive to supply milk to the predominantly government-owned dairies which often are inefficiently managed and tend to set consumer prices too low relative to production costs. Furthermore, village milk collection is generally poorly organized and is often controlled by middlemen who may also be larger farmers who tend to reduce small producer margins. This situation has caused Central and State Governments to reconsider their policies and has resulted in greater interest in setting up public sector cooperatives  - 18 - based on the experience of the successful Kaira District Cooperative Milk Producers Union Ltd. (more commonly known as AMUL). 6.05 The draft Fifth Five Year Plan document emphasizes a coor- dinated and massive outlay for animal husbandry and dairying involving a public sector expenditure of Rs 52.2 billion. It aims almost exclusively at the small and marginal farmers, and for cattle, poultry, sheep and pig- gery development under cooperative arrangements. In case of dairying, the basic thrust will be on programs that will integrate the industry from the production level to the consumer. The choice of technology rests essentially on a massive cattle cross-breeding program with its supporting programs of artificial insemination, fodder development, animal health, milk marketing and processing, education, training, research and institutional credit. Equally important to this production objective is the distributive or equity objective whereby all the programs are to be aimed and implemented through the small and marginal farmers and landless laborers, in general terms - the rural poor. The choice of institution is the producer's cooperative based on the AMUL model suitably adjusted to local conditions. The planned target is to increase milk production by 5.4 million tons at the end of the plan period (nearly three times the achievements of the Fourth Plan). 6.06 Operation Flood will be continued in about the 50 districts which constitute essentially the milk-shed areas of the four metropolitan city dairies. A significant feature of India's Fifth Five Year Plan is the development of a National Milk Grid, the foundations of which have been developed during Phase I of Operation Flood. During Phase II a coordinated system of milk supply will be developed which will link together not only the largest centers of population but also six of the important smaller cities in the country. Each program will be established along commercial lines with the ultimate aim of producer ownership of the processing. facili- ties through cooperative unions patterned after the AMUL model. 6.07 Other supporting development programs include feed and fodder programs and disease control. The aim is to increase green fodder produc- tion by emphasising fodder extension programs as well as the production and distribution of seeds of the most productive forage species. More emphasis is also to be given to increasing the supply of concentrate feeds in an effort to achieve the high level of milk production expected from cross- breeding programs. In this connection the efficiency and output of existing feed plants is to be improved and new plants established where required. The new mills are to be owned and managed by the proposed cooperative dairy unions. 6.08 The promotion of crossbreeding with fine wool exotic sheep, greater emphasis on selection for high milk strains of buffalo, increased availa- bility of day old chicks of improved egg and meat strains and a major in- crease in the overall research effort in livestock and fodder production are other components which complement the emphasis in the fifth plan on smallholder dairy development.  - 19 - Bilateral and MultilateralSuipport 6.09 Although most funds for livestock development under the Fifth Plan are expected to come from local sources substantial external assistance to dairy, sheep, poultry and fodder development in India continues to be provided by bilateral and international agencies. Examples of bilateral dairy projects are the Indo-Danish Cattle Development Project in Karnataka, the Indo-Swiss project in Kerala, the Indo-German project in Himachal Pradesh and extensive New Zealand support in training dairy engineers and helping dairy plant construction. Improved dairy stock have been provided through the cooperation of the Australian Government and through Heifer Project, Inc., from the United States. FAO/UNDP.have been active in poultry development, in fodder production and cattle breeding while Australia, the USSR and PAO have supported sheep and wool improvement activities. Important assistance has also come from UNICEF. Significant contributions in animal husbandry education and research has been made by USAID, especially through the cooperation of several U.S. universities. A bilateral contributor which deserves special mention is the Danish Government. The Indo-Danish Cattle Development Proj- ect (IDP) at Hessarghatta, Karnataka State, was conceived in 1961 and became operational in 1964. The original purpose of the project was to establish a mixed dairy and crop production farm to provide Indian farmers and govern- ment technicians with training in modern dairy production methods. The first agreement between GOI and the Danish Government expired in 1970 and was followed by a second which stipulated that the project would continue through November 1975. The new agreement provided for strengthening the existing main center at Hessarghatta and establishing three sub-centers (each with an area of about 50 ha) at Munirabad, Kudile and Dharwar, Karna- taka State. Up to mid-1971 the Danish contribution to IDP amounted to Rs 9.5 million. Denmark is also assisting GOI in establishing foot and mouth vac- cine production centers in Bangalore and Poona, and cattle development centers in Maharashtra and Meghalaya States, five frozen semen banks and a dairy training institute. 6.10 The World Food Program (WFP) support of Operation Flood is also particularly noteworthy. Over a 5 year period WFP will be supplying 126,000 tons of skim milk powder and 42,000 tons of butter oil for recombination into liquid milk at processing plants in New Delhi, Bombay, Calcutta and Madras. Profits from the sale of this milk are used for financing develop- ments in milk processing facilities and in increasing milk supplies and production in rural areas adjacent to these four largest cities of India. Resettlement of city milk producers in rural areas is a major objective. The operation is managed by IDC. It is currently two years behind schedule. 6.11 World Bank Group assistance to livestock development in India has grown rapidly in the last 12 months. Three specific dairy development projects (Karnataka, Rajasthan and Madhya Pradesh) are being financed (total cost of the three projects is US$143 million), the Drought Prone Area Pro- gram supported by the Bank Group has an important livestock component, and an extensive series of Command Area irrigation projects catering to mixed livestock-agricultural enterprizes are now being prepared and financed.  - 20 - VII. THE POTENTIAL OF IMPROVEMENT The Basic Proposition 7.01 There are several factors arguing for a brighter future for live- stock production in India. The first is that average livestock yields are so low that they leave enormous scope for improvement; the second is that programs for improved technology involving genetic change, feed supplementa- tion and market organization hold promise of distinctly higher yields; the third is the empirical observation that some Indian farmers have displayed a strong response to technological and market innovations. This said, it must be stressed that while there is potential for increased production, there are many serious constraints of a physical and institutional character which continue to hold back both the agricultural and livestock potential of the country. 7.02 Increasing milk production, particularly amongst the rural poor, is the main objective in the strategy of livestock development proposed by the current Five Year Plan. The choice of technology proposed rests essen- tially on a massive cattle cross-breeding program with all its associated activities of artificial insemination, provision of concentrate feed, fodder development, animal health, milk marketing and processing, education, train- ing, research and institutional credit. At present the basic resources re- quired to achieve the production and equity objectives are limited. There are relatively few dairy animals with the genetic potential for high milk production, feed supplies are critically short, trained and experienced personnel are below requirements, problem-oriented research information is lacking and the extension service is largely ineffective. Furthermore, marketing is often poorly organized and many public processing plants sub- sidize urban milk prices at the expense of the producers. 7.03 A key factor influencing the success of the dairy production objectives lies in the extent of acceptance of crossbreeding to exotic bulls by village farmers and the concomitant need to improve the quantity and quality of feed fed to such animals. In this context it is important to keep in mind that the primary function of local cattle is the provision of draft power and that acceptance of crossbreeding to exotic bulls will depend in large degree on the draft capacity of the crossbred oxen pro- duced. Evidence on this matter is presently unclear to many farmers and a careful review of this problem together with widespread demonstration of the draft capacity of cross breds is urgently required. The number of calves born to each village cow in its lifetime of 10-12 years is 4 to 5 and the working life of a bullock lies between the age of 4 years to 8 to 10 years. Thus almost all males born of indigenous cows are required for draft purposes. Where cross-bred cows are maintained with adequate feeding, significantly higher reproductive rates are encountered; because more calves are then born by each cow, it is feasible to breed for female replacements by mating to a cross-bred dairy sire, as well as for draft bullocks by mating to draft-type bulls. The problem for the small farmer is under- standing that crossbreeding for milk production does not mean he can no longer breed for draft bullocks.  - 21 - 7.04 The second factor which is likely to hinder rapid progress is the critical feed situation. The major hope in this field lies in expanding leguminous fodder production, particularly berseem and lucerne. An irri- gated area of one-tenth of a hectare is required to provide sufficient green fodder supplement for each crossbred cow; there is therefore a small degree of competition between milk and crop production, even though farm income per unit area of land is usually higher when milk production from improved cattle or buffalo is a key factor in the farm management plan (see para 7.07). Further offsetting this competition between grain and fodder crops for land and water is the higher subsequent grain yield farmers usually experience when a legume fodder is used irT their cropping rotation. Criti- cal local data on these yield differences are not yet readily available and further local research and demonstration of the overall yield and profita- bility of alternative farming patterns is urgently required. 7.05 The institutional constraints that lie in the way of achieving the income distribution or equity objective are equally formidable. Broadly speaking these lie in the division of the country's agricultural economy into two sectors; the developing sector where the bulk of the land is in the hands of the relatively few who are well provided with resources and who produce the main production surplus; and the nondeveloping sector, which includes the majority of farmers, tenants, share croppers and labourers who have negligible resources and a negligible market surplus. For the 65 percent of the 70 million rural families in India at subsistence or below, the use of an agricultural technology which requires cash inputs is difficult to visualize. Offsetting these circumstances, however, is the tremendously impressive achievements amongst underprivileged small farmers of the Kaira Dairy Cooperative Union, achievements which fittingly support the theme of the last International Dairy Congress (Delhi 1974) "Dairying as an Instrument of Social Change". It is the particular experience of India that dairying can uniquely fulfill the function of stimulating effective community effort which encourages support for a much wider development of producer controlled dairy cooperatives of the AMUL type, cooperatives whose function and result is measurable as much in social change as it is in increased dairy production (see para. 5.09). Difficulties, slowness, and disappointments are inherent in creating the new administrative, organizational and institutional arrange- ments necessary to ensure effective functioning of the village dairy cooper- atives in an environment lacking the community spirit and characterized by the unequal hierachal environment of rural India. Nonetheless, there are now several examples in Gujarat State of successful dairy development and there is reason to be optimistic about the potential for their expansion. 7.06 Development of draft cattle capacity is constrained, as with dairy- ing, principally by inadequate feed resources and by the relative poor market price that all types of cattle and buffalo command. These two factors are clearly interrelated; when cereal grain has a higher price per unit weight than cattle it is not surprizing that little deliberate effort is made to grow cattle fodder. To the extent that a changing attitude to cattle slaugh- ter allows, the encouragement of an export trade in bovine meat will stimu- late demand for heavy weight surplus stock and encourage both the breeding  - 22 - and feedinR of heavier animals suited to draft production. Improved dairy production would also be expected to lead to improved draft capacity through the provision of better calf rearing, disease control and improved fodder production. 7.07 In the present circumstances of a precarious balance between the size of the livestock population and overall fodder availability, almost all feed consumed is used for maintenance purposes, and justification for the proposition that India has a large livestock production potential re- sides in the impact that relatively marginal increases in food intake per animal can have on stock productivity. Changes in the productivity per animal could be achieved by modest reductions in stock numbers, by increasing the quantity and quality of fodder grown, both on arable land and on communal grazing areas or by both. Specifics of the Potential 7.08 Quantification of the potentials for yield improvement in a country as vast and diverse as India requires a very large degree of over simplica- tion; an oversimplification which is, however, inevitable if any feel for the livestock production potential of the country is to be obtained. 7.09 Consider the production alternatives available to a farmer with land receiving 500-600 mm of rain during the summer monsoon. He can farm the property in the traditional manner growing only summer crops and using negligible inputs; he can undertake improved dryland farming practices in- volving inputs of better seed, fertilizer, pesticides and water conserva- tion; or he can construct a shallow well yielding about 6,000 meters3 of water in the dry season and intensify his cropping pattern using limited irrigation. 7.10 A study of the variations possible in the multitude of farm bud- gets which arise in analyzing these alternatives highlight the important point that under the conditions proposed of limited irrigation availability, farm income is maximized by balancing crop and dairy production at the point where the basic maintenance requirements of the cattle are met by crop by- products, with irrigation water being used to grow summer crops and suffi- cient berseem or lucerne to provide the incremental diet required for pro- duction. In these circumstances about 400 1 of milk per ha can be produced with a negligible reduction in potential crop yields. The unimproved milk yield per ha from a traditional farm is estimated at about 40 liters. Thus, where limited irrigation is practical, a tenfold increase in milk yield per unit area of land appears possible. Where improved dryland farming only is possible, improved milk yields are dependent upon the purchase of concentrate feed mixes to complement the basic straw available. In this situation milk yields of 200 1/ha, requiring the use of 100 Kg of concen- trate per 200 1 of milk produced, appear the probable levels of profitable production.  - 23 - 7.11 The conclusions drawn from such studies imply that substantial increases in dairy production as a byproduct of agriculture are readily achievable but require either a substantial input of a concentrate feed, a product in short supply, or the development of about 0.1 ha of irrigated lucerne or berseem for each cow milked. In either case the merit of a concentration of development effort on dairying is the comparatively simple technology involved and the compatability of dairying with the socio-economic objectives of forming strong village cooperatives in the rural environment of India. It should be clearly understood, however, that attempts to justi- fy dairy development on the basis of the contribution it can make to the productivity and income of small farmers oversimplifies a difficult problem. Smaller farmers without access to institutional credit or to adequate work- ing capital do find it difficult to acquire better quality stock, either by purchase or breeding, and the few who do have them find it more difficult to exploit their higher production potential. A risk of lowered draft value -- real or imagined -- in the male progeny also inhibits the smaller farmer from participating in cross-breeding with exotic bulls. The Importance of Flexibility 7.12 Realization of the particular difficulties of the small farmer has led some observers to press for the use of the buffalo as the milk animal for India, in the belief that this animal is more readily attainable by small farmers, and that it is more manageable and more productive on poor quality feed. The evidence available suggests that each of these propositions is questionable. The pragmatic approach desirable is to encourage milk produc- tion and marketing via the AMUL model, be it milk from crossbred cattle or buffalo, and to ensure that cooperative development proceeds with an orga- nizational structure which is compatible with the production requirements of the small farmers, and which ensures that importance is placed among producer members on efficient management and training. 7.13 The two main points which emerge from an analysis of the successes and failures to stimulate livestock production in India are those that any a priori'analysis might hold to be self-evident. Firstly, there is no single operational strategy which suits all rural strata and all geographic condi- tions equally well; flexibility in technology, in support services and in institutional structure is essential in designing production objectives and projects for specific groups. Secondly, any meaningful statement of a pro- duction objective for a specific purpose requires a realistic identification of the potential, the technology to be used and the input requirements, with full account being taken of the social, political and economic obstacles that constrain the farmers' response. A Balanced Approach 7.14 In this review emphasis has been placed on dairy production and draft capacity because of their overwhelming importance in India's livestock  - 24 - development strategy and scenario. This emphasis, however, is certainly not meant to minimize the importance of other livestock production activities, nor is it meant to overlook the critical role other livestock play in pro- viding a livelihood to many small, landless and migratory producers. 7.15 Large increases in poultry production, particularly from using low grain density rations in deep litter enclosures, in fine wool production and in the meat available from sheep, goats and bovines are all worthy and attain- able objectives. The most difficult task in attaining these production goals is the necessity for community effort amongst farmers, be it in operating a just and equitable village dairy cooperative or in agreeing on a non-exploit- ive grazing pattern for communal lands and water points. The institutional structure of rural India, and the credit, market and extension problems this structure engenders for small farmers, exacerbate the difficulties even fur- ther. Progress will inevitably be slow. Nevertheless, there is reason to be optimistic that the lessons learned with such difficulty over recent years will lead to a more rapid acceleration of production benefits.