Our visit to Sholapur in July 2019 demonstrated the power of “doing business with a Purpose”. To give you the rationale for our conclusion, we are sharing a short history on Sholapur Milk farmers pre 2015, .
Pre 2015- villages at Sholapur, such as Wagholi, were
(i) black listed by banks for 100% defaults on bank loans.
(ii) Unemployment & migration to urban areas was high.
In July 2019, (i) the same banks are chasing the villagers of Wagholi by offering new loans, since majority of their past dues have been repaid.
(ii) Unemployment & migration has declined sharply.
(iii) Milk led farm income in this region has risen by more than Rs 2 billion since 2015.
Interestingly, Sholapur had 3 droughts since 2015. What lead to this sustainable and transformative change? Read on…
Our Visit to Milk Farmers of
at Sholapur, on 26th and 27th July 2019.
Hatsun’s entry in 2015 led to Transparent Pricing
Hatsun Agro, is India’s largest private sector dairy, with a significant presence in 6 Southern States of India such as Tamil Nadu, Karnataka amongst others. They started procurement of milk in Maharashtra at Sholapur in 2015. Pre 2015, farmers were paid effective price of less than Rs 17 per litre of Milk. Hatsun started with 50% higher price at Rs 25 per litre in 2015. Hatsun offered higher incentives for better quality milk. Higher quality milk fetches Rs 32 per litre today, for the Hatsun farmer.
Quantity and Quality of Milk have improved significantly since 2015
Hatsun provides free animal husbandry services to its milk farmers such as
(i) improved cattle genetics through high merit semen
(ii) better artificial insemination services
(iii) guidance on growing fodder which raises nutrition
(iv) training on use of preventive techniques to avoid cattle diseases which lead to anti-biotic free milk.
(v) use of software technology to track genetic and lactation history of its cattle. Additionally, Hatsun does testing of milk to avoid multiple sources of adulteration. As a result, within 4 years, annual Milk output has increased by 80 million liters combined with significantly higher quality at Sholapur.
Milk farmer profitability has grown manifold within 4 years at Sholapur
Hatsun has increased profits from milk farming through higher milk output per cow and sharply reduced costs. Cattle Feed accounts for more than 70% of total costs in milk farming. Hatsun has halved feed costs of its farmers by
(i) providing free seeds of high nutrition & higher yielding perennial fodder which grows with minimal water
(ii) Providing mineral rich feed supplements at low cost
(iii) reduced labor costs in feed making through development of Silage. Silage is green fodder converted into dry fodder for use in Summer, when green fodder availability declines. Additionally, Hatsun shares insights on farm automation with improvised machines which raises per person productivity.
Sustainable and transformative change at a large scale
Hatsun’s initiatives, besides increasing farm profits have provided a new hope and confidence for existing farmers as well as their next generation. We understand that Hatsun is setting up a large dairy processing plant at Sholapur to be operational in early 2020. We believe this will ensure that the transformative changes of the past 4 years are sustained in the long term.
We believe, Hatsun is a very strong Role Model for the private sector businesses of India in “doing business with a Purpose”. Hatsun today, positively impacts more than 4 million people in India either as its farmers, customers, vendors and employees.
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