Notes from CIIE.CO’s Roundtable on the Dairy Sector on January 17, 2023
Dairy production in India is anchored in 80 million rural smallholder households with marginal livestock holdings. Household-based production reflects the traditional gendered division of labour within households. Male members control market transactions and cash flows, while women carry out the bulk of day-to-day production activities.
While time and labour-intensive, women’s work in dairy farming is invisible and under-compensated. Women rarely own productive assets (land or cattle) and have little say in production decisions. The majority are cut off from direct access to their share of dairy income. Their labour is framed as an extension of domestic duties, which leaves little scope for entrepreneurial exploration or independent financial decision-making for personal or productive purposes.
This core disconnect between labour and decision making limits women’s opportunities for income and wealth generation, compromises their freedom of financial choices to meet life goals and contingencies, thus impairing their financial independence.
Financial inclusion by way of building digital and deep tech-infused gender-intentional fintech solutions is one way to bridge this disconnect, create a level playing field and open up a wider opportunity set for women dairy farmers in India.
On January 17, 2023, we organised “Fintech for Women’s Financial Inclusion: Explorations in the Indian Dairy Sector” - a roundtable of esteemed domain experts, long-term practitioners, dairy collectives, and fintech founders to deliberate on the current gaps and ideate on suitable solutions to boost the financial well-being of women dairy farmers in India.
The Roundtable followed a structure of fluid discussions, insight discovery and synthesis of actionable takeaways in two formats - large-group idea exchange and small-group intensive brainstorming. This note captures the key insights from this exploration.
Dairy is an extension of the household and at best provides smoothening of income. Dairy farming households operate at subsistence levels of production and have no visible incentives to upgrade production and improve productivity. For women, dairy activities are often considered an extension of household labour. This is often so because the milk from the cattle is often used within the household (at least partly).
Women do not have control over the household income from dairy farming. Intra-household disparity in distribution of income and poor valuation of women’s labour in the raw milk procurement market not only leads to underpricing of milk and low unit level profitability; but lack of direct access to compensation also challenges the financial independence of women in dairy farming households. This has negative downstream effects on their ability to save, access credit and participate in financial decision making at the household level.
Rural India lacks an enabling entrepreneurial ecosystem. This is while there is vast unmet demand for milk and dairy products in the consumer market. Women are especially alienated from entrepreneurial ambitions on account of social conditioning, social barriers, missing mental models, absence of exposure to plausible business models, exclusion from formal financial networks and among other factors, exclusion from the formal dairy value chain.
A female dairy farmer in India
Nandini is a 30 year old mother of two living in a village 30 kms from the town of Dewas in Madhya Pradesh. She shares a two room semi-pucca house with her spouse, children and mother-in-law. The family cattle - whom Nandini has lovingly named Rani and Sita live in a shed adjoining the house. Nandini starts her day at 4 am to tend to the cows. Rani is expecting a calf and needs special care. Nandini fetches fodder and water, cleans the shed, washes, grooms and feeds the animals before proceeding to milk them. She may spend over 6 hours a day caring for the cows. It is hard work, especially combined with the load of household responsibilities. However, this does not stop Nandini, she deeply cares about the well-being of her cattle.
Dairy farming is a secondary source of income for Nandini’s family. Their primary occupation is agriculture and the family income amounts to less than INR 100,000 a year. Given the seasonal nature and other volatilities of farming, Sita and Rani are useful as they bring in a steady flow of income. Every morning after Nandini is done milking them, her husband carries the milk cans to a local milk collection centre. A collection agent weighs the milk and pays Nandini’s husband in cash. Nandini’s husband has a relationship with the collection agent and approaches him for small ticket loans when finances are tight. In return, he pledges Rani and Sita’s milk to him.