In Mehsana district of Gujarat, the state which gave birth to India's white revolution, farmer Ramji Jaiprabhu gets Rs 13 a litre for the milk he produces, compared with Rs 10 last year.

The price of fodder he buys is Rs 470 per bundle of 70 kg, against Rs 450 last week. It was Rs 420 a year ago. Inflation has helped the already high fodder prices shoot up, leaving milk farmers gasping.

"We are earning next to nothing given the high cost of production," he says about the country's largest agricultural commodity that provides bread and butter to the weakest sections, including most of landless agricultural labourers.

And if the earnings are more than Rs 1,50,000 for a cooperative, then 35 per cent income tax is charged on the cooperative, says Jaiprabhu. The farmer is, however, keeping the show going, just like his  100 million counterparts across the country.

Fodder prices have shot up since 2000, thanks to exports and central excise duty on molasses, which is used to make fodder. The recent inflationary trends have only added to the woes. The molasses used by the cattle-feed industry attracts central excise duty at the rate of Rs 500 per million tonne since 1998.

"The levy has increased the animal feed cost by 60-75 per cent," says the Indian Dairy Association. The farmer is unable to bear this burden and hence many farmers have discontinued using compounded feed. This ultimately results in low milk production and affects the poor and marginal farmers.

Agriculture scientist M S Swaminathan says: "Today, a bottle of mineral water costs as much as milk. The rise in prices affects all consumers and two-thirds of them are producers. So, unless their incomes grow, anti-inflationary measures make no sense."

In Karnataka and Andhra Pradesh, the government has intervened to cushion the dairy producers against inflation by raising the support prices marginally by Rs 2.50 and Rs 1.50, respectively. Rajasthan too has taken similar incentives.

The milk producers are turning to the private sector as well as to the end user for better prices wherever it is possible. Says a dairy official in Delhi: "The private sector forces cooperatives to be efficient. There is no threat from them."

With contribution from Rakesh Prakash, Krishna Mohan, Maulik Rajnikanth Pathak, Nishith Trivedi and Komal Gera

Inflation, the silent killer