The ministry of animal husbandry, dairying and fisheries is pitching for a removal of ban on exports of skimmed milk powder (SMP), saying the restriction is hurting earnings of farmers selling milk.
The ministry is also pushing for subsidising SMP exports up to 60,000 tonne, official sources told FE. It will place the proposal before the the Cabinet Committee on Economic Affairs (CCEA) soon for approval, the sources added.
Prices of milk, which has a 3.24% weightage in the wholesale basket, jumped 15.51% last month and soared more than 10% in each of the six months through April. Retail prices of milk and its products moved up 10.94% in April. A resurgent middle class with higher disposable incomes is opting for a more healthy diet regime, driving up demand for milk and its products along with other protein-based food items.
Pawar also criticised the government?s ?ambivalent? policy on milk and milk products and sought the removal of export restrictions on SMP and casein. Earlier this month, the ban on casein exports was lifted, although the restriction on SMP exports continued. Left with around 150,000 tonne in inventories, SMP manufacturers have also demanded the scrapping of the ban to ease stocks.
The government had banned exports of casein and milk powder in February last year to tide over a domestic shortfall that caused prices to soar. The country needs to raise its milk output by at least 5 million tonne a year to match growing demand, compared with an average annual increase of 3.2 million tonne in the last 15 years, according to an official estimate.
India, the world?s largest milk producer, expects production of about 127.3 million tonne in 2011-12. The country had exported milk powder and casein worth R500 crore in 2009-10 ? before the ban was imposed in 2010-11? with Japan and Europe being the key markets.
The country?s dairy industry, which is growing at 10% annually, is expected to touch R5,00,000 crore by 2015, Assocham said in a recent report. As much as 40% of the milk output is used in making different products, including butter, ghee, cheese, curd, paneer and ice cream. Around eight crore rural families are engaged in dairy production and the rural market consumes more than a half of the total milk produced, the report said.
Industry executives said rise in feed costs, low yield due to lack of adequate fodder and the absence of adequate infrastructure such as cold storages and transparent milk-pricing system are driving up milk prices, and the ban on SMP exports won?t solve the problem.
Some farmers in western Uttar Pradesh said last week that the government?s incentives to boost meat exports were hurting milk production, as people are tempted to sell the cattle once their best productive period is over.
?The problem is you can?t produce the cattle in huge numbers in a short period to boost milk output, but you can sell them off to the butchers anytime you want even if the animal can still produce milk, albeit less, for some more years. This is the main reason why milk production will always lag consumption,? a farmer, who is setting up a dairy unit in Uttar Pradesh, had said.
