Bonanza! Maharashtra government pays Rs 106 crore in subsidy to dairy farmers

By: | Published: October 11, 2018 1:42 AM

The subsidy rate of Rs 5 per litre of milk is applicable from August 1. The state produces an excess milk production of about 10 lakh litres. This includes milk powder production and entails a daily subsidy of Rs 50 lakh.

Some of the data has been uploaded by dairies and payments have been received for the period of August 10 to August 20.

Subsidy worth over Rs 106 crore has been paid by the government of Maharashtra following the submission of bank account details of dairy farmers in the state.

The state government had taken a decision some months back to provide a subsidy of Rs 5 per litre of milk to the co-operative and private producers to convert it into milk powder. To provide the subsidy in a transparent manner, the authorities have also asked for bank account details of dairy farmers so that the amount can be transferred directly to them. Once the bank accounts are verified by the authorities, the subsidy amount would be released, officials said.

The subsidy rate of Rs 5 per litre of milk is applicable from August 1. The state produces an excess milk production of about 10 lakh litres. This includes milk powder production and entails a daily subsidy of Rs 50 lakh.

At a meeting of the dairies in the state with the Dairy Commissioner of Maharashtra, the glitches in the process were ironed out and the subsidy has begun, senior industry people said. Prakash Kutwal, chairman, Kutwal Foods said a meeting had been called in Pune which was attended by nearly 41 milk dairies in the state — both cooperative and private where there was a discussion on the uploading of the farmer data, he said.

Some of the data has been uploaded by dairies and payments have been received for the period of August 10 to August 20, he said. Work is in progress for the uploading of the rest of the data and a meeting has also been called by chief minister Devendra Fadnavis to discuss challenges facing the state’s milk sector.

According to officials, more than 17 dairies, both private and cooperative, have submitted the details of farmers and the state government had transferred the subsidy to them. After the agitation by the farmers in July to increase milk prices, the state government announced a subsidy of Rs 5 per litre of milk in addition to packed milk for dairy products. Of the Rs 106 crore subsidy given to dairies to help them pay dairy farmers, Rs 53 crore was for production of skimmed milk powder (SMP) in order to reduce excess liquid milk.

Dairies had earlier warned that if the government does not pay the amount of subsidy soon, milk collection will be stopped by dairies. Several private and cooperative milk dairies had sought extra time from the government citing the lack of a database and the confusion about the parameters on the calculation of the new milk rate.

Over the last year, average procurement price for cow milk containing 3.5% fat and 8.5% solids-not-fat (SNF), had fallen from Rs 24-25 to Rs 17-20 per litre in states like Maharashtra. Buffalo milk (6.5% fat, 9% SNF) had fallen from Rs 41-42 to Rs 34-36. But retail price of toned milk in pouches (only 3% fat, 8.5% SNF) has remained at Rs 42 per litre, and full-cream milk (6% fat, 9% SNF) at Rs 52 per litre.

Private dairies in Maharashtra had begun building a database of farmers from whom they buy milk. This, the dairies say, will help them pass on government subsidies, if any, directly to the farmers. Private dairies account for around 70% of the 1.4 crore litres of milk procured in the state daily. However, these do not deal directly with farmers but with Bulk Milk Coolers (BMC) operators, who in turn arrange for milk for the dairies. Payment is made to the BMC operators who arrange for payment to farmers. Most dairies ensure online payment down the value chain.

After the agitation, several dairies put their representatives on the job to gather information on milk collection to create a farmer database since there is little information or no authentic data on milk collection. Dairy representatives were gathering information on the amount of collection, excess milk and what is done with it in addition to information on the buyer and seller.

The state produces around 1.30 crore litres daily. Of this, 60 lakh litres is in milk packs for daily use. The government has made a financial provision for the preparation of the remaining 70 lakh litres of milk. Of the total 207 private and co-operative dairies in the state, 70-75 dairies that collect over 10,000 litres on a daily basis, are eligible for government subsidy.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Switch to Hindi Edition