Dairies in Maharashtra to reduce procurement prices by Rs 2 per litre

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Published: May 3, 2019 1:02:27 AM

Dasrath Mane, chairman, Sonai Dudh Sangh said that the dairies have decided to pay `23 per litre since they were finding it unviable to pay farmers in the absence of the subsidy of `5 per litre.

According to industry sources, the `55-crore subsidy for powder exports has been withheld which has led to losses for the dairy industry.

Dairies in Maharashtra have decided to reduce procurement prices to farmers to `23 per litre with effect from May 1, following no clear directives from the government on the extension of the subsidy scheme for farmers.
Dairies were paying a procurement price of `25 per litre from July last year. The state government had announced the subsidy in July last year, after strong protests by dairy farmers, who were struggling with low realisations. Back then, dairies had slashed the procurement price of farmers as they were burdened with huge stock of unsold skimmed milk powder (SMP).

The state government had agreed to provide `5 subsidy to the milk co-operatives, which will have to be passed on to the farmers. The subsidy scheme, which was initially for a period of 6 months, was extended till April 30 and following no clear directives from the government on the extension of the scheme, private and cooperative dairies in Maharashtra met this week to review the situation.

Dasrath Mane, chairman, Sonai Dudh Sangh said that the dairies have decided to pay `23 per litre since they were finding it unviable to pay farmers in the absence of the subsidy of `5 per litre.
Initially, the subsidy was announced by the government from August 2018 to January 2019. For the next three months, from February 2019 to April 2019, the government announced a subsidy of `3 per litre. The extended scheme ended on Tuesday ( April 30), Mane said, pointing out that around 30% of the earlier subsidy dues were yet to be paid by the government. Around 70-80 dairies attended the meet, he said, adding that most dairies had agreed to follow this decision.

Prakash Kutwal, secretary of the Maharashtra Milk Producers and Processors Association, however, was of the view that it will be unfair to give reduced prices to farmers at the times of drought and fodder shortage in the state. Another meeting has been called on May 7 to review this situation, Kutwal said, pointing out that the government’s decision on subsidy would also be clear by then. Not all dairies in the state are following this decision to pay `23 per litre to farmers, he stated. More importantly, price of butter has risen by `30 per kg and milk powder by `100-120 per kg and therefore it is not a huge burden on dairies, Kutwal said, adding that dairies should continue to pay farmers `25 per litre.

Vinayakrao Patil, president of Maharashtra Milk Producer and Process Professional Welfare Association said that the government, which does not understand the difference between cow and buffaloes, is deciding the milk policy. The government is insensitive to the cooperative sector, he claimed. According to industry sources, the `55-crore subsidy for powder exports has been withheld which has led to losses for the dairy industry. Dairy industry sources claimed that there is no option other than reducing milk prices during the drought situation.

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