Maharashtra dairies to withhold subsidy till dues are cleared

By: | Updated: December 8, 2018 2:25 AM

Dairies in Maharashtra had waited till November 30 for pending dues of Rs 100 crore under the state government subsidy scheme and had threatened to pull out of the scheme.

Of the total 207 private and co-operative dairies in the state, 70 to 75 dairies that collect over 10,000 litres on a daily basis are eligible for government subsidy. (Representational photo: Reuters)

Dairies in Maharashtra have decided to withhold subsidies to farmers following a delay in payments by the state government. The dairies have decided to pay Rs 20 per litre instead of Rs 25 per litre, the rate normally paid to farmers.

This means the subsidy of Rs 5 per litre will be withheld by dairies until the government releases the pending payments, Prakash Kutwal, secretary,Milk Producers and Processors Association told FE after a meeting with industry representatives in Pune. Around 58 cooperative and private dairies had met to discuss the issue of subsidy.

Dairies in Maharashtra had waited till November 30 for pending dues of Rs 100 crore under the state government subsidy scheme and had threatened to pull out of the scheme. Kutwal pointed out that dairies had paid farmers in anticipation of the subsidy but the government had failed to make the payments on time.

The state government had implemented the subsidy scheme, under which Rs 5 per litre amount was extended to dairy farmers from August this year and it was to continue till October-end. Around Rs 100 crore of subsidy amount is pending to be disbursed to the dairies from September 10 to October-end.
After a four day strike by dairy farmers in the state in July for higher prices, the state government had then directed milk cooperatives to pay a procurement price of Rs 25 per litre of cow’s milk to the farmers, an increase from the earlier rate of Rs 17- 19.

The state produces around 1.30 crore litres of milk daily out of which 60 lakh litres is used in pouches for daily use. The government had 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 to 75 dairies that collect over 10,000 litres on a daily basis are eligible for government subsidy.

Last year, the state had made it mandatory for the milk federations to pay a minimum of Rs 27 per litre on milk procured from dairy farmers across Maharashtra. But the milk federations had not been able to pay more than Rs 17-18 per litre to dairy farmers.

Dairy firms, which had been in touch with the state environment department, seeking an exemption from the extended producers’ responsibility (EPR) — a mandatory clause that assigns the responsibility of disposal of plastic waste to the manufacturers — have stated that once the dairies run out of film, they will not be able to make milk pouches and and package the product for sale to customers.

Kutwal said that the plastic film suppliers should inform dairies three days in advance about shortage in supplies and accordingly dairies will stop supplying milk in pouches.

Last month, the plastic manufacturers had decided to stop the supply of plastic films, used to make milk pouches from December 15, as they did not want to design the EPR either. Dairies had also indicated that prices could rise by Rs 10-15 per litre for supplying milk in bottles failing which they would resort to an agitation.

In response to this announcement, Maharashtra government stated that dairies should stop issuing threats about a price rise and going on agitation . As per the government scheme, private dairies should pay a deposit of 50 paise for half a litre and Rs 1 for one litre of milk. A meeting will be held with dairies on December 11. The government has made it clear that the plastic ban will not be revoked.

Around 85 lakh litre milk is packed in Maharashtra every day for domestic use, which requires 10,000 tonne plastic per year.

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