Maharashtra govt’s scheme to deal with excess milk yet to take off

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May 30, 2020 10:13 AM

Many dairies fear their business will be hit if the government does not pay them soon, he said. There are about 25 dairies in Maharashtra that are converting their excess milk stock into milk powder.

The state government had promised to provide funds to the dairies for procuring 10 lakh litres of excess milk per day.

Maharashtra government’s scheme to deal with excess supply of milk by encouraging dairies to convert the excess milk into powder and butter has not taken off as expected. A month after the announcement, instead of the targeted 10 lakh litres of excess milk that was to be procured per day from farmers, the cooperative dairies are procuring only around 5 lakh litres.

The state government had promised to provide funds to the dairies for procuring 10 lakh litres of excess milk per day. The government made it mandatory for dairies to pay farmers at least Rs 25 per litre of milk and the scheme was on till May 31. Dairies says they are yet to receive payments from the government, while the government says dairies are yet to submit farmer data.

Prakash Kutwal, secretary, Milk Producers and Processors’ Welfare Federation, said milk sales have gone down by 40% during the lockdown period due to closure of hotels, restaurants and tea shops. There was also no offtake from institutional consumers such as caterers, ice-cream makers and sweetmeat sellers, Kutwal said. Before the March 24 lockdown, dairies were paying Rs 29-30 per litre but now dairies are paying farmers Rs 21-22 per litre.

Maharashtra’s average daily collection is around 1.30 crore litres. Of this, around 60% is sold to retail through pouches. Ranjit Deshmukh, chairman, Mahananda, said only 5 lakh litres of milk is being collected on a daily basis because dairies were unable to procure more from farmers. The state government has, therefore, limited the total procurement of excess milk to four crore litres for which, `127 crore was set aside.

Many dairies fear their business will be hit if the government does not pay them soon, he said. There are about 25 dairies in Maharashtra that are converting their excess milk stock into milk powder. Deshmukh said said about 2.60 crore litre of excess milk has been procured so far and 2,100 tonne of milk powder and 1,100 tonne of butter have been prepared. “The cooperative and some private dairies have been asked to submit data of the farmers who have received Rs 25 per litre from them. Based on the data, the disbursement to the dairies will start,” he said.

The government has already allocated Rs 50 crore for disbursement to the farmers and Mahananda shall disburse this amount after the data given by the dairies is verified, he said. The delay was caused due to data not being shared by dairies, he said. Now this powder and butter is treated as buffer stock and once the the lockdown is over, Mahananda shall then sell this powder and butter to institutional buyers on behalf of the government, Deshmukh said.

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