Cooperative and private dairies in Maharashtra are likely to stop collecting milk from farmers across the State on October 26 and 27, in order to pressurise the State Government to accede to their long standing demand.
Farmers would be left holding around two crore litres of unsold milk.
These dairies are demanding subsidy for the production of skimmed milk powder (SMP) as prices in the international market have crashed. They also want the dairy business to be recognised as part of the agriculture sector, so that it can get additional subsidies from the Centre as well as the State Government.
Dairies in the State process about one crore litres of milk a day, of which about 70 lakh litres gets sold in the retail market, and another 15 lakh litres is used to make paneer and other milk products, while the rest is used for making SMP.
Due to the low demand in the international market, about 15,000 tonnes of milk powder is piled up across State warehouses.
The Managing Director of Gokul Diary, D. Ghanekar, told Business Line that in the last two years, the price of SMP has dipped from $3,500 to $2,100 a tonne in the international market. But the operational cost of procuring milk and making SMP continues to increase.
He said he had urged the Centre and State Governments to procure SMP as a market intervention measure and to give it away as food-aid to needy countries. “In a way, the diary sector needs a bailout package of about Rs 500 crore from the government. In comparison to the other bailout packages, our demand is in miniscule,” Ghanekar said. A senior Maharashtra Government official said that if dairies stopped procuring milk, it would affect small and marginal farmers, who have already lost some crops given the uncertain rains. “It could create a law and order situation in the villages and affect the whole State,” the official said.
The Chairman of Warna Dairy, Vinay Kore, said that a body such as the National Dairy Development Board (NDDB) must procure the existing SMP inventory, pool it together, and then try and sell it in the international market.
He added that NDDB must also look at the feasibility of exporting it to the US.