Punjab: MILKFED hikes procurement rates for farmers to ‘compete with private sector, curb diversion’https://indianexpress.com/article/cities/ludhiana/punjab-milkfed-hikes-procurement-rates-for-farmers-to-compete-with-private-sector-curb-diversion-5743287/

Punjab: MILKFED hikes procurement rates for farmers to ‘compete with private sector, curb diversion’

This is the second hike by MILKFED in the past two months. In April, it had hiked rates by Rs 10 per kg fat for both BM and CM.

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The move is likely to hit consumers very soon as Verka Milk retail prices may go up by Rs 2/litre across the state. (Representational photo)

The Punjab State Cooperative Milk Producers’ Federation Limited (MILKFED), the state-owned milk procurement cooperative which also owns the brand ‘Verka’, has increased milk procurement rates for farmers by Rs 20 per kg fat starting Tuesday (May 21). The move is likely to hit consumers very soon as Verka Milk retail prices may go up by Rs 2/litre across the state.

As per orders issued by the general manager to MILKFED plants across the state, procurement prices for farmers have been increased to “curb diversion, compete with private sector, maintain milk procurement and meet the increasing demand of liquid milk and fresh milk products to the consumers in lean season”. In summers, animals produce less milk.

Speaking to The Indian Express, dairy farmers said that currently, Verka is facing stiff competition from private companies. However, MILKFED remains the largest milk procuring network with its statewide reach and infrastructure.

With the increase of Rs 20 per kg fat for both buffalo milk (BM) and cow milk (CM), MILKFED will now be paying Rs 600 per kg fat for buffalo milk and Rs 580 per kg fat for cow milk (Solids-Not-Fat (SNF) content is also considered while calculating rate for cow milk). For instance, if there is 8 per cent fat in 1 kg milk, a farmer will get Rs 48/kg at rate of Rs 600 per kg fat.

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This is the second hike by MILKFED in the past two months. In April, it had hiked rates by Rs 10 per kg fat for both BM and CM.

Sources in MILKFED said that increase in procurement rates for farmers is likely to hit consumers soon and prices of Verka milk packets may go up by Rs 2 anytime. “We have no other way to recover extra cost that will be given to farmers now…it will naturally come down to consumers…,” said a MILKFED official.

Daljit Singh Sadarpura, president of the Progressive Dairy Farmers Association (PDFA), the state’s largest dairy farmers body, said that till 2017, MILKFED was giving Rs 630 per kg fat rate and then the skimmed milk powder rates in international market crashed, leading to a trickle-down affect on the Indian market, especially Punjab, which known for its cattle trade worth crores.

“Dairy farmers suffered double blows. First, due to gau rakshak gangs, our cattle trade worth crores to other states almost stopped and milk rates dropped too. Even now it, has reached Rs 600 per kg fat for buffalo milk which is lesser than Rs 630 two years back. The government needs to pay more. We are still waiting for the Punjab government to pass a notification and relax rules for procuring NOC for cattle transportation. It is too complicated as of now and then cow vigilantes stop vehicles on the way and harass our employees,” he said.

BR Madaan, general manager of the Ludhiana Verka Milk Plant, said, “in Ludhiana plant alone, we are procuring milk from 80,000 farmers daily and intake is 3.6 lakh litres of milk daily. But in winters, it even touches 5.5 lakh litres a day. Naturally there is shortage. In summers, milk production decreases and demand increases. We need milk to make other products like paneer, curd, etc. Our skimmed milk powder stock is also very low currently. Rates had crashed due to crash in powdered milk rates internationally, but market is recovering.,” he said.