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Maharashtra: Why dairy farmers are angry

Prices paid to dairy farmers have fallen steeply from Rs 25 per litre to Rs 15-16. Milk collection centres, both private and cooperatives, are not ready to pay the expected price.

Written by Shubhangi Khapre | Mumbai | July 22, 2020 3:24:37 am
Dairy farmers, milk prices decline, Mumbai news, Maharashtra news, indian express news Farmers argue they cannot recover even their expenditure on milk production, which comes to about Rs 18-20 per litre. (Representational)

Angry dairy farmers have taken to the streets against the sharp decline in milk prices. Farmers poured away hundreds of litres of milk in protest. They have also decided to suspend milk supply. The Indian Express explains what triggered the unrest.

What is the protest all about?

Prices paid to dairy farmers have fallen steeply from Rs 25 per litre to Rs 15-16. Milk collection centres, both private and cooperatives, are not ready to pay the expected price. Farmers argue they cannot recover even their expenditure on milk production, which comes to about Rs 18-20 per litre.

What are the reasons for this sharp fall?

The mismatch between demand and supply. In the last four months, milk demand has come down by 30 to 35 per cent, resulting in excess milk in the state. The closure of five-star hotels, restaurants, resorts, sweet shops, ice-cream businesses is one of the reasons for the lower demand. The demand for milk products like paneer, butter milk and sweet milk lassi, which require bulk milk supply daily, has also come down. Usually, the time between March and June sees an increased demand for milk due to the wedding season but not this year. The supply of milk from Maharashtra to other states has also been adversely affected due to Covid-19.

Has the government taken any steps to help dairy farmers?

On April 6, the state government had announced it would purchase milk from dairy farmers at Rs 25 per litre to hold the price line. The official data states that the government buys 7 lakh litres daily. But this procurement is a small fraction of the overall milk production across the state, which averages 1.40 crore litres daily. In normal times, the private sector buys 90 lakh litres, cooperative milk unions 35 lakh litres, and hotels and restaurants 15 lakh litres. Since maximum milk is bought by private and cooperative unions, they easily determine the milk rates, and that is true for this year too. The farmers are at their mercy as these two sectors have better and assured milk collection network and mechanism. The fallout is, farmers have to accept the price they pay.

What are farmers demanding?

The farmers are demanding higher remuneration for milk. Dairy farmers are demanding Rs 27 to Rs 30 per litre. They have sought the state government’s intervention by way of financial package citing that higher expenditure on cattle fodder and labour has led to increased cost in the sector.

What will be the political ramifications of the farmers’ unrest?

The BJP along with its alliance partners Republican Party of India, Rashtriya Samaj Party, Shiv Sangram and Rayat Kranti Party has threatened an indefinite agitation across the state from August 1. The BJP and allies launched a day-long agitation on Sunday. Their demand is, the government should provide subsidy of Rs 10 per litre of milk and Rs 50 per kg of skimmed milk powder. The Opposition party has seized the opportunity to exploit the farmers’ unrest to attack the Maha Vikas Aghadi government. The price fall has badly affected dairy farmers across Western Maharashtra, Vidarbha, Marathwada, North Maharashtra and Konkan. But its political fallout is more in Western Maharashtra, which has a robust and largest dairy farmers’ network. Western Maharashtra also is a stronghold of ruling parties Congress and NCP.

For the government, what would be the financial implications of meeting the farmers’ demands?

The government reckons that it would not be possible to provide such a huge subsidy of Rs 10 per litre of milk and Rs 50 per kg of skimmed milk powder to dairy farmers. Especially when the state is reeling under severe financial constraints. Even by conservative estimates, it would amount to annual subsidy of Rs 1,000 crore.

Even in the past, whenever governments provided financial assistance of Rs 5 per litre of milk and Rs 25 per kg of milk powder, it was for short durations not exceeding three to six months. Therefore, the state government believes practical approach was to increase the milk demand in town markets to stabilise the rates at Rs 25 per litre.

How important a sector is dairy farming in Maharashtra?

Almost every farmer household in Maharashtra is engaged in dairy farming. From maintaining two cows to 50, the farmers use dairy farming as an allied agriculture activity to ensure sustained income and livelihood. Dairy farming provides daily earning. It is also dependable and only income to survive on when farmers incur financial losses in kharif or rabi season.

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