Export of skimmed milk powder (SMP) from Maharashtra has increased significantly in the last few months, thanks to the export subsidy offered by the central and state governments. It is estimated that about 5,000 tonnes of SMP have been exported from the state since July, and dairy owners are confident that they will export more of the product.
Earlier this year, the central government had announced a 10 per cent incentive on exports, keeping in mind the large stock of SMP with dairies. The stock of SMP had piled up after low international prices slowed down exports, and dairies started slashing the procurement price of farmers.
During this period, dairy farmers in the state got only Rs 18-20 per litre of milk, much lower than the government-mandated price of Rs 27 per litre.
In July this year, farmers’ organisations in the state held protests on a large scale and disrupted the supply of milk to major cities, forcing the state government to intervene and extend a subsidy of Rs 5 per litre for export of SMP, to help dairies pay at least Rs 25 per litre as procurement price. The central government’s subsidy has accelerated the export of stocked SMP and helped dairies liquidate their stock.
Dasarath Mane, chairman of the Indapur Dairy and Milk Products Limited, which retails dairy products under the brand Sonai, said around 5,000 tonnes of SMP have been exported. “The dairies have about 6,000 tonnes of SMP, which will be exported soon,” he said.
“Bangladesh, Dubai, Pakistan and Nepal etc are our main export markets and we hope to keep up exports in the coming months,” added Mane. He also said the subsidy scheme could be extended by the central and state governments.
As milk production increases, dairies will produce more SMP that can be exported with the help of the subsidy, said Mane.
However, SMP continues to trade below the $2,000/tonne mark on Global dairy Trade, the online auction platform of New Zealand’s dairy giant Fonterra. This amounts to about Rs 142 per kg, and the subsidy has helped dairies stay afloat as only the production cost of SMP is pegged at around Rs 150 per kg. With India shipping out large quantities of SMP, international prices may remain subdued.
Dairies, however, say they are yet to receive Rs 200 crore from the state government as subsidy for the export of SMP. State government sources, meanwhile, blamed some dairies for failing to provide bank account details of farmers to avail the subsidy.