The dairy sector in Maharashtra has been plagued by low prices, prompting farmers to take to the streets in protest. Dairies are now gearing up for a procurement price war as skimmed milk powder and white butter prices have improved in the international market.
What is the current procurement price that dairies pay farmers? What is the status of the government subsidy programme?
The subsidy programme was announced last year in view of the farmers’ protest. A slump in the global prices of SMP and white butter forced dairies to revise their procurement prices. Now, the state government has announced a subsidy programme where dairies will be paying Rs 25 per litre upfront to the farmer. After submission of payment details, the government was to reimburse the dairies at Rs 5 per litre. The scheme started in June and we have received payment up to October 10. As of now, subsidy worth Rs 100 crore remains unpaid despite sending repeated reminders to the government. Dairies then decided to revert to Rs 20 per litre base price that is continuing for now. This will soon change, given the sudden jump in SMP prices in the global market. Rate of SMP that was Rs 120 per kg has now gone up to Rs 200 per kg. Similarly, white butter prices have increased to Rs 240 per kg. As SMP export is viable once again, farmers will get good prices. I won’t be surprised if procurement prices go up to Rs 25 to 28 per litre again.
The ban on plastic pouches was also an issue with the dairies. Though the state government gave a breather till February 15 to find a solution, there is none in sight. What is your take on this?
Plastic pouches used in dairies do not have an alternative. The state government’s plastic ban envisaged dairies buying back the pouches and transporting the same to the manufacturers. However, manufacturers decided to stop the production of such pouches as this mechanism is really not feasible for them. The government’s intervention bought us time, but we did not find an alternative. We have asked Aarey (the government dairy) and Mahanad (the apex cooperative dairy of Maharashtra) to come up with a feasible solution, but nothing has come of it. Practically, there is no feasible and economical alternative to plastic pouches. Glass bottles will be more expensive and losses will increase. This will hurt consumers as well as dairies.
The Food Safety and Standards Authority of India has prescribed guidelines for minimum residue levels of antibiotics in milk. What are the dairies doing to adhere to it?
Let me clarify, as dairies, we welcome such a move as it directly affects the health and wellness of our customers. Luckily, in Maharashtra, our farmers do not use inputs such as oxytocin that have been difficult to control. At most, over-the-counter drugs need to be controlled, for which it is necessary to educate farmers. We had a meeting with the secretary of the department to discuss the matter where we decided that dairies should go to the farmers to educate them. The three-month period will be utilised for educating farmers.
With parts of Maharashtra facing a drought, what do you think will be the effect on the dairy industry? What steps need to be taken to ensure farmers do not sell their animals at throwaway prices?
The drought has affected most parts of Maharashtra with Marathwada and North Maharashtra reeling from it. Farmers are finding it difficult to keep their animals alive as fodder and water is getting scarce. In such a scenario, we suggest the government immediately swing into action to help the farmers keep their animals alive. Where fodder camps are necessary, they should be opened and in places where farmers can grow their own fodder, money should be provided to them. Proper steps should be taken to prevent corruption at the fodder camps, but farmers should get relief as soon as possible.
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