A day after the cabinet minister for dairy development, animal husbandry and fisheries, Mahadev Jankar, declared export subsidy for skimmed milk powder to improve the procurement price of milk, farmers’ unions have criticised the move. Swabhimani Shetkari Sanghatana, a farmer’s body led by MP Raju Shetti, has said it will go ahead with the plan to stop milk supply to Mumbai and Pune from July 16.
Procurement prices of milk over the past few months have nose dived as dairies, both cooperative and private, complain of stock of skimmed milk powder (SMP) eating into their profits. Export of SMP, dairies said, has become non-viable because of low prices and the inventory of unsold stock across the country is estimated to be over 3.5 lakh tonne. Maharashtra alone has 40,000 tonne of SMP and dairies have slashed the procurement price of farmers. Currently, farmers in the state are paid at the rate of Rs 17-23 per litre for milk with 3.5 per cent fat and 8.5 per cent SNF (solid-not-fat).
Lower realisations have caused distress among farmers who claim such prices have made the dairy business non-viable. A few months ago, farmers in Vaijapur taluka of Aurangabad had taken to free distribution of milk to protest against the prices. The Swabhimani Shetkari Sanghatana has announced its intention to stop the supply of milk to Mumbai and Pune from July 16. The farmers have asked for payment of Rs 5 per litre as direct subsidy.
Meanwhile, Pasha Patel, the chairman of the state government’s committee for agricultural pricing said they have recommended export of 20-25,000 tonne of SMP. “The export subsidy for it would come to around Rs 100 crores and the chief minister has assured us of full cooperation,” he said. Jankar’s announcement is seen as the first step towards this. The matter is scheduled to come up to the cabinet soon. The subsidy for exports, it is learnt, will be given for two months.
Patel said they are also trying to include milk in the midday meal scheme and looking at reduction of Goods and Services Tax (GST) on ghee and butter. “The present slab of 12 per cent is resulting in losses to the dairies and we have requested the government to bring it down to five per cent,” he said. A special committee headed by Patel has been formed to coordinate between the industry and the government. The committee has representations from both cooperative and private players.
Of the 1.4 crore litres of milk procured in the state on a daily basis, cooperative players corner around 40 per cent. The rest is procured by private players. Asked about the demand of direct subsidy for farmers, Patel said it will not be a viable model in Maharashtra. “Unlike Gujarat or Karnataka, the state does not have a single brand. Thus, it will be difficult to pay the farmers directly,” he said. Private players, in particular, source milk from bulk milk chiller (BMC) operators who deal with the farmers.
Faced with repeated agitation, the state government had announced Rs 3 per litre as subsidy for dairies that produce 20 per cent more SMP than their installed capacity. The move had seen the production of 13,000 tonne of SMP but farmers had not benefited from it. Patel had himself admitted that the scheme had failed to get the desired effect.
Meanwhile, Shetti and his organisation have decided to go ahead with the planned stoppage. Yogesh Pande, the spokesperson of the Sanghatana, said the present scheme will benefit only the powder producers and farmers will not be able to get anything out of it. “A mechanism can be worked out to ensure that the benefits pass on to the farmers but the government has shown no inclination to do so,” he said. With the Sanghatana having good support in the milk producing belt of western Maharashtra, the agitation can cause disruption in normal supplies.