The Maharashtra government has decided to extend the Rs 5 per litre subsidy to dairy farmers, which ended on November 1, by three more months. The state government had announced the subsidy in July this year, after strong protests by dairy farmers, who were struggling with low realisations. Back then, dairies had slashed the procurement price of farmers as they were burdened with huge stock of unsold skimmed milk powder (SMP).
Since last year, global SMP prices have been stagnant and remained below the $2,000 per tonne mark. Future contracts don’t seem promising either, indicating that Indian dairies may continue their struggle for a while.
While the government-mandated procurement price was Rs 27 per litre, farmers were getting paid between Rs 17 and 22 by the dairies. The state announced a subsidy of Rs 5 per litre till November 1 and paid about Rs 65.85 crore in this period to dairy farmers in the Pune division, which comprises the districts of Pune, Satara, Sangli, Solapur and Kolhapur. The dairies were asked to submit bank details of individual farmers as the state government wanted to transfer the subsidy directly to the farmers’ accounts.
As the state government had not issued fresh directives about the extension of the scheme, farmers had complained of lower realisations. Dairy farmers in western Maharashtra said the scheme had ended right when milk production is all set to go up. The production usually increases between November and February, when fodder and water are available in sufficient quantities.
Dairies and dairy farmers across the state have welcomed the government’s decision of extending the subsidy period.
Rajiv Mitra, managing director of the Phaltan-based Govind Milk and Milk Products, welcomed the extension of the subsidy, but added, “The state government should be prompt in releasing the subsidy”.