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Centre says co-operatives and private dairies fix prices; but agrees on input costs rising

Dairy farmers in Maharashtra will have to sort out the support price for milk directly with the co-operatives and private dairies as the Union and the State governments are unwilling to intervene. 

Over the last few months, dairy farmers in Maharashtra have been demanding minimum support prices for milk. 

The Department of Animal Husbandry and Dairying told the Lok Sabha recently, “Prices are decided by the co-operative and private dairies based on their cost of production and market forces. Milk pricing being free from government control, this Department does not have any proposal to fix Minimum Support Price (MSP) for milk,” the Department stated. 

Increase in input cost

However, the Union government has admitted that there has been an increase in the input costs as reported by milk unions, particularly the energy, logistics, and packaging cost which have been attributed to the increased retail prices. 

The selling price comprises the milk procurement price paid to the farmers (including the cost of production) and the cost of processing and marketing. While farmers claim that they receive only a small amount of the sale price,according to the Union government, about 74 per cent of the sale price is transferred to the farmers as procurement price.

The Maharashtra government has not responded to farmers’ demand. One of the senior State officials said the State has little say in milk prices. The co-operative milk sector in the State is finding it hard to compete with the private dairies.  

State panel

In May this year, the State government formed a committee under the then Deputy Chief Minister Ajit Pawar to discuss a fair and remunerative price for milk.

However, with the new government taking charge the future of the committee hangs in the balance. State government sources said that the Eknath Shinde government might dissolve the Pawar committee and appoint a new one to discuss the matter. 

The Hindu Business Line Aug 2nd 2022