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High cost of cattle feed: Milk cooperatives face strain in supply chain

No plan to increase price of milk as of now, say federations

As the festival season has started, milk cooperative federations are witnessing a strain in the supply chain as the production has witnessed a marginal decrease primarily due to the increase in fodder cost. The organised sector is witnessing a decrease in procurement and the federations expect the situation will be normal after Deepavali. Farmers, however, demanded an increase for the procurement price of milk and direct subsidy to the fodder. The federations, however, have no plans to increase the consumer price for the milk as of now.

Managing Director of Amul R.S. Sodhi told The Hindu that the cost of milk production was 15to 20% higher than the previous year because of the increase in fodder cost. He said the production may have come down in the last two months also due to Lumpy Skin Disease, but the disease was under control and things were normal now. “Milk production saw a marginal decrease as farmers have cut down on the cattle feed due to increase in the price. Compared to 2019, the organised sector got about 15-20% more milk during the pandemic as unorganised sector could not function regularly. But in 2022, the demand for milk is high but the production has not increased to match the demand. There is a tightness in market. But we do not see any reason to increase the price at the moment,” he said adding that the Amul had recently increased the price of milk by ₹ 2 in August.

Dr. Sodhi said the grain cost had increased. “Corn cost has increased. One of the main ingredient in cattle feed is de-oiled rice bran. Its cost has increased by 40 to 50%. We need to find better and affordable alternatives for de-oiled rice bran. These things are bringing strain in the supply chain system. But the situation is better in the last two-three days during the pooja holidays. All dairies are getting more milk. After Deepavali, things will be back to normal,” he said and hoped that the fodder cost may decrease as green fodder had increased due to a better monsoon in milk producing States. “This may reduce the fodder prices,” he hoped.

General Manager of Pradeshik Cooperative Dairy Federation Tapesh Yadav said they were also not going to increase the prices, even though the raw material prices were high. “We had revised our prices in August. During the festive season, usually the production decreases. The price hike in raw materials may impact the production,” he said.

Co-convener of All India Dairy Farmers Federation Ajit Nawale demanded fair and remunerative price for the milk. “It should be at least 15% more than the cost of production. The cost of corn and soya bean, key ingredients of cattle feed, have increased. Farmers must be given direct subsidy for the cattle feed,” Mr. Nawale said.

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