500 crores export subsidy for SMP could bring 270 million USD and 120 million smiles

Maharashtra government finally ended their scheme of collecting 1 million LPD of milk at Rs 25 per litre on tuesday. The scheme was extended twice since April 2020. Farmers associated with state cooperatives were the major beneficiaries. The total collection of milk under this scheme could reach to maximum of 5.5 lakh litres per day. A total of 6 crore litres of milk was collected under this scheme. The cooperatives are paying Rs 25-26 per litres to the farmers .

The private sector is buying milk from Rs 19-21 per liter. Private sector will be reducing the price further to Rs 18 per liter soon. It is due to huge stocks of SMP and butter in the state. Industry sources confirm a huge stock of 60-70000 MT of SMP in Maharashtra alone. The private sector in the state has requested a bail out package for the sector. The demands are mainly to clear off the SMP and butter stocks through export subsidy . Also read Now its the turn of milk processors to declare procurement holidays in Maharashtra

This situation is prevailing outside Maharashtra state also. State cooperatives in the country has also got around 170000 MT of SMP stocks (62% more than the last year). They also have 104000 MT of Butter and 22000 MT of ghee . These stocks are respectively 40.50% and 47% more than last year same period.

These state cooperatives have approached the government to give export subsidy to clear this stock. The government may also distribute these stocks through Anganwadis, schools, colleges and hospitals to COVID patient. Also read Amul approached government to get 160 Crore export subsidy for clearing SMP stocks

An export subsidy Rs 500 Crores for milk powder at Rs 50 per Kgs could help in clearing 100000 MT of SMP stocks. The country will get around USD 270 million or Rs 2000 Crores worth of foreign exchange in return. India’s exports of dairy products soared to 3376 Crores or 180688 MT in 2018-19 because of export subsidy.

The government will have to take a decision fast as flush season is approaching . High milk production and huge stocks of SMP and butter would kill the dream of Atma nirbhar dairying atleast. The government could always extend Rs 500 Crores from so many funds lying unused under DAHD, DIDF , NDP-2 etc . Farmer’s survival today may be more important than dairy infrastructural development tomorrow. It is just a matter of priorities