Now its the turn of milk processors to declare procurement holidays in Maharashtra

Maharashtra state saw a lot of agitations by various groups to get clarity on government’s policies to support dairy sector. The farmer groups stopped supplies of milk to the plant for a day earlier in this week. Now for the first time dairy processors are forced to take such action owing to dip in demand for milk. This was told by Gopalrao Mhaske, chairman ,Maharashtra Dairy Farmers and Processors Welfare Association. This association is the umbrella body of private and cooperative dairies in the state.

Major reason for the dairies to declare one day procurement holiday is lack of clarity on state government’s policy. The future of the state government’s scheme to procure excess milk from them is not clear. State government was procuring excess milk from dairies at Rs 25 per litre and converting the same into SMP and white butter.

State government’s intervention to resolve dairy crisis

The government promised to procure around 10 lakh litres of milk every day during the lockdown. The government collected nearly 5.61 crore litres of milk till July 10. The collected milk was worth Rs 79 Crores. The scheme will end on July 27th after two extensions in the past.

At the beginning of the nationwide lockdown, dairies in Maharahstra were paying farmers at the rate of Rs 30 per litre for milk with 3.5 per cent fat and 8.5 per cent solid-non-fat (SNF). The closure of hotels, restaurants and catering businesses had hit the industry hard, resulting in a massive drop in the sale of milk and milk products. The dip in demand brought about by the lockdown had seen dairies slashing their prices drastically to almost Rs 22.50 to Rs 17 per litre.

SMP, which was trading at around Rs 300 per kg before the lockdown, has now touched the Rs 160-170 per kg mark, resulting in major losses for dairies. Across Maharashtra, dairies have reported around 70,000 tonnes of unsold SMP, while nationally the unsold stock is close to 2 lakh tonnes.

Mhaske is also a director with the Pune District Cooperative Milk Producers Union, the owners of Katraj brand. He said the union was procuring 30,000 litres of excess milk per day. “Our sales, which were around 1.15 lakh litres, have since come down to 90,000 litres,” he said.

Ongoing dairy farmer’s agitations in Maharashtra

Milk procurement holiday is a necessary evil . Dairies do not purchase milk during a ‘procurement holiday’ and suspend their milk collection. As per Mhaske the dairies will not opt for Milk holdiays if the state government continues with their current scheme of procuring excess milk.

Earlier this week Ajit Nawale of milk producers Sangharsh Samiti said that they have demanded the subsidy of ₹10 per liter. He demanded an intervention scheme to ensure that the farmers get at least ₹30 a litre as procurement price.

The Opposition BJP also launched a state-wide agitation against the drop in prices. BJP leaders have submitted demands for a Rs 10 per litre subsidy for dairy farmers. They also demanded Rs 50 per kg subsidy for milk powder.

Mhaske said similar schemes as suggested by various groups for the benefits of the farmers for the next few months will help dairies in Maharashtra tide over the crisis.