UP govt to lease out six state dairy plants

In a significant move aimed at bolstering the dairy sector and ensuring availability of quality milk to the public, the Yogi Adityanath-led government in Uttar Pradesh on Tuesday decided to lease out six state dairy plants for a period of 10 years.

The decision, taken in  a cabinet meeting here on Tuesday, is expected to benefit not only dairy farmers by ensuring fair prices for their milk but also ensure availability of high-quality dairy products for the general public.

Among the six dairy plants chosen for the purpose, some are currently non-operational or are functioning below their capacity.

“The Yogi government’s decision to lease out these plants is expected to rejuvenate the state’s dairy sector, give a boost to the Dairy Federation, semi-government milk processing & marketing institutions, and dairy cooperatives,” Finance Minister Suresh Khanna said while briefing reporters after the cabinet meeting.

He clarified that while the government was leasing out the dairy plants, the ownership would remain with the PCDF  and dairy cooperatives. The lease firms will be responsible solely for the management and operation of these plants and will not have the authority to make any structural changes.

The leasing terms stipulate that in the first three years, the annual rent will remain the same, and from the fourth year onwards, a standard annual increment of 5.50% will be applied. Currently, the annual lease rent for the Gorakhpur plant is Rs 110 crore, Kanpur’s plant Rs 325 crore, Noida’s plant Rs 438 crore, Prayagraj’s plant Rs 65 crore, Azamgarh’s plant Rs 11 crore, and Moradabad’s plant Rs 110 crore.

“This move is expected to generate an annual revenue of INR 43.28 crore for the department,” the official said.

In line with the leasing process, the dairy plants will first supply milk to the respective district cooperative dairy societies. Additionally, there will be no disruption for dairy federations connected with these plants, allowing them to continue their regular operations. Before the plants are leased out, the department will clear their outstanding debts.

Furthermore, the PCDF employees working in these dairies will be absorbed into other dairy federations and PCDF units.

The Request for Proposal (RFP) process will be initiated within 84 days from the publication date for the leasing of these dairy plants, and the lease firms must commence plant operations within one year. Failure to do so will result in the forfeiture of security money.

The minister said that this strategic decision was poised to strengthen the dairy industry in Uttar Pradesh, ensuring a stable and efficient supply of milk and dairy products to people, while supporting the growth of dairy cooperatives and federations in the state.