Would Rs 150 Crore export subsidy improve the milk prices in Gujarat

The Gujarat government will provide an assistance of Rs 150 crore to milk cooperatives in the state to help them export milk powder. The government will provide Rs 50 for every kilogram of milk powder exported by the cooperatives who currently have a massive stock of 90,000 metric tonnes.

“In Gujarat, about two crore litres of milk is produced daily. After selling milk and using it for making value-added products, the milk cooperatives convert the extra milk into milk powder. The national and international prices of this milk powder has fallen and due to this, the Amul Federation (Gujarat Cooperative Milk Marketing Federation) and its unions currently have a stock of more than 90,000 metric tonnes of milk powder,” said Deputy Chief Minister Nitin Patel. This stock of milk powder is worth Rs 1,850 crore.

Patel said that if the milk powder is sold at the current prices, then the milk cooperatives will have to bear a loss of Rs 80-90 per kilogram. “Any loss for the cooperatives will have a direct impact on cattle-rearers. They will get less prices for milk,” Patel said while announcing the financial assistance. Patel said officials of GCMMF and the milk cooperative unions had met the chief minister and him on the issue.

The deputy CM said that the financial assistance will help milk powder exports despite the low prices prevailing in the international markets for skimmed milk powder. This financial assistance will be given for six months from November 1, 2020.

He said there was a similar situation two years ago when the government provided Rs 260 crore to give Rs 50 as assistance for every kilogram of milk powder exported by the milk cooperatives, in a move that helped the farmers.