Dairy farmers protest as milk procurement prices dwindle

The lockdown has once agains led to concerns being raised about the procurement price of milk. Having to sell cow milk at Rs. 15 – 20 per liter, farmers in Maharashtra took to the streets to protest. Their anguish spilt over to the streets as they dumped their milk on roads and stopped milk supply to urban areas, The Indian Express reported.

It was reported that since April, dairies in Maharashtra had started slashing procurement prices they paid to farmers for their milk. In Maharashtra, farmers who were paid at the rate of Rs. 30 per liter for their milk with 3.5 percent fat and 8.5 percent SNF (solid not-fat) milk are now being paid anywhere between Rs. 17 – 22.50 per liter, IE reported.

The agitation, which was led by the Swabhimani Shetkari Sangathana, saw members of the organization and some farmers stopping tankers passing through Sangli and Kolhapur districts and emptying them on the Pune-Bengaluru highway.

Why this is happening

Sabrang India had earlier reported that milk producers were facing the heat as milk prices fell due to a drop in demand and a rise in inputs like fodder, gram, straw, etc. Around March, the decline had been around 25 percent and this has led to a fall of Rs. 5 – 7 per liter. Speaking to The Times of India, Raju Shetti of the SSS said that the decline had further exacerbated to 40 percent and that the farmers were left with a lot of unsold milk.

Dairy owners said that the pandemic and the extended lockdown is to blame for the farmers’ woes, IE said. They claimed that during the initial days of the lockdown, items like ghee, butter, cheese, milk cartons sold like hot cakes due to people stocking up, the closure of institutional buyers like ice cream manufacturers and sweet shops hit milk sales.

Even the slowdown of festivities like marriages and religious occasions which made use of a lot of milk and milk products has worsened the problems further. The closure of sweet shops on the streets, tea stalls, canteens, hotels etc. have led to a further decrease in the demand of milk. Even the SMP (skimmed milk powder) which is either traded on community platforms or reconverted into liquid milk when production goes down is presently being sold at Rs. 160 – 170 per kg as opposed Rs. 270 – 300 prior to the pandemic.

To add to it, there is now a glut of SMP in the market with about 2 lakh tonnes being available in the market which has further lessened procurement costs from farmers.

Planet Agriculture explained that while dairy farmers were already struggling with falling prices, in a notification dated June 23, 2020, the Union Ministry of Finance exempted imports of milk and cream in powder, granules, or in other solid forms into India under the Tariff Rate Quota quantity. It allowed the import of 10,000 tonnes of milk powder for the fiscal with a 15 percent tariff on imported quantity. Though 10,000 tonnes is only 0.059% of the total milk production, the National Dairy Development Board (NDDB) deemed it a judicious step to be leveraged when prices shoot up.

Demands

Farmers are now demanding a subsidy of Rs. 5 – 10 per liter to be paid directly to farmers’ bank accounts and an incentive of Rs. 50 per kg for export of milk powder, reported Grainmart. They also demanded a halt on the 10,000 tonnes of milk powder and demarcation of at least 30,000 – 40,000 tonnes of the SMP as buffer stock.

Solutions / criticisms

Speaking to Livemint, RS Sodhi, MD, Gujarat Cooperative Milk Marketing Federation which sells products under the most popular brand, Amul, said that the cash support to farmers would not solve the problem. He gave two alternatives to increase demand. First, financial support from the Centre and the State for converting milk into powder, along with export incentives. Second, making milk powder a staple part of a mid-day meal take-home rations for children.

The Maharashtra state government had launched a scheme for dairy cooperatives to procure up to Rs. 10 lakh liters a day and convert it into SMP and butter, The Print reported. Launched in March, the scheme was to run till the end of May, but was extended till July 31 given the current situation.

Anook Kumar of the animal husbandry and dairy development department said that the idea of the scheme was to auction the SMP and butter on a central government portal. He told The Print that around 16 – 18 dairies participated in the scheme and the government had procured 5.61 crore liters of milk till July 19. However, given the numbers, the government hasn’t met its target of 10 lakh liters a day and has only been able to procure 5 – 6 lakh liters a day.

The reason for this, he said, was that almost 78 percent of the total milk in Maharashtra came from private diaries which were not included in the scheme due to which farmers from only 12 talukas benefitted partially from the scheme.

The All India Kisan Sabha (AIKS) and SSS both said that the scheme was inadequate and hadn’t remedied the situation and have said that they will intensify the agitation starting August 1.

Political slugfest

Even while the farmers are still fighting for sustenance, the BJP and Maha Vikas Aghadi (MVA) have engaged into a political slugfest. 

Congress leader Balasaheb Thorat shot back at the BJP saying, “The BJP has no right to talk about farmers’ rights. It needs to explain why the Centre has allowed the import of 10,000 metric tonne of milk powder? When there is a surplus of milk and milk powder, the Centre should have given incentives for the export of milk powder,” IE reported.

However, the Centre maintained that it hadn’t yet imported the 10,000 tonnes of milk powder and accused the MVA government in Maharashtra of making false allegations and covering up its “failure to tackle dairy farmers’ unrest” in the state. 

BJP Kisan Cell Chief and former agriculture minister, Anil Bonde, told IE that the SSS was being used by the MVA government to spread false information about the BJP.

Hence, how the government ensures fair prices to dairy farmers in the state, remains to be seen.

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