Supply Chain Council of European Union | Scceu.org
Procurement

Pvt dairies in Maharashtra cut milk procurement prices for farmers

Consumers continue to get milk at the same price of Rs 48 per litre.

Private dairies in Maharashtra have reduced procurement prices of cow milk from Rs 25-27 per litre to Rs 22-23 per litre. The move comes in the wake of a fall in butter and milk powder prices after a brief spike post lockdown.

“Butter prices had increased from Rs 240 per kg to Rs 290 per kg a month ago when the lockdown was eased. Similarly, SMP (skimmed milk powder) prices had increased from Rs 150 per kg to Rs 190 per kg because of a rise in demand from dealers who had exhausted their stocks of butter and SMP. In October, prices of butter and SMP dropped again to Rs 250 per kg and Rs 160 per kg after dealers built their inventory and there is no longer a rush to buy these again,” said Prakash Kutwal, secretary, Milk Producers and Processors Welfare Association, the umbrella body of cooperative and private dairies in the state.

Therefore, the dairies which had hiked procurement prices to Rs 25-Rs 27 per litre after the lockdown period have now reduced the same to Rs 22-23 as the demand has stabilised, he said.

Interestingly, consumers continue to get milk at the same price of Rs 48 per litre. Maharashtra has almost 75 private dairies and 40 cooperative dairies. There are some 40 plants that convert milk into powder with the processing capacity of 4 crore litre on a daily basis. The daily collection of milk, however, amounts to 1.70 crore litre per day.

During the lockdown, Mahananda — the state government’s dairy products company — was to procure 10 lakh litre from farmers every day to convert the same into SMP since the demand for milk was low. Although the target was to collect 10 lakh litre on a daily basis, dairies managed to collect 5.5 lakh litre per day.

The state government has formed an advisory committee headed by the dairy commissioner of Maharashtra a few months ago to resolve issues related to the sector, but a meeting is of the committee yet to be held, Kutwal said.

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