Maharashtra Government likely to extend Milk Procurement Scheme to Support Farmers

The Maharashtra government is likely to extend its scheme of procuring excess milk from dairies to support farmers affected by the lockdown. The Milk Procurement Scheme, which was launched in April and ended on May 31, has not met its target of procuring 4 crore litres of milk, and it is for this reason that the government is actively considering extending it, said Anoop Kumar, Principal Secretary, Marketing and Animal Husbandry, Dairy Development and Fisheries Department.

A final decision in this regard will be taken pending approval from Deputy Chief Minister and state Finance Minister Ajit Pawar, sources said. The scheme was introduced to help farmers get a flat price for their milk, after dairies slashed procurement prices amid the nationwide lockdown citing ‘demand destruction’.

Demand for milk and milk products had dropped drastically as the lockdown impacted businesses like sweet shops, tea shops and ice cream parlours, as well as social gatherings like marriages and parties. So, dairies had slashed milk prices almost overnight to Rs 19-20 per litre. The lockdown-induced demand destruction had come at a time when dairy farmers were enjoying a rare bull run. The combined effect of flood and drought in 2019 had affected milk production, and with milk running short, dairies had hiked procurement prices. Before the lockdown, some farmers were commanding prices of Rs 32.50 per litre for milk with 3.5 per cent fat and 8.5 per cent SNF (solid not fat).

But after the lockdown, when prices were slashed to Rs 19-20 per litre, the state government decided to step in to stop this drop.

Under the scheme, the state government planned to procure 10 lakh litres of milk from dairies every day and convert it into skimmed milk powder (SMP) and white butter. To be eligible for this scheme, dairies had to pay a minimum procurement price of Rs 25 per litre to farmers. Procurement would be done by 32 state government-controlled milk cooperatives. The state government’s aim was to procure 4 crore litres of milk by the end of the scheme on May 31, at a total estimated cost of Rs 147 crore. But so far, the government has managed to procure only 2.77 crore litres of milk under the scheme.

Till now, the government has cleared Rs 4 crore to cooperative dairies with bills worth Rs 10 crore to be cleared soon.

Prakash Kutwal, secretary of the Milk Producers and Processors Welfare Association, the umbrella body of cooperative and private dairies in the state, said the scheme has been unable to procure more than 4 lakh litres of milk per day against its target of 10 lakh litres per day. “Dairy farmers have started reducing the feed given to their animals, which has resulted in a drop in milk production in the state. Also, consumption has increased due to the gradual easing of lockdown,” he said.

Read: Dairy Farmers’ Decision to Hike Milk Rates Gets Thumbs Down