Gujarat Government announces 300Cr Rs subsidy support to struggling Dairy Cooperatives.

Pashu Sandesh, 27^th June 2018

At the time when the international prices of milk is running all time low and Indian Dairy Cooperatives are having unprecedented inventories of surplus skimmed Powder(SMP) over the tune of 4Lac tons, Gujarat Government has come to the rescue of its Cooperatives. Government has announced 300 Crore Rupees subsidy for the sale of 60000 tons of SMP in the international markets. This would roughly correspond to the subsidy of 50 Rs per Kg of SMP. Gujarat Cooperatives are sitting over 1.10 Lac tons of SMP.

Deputy Chief Minister of Gujarat Nitin Patel while announcing the subsidy said in a press conference at Gandhinagar that “Approximately 1.10 lakh tonnes of SMP worth over ₹2,500 crore are piled up at these dairies, thereby blocking their funds. International prices are lower than our SMP prices. Hence, the international market sale at this rate may cause huge loss to these dairies”.

The SMP prices have already slipped by about ₹100 a kg from their peak last year at ₹240. Currently, SMP prices hover at around ₹135/kg in the domestic market and about $2000/tonne in the international market (about ₹140/kg).

“The State government has, therefore, decided to provide ₹50/kg financial assistance for all SMP exports to be done by Amul for the next six months, beginning from July 1, 2018. This will be allowed till the ceiling of ₹300 crore is met,” he added.

“GCMMF made representations and expressed that if the blocked funds are not released in time, it will affect the price of milk to be paid to 36 lakh cattle rearing people in the state, who are members of the Federation. We decided to give subsidy to GCMMF so that the farmers and people engaged in cattle rearing do not suffer and get sufficient prices of milk,” Patel said.

Managing director in GCMMF, RS Sodhi, said: “We don’t want to pass on the burden to milk producers.. Cattle rearing people in Gujarat get Rs 8-10 more per liter on milk sell as compared to those from Maharashtra, Punjab and UP.”

Milk cooperative unions led by Gujarat Cooperative Milk Marketing Federation (GCMMF) Chairman, Ramsinh Parmar and other dairy leaders had represented to the Gujarat Chief Minister Vijay Rupani regarding the falling international prices and the impact it has created on the overall export of the SMP and the low procurement cost to the farmers.