No MSP for Milk: Government Reaffirms Market-Led Pricing in Parliament

Pashu Sandesh, July 22, 2026

The Central Government has clarified that there is currently no proposal to introduce a Minimum Support Price (MSP) for milk, reiterating that milk procurement prices will continue to be determined by dairy cooperatives and private processors based on prevailing market conditions.

The clarification came in a written reply to a question in the Lok Sabha on July 21, where Union Minister for Fisheries, Animal Husbandry and Dairying, Rajiv Ranjan Singh alias Lalan Singh, stated that milk prices are decided by dairy cooperatives and private dairies according to market realities, and that the government is not considering an MSP mechanism for milk at present.
The government's position comes at a time when dairy farmers are increasingly worried about rising production costs. Feed, fodder, veterinary services, labour and energy expenses have increased significantly in recent years, while milk procurement prices have not always kept pace.

Why Milk MSP Is Different

Unlike wheat or paddy, milk is a highly perishable commodity that is produced and marketed every day. Pricing also varies according to fat and SNF content, making a uniform national MSP difficult to implement. Experts argue that any MSP mechanism would require an extensive procurement, processing and storage system, potentially creating a major fiscal burden.

India's dairy sector is largely driven by cooperative institutions such as Amul, Nandini, Milma, Sudha and Verka, alongside a rapidly growing private dairy industry. The government believes this market-linked ecosystem is better suited to price discovery than an administered MSP regime.

Government Focus is on Infrastructure

Instead of price guarantees, the Centre says it is strengthening dairy infrastructure and farmer participation in the organized sector. By March 2026, more than 36,000 new village-level dairy cooperative societies had been established, while milk chilling, testing and processing capacities were significantly expanded.

The Bigger Policy Question

The debate over milk MSP is unlikely to end. Farmer groups argue that dairy producers need greater income protection, while policymakers fear that a statutory MSP could distort markets and raise consumer prices.

For now, the government has made its choice clear: India's dairy future will be built around stronger cooperatives, improved infrastructure and market-driven pricing rather than a guaranteed minimum support price. Whether this model can adequately protect dairy farmers from rising costs and price volatility remains a key question for the sector.

Dr. Akash Waghmare
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