Indian Government is boosting dairy sector … Don’t you know it?

Indian Government is boosting dairy sector … Don’t you know it?

Dairy Sector


Dairy sector witnessed difficult time this year, we all are aware that milk production is rising day by day while the procurement prices are not enough. During the last six months, the procurement price is constantly declining while the retail price is at the same level. The average procurement price for one litre is Rs 25 – 35 per litre while the retail prices reaches Rs 50. The reason behind such a situation is an overproduction of milk and crash of skim milk powder (SMP) prices in the international market. That’s why the producer and consumer both are in stress.  

Many state governments where farmers lobby is strong had done what they can, to support the dairy sector / industry in their respective states. Government policies should handle these situation efficiently.

In India, the government takes the action but a little too late or only after the public start agitations. A few days back Gujarat government announced an export subsidy of Rs 300 crore for next six months. Recently after farmers agitation, Maharashtra government announced a minimum procurement price of Rs 25 per litre for milk. Goa, Karnataka and Kerala government are already paying a premium of Rs 50 to 70 per litre of milk for the producers pouring milk in the cooperative sector.

Ministry of Agriculture and Farmers’ Welfare took the remarkable steps to control the ongoing milk crisis in Maharashtra. A press note released on 19th of July says:​

Communications with Secretary, M/o Women and Child Development, Secretary, D/o School Education and Chairman Railway Board has been done and states like Karnataka, Bihar, Rajasthan etc, have started supply of milk/WMP/milk products to schools under ICDS programme and Rajasthan through Mid-day meal scheme.

The Department of Agriculture and Farmers‘ Welfare has increased the import duty of Whey milk powder from 30% to 40% and notified by DGFT on March 27, 2018.

DGFT decided to provide the export incentive for milk powder and Casein etc. at 10% in its notification on July 13, 2018. This includes Nepal and Bhutan.

For the benefit of farmers and considering the present scenario, the Department has again requested to increase the export incentive for milk and milk products and Casein from 10% to 20%.

Under “Support to State Cooperative Dairy Federation” scheme, a corpus of Rs 300 crore in perpetuity with NDDB is to be kept and used for providing soft loans for working capital.

A soft loan with simple interest at a rate of 5 % is given to various cooperatives.

Source: Pashu Sandesh, 22nd July 2018

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