Amid a glut in milk production in India as well as globally, dairy farmers are finding it difficult to get a fair price for their produce. The over-production of milk has created a problem of plenty for dairy plants, with inventory piling up.

The National Dairy Development Board (NDDB) has moved to Union government for incentives to help the milk –cooperatives to maintain the huge inventory that have piled up following the oversupply. Exports not possible due to glut situation globally.

“There is a glut situation globally. The prices of milk powder have declined sharply. Indian companies- co-operatives and private companies have accumulated huge stocks of milk powders.

In the co-operative sector alone about two lakh metric tonne of milk powder inventory has piled up leading to blocking of working capital”, NDDB Chairman Dilip Rath told Business Standard.

They are finding it difficult to sustain the milk procurement. To be in business they have reduced the milk price paid to the farmers. However, the co-operatives sponsored by NDDB also Mother Dairy have retained the price level and they have not reduced it. We have to wait for the market to improve, he added.

The Board has requested the Government of India to announce two schemes to ease the burden of the processors.

One is giving working capital loan at lower interest say at five per cent and secondly giving assistance to co-operatives to maintain the inventory like storage cost or similar other incentives which is under the consideration of the Ministry of Animal Husbandry and Dairying. Nothing has been announced as yet, said the Chairman.

India is the largest milk producers, produced 165 million tonnes for FY16. The sector is expected to continue its growth with a CAGR of around 16 per cent during 2017-2022.

Earlier this month, farmers in Maharashtra went on a seven-day agitation in Ahmednagar district demanding a minimum support price (MSP) for milk and free distribution of milk. The state government has announced Rs 3 subsidy which is also not helping and farmers will raise this issue in their nationwide agitation on June 1.

Last year, farmers stopped supplies to the cities on strike, pouring thousands of litres of milk on the streets across the state, to protest against the Maharashtra government for not fixing procurement rates.

Article sourced from www.business-standard.com