As milk prices fall in Maharashtra, dairy farmers feel the squeeze

Dairy farmers in Maharashtra have started to feel the pinch of the lockdown with procurement prices of milk dipping by 20 to 50 per cent. Decline in their income also means lower amount of feed being given to cattle.

Due to lack of demand, farmers who used to make processed milk products such as curd, butter, ghee and khoya as a cottage industry, now sell milk at lower rates in the market. Khoya is an intermediary milk product, which is used as a raw material for making traditional sweets.

Due to the lockdown, milk demand from restaurants, tea stalls and sweet shops has come to a standstill. The State Government has assured that 11 lakh litres of excess milk will be procured per day from farmers by the cooperative dairies for which funds would be provided by the State Government.  However, it has not translated into additional income for the farmers.

Before the lockdown, cow milk was sold by farmers at Rs. 30 to Rs. 35 a litre; today, it has dipped to Rs. 20 to Rs. 22 a litre. In some places, it has even dipped to Rs. 12 per litre. This milk is being procured by private dairies. On the other hand, due to logistics issues, animal feed supplies have become irregular, leading to a considerable jump in prices.

Maharashtra government’s scheme to deal with excess supply of milk by encouraging dairies to convert the excess milk into powder and butter has not taken off as expected. A month after the announcement, instead of the targeted 10 lakh litres of excess milk that was to be procured per day from farmers, the cooperative dairies are procuring only around 5 lakh litres.

The state government had promised to provide funds to the dairies for procuring 10 lakh litres of excess milk per day. The government made it mandatory for dairies to pay farmers at least Rs 25 per litre of milk and the scheme was on till May 31. Dairies says they are yet to receive payments from the government, while the government says dairies are yet to submit farmer data.

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