Dairy farmers take a second blow in just two months as private milk companies have reduced procurement prices up to Rs 15 per litre. The price cut came into effect last week and is expected to have an impact on earnings of over 20 lakh dairy farmers by up to Rs 15,000 a month.
The companies had already announced a cut of Rs 6-10 per litre in March. Before March 23, private companies paid Rs 32-34 per litre to farmers besides monthly incentives, while Aavin paid Rs 32 per litre.
“All milk companies have slashed procurement price to Rs 18-19 a litre for SNF (Solid Not Fat) level above 8. Our earnings have come down by Rs 15,000-20,000 a month,” said a Kamalakannan, a farmer from Thandrampattu in Tiruvannamalai.
The permission for partial functioning of tea shops and hotels has failed to boost milk consumption which has fallen by 70 per cent since March 23. As a result, the private milk companies have reduced procurement price a second time, say milk producers.“Many farmers have opted for jobs under MGNREGA scheme in Tiruvannamalai, Vellore and Villupuram districts,” said Kamalakannan.
Prior to lockdown, the States’s daily milk demand was 2.1 crore litres. This includes 45-lakh litres earmarked for hotels and tea shops and 65-lakh litres sent for producing milk products such as ghee, milk powder, butter, sweets and other items.Consumption of milk and dairy products remains slow since people have lost jobs and have no money, said industrial sources. In addition, milk procured from farmers could not be converted into powder owing to infrastructural constraints.
“Excessive milk procured can no longer be converted into milk powder. The milk products consumption continues to remain low. Unless tea shops are allowed to function fully, the demand will increase,” said a source from a private milk company.
In contrary, the State owned Aavin’s milk procurement increased upto 35 lakh litres a day. A senior Aavin official said, “Since Aavin mainly caters to households, our demand remain high. In Chennai alone, we supply nearly 13.8 lakh litres a day.”