As the lockdown eases across the state, the dairy sector is optimistic about demand picking up in the days to come, as well as increasing the procurement price of milk for farmers. Since the start of the lockdown, farmers have seen a drastic reduction in the procurement prices with dairies paying between Rs 20-25/litre for milk.
Dr Vivek Hindurao Ksheersagar, managing director of the Pune District Cooperative Milk Producers Union – which retails products under the brand name of Katraj — admitted that since the start of the lockdown, they have seen nearly 1 lakh litres of excess collection. “We are collecting around 2.5 lakh litres of milk per day but are able to sell only 1.5 lakh litres either in pouch or products. The rest is converted into anhydrous skimmed milk powder,” he said.
SMP is a commodity traded by dairies either in the domestic or international markets. Dairies in Maharashtra have complained of a complete stoppage in SMP trade as prices had dipped to Rs 215-20 per kg against a production cost of Rs 250-260 per kg.
Before the lockdown, dairy farmers were being paid a relatively higher procurement price of Rs 28-30/litre. But as demand for liquid milk dropped after the lockdown was imposed, dairies started price correction. At present, state dairies are reporting around 20 per cent excess collection which they are converting into SMP.
The present price correction has prompted farmers to plan street protests against the low prices. Gram sabhas are being convened to take a call about the way the protests would be organised and the All India Kisan Sabha has extended its support to the protest.
Meanwhile, most dairies have agreed that the procurement price is going to increase in the next few weeks as demand picks up. Initially, private dairies are expected to increase their procurement prices to around Rs 25/litre, after which further correction can be expected depending upon the demand.