Milk Costs Hiked: Inflation-hit Dairy Farmers Say Too Little Too Past due

The hike in the price of milk sold by Verka in Punjab, a subsidiary of Milkfed, by Rs 2 from Thursday may distress the common man, however, milk producers rue that a hike of at least Rs 5 was needed to help dairy farmers sustain in the wake of skyrocketing production costs.

Gujarat Cooperative Milk Marketing Federation (GCMMF), which markets milk and other dairy products under the Amul brand, had on Wednesday increased milk prices by Rs 2 per litre across India citing an increase in input costs.

Sources say the milk producers had demanded an immediate hike of Rs 5 but the cooperative minister affected a hike of Rs 20 per kg of milk fat to soften the blow of inflation and the increasing cost of production for the state’s milk producers.

Farmers say staying in the business has become extremely difficult as the cost of production has increased by up to 60 per cent thus breaking the back of a once robust allied sector of agriculture.

Dairy farmers say that up to 75 per cent of the cost of production comprises the feed for the animals. “Owing to the export of soybean and the resulting shortage in the country, the cost has gone up to Rs 6,900 from Rs 3,200 per quintal in winter. Due to Covid-19, the crop production has also suffered adding to the hike in prices,” they said.

“If not the protein-rich soybean, the cost of desi ‘Sarson Di Khall’ (mustard cakes) has also increased from Rs 1,600 to 1,800 to now Rs 3,200, which was our second-best option.”

Next comes cottonseed feed which has also gone way out of the reach of struggling dairy farmers to Rs 5,000 per quintal from Rs 3,200.

“If the milk prices are hiked by at least Rs 6 only then will the dairy farmers earn Rs 4. With a Rs 2 hike, the farmers will get Rs 1 or at the most Rs 1 and 25 paisa only,” said Daljit Singh Sadalpura, President, Progressive Farmers Association.

Dairy farmers are being forced to invest out of their own pocket and the sector is not sustainable anymore for many. Some are forced to sell their animals, he lamented.

“People must understand that to get the supply of unadulterated good quality milk, they will have to pay the cost also or else only adulterated milk will be available in the market at low cost,” he added.

Sadalpura further explained that dairy farmers incur cost on diesel needed for tractors, milking machines and gensets etc. for a farm size of about 100 cows, four tractors function all day consuming at least 100 litres of diesel besides hike in scantily available labour costs. The per-acre cost of corn was Rs 30,000 last year but it has now gone up to more than Rs 40,000 this year.

The Rs 2 hike has come effectively after only five years. Price was hiked slightly before Covid struck. Shutting down of private plants has led to no production of milk powder. Milk consumption went down as no weddings were allowed, restaurants were shut, said Singh. “If cooperatives die, the dairy sector will also die as it is surviving only because the cooperatives pay the farmers up to 85 per cent of the costs.”

Cooperation Minister of Punjab, Sukhjinder Randhawa said that Milkfed Punjab has always stood by the dairy farmers during the time of the Covid epidemic when some private buyers had stopped buying milk and others had reduced the price of milk. Milkfed, despite its limited resources, not only procured the entire milk but also did not reduce the price of milk, he said.

MD Milkfed Kamaldeep Singh Sangha said that the recent increase in the prices of diesel and petrol as well as the sharp rise in the prices of raw materials used in animal feed such as soybeans, husks, sorghum etc are likely to reduce the profits of milk producers. As a result, the decision taken by the Cooperation Minister to increase the price of milk by Rs 20 per kg fat to improve the economic condition of 2.5 lakh milk producers affiliated with Milkfed would benefit the existing milk producers.

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