Excessive stocks of skimmed milk powder (SMP) have become an issue of concern in Maharashtra’s milk sector. The state inventory of SMP has reached nearly 50,000 tonnes.
As a result, dairy or SMP owners in the state said that they are not in a position to to pay higher milk procurement prices for farmers.
Dairy owners in the state pay farmers rupees 23-24 per litre. And, before the second wave of COVID-19 lockdown, dairy farmers were paid higher procurement price of rupees 30-35 per litre.
Chairman of Sonai Group, Dashrath Man said due to the mis-match between demand and supply caused by the ongoing Covid-19 pandemic, demand for milk and milk products was lower, comparatively.
He added more to this and said, “On one hand there is less demand in the market-leading to stockpiling of unsold milk powder and on the other hand we cannot turn back farmers who come to us."
He further added, "It has become difficult to manage payments. If this situation continues, procurement prices may go down further.”
The state had faced a similar problem in the year 2018 following which the government had announced an export subsidy of rupees 50 per kilogram.
Dasrath also said, "Exporting milk powder will lift demand and improve sentiment."
Head of the Kolhapur District Co-operative Milk Producers Union Satej Patil said that dairies in the state have been seeking export subsidies from the Centre to overcome the problem of excess milk powder stocks.
The state government relen announced that Fair and Remunerative Price (FRP) would be considered for the dairy sector on the lines of the sugar segment.
Maharashtra State Milk Producers and Processing Professionals’ Welfare Association Secretary Prakash Kutwal said that if the third wave Covid-19 hits the state as predicted, the dairy sector shall be badly affected and it will become more difficult for dairies to pay farmers.