Government extends subsidy to cooperatives to allow more pay per litre of milk

INDIA – The state government of Maharashtra has ordered cooperatives to pay farmers US$0.36 per litre of cow’s milk, an increase from the previous US$25 to US$0.28 paid per litre to end the dairy farmers’ strike, reported ET Retail.

According to dairy development minister Mahadev Jankar, the government will extend its subsidy to US$0.073 per litre to the dairy cooperatives effective July 21 for a period of three months, this in an effort to ensure more pay to farmers.

“By extending the subsidy to co-operatives the government will have to bear a burden of US$10.9m per month,” he said

The decision was welcomed by Raju Shetti, the leader of Shetkari Swabhimani Sangathna (SSS), the farmers’ union who called off the dairy farmers’ strike that called for an increase of US$0.073 per litre in the procurement price of milk.

“We wanted the farmers to get more price for their produce.

We have achieved our goal,” said Raju.

He added that the state will decide whether to continue the grant or not based on a review of the price of the skimmed milk powder in the international market.

Low supplies

The strike had devastating effects on the entire milk supply chain with reports of significantly low stocks and ‘almost nil’ supplies.

Maharashtra milk producers led by Shetti had stopped milk supplies to dairies and collection was severely affected in the state for several days.

Some dairy farmers spilled milk onto the streets blocking state highways with their cattle in response to the call for a ‘Chakka Jam’ given by farmer body Swabhimani Shetkari Sanghatana (SSS).

Mumbai and Pune were also affected with collection reported at 20-25%.

This comes after the government announced plans to give 10% export incentive on the export of milk, milk powder, and milk products.

The government is also considering to cut GST on ghee and butter to 5% from 12% and increasing import duty on lactose to 60% from 40%.

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