Milk Price Hike Is Pain For Indian Government

FAIRLIFE -- 

NEW DELHI - After the onion, the milk seems to pinch consumers' pockets. On Saturday, the Gujarat Cooperative Milk Marketing Federation (GCMMF), better known as Amul, and Mother Dairy, which are owned by the National Dairy Product Development Board, increased the maximum retail prices (MRP) of their various milk varieties. Bags in Rs 2 per liter.

This was the second rate revision carried out by the two major dairy companies in the current year.

However, it can be seen that the increase in the milk MRP during the NDA government's mandate has been quite insignificant since it began its first mandate on May 26, 2014. The general increase in the past five and a half years is only 8 rupees per liter, and half has occurred in the past seven months.

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As the largest "harvest" in India by value that is bought and consumed daily, milk is more representative of the return of food inflation. Unlike onions, whose prices may drop after March, the milk supply may take longer to calm down.

This is in contrast to the time since this government took office in 2010, when the MRP for whole milk on the Delhi-NCR market increased by 18 rupees per liter and for milk rose to 14 rupees tonic.

The price trend also reflects consumer price inflation, which during the first term of the NDA from June 2014 to May 2019 was below 3.3% on an annual average, compared to 11% more between 2009-10 and 2013-14 under the UPA led by Congress.

Although consumers have been treated fairly well during this diet, this does not apply to farmers.

The average purchase price paid by the unions of the GCMMF to milk producers rose from 298 rupees per kg fat in 2008 to 2009 to 535 rupees in 2013 to 2014. This results in whole milk, 6 percent fat and 9 Percent contains fat-free solids, an increase from 18.42 rupees to 33.06 rupees per liter or 79.5 percent. Since 2013/14, however, the average producer price has only increased from 155 rupees to 690 rupees per kg fat or 42.64 rupees per liter in the period 2018-19. In five years it will be less than 29%.

Consumer price inflation stood at 10.01% in November. It was the first time since December 2013 that it was a single value. This is also reflected in milk, as cooperatives and private dairies recorded an acquisition of 4 to 5% less this year compared to 2018-2019.

The GCMMF unions alone may have seen their milk collection drop by 5 to 6% for the first time, despite paying 100 to 110 rupees per kg fat to their 30,000,000,000 ruby ​​producers. Meanwhile, prices for skimmed milk powder have risen last year doubled around 300 rupees per kg.

The reasons for the scarcity of the supply can partly be climatic and partly structural. The milk washing season, in which animal production increases due to the better availability of feed and water, as well as lower temperatures and humidity, usually lasts from October to March. This time the download was delayed due to excessive rainfall from September to November.

“It rains at times, so much that even the open fields on which the animals graze are flooded. The feed does not rise because the water has to go down first. Now that winter has started and the rain has decreased, the river should decrease. With the end of the wedding season, the demand situation should also ease, "said the president of a large private dairy company based in the south.

For structural reasons, R Sodhi, managing director of GCMMF, believes farmers have been forced to reduce herd size and invest little in animal nutrition and health due to the ongoing three-year low price period. In addition, the cost of corn, cottonseed flour, oil-free rice bran and other food ingredients has also increased. "The recent price reviews should encourage farmers to buy more animals and feed them better," he said.