Govt to discuss milk powder export ban with co-ops

Seven months after the government imposed a ban on the export of skimmed milk powder (SMP), the Ministry of Agriculture has invited representatives from co-operatives and major private SMP players for a meeting on September 24 to discuss the ban.

The ban was imposed to make milk available to domestic consumers at a reasonable price since the price of milk was shooting up.

However, this in turn has prompted co-operatives to ask why cassein, a protein found in milk and used independently in many foods as a binding agent. But, the ban does not apply on its exports.

Major co-operative dairies like Amul, who account for over 50 per cent of the milk procured by the organised sector, have been protesting the move of the Government on the premise that it harms the interest of the milk producers.

A spokesperson for Amul said the growth in domestic milk production can be maintained if farmers are paid remunerative price of milk and that lack of access to international market will make them vulnerable to sell in domestic market at loss

"Since beginning of the year, international dairy commodity prices have been rising at a unprecedented rates. The international market price of Skimmed Milk Powder (SMP) has increased from $2,500 per tonne (Rs 110 ô kg) in January this year to $5,300 per MT (Rs 210 per kg) at present.

This makes export of SMP quite remunerative for Indian dairy exporters. However, because of the ban, domestic price of SMP has crashed from Rs 140 per kg in February this year to about Rs 103 per kg at present, " said an official from Gujarat Cooperative Milk Marketing Federation (GCMMF).

He added that if the export ban continues, the price of milk could fall to as low as Rs 4-5 per litre. Co-operatives are also questioning the motives behind several known dairies who are interested in the continuation of ban.

They say that some of these dairies are increasing their profit margins through increase in consumer prices by a huge percentage while keeping producer prices extremely low where only 50 per cent of the consumer's rupee would be passed on to the producer.

On the other hand co-operative dairies against the ban claim that they pass on over 80 per cent of the consumer's rupee to the producers.

Earlier, the Confederation of Indian Industries (CII) had circulated a note that supports the SMP export ban however this has only sparked more concerns with co-operatives.

"In between lobbying for own interests, no one is concerned about the farmer who is not encouraged to produce more milk since the cost of production has gone up so much," said R S Sodhi, chief general manager, gcmmf