'Dairy industry in need of government support'

TRADE TALK/ Animesh Banerjee, president of Indian Dairy Association

India is the largest milk producing country in the world with production close to 100 million tonnes. However, milk availability seems to be an issue. Retail milk prices have gone up by Rs 2 a litre in the past one year, which is a rise of 9-14 per cent, considering a price range of Rs 14-22 a litre. Ajay Modi talks to Animesh Banerjee, president of the Indian Dairy Association, the apex body of Indian dairy industry, on the availability of milk and export ban on powder.

Is the country facing a shortage of milk?

We cannot say there is a shortage of milk in the country. The per capita availability of milk has gone up from 218 grams in 2002 to 232 grams now. We have not imported milk products in a major way. All the milk processing plants are running without any problem. However, with the increasing internal demand, the requisite push in production is missing. Therefore, at certain periods of the year, we witness a demand-supply gap.

Despite an increase in production, milk availability seems to be an issue. How can it be addressed?

We have a 9.2 per cent growth in sectors such as manufacturing and services. The growth has been facilitated by supportive government policies. Such policies should also be formulated for the agriculture sector. The milk farmers in the country are largely poor and do not have the resources to provide nutritional feed to their cattle.

How do you see the increase in milk prices?

There has been a nominal increase in milk prices, which is logical as there has been an increase in the cost of transportation, cattle maintenance, etc. Moreover, the cost of living has gone up. The fact that production increase is not commensurate with the growth in population has also helped prices go up.

Do higher milk prices mean more realisation for farmers?

Usually, 65-70 per cent of the final milk price goes to a farmer. But, a farmer sitting in a remote village has little idea of the price his milk fetches at the final sale point. There is a layer of delivery channel between him and the final buyer that leads to a lower realisation. At times, even the feed cost is not recovered.

How do you view the ban on skimmed milk powder export that was imposed in February?

The ban is a precautionary step, though it has affected the industry's reputation as an exporter in the international market. Regular monitoring of prices along with some buffer stocking is needed to avoid ad-hoc measures such as banning exports.