Maharashtra’s dairy farmers dump milk on the streets in protest against low procurement prices

Farmers belonging to the Shetkari Sanghatana during a protest demanding an increase in milk procurement prices, at Nandani Village in Kolhapur on July 21.

Maharashtra’s dairy farmers have begun a protest against the low prices they have been getting for milk over the last three months. Organisations such as the All Indian Kisan Sabha and the Shetkari Sanghatana are agitating for remunerative milk prices. On July 20, they dumped milk on the streets across towns in the State. Shetkari Sanghatana members stopped milk tankers of the Kolhapur District Milk Cooperative Milk Producers from ferrying milk to Pune and Mumbai. The cooperative’s milk retails under the brand name Gokul and is very popular with urban consumers.

Farmers say milk prices have fallen by 40 per cent since the beginning of the lockdown. The price started coming down in April. Like all businesses, the dairies that used to procure milk from the farmers cut the purchase price they normally paid. Farmers used to receive Rs.30 to Rs.35 a litre for milk that had 3.5 per cent fat and 8.5 per cent solid-not-fat, or SNF. After the lockdown, prices dropped to Rs.17 to Rs.22.50 a litre. Now that the lockdown has been largely lifted and the local economy has started functioning, farmers expect to be paid the old prices. Dr Ajit Navle, general secretary, All India Kisan Sabha, Maharashtra, said that since milk sales have resumed to pre-lockdown level there was no reason why farmers should not receive their share of the profits.

Dairies say that they are still hit by a backlog of payments because of the pandemic and cannot afford to meet the farmers’ demands as yet. Shubham Gupta of Bharat Dairy in Mumbai, who supplies milk to homes and commercial enterprises, says he has not been able to collect dues from 60 per cent of his customers because they have either wound down their businesses temporarily and left for their home towns or are themselves citing an inability to pay their dues because of the lockdown. Gupta used to buy milk directly from farmers but now he buys from a middleman who give it on credit.

In the early days of the lockdown, there was a rush to purchase groceries and dairy owing to customers’ fear of shortages. Milk, butter, milk powder, ghee, cheese, paneer, ultra-heat-treated milk that is sold in cartons, ice cream, Indian sweetmeats and all other dairy products disappeared off the shelves. However, though milk was considered an essential item and allowed to be transported over district boundaries, producers of extraneous milk products such as sweets and institutional manufacturers of ice creams, chocolates, cheese, and so on, had to stop their production since their products were not on the list of essential items. As a result, the quantum of milk procurement dropped.

Dairies used to convert excess milk into skimmed milk powder and then trade it as a commodity, or reconvert it to liquid milk in the months when milk production drops. During the lockdown, there was obviously a vast amount of excess milk and this too was converted into skimmed milk powder. At present, there are around two lakh tonnes of milk powder stock in the country. Market economics dictates that if this stock is disposed of at one go, there will be a sharp drop in prices and dairies are not willing to take that hit. It is a stalemate. Dairies are not paying farmers. Farmers say that dairies can afford to and, therefore, say they would rather waste their milk than sell at a low price.

Farmers are demanding a direct subsidy between Rs.5 to Rs.10 a litre, which will ensure a realisation of Rs.25 to Rs.30 a litre and take care of their production costs. They say the subsidies will act as a safety net against price fluctuations. For their part, dairies have asked the government for export subsidies so that they can unload the over-stocked skimmed milk powder in foreign markets. They say this will restore balance in the local economy and they will be able to pay farmers the regular rates. The dairies have also protested against the Centre’s decision to import 10,000 metric tonnes of milk powder when there was a surplus in the country. Farmers’ organisations support this demand of the dairies and have demanded cancellation of the import of milk powder.

During the lockdown, the State government had purchased milk at Rs.25 a litre in order to hold the price, but it could not purchase more than seven lakh litres a day. Daily milk production across the State is 1.40 crore litres, of which the private sector buys 90 lakh litres, milk cooperatives 35 lakh litres and commercial eateries 15 lakh litres.

A meeting of farmers’ representatives and dairy firms with the government was held on July 21, but it achieved little. Ajit Navle described it as “disappointing”. He said that Sunil Kedar, the Minister for Animal Husbandry and Dairy Business Development, was open to negotiations but gave no commitment other than saying that he would present their cases to the Chief Minister.

“We will keep up our andolan until the farmers get Rs.30 per litre,” said Navle. The Bharatiya Janata Party (BJP) has also joined the protest and has threatened to escalate it from August 1 if the government does not respond. Balasaheb Thorat, chairman of the Maharashtra Pradesh Congress Committee who is also Revenue Minister, remarked that considering the Centre was planning to import skimmed milk, the State wing of the BJP had no moral right to join the protest. “It is like agitating against yourself,” he said.

(The accompanying video is courtesy Alll India Kisan Sabha.)