In a bid to expose the duplicity of private players on the issue of import SMP at ZERO duty, the co-op dairy major GCMMF has written a letter explaining how the vested interests are out to harm the interest of dairy farmers in the country.
Writing to the Secretary, Ministry of Food Processing Industries, GCMMF says taking advantage of the short memory of the public, private players are making a case for import at zero percent in wake of this year’s high price.
GCMMF reminds the Ministry that this phase of high price is temporary. “The country has taken the wrong step of importing huge quantity of milk powders (nearly 80,000 MT) at ZERO duty during 2011 and 2012 which has resulted into price fall in domestic market prices for more than one year. And hence Imports of any quantity are detrimental to the domestic milk producers, in the short and long run” GCMMF argues.
Readers would recall that there is a proposal being mooted by CII calling for importing SMP to the tune of 50000 MT at ZERO duty. GCMMF opposes the move and reminds that it opposed RCEP because of possibility of cheap imports from NZ/Australia which could have hurt the dairy farmers earlier.
GCMMF, the parent body of Amul which represents 3.6 million farmers says the move is purely motivated for private players’ benefits as they want cheap raw material and is not in the interest of the farmers or consumers.
Currently, overall the milk production in the country is growing at a healthy rate of 6 percent. While there may be some downfall seen in procurement by major co-operatives in this year due to exceptional weather conditions, high input costs and low procurement prices, but it has to be looked into totality, says GCMMF.
It must be noted that last year, due to lower price of commodities, all the private players had stopped milk procurement and as a result all co-operatives across India had seen unprecedented growth in milk procurement and hence this year the milk collection is little less than the previous year for co-op, the GCMMF letter points out.
“However, if we compare last two years data, you will realize that milk procurement is growing at a healthy CAGR of 7-8% (which is much higher than global CAGR of <2%) and as a result of which, there is no shortage of milk anywhere in the country. This proves that it is a case of only milk diversion and not shortages”, argues GCMMF.
The GCMMF letter makes a valid argument saying “Since last year SMP prices was Rs 150 per Kg, the private players (sweet makers, Khoa making, ice cream mfg etc) were using SMP instead of sourcing milk and as a result all milk was diverted to Co-op (private milk processors were not buying milk due to lower powder prices) and hence co-op has grown at over 20%. Whereas this year the situation has reversed with SMP price nearing Rs 300, all the private players have started using milk instead of SMP and hence co-ops are getting less milk as
compared to the last year.”
Attacking the vested interests GCMMF says “This lobby is making noise that SMP prices have doubled in last one year, but they have failed to compare it over last 5 years. It is important to note that SMP prices during 2014 were also in the range of Rs 250-300 per Kg which are today Rs 280-300 per Kg.”
The farmers of the country have started getting just correct price for their milk since last 3 months after suffering for 3 years) and at the same time there is no major impact on consumer price of the milk and overall there is no shortage of milk production in the country.
“We recommend that Govt should not surrender to such motivated representation of CII or any other body and should not allow imports of any dairy commodity at ZERO duty under any circumstances”, it says.
