Page 16

16

Pricing Trends in Dairy Products: 2018 Domestic milk and milk products Price:

International milk and milk products Price:

Source: Market watch

Source: Market watch

Source: USDA

Source: USDA

Source: USDA

Source: Market watch

Why are small dairy farmers in India out of business?

I

ndia’s milk crisis has been pushing small dairy farmers out of business and helping dairy multinationals to expand at their expense. A report stated that localised and people-driven milk markets based on agro-ecological livestock culture would be on its way out due to current milk crisis.Titled ’The milk crisis in India: The story behind the numbers’ establishes a link between global development in dairy industries and slowing down of local small-scale dairy business. The global slump in skimmed milk powder (SMP) prices since 2015 is a result of China and Russia stopping import of SMP. This created surplus in the (European Union) EU and sent ripples in the global market. The situation worsened after April 2015 when the EU scrapped its milk quota, which regulates the production of milk and control its overproduction. The increase in production of milk in these countries has affected export of SMP from India. The export from India during fiscal year 2014-15 reduced to 30,000

tonnes as compared to 130,000 tonnes the year before. In April 2015, SMP was being sold by private dairies at Rs 180 per kg, compared to Rs. 270 in the previous year.Indian dairy companies had attempted to dispose of SMP stocks in domestic market after recombining it with butter fat and converting it back to liquid milk. It led to slump in procurement price of milk in domestic market. Butter fat, is needed to make milk from SMP was imported in a large amount at a cheap rate from the EU and the US in 2014-15. The imports of subsidised butter fat into India rose from 25,000 kg in April 2014 to 704,167 kg in November 2015. Less money from milk is pushing small dairy farmers in debt. While this trend is global, Indian farmers have not received any support from the government even as their counterparts in the EU and USA have.The decision of private dairies and cooperatives to dispose SMP in the domestic market led to a price war, resulting in a further fall of prices

Dairy Times

Source: USDA

and even lower procurement price. Cheap milk brought temporary relief to consumers; the quality of milk available is poorer. The milk made from SMP has lower nutritional value as compared to fresh milk. Fresh milk is richer in vitamins and minerals than SMP. Moreover, a consumer is not able to determine the age of milk. Dip in price due to surplus in global market has given opportunity to big companies to expand into other countries. It pushed small dairy farmers out of the market but helped big corporations and cooperatives to expand their business. The procurement prices for small farmers have reduced even as the cost of production increased due to drought. Before May 2015, the production cost for a litre of milk was Rs. 26 per litre. Today, because of a severe drought in the region, the cost of production is Rs 30 per litre of milk. The procurement cost varies between Rs. 28-35 per litre depends on content of fat. Before May 2015, the cost of milk procurement was varied between Rs 32-38 per litre.

Dairy Times Feb Mar 2018  
Dairy Times Feb Mar 2018  
Advertisement