New price structure, a death-knell for dairy industry?

By S. Vydhianathan

CHENNAI, JULY 15. Even as the dairy farmers are demanding an increase in procurement price, district cooperative milk producers' unions have fixed a new standard leading to reduction in purchase price of milk.

The Government, in April 1998, fixed a procurement price of Rs. 9 per litre for cow's milk and Rs. 12.20 a litre for buffalo's milk with 4.5 per cent fat and 8.5 per cent substance non-fat (SNF).

Following the farmers' demand, the government had agreed to procure cow's milk with 3 per cent fat and 7.7 per cent SNF on a pro rata basis, which worked out to be Rs. 6.67 a litre.

This standard was followed till last month. But from July some district unions fixed a new price structure based on revised standard norm.

They have issued instructions to village cooperative societies asking them to follow the revised price structure. As per the revised structure, the procurement price for milk with 3 per cent fat and 8 per cent SNF is Rs. 5.62 a litre as against the earlier price of Rs. 7.61, while the price for milk with 3 per cent fat and 7.7 per cent SNF is Rs. 4.50 compared to Rs. 6.67 previously.

A revised price list has also been issued for various combination of fat and SNF content, which is much less than the earlier price.

Earlier, the societies accepted milk upto 7.7 per cent SNF. Now they are not only confiscating milk with less than 7.7 per cent SNF, but also levying heavy fines on farmers for supplying it to the societies. In Kancheepuram and Tiruvellore districts if the SNF content is less than 8.5 per cent, then a fine of 40 paise per litre is levied for 8 per cent, 30 paise for 8.1 per cent, 20 paise for 8.2 per cent, 10 paise for 8.3 per cent and five paise for 8.4 per cent SNF.

While the arrears for the farmers are mounting every month the new price norm will sound the death-knell for the dairy industry in the State, according to dairy industry sources. In Tamil Nadu, majority of cows yield milk with SNF content ranging from 7.7 to 8 per cent only. It would be difficult to improve the quality of milk overnight.

They alleged that the situation in village societies worsened after the dissolution of elected representatives and appointment of special officers.

On many occasions, Special Officers were rejecting milk without any reason causing heavy loss to them, according to Mr. M. J. Prabu, former president of the Morabakkam Society near Chengalpattu. No doubt, farmers are forced to switch over to private dairies as they are unable to bear the harassment by officials, he added.

Meanwhile, sources in the Tamil Nadu Cooperative Milk Producers' Federation have justified the revised procurement price structure stating that it had been done with a view to increasing the quality. Thanks to the new norm, Chennai is getting milk with higher fat and SNF content.

Though the Federation is not directly involved in price fixation as the power has already been delegated to unions, the sources said the basic price had not been changed, but only the standard had been revised.

As per the new quality norm, there is every possibility for farmers to get better price for high quality milk. Farmers in Nilgiris district are now getting more than the price fixed by the Government.

According to farmers, only a microscopic minority are getting higher price while more than 80 per cent are affected by the new quality norm.

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Section  : Southern States
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