After opening the door for distribution of pulses in welfare programmes, the central government has urged states and ministries to consider distributing milk under the mid-day meal programme and the Public Distribution System.
The argument is that this would create additional domestic demand for the commodity and prevent a sharp fall in price.
It has also directed co-operatives to boost their procurement of milk in view of good production this flush season that starts from November and lasts till March.
"This will increase the consumption of milk and subsequently better returns to dairy farmers," went an official statement.
Some weeks earlier, the Union Cabinet had approved a proposal for enabling ministries and departments to distribute pulses in welfare programmes from its buffer, alongside grain. Described as part of a bigger move to create domestic demand for agricultural commodities, particularly those which have seen a sharp fall in prices in recent months.
The government said milk co-operatives have also been advised to set a target of two per cent share in world trade by 2020. National Dairy Development Board (NDDB) has been asked to prepare an action plan in co-ordination with states to achieve the target, it added.
India's milk production in 2016-17 was estimated at 164 million tonnes, about nine mt more than a year before.
The government has set a target of 255 mt of milk production by 2022, part of the aim of doubling farmers' income by then.
"The total share of milk procurement by cooperatives is to be increased from the existing 10 per cent to 20 per cent of production by 2022. This will ensure better returns to dairy farmers," the ministry of agriculture said.
In a recent meeting, the ministry asked major cooperatives such as Amul in Gujarat, Nandini in Karnataka, Sudha in Bihar, Vita in Haryana, Verka in Punjab and PCDF-Parag in Uttar Pradesh to ensure milk was purchased from farmers without discrimination.
Co-operatives' milk procurement rose by 20.4 per cent during November 2017 from the year-ago period. The procurement rate was higher by 4.7 per cent.
The ministry said the country had a stock of Skimmed Milk Powder (SMP) of 116,000 tonnes due to higher conversion, expected to increase to 200,000 tonnes by end-March 2018.
About Rs 10,881 crore of financial assistance is being provided under the Dairy Processing Infrastructure Fund to milk federations and unions for the purpose. States and co-operatives have been asked prepare plans accordingly, the statement added.
To check adulteration, states and Union Territories have been told to collect 500 random samples of milk every month at village level. The Food Safety and Standards Authority will co-ordinate. States have also been advised to instal adulteration testing equipment at villages. Financial assistance of Rs 100 crore has been earmarked for that.