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Prices slumping, include milk in Rs 35-bn stabilisation fund: Farm Ministry

Move will enable states and milk unions increase procurement from farmers

Sanjeeb Mukherjee  |  New Delhi 

Prices slumping, include milk in Rs 35-bn stabilisation fund: Farm Ministry

To stem the sharp fall in prices, the has sought inclusion of the commodity under the (PSF) scheme of the department of consumer affairs.

This, officials said, would enable state governments and unions to purchase bulk quantities of fresh from farmers and convert them into skimmed powder (SMP) and ghee for future use.

How much of this actually translates into actual purchases this year remains of seen, as almost 99 per cent of the Rs 35 billion allocated as Central share under the fund has been exhausted till December, and much of this has gone into buying pulses from farmers.

Officials said once is included under PSF, states would be able to distribute the commodity through welfare programmes such as the public distribution system (PDS).

The Centre contributes half of the total fund under PSF, while states put in the rest.

The in mid-December had issued an advisory to states and other Central ministries and departments to include under mid-day meal, and other welfare programmes including distribution through Aanganvadis.

Recent measures to create additional domestic demand for have come against the backdrop of a sharp fall in procurement prices mainly due to weak global markets and excess supplies during the flush season.

The flush season for runs from November to March, when supplies are usually on the higher side.

Though prices tend to move downwards during this period, this year, they've been particularly bad as procurement rates have dropped to their lowest levels.

A weak global commodity market for since 2015 has exacerbated the fall.

SMP, which quoted at around $5,000 per tonne around 2015 in the global markets, is now selling at below $2,000 per tonne.

Officials said fresh procurement rates in Maharashtra have dropped to Rs 18 per litre from Rs 26-27 last year, while buffalo rates in Punjab and Haryana are down to about Rs 26 per litre from Rs 38-40 last year.

Though cooperatives have upped their procurement by 25-30 per cent this year, there is a limit to which they can support. The private sector has been poor in buying this year as exports are unviable.

Overall production in 2017-18 is estimated at over 6-7 per cent more than last year’s production of 165 million tonnes.

The government estimates that as of now country has a stock of of 116,000 tonnes due to higher conversion which is expected to increase to 200,000 tonnes by end-March 2018.

First Published: Fri, January 05 2018. 19:41 IST