As our dairy sector integrates itself increasingly with the global one, the volatility in international markets is likely to be transmitted to a large extent to our domestic market, the chairperson said.
She added, “I fear that all too often when we think of our position in the global market and the steady growth in our milk production, we see ourselves as growing exporters of dairy commodities, and believe this could also improve returns to our milk producers. While this may be so, we need to appreciate that pursuing this path without ensuring that the domestic market is met would result in competition between the domestic and export markets and an increase in prices for domestic consumers.”
She claimed the rise in feed costs from an increase of nine per cent in 2011-12 to 27 per cent in 2012-13 is also leading to higher production costs and therefore higher milk prices. At some stage, the rise in price of milk could erode the ability of many families to purchase milk.
About seven per cent of total world milk production is traded. Developed countries account for about three-fourths of exports and developing countries account for about three-fourths of the imports.
Currently, the organised sector handles only about 30 per cent of the marketable surplus. Patel feels in the interest of both producers and consumers, it is necessary to increase the share of the organised sector comprising cooperatives, producer companies and private companies. The National Dairy Plan has set this target over the next 15 years at 65 per cent.