Govt to create milk buffer stock to check price rise

To check the spurt in milk prices, government is considering a proposal to create a buffer stock of skimmed milk powder (SMP) in the country. Officials said the buffer stock expected to be created with milk processing companies, will be provided adequate subsidy by the government. 

“The proposal to create such a buffer stock was discussed recently at a meeting of the Inter-Ministerial Group in inflation,” a senior official said. The meeting attended by senior officials from department of food, consumer affairs, agriculture, finance and others also decided to create adequate domestic demand for SMP within the country through by encouraging its usage in government’s social welfare programmes.
According to industry officials, the country has stocks of around 111,000 tonnes of skimmed milk powder lying with different cooperative and private diaries, while the annual domestic demand is around 88,000 tonnes.

“Unless, government creates a fresh outlet for SMP, milk procurement could fall drastically, because the flush season for milk (when supplies increase) would start from October onwards,”  R.G. Chandramoghan, managing director of Hatsun Agro Products Ltd told Business Standard.

He said the excess stocks have been created after government imported around 50,000 tonnes of SMP two years back to tide over domestic shortage. “Exports are also not much viable as global prices have dropped,” another leading milk supplier in the private sector said. India’s annual milk production is estimated to be around 130 million tonnes, while demand is slightly more than that.

The Economic Survey of 2011-2012 estimated domestic demand for milk was growing at around six million tonnes yearly, while incremental yearly production in the past 10 years was around 3.5 mt.