Metro Dairy to roll back milk prices on political pressure

Apprehensive of the political fallout of hike in milk prices ahead of elections, the Mamata Banerjee-led government in West Bengal has successfully wielded pressure on one of the largest milk producers in the state to roll back prices within ten days of the price revision.   

Effective from 17th this month, Metro Dairy, in which the state government-backed West Bengal Milk Federation has a 47 per cent stake, has raised prices of 500 milliliters of toned milk from Rs 17 to 18, while that of double-toned milk from Rs 15 to Rs 16.

The move was aimed to curb losses, which the producers had been incurring since January this year, according to Sumit Deb, Managing Director, Metro Dairy.

“We had an internal discussion with the board members, and it was decided that the price rise would be rolled back from tomorrow on request of the milk federation,” said Deb.

A public private partnership,  Metro Diary is a product of a three-way joint venture between West Bengal Milk Federation, Keventer and National Dairy Development Board (NDDB), forming  the Benmilk Keventer Limited.

This financial year, the company had made profit between April to September, but since October, higher transportation cost had led to losses. Till January, the losses were compensated from accumulated profits.

However, beginning January the company turned into a net loss making concern, with net losses as high as Rs 1.9 crore only in the month of January.

One of the key reasons of the losses had been the high transportation cost the company had been incurring in transporting milk, as the quantum of milk supplied locally by the West Bengal Milk Federation had been gradually shrinking. From about 1 lakh kg per day, the supply had reduced to nearly half in the last few months, which necessitated the import of milk from states as far as Uttar Pradesh and Bihar, according to Deb.

Over the last few months, illegal supply of cattle from India to Bangladesh has been on the rise, which has reduced the supply of milk, among other reasons, according to sources.

Nationally,  milk prices have been going up too. Recently, milk producers in Mumbai increased by Rs 2 per litre. In Delhi and NCR region, the prices had already gone up by the same quantum last October.

Notably, as soon as the Trinamool government had come to power in 2011, milk prices were raised by a whopping Rs 6 per litre.

However, this time, the government is certainly in no mood to succumb to any anti-populist measures.