Badal writes to PM Modi for fiscal relief to milk producers

Seeking Prime Minister Narendra Modi's personal intervention for extending financial relief to state milk federations, Punjab Chief Minister Parkash Singh Badal has written to the PM for providing interest subvention on loans availed by them from banks.
Badal has requested Modi to frame a viable interest subvention scheme akin to the one floated last year for sugar mills.
In the letter, Badal said that state dairy cooperative federations, with the support of dairy cooperatives consisting mainly of small and marginal producers, were playing a proactive role in overall improvement of milk production in the country.
Since milk is a perishable commodity, the federations had to procure milk from these small and marginal producers during flush season, the CM said.

The federations are compelled to convert surplus milk into Skimmed Milk Powder (SMP) and Ghee for preservation and future requirements during the lean period, he said.
The CM said state milk federations had to avail cash credit limits or short term loans from banks in the last season for timely payments to producers, but due to very less market rates of SMP in comparison to its cost of production, they were unable to sell the stock of SMP.

"This situation has arisen due to huge fall in the prices of milk in the international market, resulting in a drastic fall in the current prices of the SMP and Ghee," he added.

Further, it has resulted in accumulation of huge stocks of SMP and Ghee with state milk federations which are unable to pay back their credit limits/short term loans to the banks, Badal wrote in his letter.
The prevailing rates of SMP are not likely to increase further and in such a case, state federations are likely to fall into debt, which will hit the dairy sector adversely, resulting in loss of livelihood for many small and marginal milk producers, he added.