Heritage Foods inks deal with dairy farmers

The rising gap between demand and supply of milk is driving the hotel industries to ink one to one deal with a group of farmers on terms and condition suitable to them. Dairy farmers who are not able to organize themselves in cooperatives are fast falling prey to this development. Public sector lender State Bank of Hyderabad and city-based Heritage Foods India have entered into an MoU for financing dairy farmers in Andhra Pradesh. As per the MoU, SBH will extend credit to farmers who will supply milk to Heritage, said Renu Challu, Managing Director SBH. “Heritage will buy milk for these farmers and facilitate repayment of loan to the bank,” Challu told reporters. Sambasiva Rao, President, Heritage Foods, said the company will identify farmers who are eligible for loan and help them by providing veterinary support for selection ofbuffaloes and cows besides other necessary training. He said the MoU is valid for one year with renewable option and the company will have an assured supply of milk from the farmers who availed loan through them. The agreement with SBH will benefit the farmers as they will also get a subsidy of 25 per cent for a loan of Rs 5 lakh as per NABARD rules, Challu said. As per the current trend, milk prices will continue to rise over medium-term because of demand supply mismatch and increasing input costs. According to estimates, milk production will continue to lag at around 4 to 5 per cent per annum over the next five years despite the plan to double India’s milk production by 2020, Heritage Foods India, Vice Chairperson and Managing Director, N Bhuvaneswari, said in a statement.