Explaining the reasons for a compulsion of raising milk prices GCMMF Managing Director said to Indian Cooperative that a sense of demotivation has crept in among farmers in the face of rising input costs and constant returns.
“The situation was scary as the demand for milk and milk products rose across the world but the zeal to invest in dairy business dwindled among farmers”, said Sodhi. There had been no rise of milk-price for the last two years, he underlined.
Sodhi said the cost of cattle-feed has increased by 30% in past year while the dairy prices have increased only in the range of 4-5%. . He also reminded that there are 36 lakh farmers who work with GCMMF and for them the cost of production has been on the rise.
It bears recall that the Gujarat Cooperative Milk Marketing Federation (GCMMF) has increased milk products across all six brands by Rs 2 per liter in Gujarat and five other states, to be effective from Tuesday May 21.
“In the last two years, there has been no increase in the milk product prices, whether it be cheese, butter or milk. The price paid to farmers has not increased vis-a-vis inflation. There were fewer incentives to the farmers to produce more,” CNBC quoted Sodhi.
Amul had also realised that the investments in dairy farming by the farmers reduced in the last year whereas the consumption is on the upswing.. “India is not just the world’s leading milk producer but also the leading consumer,” Sodhi added.
CNBC also presents a few cases where in fact due to the fierce competition dairy co-ops have lowered prices a little bit. It talks of several dairy co-ops of Maharashtra in this regard.
It is being said that being the market leader GCMMF’s raise in milk prices would compel other minor players to follow suit. “We have not reduced the price after 2014-15. So our price will be at par with the inflation,” R S Sodhi said.
Amul has revised the price of its Amul Gold 500 ml packet to Rs 27; 1-litre pack to Rs 53, and; 2 Litre pack to Rs 103. The Amul Taaza variants have seen a hike as well. Amul will now retail 500 ml SKU at Rs 22, and 1 litre at Rs 42. Amul’s premium milk range Amul Diamond will now be sold at Rs 28 for 500 ml pack and 1 litre at Rs 55.
Sodhi assured that the price increase will directly flow to the farmers and is meant to relieve them of their financial strain. “What is good for farmers is good for Amul; it being a cooperative”, stated Sodhi.