Milk Price Determination: Panel Asks Govt to Examine Mechanism

New Delhi, Mar 19 (PTI) A parliamentary panel has pointed out that the increase in milk prices is less than the average rate of food inflation and asked the government to examine the mechanism of price determination by milk procurement agencies to ensure better returns to farmers.

A Standing Committee on Agriculture, Animal Husbandry and Food Processing submitted a report in Parliament on the Demand for Grants related to the Department of Animal Husbandry and Dairying.

The Committee asked the department to furnish a detailed note, including the reasons for the suspension of the license of DMS (Delhi Milk Scheme) by the food regulator FSSAI.

"The Department has stated that the average milk price has increased from Rs 30 in 2014 to Rs 45.98 in December 2024. Further, the Department has acknowledged that the milk inflation has remained much below the average food inflation during the last one year while the WPI inflation in food was recorded at around 6 per cent, it was just 1.6 per cent in milk and milk products," the report said.

The Committee are of the view that there is widespread adulteration of milk and milk products, which results in the farmers not getting remunerative prices for their milk sold in the market and also affecting the health of consumers.

The panel also noted that the increase in milk prices is less than the average rate of food inflation in the country.

"This, the Committee believe, is not benefitting the millions of dairy farmers who depend solely/ predominantly on the sale of milk for their livelihood, as the dairy Farmers' income from the sale of milk, is not keeping pace with food inflation. The Committee, therefore, is apprehensive of the fairness of price being determined by the procurement agencies be it cooperatives or private dairies," the report said.

The panel recommended the department to "examine thoroughly the mechanism of price determination by milk procurement agencies to ensure just and reasonable
price".

The report mentioned that the price of milk to farmers is being determined by the cooperatives and private dairies based on market conditions.

The retail price of milk and the price provided to procure milk from milk farmers are different as other costs like transportation, processing, packaging, marketing, sales & distribution, infrastructure costs etc. are also incurred.

As per the department, about 70-80 per cent of the consumer / retail price is
paid back to milk producer farmers in the dairy cooperative sector.

"Further, the committee feels there is a lack of proper implementation of laws
relating to adulteration checks and prevention of milk and their products, accordingly, the Committee recommend the department to take appropriate action and efforts may be made to devise an instrument to test the purity of milk at the household level," the report said.

On the DMS, the Committee said it is not clear "why such an outfit which is contributing to the government revenues rather than depending on the government for survival, is being made to suffer".

The Committee asked the department to furnish them a detailed note, including inter alia (i) the reasons for the suspension of the license of DMS by FSSAI; (ii) the steps taken to ensure its adherence to FSSAI stipulations; (iii) revival steps taken/proposed to be
taken and (iv) huge brand value/recall value it enjoys in the retail markets of NCT, Delhi.

The Delhi Milk Scheme (DMS), set up in 1959, is a subordinate office of the Department of Animal Husbandry & Dairying, the report said.