Parliamentary Panel Urges Government to Review Milk Price Determination Mechanism for Farmers

A parliamentary committee has highlighted that milk prices have risen less than the average food inflation rate. They urged the government to review how milk procurement agencies set prices to ensure farmers receive fair returns. The Standing Committee on Agriculture, Animal Husbandry and Food Processing presented a report in Parliament concerning the Department of Animal Husbandry and Dairying's budget requests.

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The report noted that milk prices have increased from Rs 30 in 2014 to Rs 45.98 by December 2024. Despite this rise, milk inflation has remained significantly lower than overall food inflation, which was around 6% compared to just 1.6% for milk and its products. This discrepancy raises concerns about the income of dairy farmers who rely heavily on milk sales for their livelihood.

Milk Price Determination and Farmer Returns

The committee expressed concern over the fairness of price determination by cooperatives and private dairies. They recommended a thorough examination of the pricing mechanisms used by these procurement agencies to ensure farmers receive just compensation. The panel believes that the current system does not adequately benefit millions of dairy farmers.

According to the department, cooperatives and private dairies set milk prices based on market conditions. While retail prices differ from what farmers receive due to additional costs like transportation and processing, about 70-80% of the consumer price is returned to farmers in the cooperative sector.

Adulteration Concerns and Regulatory Actions

The committee also raised issues about widespread adulteration in milk and its products, affecting both farmer earnings and consumer health. They recommended better enforcement of laws against adulteration and suggested developing tools for testing milk purity at home.

Regarding the Delhi Milk Scheme (DMS), the committee questioned why its license was suspended by FSSAI despite its contribution to government revenues. They requested a detailed explanation from the department, including reasons for suspension, compliance steps, revival plans, and DMS's brand value in Delhi's retail markets.

Delhi Milk Scheme's Role and Challenges

DMS, established in 1959, operates under the Department of Animal Husbandry & Dairying. The committee is concerned about its future given its significant brand presence in Delhi. They seek clarity on actions taken or proposed for its revival and adherence to FSSAI regulations.

The panel's report underscores the need for a balanced approach to pricing that supports both farmers' livelihoods and consumer interests. Ensuring fair practices in price determination and addressing adulteration issues are crucial steps toward achieving this balance.