Post-campaigning, Gujarat dairies pare cost of milk procurement

Post-campaigning, Gujarat dairies pare cost of milk procurement

Ahmedabad: There will be one group of people who will be looking unhappily at the counting of votes that begins in Gujarat over the weekend and which marks the end of the election process in the state—the state’s milk producers.

That’s because dairies that buy milk from these producers have already begun reducing procurement price by 5-10% this week; the final phase of voting ended on 16 December.

Some dairies were keeping the price of milk artificially high despite abundant supply because their chairmen were contesting the polls. And they were paying higher procurement prices to keep their political vote bank, the milk producers of rural Gujarat, happy. Other dairies had no option, but to follow suit.

Now, with elections over, most dairies are reducing their procurement price.

“We have brought down our milk procurement price from Rs300 per kilo of fat to Rs280," says H.A. Nadiadwala, managing director of Ahmedabad-based Uttam Dairy. His dairy buys more than 75,000 litres of milk every day from farmers in Ahmedabad district.

The Banas Dairy of Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF), which owns the Amul brand of dairy products, too, has revised its procurement price from Rs300 per kilo of fat to Rs275-280 this week. The federation has 13 dairies and most of them are expected to cut prices in the next few weeks.

Vipul Chaudhury, chairman of the biggest dairy in Gujarat, Mehsana Dairy, is a BJP (Bharatiya Janata Party) candidate and contested the elections from Bhiloda constituency in north Gujarat. Baroda Dairy chairman Madhu Shrivastava is a BJP candidate from Waghodia in Vadodra district in central Gujarat, while Ramsinh Parmar of Kaira dairy is a Congress candidate from Thasra in central Gujarat. Two other board members of Banas dairy are in the electoral fray .

“As of today, our 13 cooperative dairy members are collecting 95 lakh litres per day of milk. This is 20% higher than last year," says a senior GCMMF official who doesn’t wish to be named. This is higher than what was seen in last winter. The highest milk procurement during last fiscal was 8.9 million litres one day in January.

GCMMF officials say milk procurement could reach 10 million litres per day in January. Of the 13 cooperatives that are members of GCMMF, Mehsana collects about 2.3 million litres of milk every day, followed by Banas Dairy (2 million) and Kaira Dairy (1.4 million).

Traditionally, milk production goes up in winter and dairies bring down the prices of procurement, but revise them upwards in summer.

Another GCMMF official, who does not wish to be identified, says the federation pays around Rs17 crore a day for milk now, compared with Rs13 crore during winter.