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MENAFN - Khaleej Times - 01/12/2012

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(MENAFN - Khaleej Times) This is one 'White Revolution' that has gone sour. Andhra Pradesh is currently faced with a glut in the dairy industry prompting the state-owned AP Dairy Development Cooperative Federation (APDDCF) to declare a "milk holiday" twice a month. Consequently, there will be no procurement of milk on these two days to overcome storage problems as also rising cost of procurement.

The overstretched Federation, which has been unable to cope with the rapid increase in milk production over the last few years, is left with an extra 170,000 litres of milk to handle and it has no infrastructure to process the milk.

Industry experts say that though the dairy sector had witnessed phenomenal growth with many entrepreneurs taking to dairy farming in recent times, there has been no cohesive strategy for commensurate capacity addition, infrastructure improvement, value addition and processing, leading to the present crisis.

According to APDDCF officials, the daily procurement of milk had shot up from 390,000 litres in August to 469,000 litres in September this year. It touched 527,000 litres in October and 593,000 litres this month. The milk procurement is expected to cross 629,00 litres in December.

APDDCF Managing Director and Vice-Chairman Mohammed Ali Rafath said: "We have started converting the excess milk into skimmed milk powder (SMP) and now we have a stock of 1,000 metric tonnes of butter and 800 metric tonnes of skimmed milk powder. We are doing all this only to ensure that the dairy farmers are not put to loss."

Being a state-run organization, the Federation has been procuring milk beyond its requirement and capacity to help the farmers, he said.

The federation's decision to declare a procurement holiday has drawn flak from the farmers and the opposition parties. "Milk is a perishable commodity and farmers have no freezers to store them or process them. If the Federation refuses to procure the milk, the farmers will suffer heavy losses," senior TDP leader and former Minister Dr K Siva Prasada Rao said.

The Progressive Dairy Farmers Association pointed out that lack of control and regulation of the milk trade has put both the farmers and consumers in a disadvantageous position. "The government has failed to keep up the promise of providing a Minimum Support Price (MSP) for milk. On top of it, they want to declare a procurement holiday," a spokesman of the Association lamented.

While the input costs of dairy farming have risen sharply due to the steep increase in the prices of cattle-feed ingredients, the dairy processors, on the other hand, have reduced the procurement price by 27 per cent, from the earlier Rs 22 per litre to the present Rs 16 per litre, the Association spokesman said.

Providing incentives to farmers, supply of milk to schools and Anganwadi Kendras and encouragement for establishment of processing plants are among the measures suggested by dairy experts to help solve the problem of plenty.


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