Thursday, November 16, 2017

What is the relationship between export subsidy on SMP and consumer price of market milk ? (49th DP, 1 to 15 Nov, 2017)

Dear Friends,

Last fortnight I happen to travel in around 4-5 states and got an opportunity to talk with dairy farmers and dairy consumers. The state of farmers is not good at most of the places as there has been a drop in milk prices as well as quota fixing of milk procurement quantities at VLC by the dairy companies. On one side the input cost is increasing along with production of milk at farmer level (due to seasonality) while on other hand he has been asked to pour less milk at lower prices.

I tried to probe more and found that due to fall in Skimmed milk powder prices in local market along with its demand after festival season, large dairies are in a state of dilemma to produce SMP in large quantities or more. If they have to make SMP for next season then they are trying to wriggle maximum out of farmer's pocket so as to hedge their risks     ( Greed is good).

Butter and ghee are getting good prices in exports so their is an upsurge in exports of these products from India. Amidst all these market dynamics , I started to think about poor consumers who is supporting industry by consuming the products at any price offered to her. I belong to a generation which has seen strikes due to increase in milk prices by certain paisa only in Delhi. Now a days dairies are increasing their milk prices in multiple of two rupees at a time. 

We also saw reduction in milk prices for consumers in winter but since last few years we have seen increase in milk price even as a new year gift in North India. 

In Maharashtra farmer groups are agitating and asking for export subsidy on Skimmed milk powder as the prices have dropped down below Rs 20 also in certain areas which I mentioned in my last to last edition of Dairy Pulse. Maharashtra is amongst top 10 milk producing state and interestingly private sector procures over 70 % of total milk produced as against cooperative sector. 

Suppose government agrees to their demand and offer export subsidy. This will lead to better prices for farmers and diversion of milk for making skimmed milk powder. Butter and ghee is already getting good price. This will lead to a situation where dairy companies would be unable to meet the requirements of market milk selling so it would end up in increase in milk prices for consumers in winters.

Can we have a consumer price regulated in the way Petrol/Diesel by linking it to the raw milk procurement price ? I would like this august group to think over it. As a consumer I consider it to be my right to get a price reduction of at least 50 % of the price being reduced at the farmer level. 

You all must also block your diary from Feb 8 to 10th for attending 46th Dairy conference at Kochi to be organized by IDA ( south zone) and anchored by IDA Kerala chapter.

Happy elearning

yours truly 
Kuldeep Sharma
Chief Thinking Officer
Suruchi Consultants (ISO 9001:2008 Company)

Wednesday, November 1, 2017

Indian Dairy Map 2017 : Empathy with Indian farmer (48th DP, 16 to 31 Oct, 2017)

Dear friends,

Last fortnight kept us very busy and joyful while celebrating Diwali on one end and meeting farmers groups of Maharashtra on the other.

Indian Dairy Map 2017 was launched on 27th October at a day long conference in Pune on Roadmap for Indian Dairy industry. This Map is a part of our commitment to offer a research based publication  to Indian dairy industry since 2011.

Our research gave some interesting insights on the trends being followed up in Indian Dairy Industry in top 10 states. We were also able to gauge the farmer's intent towards pasture development, selection of type of animals and awareness levels on yield improvement.

A nationwide distribution on animals, milk production, animal productivity and milk availability were the key highlights of the research.

Our team is working to develop and share a detailed report state wise on how the dynamics of dairy development are moving but in nutshell the following key insights got surfaced up with the research.

a. Higher cattle population of a particular type of animal does not ensure high productivity or improvement of yield in that category.

b. Farmer's interest and awareness ( may be linked with market dynamics) is a better catalyst in any state for performing on animal productivity than government's policies and push.

c. There has been a shift and liking of farmers towards cross bred exotic animals and buffaloes across the country in most of the states. It is also being seen in the states which are perceptually assumed to be the patrons of desi cows. 

As a conclusion I feel the think tank at government's level must take a holistic view of all these factors and give their ears to farmers before planning and devising schemes skewed towards a particular type of animal.

Good news is that Government has undertaken a mammoth task of providing animal identification chip to around 80 % of the total miking animal population in one year only. It would change the dairy landscape completely and may be in our next year research based document the available data would be more realtime and accurate.

I am also anticipating that while doing this exercise government departments  might experience change in existing data drastically in any direction for number of animals in milk, productivity and their types.

Please send a request with your complete address for getting a copy of the map. You may use it as co-branding with us also and print on annual calendar also. We will provide you the designing support for co branding. We would like to see this map at each and every dairy establishment in the country. This map is available free of cost to every one.

Happy e learning.

with best regards

Kuldeep Sharma
Chief Thinking Officer
Suruchi Consultants (ISO 9001:2008 Company)
C-49 Sector-65
Noida 201307