Dairies demand subsidy on milk buy, GST rate cut on ghee and butter to stay afloat

Pune: The milk cooperatives and private dairies in the state threatened to stop buying additional milk if their demands of subsidy and a reduction in GST rate were not met by December 1.

At a meeting held in the city on Saturday, the milk cooperatives and private dairies demanded a subsidy on milk purchase and export of milk powder. They also sought reduction in goods and services tax on ghee and butter to 5% from the prevailing 12%.

Vinayak Patil, leader of the association of milk cooperatives and private dairies, said that the state government should look into our demands at the earliest to ensure that the dairies do not run into hefty losses.

Patil said the dairies want a subsidy of Rs 5 on milk purchase and Rs 22 on export of per kilogram of milk powder. "The dairies will be able to maintain a purchase rate of Rs 27 per litre, as mandated by the government, if the state assures the subsidy. The dairies are purchasing milk from producers to avoid losses to farmers. About 60 lakh litre of additional milk is being collected every day by the dairies. The government needs to give due consideration to the dairies else they will have no choice but to stop buying milk," he said.

The daily collection of milk by dairies in the state is around 1.40 crore litre, which is about 60 lakh litres more than the daily demand.

In July this year, the cooperatives and dairies had decided to approach chief minister Devendra Fadnavis demanding financial assistance to counter the continuous financial losses. The dairies had cited the case of the Karnataka government, which had announced a subsidy of Rs 5 per litre to protect interests of farmers. "If a similar scheme is doled out to us, it will be of huge benefit to the milk sector," cooperatives' representatives had said then.