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Entry of private players, who offer higher purchase prices to farmers, has stunted supply to Aarey
Posted On Friday, April 09, 2010 at 01:07:43 AM
Private players in milk industry are making life tough for the Maharashtra government owned brand.
In Maharashtra, Aarey has 30,714 primary co-operative societies. These societies collect and supply milk to Aarey. Pune district has the maximum number of societies (14,778) out of a total of 30,714 societies in the state.
In Pune city, there are 268 milk distribution centres. It follows Greater Mumbai (3,999) and the Navi Mumbai region (341).
The government has fixed the purchase price of milk along with the guarantee of purchasing all the milk produced by the milk producer.
Primary co-operative societies have been established at the village level while there are co-operative milk unions at the district/taluka level.
The milk collected by the societies is sent to co-operative dairies or government dairies and from there the milk is dispatched for selling or for converting into milk products.
The government has given guarantees for the acceptance of milk by purchasing it at a fixed price.
After covering the expenses incurred by the taluka/district unions, the payment is done to primary milk societies so as to enable the members of primary milk societies to receive the payment against the milk supplied by them.
The government fixes the purchase price of milk on the basis of production cost from time to time and these rates are fixed for two seasons — flush and lean.
Flush season lies beteween October 1 to March 31 and the lean season begins from September 1. Generally, the purchase rates during flush season are lower by Re 1 and in the lean season the price is higher by Re 1.
In the year 2003 to 04, due to the drought, the purchase rates for both seasons were kept the same.
Now, due to the entry of private players in the milk market, the state government has increased the purchase price from Rs 12.50 per litre to Rs 14.50 per litre.
However, private players still give a higher purchase price to the milk producers (farmers). Therefore, the state government does not get adequate supply of milk from farmers.
So, the state government has issued a circular to all regions to supply toned milk. The government is saying that this being a lean season is the reason why Aarey has not been able to get adequate quantities of milk from farmers.
That is the stated position of the government. However, sources say the real reason behind it is private players purchasing milk from suppliers at a higher rate than what the state government is offering.
And that is the reason why Aarey is facing a milk shortage.
A top Aarey official said, “This is the first time Aarey is facing this kind of a situation. This is because of the fact that a large number of private players entered the milk market in the last decade including those from outside the state like Mother Dairy and Amul amongst others.
As a result the cost of purchase has gone up. The state government cannot change its policy related to purchase prices in a short period. So, farmers (who are members of co-operative societies) have started supplying milk to private player because they offer higher prices.”
Hemant Gadve, general manger, government milk scheme, Pune region said, “We know that there is not sufficient milk supply. Therefore, the state government has issued a circular to supply toned milk to consumers from April 1.
However, we have not yet started production of toned milk. Toned milk has less fat than cow’s milk.
Cow’s milk has 3.5 per cent fat while toned milk has 3.00 per cent. Buffalo’s milk has 6.5 per cent fat which is much compared to other kinds of milk.
The rate of toned milk is less than cow’s milk. It has been fixed at Rs 24 per litre as per the newly revised policy.”
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