BWI: Gujarat Dairies Urge for Immediate Government Action in Fodder Crisis

Press release from Business Wire India
Source: Amul
Thursday, November 26, 2009 12:16 PM IST (06:46 AM GMT)
Editors: General: Consumer interest, Food & drink; Business: Banking & financial services, Business services, Commodities & materials, Retailers
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Gujarat Dairies Urge for Immediate Government Action in Fodder Crisis


Anand, Gujarat, India, Thursday, November 26, 2009 -- (Business Wire India) -- In a meeting convened last week in Delhi by Secretary (Animal Husbandry, Dairy and Fisheries), all state milk federation has urged government to take urgent action to overcome cattle feed and fodder crisis. It was discussed that government had failed to take any appropriate action to prevent export of de-oiled cakes. No steps have been taken so far to reduce the cost of input material for cattle feed. This has resulted into extreme surge in input cost for farmers.

It is pertinent to note that dairies of Gujarat had submitted a detailed memorandum to Honorable Prime Minister Dr Manmohan Singh in September 09 with suggestions to take following actions:

-- Restore custom duty on Milk Powder to 15 % on 10,000 MT TRQ and to 40% on butteroil

-- Impose export duty on export of Oilmeals, de-oiled cake, cattlefeed etc which helps in price reduction of cattlefeed within the country and removal of VAT & Excise duty on use of Molasses in cattle feed leading to reduction in domestic cattle feed prices

-- VAT on all value-added Dairy products to be fixed to 4%.

Prices of cattle-feed ingredients normally fall from the time the kharif crop is sown in July to its harvesting in November. Last year, prices of major feed raw materials fell between 8.5 % for rapeseed extractions to 29 % in the case of rice polish during the July-November period. But this year - mainly due to drought - the anticipated trend in decline of prices of raw material did not take place. As a result, average prices of de-oiled rice bran this month are 24 % higher compared with November 2008, with the corresponding year-on-year increase being 23 % for rapeseed extractions, 32 % for rice polish, 18 % for jowar and 43 % for molasses. As a result the price of cattlefeed being sold by co-operative dairies to their members in Gujarat has gone up to Rs 9500 per MT from Rs 7800 per MT last year - a burden of 20% on the production, while the dairies are still making loss on cattlefeed.

To compensate farmers for their higher milk production costs, dairies have had to raise procurement prices. GCMMF unions are currently paying farmers an average price of Rs 318 for every kg of fat, which is 16 per cent more than last year's Rs 275 at this point of time.

It is unfortunate that milk producers have to bear the brunt of inflation in food prices which is barely getting compensated for higher cattle feed prices.

GCMMF has once again requested central as well as state government to look into the matter urgently and take necessary actions like abolition of excise duty & VAT on molasses for use in cattlefeed, imposing duty on export of de-oiled cake. GCMMF had also suggested to reduce VAT to 4% on all value added dairy products.

It may be noted that during 2008-09, the GCMMF unions recorded an average milk procurement of 87.19 lakh kg per day (LKPD), a 15 % jump over the previous year's 75.90 LKPD. However, this year, the growth has slowed down to 6-7 % mainly because of higher fodder and feed costs, which has offset higher milk procurement prices. This could eventually impact milk supplies and prices further.


CONTACT DETAILS
R. S Sodhi, Chief General Manager, G.C.M.M.F. Ltd., +91 (2692) 221211/ +91 9824011058, sodhi@amul.coop

KEYWORDS
CONSUMER, FOOD, BANKING, BUSINESS SERVICES, COMMODITIES, RETAIL

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