The Government of India is actively considering to incentivise trade in milk and milk products in the country and their exports. According to sources, there was a high-level meeting recently, at which the situation of the milk producers was deliberated on. According to experts, it was due, as recently, the Centre raised the minimum support prices (MSPs) of a number of kharif crops.

The ministers who met were Nitin Gadkari, minister for road transport and highways, shipping and water resources, river development and Ganga rejuvenation; Piyush Goel, minister of finance, railways and coal, and Radha Mohan Singh, minister of agriculture and farmers’ welfare.

Gadkari tweeted that the Centre will give a 10 per cent incentive on duty to boost dairy product exports, and shall also consider distribution of the milk in the Mid-day Meal Schemes for schools and anganwadis. These steps were being taken to ensure better remunerative prices for the dairy farmers and make the dairy business profitable. This was also an important development, as there has been a continuous protest from the dairy farmer in Maharashtra.

Meanwhile, it was stated that the government was actively considering lowering the Goods and Services Tax (GST) rates for milk products. Currently, many milk products, such as ghee and butter, are placed in the 12 per cent slab under GST. Discussions are on to bring them in the five per cent category.

R S Sodhi, managing director, Amul, stated that the 10 per cent incentive was a good move, adding, “However, the gap between the Indian and international prices is wide. This leads to a lot of competition. The consumption of milk is very low in India. And therefore, there should be an efficient system in place, so that milk reaches to people and become affordable.”

However, Girish Chitale of Chitale Dairy stated that the policies made by the government should be clear.

“We don’t know the 10 per cent incentive is on liquid milk or powder. If it is on milk, it will have an impact on milk prices, and if it is for powder, it will be not useful and chances are there that a few stakeholders may not pass on the benefits to the consumers,” he added.

Chitale stated that this move to give 10 per cent incentives should be temporary. “There are other issues the governemnt should look into. These the price difference between the Indian and international market, lower yield, fodder issue, distribution management, etc.,” he added.