Big Co-operatives Not Ready to Buy Milk from Farmers Due to Drop in Dairy Sales

Big co-operative societies in India are not willing to buy milk from farmers as the nationwide lockdown has badly impacted dairy sale across the nation.

They are saying that as sweet shops, tea-kiosks, offices and institutions are closed the sale of dairy product has gone down by up to 30% in some centres.

It must be noted that co-operative societies and private companies are the two big segments that obtain milk from farmers.  The cooperative societies are blaming the private players for the problem saying that they are not procuring from the farmers. On the other hand, private companies told that police violence and the fear of COVID-19 infection have forced the daily workers to quit the job. Now they have no option but to close their dairies.

Rajasthan Co-operative Dairy Federation Limited or RCDFL, which is one of the biggest milk purchasers in the state has reduced the procurement of milk by 25%. Vinod Gera, deputy manager of RCDFL said that "Before 15^th March, we used to procure 41 lakh litre of milk per day. But, now we have reduced it to 30 lakh litre”.

He said as the private dairies are closed, farmers who were selling milk to them have now started supplying milk to the RCDFL adding that “We have no option but to refuse procurement”.

In total, there are 190,500 cooperative societies including those at the village level. As per their estimates, the average milk procurement from 1 March to 15 March was round 500 lakh litre / day and the sale was only about 390 lakh / day. But, seven days after nationwide lockdown, on 30^th March, the procurement went up to 533 lakh litre / day but sale dropped to 330 lakh litre / day.

MD, Gujarat Cooperative Milk Marketing Federation Ltd (AMUL) Rupinder Singh Sodhi has admitted that its brand has suffered a 10% drop in the sale. Sodhi said, “Soon after the lockdown, there was a fear and people stored milk for 3-4 days. But after that there was a drop in demand of up to 30%. Now it has stabilized a bit but still our sales are down by 10%". He is hoping that the situation will normalize as soon as the temperature starts rising as summer witnesses a decline in milk production & increase in demand.

Kolhapur Milk Union, Maharashtra, has no buyers for 25 percent of its milk. Out of 12 lakh litres that it obtains from farmers, around 3 lakhs remains unsold. MD, DV Ghanekar has blamed the government for lack of foresight & micro-planning before enforcing the lockdown.