Dairy Farmers Federation of India Demands Withdrawal of GST on Milk Products

On Wednesday, dairy farmers from many states including Haryana, Rajasthan, Uttar Pradesh, and Kerala protested in Delhi requesting the central government to reconsider its decision to impose a 5 percent GST on dairy products and an 18 percent GST on dairy machinery.

Under the aegis of the Dairy Farmers Federation of India (DFFI), the farmers also wrote to Parshottam Rupala, the Union Minister of Fisheries, Animal Husbandry, and Dairy, requesting his assistance for the domestic dairy farmers in the nation.

Small dairy farmers, who make up 75% of the nine crore households involved in dairy production in India, will be negatively impacted by the GST, the lack of a Fair & Remunerative Price (FRP), and rising green fodder prices, the DFFI stated in a statement. According to the DFFI, dairy farmers in states including Karnataka, Telangana, Kerala, Andhra Pradesh, Tripura, Madhya Pradesh, Uttar Pradesh, Rajasthan, and Haryana organised similar protests at local milk booths, cooperatives, and district collectorates to oppose the new GST.

According to the DFFI's memo to Rupala, the sector is distinguished by a concentration of small farmers, with 2-4 cows being owned by 75% of rural households. "Most of them are marginal, landless, and poor, despite being one of the main sectors and the source of income for millions. Year after year, milk production rises while family incomes are declining. In the dairy industry, rural households spend the majority of their income on fodder and feed. According to the memo, they cost more than 75% more than other livestock combined.

Occupational Transition

Farmers claimed that rising inflation and the cost of fodder has forced them to switch to other lines of work. They said that both farmers and consumers will be impacted by the GST Council's suggestions. They informed the Minister that the decision would affect small and middle-sized cooperatives as well as dairy business owners engaged in milk production and value addition. The statement continued, "These recommendations will harm cooperatives and small dairy farmers and open the door for giant corporate entities to monopolise control of the dairy industry in India."

They recommended the Minister to set a temporary minimum FRP of Rs 45 per litre for milk. "Reduce the cost of production by adding a special clause to the MNREGA rule to provide a subsidy of 200 days wage per year to all the small dairy farmers having at least two cows/buffaloes," they suggested. This would be similar to the model used by the LDF Government of Kerala, through the Ayyankali Urban Employment Guarantee Scheme.