With a view to safeguarding the interests of small and marginal milk producers of the state, the Punjab Chief Minister Mr. Parkash Singh Badal today urged the Prime Minister Mr. Narendra Modi to seek his personal intervention for extending financial relief to the State Milk Federations by way of providing interests subvention on the loans availed by them from the banks.In a letter to Mr. Modi, the Chief Minister requested him to frame a viable interest subvention scheme akin to interest subvention scheme floated last year for the sugar mills.
Mr. Badal apprised the Prime Minister that India was the largest milk producing country in the world. State Dairy Cooperative Federations, with the support of dairy cooperatives consisting mainly of small and marginal milk producers, were playing a proactive role in the overall development of milk production in the country. Since milk was a perishable commodity, the milk federations have to procure milk from these small and marginal milk producers during the milk flush season. The cooperative federations are compelled to convert surplus milk into Skimmed Milk Powder (SMP) and Ghee for the sake of its preservation and future requirements during the lean period.
The Chief Minister further informed Mr. Modi that the State Milk Federations had to avail cash credit limits or short term loans from various banks during the last season in order to make timely payments to the milk producers, but due to very less market rates of SMP in comparison to its cost of production, the federations were unable to sell the stock of Skimmed Milk Power. This situation has arisen due to huge fall in the prices of milk in the International market, resulting in a drastic fall in the current prices of the SMP and Ghee. Further, it has resulted in accumulation of huge stocks of SMP and Ghee with the State Milk Federations which are unable to pay back their credit limits/short term loans to the banks. The prevailing rates of SMP are not likely to increase further and in such a case, the State Federations are likely to fall in debt trap, which will hit the dairy sector adversely, resulting in loss of livelihood to so many small and marginal milk producers, added Mr. Badal.