In 8 of 12 top milk-producing States, private players procure more from dairy farmers

Gujarat, Bihar and Karnataka are among the States where cooperative dairies collect more milk compared to private dairies.

Private players have a strong foothold in eight of the top 12 milk-producing States in the country that account for 88 per cent of the country’s milk production as of 2019-20, according to a study commissioned by Hatsun Agro Product Ltd and done by Crisil.

In 2020-21, private dairies in Maharashtra collected 123-127 lakh kg of milk per day (LKPD) milk, while cooperative dairies collected 36-38 LKPD milk. In Uttar Pradesh, private dairies collected 121-125 LKPD milk, while cooperative dairies collected 5-7 LKPD milk. Two-thirds of the total milk are handled by private dairies in Tamil Nadu. Private dairies across the States collected 557-562 LKPD milk, while cooperative dairies collected 535-540 LKPD milk. Gujarat, Bihar and Karnataka are among the States where cooperative dairies collect more milk compared to private dairies. In Gujarat, cooperative sector dairies collected 225-227 LKPD milk, while private dairies collected just 12-14 LKPD milk.

“In Karnataka, Rajasthan, Haryana and Telangana, a subsidy of ₹2-6 per litre is being provided to co-operative dairies for procuring milk This increases the milk procurement price offered by co-operatives, encouraging farmers to divert more milk towards co-operatives. Private dairies need to match the procurement price of the co-operatives for regular supply of milk, leading to an increase in raw material cost for private dairies,” the report stated.

RG Chandramogan, Chairman, Hatsun Agro Product Ltd, said in a statement: “The report is extensive and gives a good picture of the contribution made by the private sector in the dairy industry starting from 1992 when the dairy industry was opened up for the private sector. The private sector used its own risk capital without any subsidies or loss write-off by State governments and contributed to the dairy sector development”.