No Prospect of Milk Imports

As of now the Government of India has no plan to import milk products such as ghee and butter. On the contrary, Union Animal Husbandry and Dairying Minister Parshottam Rupala has assured that his ministry will boost supplies from untapped domestic sources.

The minister’s comment came after Rajesh Kumar Singh, secretary in the same ministry, had told reporters few days ago that the government may look at importing dairy products such as butter and ghee if needed as there is a supply constraint due to stagnant milk production in the last fiscal year. This statement was subsequently politicized with opposition leader Sharad Pawar ( a former Union Agriculture Minister) criticisising the move as anti-farmer.

Rupala has said if at all in the most unlikely situation the need of import arises then that would be routed only though the National Dairy Development Board (NDDB), which would ensure that the market is not distorted and the interests of dairy farmers are protected.

The Government of India seems well aware and considerate of the fact that dairying has been a major source of livelihood for millions of dairy farmers in the country and all the schemes/ programmes of the Government are aimed at further strengthening it.

However, this is a fact that there has been some demand and supply gap that has been observed in the dairy sector- primarily due to increased demand for nutritious, safe and hygienic milk and milk products post COVID-19 pandemic.

To meet the growing demand and considering the fact that the supply of milk in the ensuing summer season being a lean season may be less, there were demands from several dairy cooperatives for import of conserved dairy commodities – milk fat and powder.

With this background, NDDB along with the Government of India has been monitoring the demand-supply situation. Since the process of import takes time, the necessary back end processes are being put in place to timely manage the situation in case of any eventuality.

In case the situation warrants, the import may be done to help ease out the situation for the dairy cooperatives to meet the summer demands.

However, in that case it will also be ensured that import is routed only through the NDDB and the needy Unions may be given the stocks at the market price after proper assessment. This will ensure that the market is not distorted and the interests of our dairy farmer is protected, which is paramount and central to any decision taken by the Government.

It may be noted that milk production in India has typically been growing at 6% annually. However, in 2022-23, production may grow at 1-2% due to lumpy skin disease in cattle. But, in 2021-22, milk output stood at 221 million tonnes, nearly 6.3% more than the previous year, according to the ministry.

Heat waves during the summer of 2022 and unseasonal rainfall in most fodder-growing states brought down the availability of fodder, and this did affect the milk-production. Besides, the country’s milk production remained stagnant in the 2022-23 fiscal due to the above-mentioned lumpy skin disease in cattle.

But then, the above figures suggest that there is no shortage of milk in the country as yet, despite the fact that “domestic demand has increased by 8-10% after the pandemic”.

There has been a rise in the milk prices, though. Wholesale price inflation in milk stood at 6.99% in December, 8.96% in January and 10.33% in February, rising for a third straight month.

While announcing the monetary policy, RBI Governor Shaktikanta Das on 6 April had said, “Milk prices are also likely to remain firm going into the summer season due to tight demand-supply balance and fodder cost pressures.”

“There is no constraint in milk supply as such in the country…There is an adequate inventory of skimmed milk powder (SMP). But in the case of dairy products, especially fats, butter, and ghee, etc, the stocks are lower than the previous year,” according to Animal Husbandry and Dairy Secretary Rajesh Kumar Singh.

Singh, however, has noted that the imports may not be beneficial at this point in time as international prices in recent months are ruling firm.

According to Singh, the shortage will be less in the northern part of the country where the lean season has been postponed with temperature cooling down due to untimely rains in the last 20 days.

Incidentally, India last imported dairy products in 2011.