BWI: Raw Deal for Milk Producers in Budget 2010-11 Feels AMUL

Press release from Business Wire India
Source: Amul
Saturday, February 27, 2010 07:17 PM IST (01:47 PM GMT)
Editors: General: Consumer interest, Economy, Food & drink, Law & justice, People, Politics, Social issues; Business: Advertising, PR & marketing, Agriculture, Business services, Commodities & materials, Household & personal care products & services
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Raw Deal for Milk Producers in Budget 2010-11 Feels AMUL


Anand, Gujarat, India, Saturday, February 27, 2010 -- (Business Wire India) -- 2.8 Million milk producers affiliated to Gujarat Cooperative Milk Marketing Federation Ltd (AMUL) feel that the Union Budget has not provided the desired support to alleviate the problems of millions of milk producers of india.

In the Economic Survey 2009-10 document tabled in the Parliament on 25th Feb, the Govt has said india is the largest producer of milk in the world with annual output of 108.5 million mt, the livestock sector contributes to 27% of value of output from total agriculture and allied activity. It also states that there is a green fodder shortage of about 34% in the country .

This shortage and resultant high cost of fodder has led to about 40% increase in cost of feed and fodder and more than 20% increase in cost of milk production. Despite higher price of milk, the poor milk producer has to still bear the brunt of 20% food inflation to support his family.

Since August last year, the Dairy cooperatives of Gujarat had represented this issue to the Hon. Prime Minister, Finance Minister, Agri Minister and Guj. Chief Minister seeking relief by imposing export duty on export of deoiled cakes. India is exporting 70 lac mts of protein rich deoiled cakes worth Rs. 10,000 crore annually. By disincentivizing exports, availability of feed would increase in the country and partially solve the problem. The Finance minister did not make any mention on the same in the budget speech on 26th Feb 2010 . This has created severe resentment amongst milk producers.

We had also requested the Govt to remove excise on molasses and reduce VAT on the same to reduce cattlefeed mfg cost. The budget did not act on the same.

We had also requested the govt to restore 15% import duty on Skimmed Milk Powder (SMP) (reduced to 5% under Tariff rate quota) and 40% on butteroil (reduced to 30%) to protect our producers from subsidized imports. The govt has not done the same. In fact, the revenue foregone by the govt on account of this has increased from Rs 52 Cr last year to Rs 147 Cr this year due to import of 25000 mt butteroil and 3000 mt smp.

The other effects of budget announcements are as follows:

A. Diesel prices have gone up by 8%. Freight rate will go up by 4-5% which will impact the producers till consumer prices are revised.

B. OTS can excise duty has gone up from 4 to 10%. Price of babyfood in this packing will go up.

C. Excise duty has increased by 2%. As a result , price of packaging film, chocolate and brown beverage will go up.

D. Corrugated box excise reduced from 8 to 4% for standalone units.

E. Custom duty on dairy eqpt imports treated as project imports with duty of 5%. We may not to be required to take epcg license for large imports now.

F. Excise duty on dairy eqpts too will be nil . Service tax on installation also goes away on such projects. It will give boost to processing eqpts.

G. Service tax on milk and milk products dispatched through rail likely to be imposed. This will increase transportation cost.

In summary, while the Finance Minister has tried to please the large taxpayers who are largely the consuming class and have access to media, the poorer sections of our milk producing class have been left to mercy of market forces.



CONTACT DETAILS
Mr. R S Sodhi, Chief General Manager, GCMMF,Ltd., +91 (02692) 221211, +919375032201, +919824011058, Sodhi@amul.coop

KEYWORDS
CONSUMER, ECONOMY, FOOD, LAW, PEOPLE, POLITICS, SOCIAL, MARKETING, AGRICULTURE, BUSINESS SERVICES, COMMODITIES, HOUSEHOLD

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