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Harish Damodaran

New Delhi, Sept 2

Concerted efforts are on to extend the current ban on milk powder exports till September 30 by another six months.

And, the initiative for this has come from the Confederation of Indian Industry (CII).

A ‘paper’ on the subject, circulated by the CII among its members, has proposed that the export ban — imposed on February 9 and valid till September 30 — “should at least be there till March 31, 2008”.

Further, the scope of the ban should be expanded beyond skimmed, whole and infant milk powders to cover related products such as casein.

The paper has claimed that powder exports had caused a substantial increase in liquid milk prices, “making it out of reach for the economically-weaker sections of the society” and “depriving the commonman, particularly children, of one the best sources of nourishment and protein”.

When asked whether these views reflected the CII’s official position, the chamber’s Senior Director (Agriculture, Food Processing & FMCG), Ms Indrani Kar, said that the paper was circulated merely to obtain comments from various sections of the domestic dairy industry.

“We have taken no official position.

“There are varying views on the issue (of lifting or extending the ban) from our different stakeholders and we are only assessing these”, she told Business Line.

Besides voicing concern over the “common man” and the “health of the nation”, the paper has given four specific arguments for extending the ban.

First, powder exports have only marginally benefited the milk producers.

Between July 2006 and June 2007, cooperatives have raised the average producers’ price of cow milk from Rs 9.31 to Rs 10.46 a litre, and that of buffalo milk from Rs 12.56 to Rs 13.98 a litre.

Thus, even as domestic powder prices have gone up by 30-40 per cent, farmgate realisations have risen by only 11-12 per cent. Second, the bulk of exports have been done by private commodity traders and it is “most unlikely” that their profits will trickle back to the dairy industry.

Third, out of the 16,677 tonnes of powder exported during April-December 2006, 12,594 tonnes or 76 per cent have been made to neighbouring Asian and African countries, which are indifferent to quality.

Thus, exports have not stimulated quality improvement or technical upgradation by domestic dairies.

Finally, while the exports were contracted at an average Rs 96 a kg, the resulting domestic shortage had pushed up prices here to over Rs 120 a kg.

In short, Indian powder was being “dumped” in neighbouring markets, “with the sole objective of creating a shortage/inflation psychosis which has helped hoarding, black-marketing and profiteering with an essential commodity”.

More Stories on : Dairy & Dairy Products | Exports & Imports | Industry Associations | Agricultural Policy

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