India asks Russia to buy products from small dairies

The Indian dairy industry will have to wait for some more time before it starts exporting cheese and other milk products to Russia.

The two countries are yet to sort out differences over a stringent export condition put in place by Moscow that disallows dairy plants with less than a thousand cattle from exporting.

Russia’s decision to extend the ban on Western food imports for another year has, however, given India reasons to hope for an early settlement.

“Earlier this year, we had proposed a compromise to enable exports to start early, but Russia did not respond. Now with the extension of Russia’s ban on the EU, we expect action. Our embassy in Russia is holding meetings with relevant departments to get the agreement on dairy expedited,” a Government official told BusinessLine .

Russia imports more than $40 billion of food items from Western countries, and New Delhi has been making efforts to grab a part of the business.

India had rejected Russia’s draft agreement on dairy imports on the ground that the condition that only dairy plants with more than 1,000 cattle be eligible for exports would exclude most of the competent dairy farms from exporting.

Russia’s logic is that if a dairy has a captive farm, it can get a certificate from an authorised veterinarian stating that the cattle have been vaccinated, and there was no risk of foot-and-mouth disease (FMD).

“Our dairy industry is very different from the West where dairy plants own cattle ranches. Most of our competent dairy producers, including Amul, will be excluded if this condition is accepted. Only a couple of Indian companies will qualify,” the official said.

India suggested that instead of insisting on a captive farm, clusters of villages from where dairy plants source their milk could be identified.

Veterinarians could then be assigned for those specific clusters who could give a similar certification related to vaccination and FMD outbreak.

In order to get exports started, the Centre had proposed that Russia could start importing from large plants with captive farms, such as Parag and Schreiber Dynamix Dairies, to begin with but six months later it has to re-negotiate the terms so that other dairy plants could also export.

Because of Russia’s refusal so far to respond to the suggestion, the agreement has been held up and even companies which qualify under the present terms are not able to export.

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