Punjab milk producers grapple with price drop, erratic payments amid lockdown

As consumption by small-scale milk processers and dairies these days is nearly negligible, the milk producers are dependent on state milk cooperative Milkfed and big private players like Amul and Nestle for procurement.

As the lockdown continues, milk producers in Punjab are struggling with low demand, price reduction and irregular payments by mass procurers.

Milk vendors distributing milk from door to door in Ludhiana on Saturday. (Gurpreet Singh/HT)

As consumption by small-scale milk processers, dairies and halwais these days is nearly negligible, the milk producers are dependent on state milk cooperative Milkfed and big private players like Amul and Nestle for procurement.

Prior to the lockdown, 3.15 crore litres of milk were produced in the state daily, but the current figures are not known to us yet, said Milkfed managing director Kamaldeep Singh Sangha. “Around 60 lakh litres are procured by private milk processing brands. Of this, Milkfed is processes 27 lakh litres every day, while the other brands are collectively processing 30-35 lakh litres of milk,” said Sangha. Milkfed sells products under the Verka brand.

Sukhwinder Singh a milk producer who also manages a collection centre for milk processors in his village Bhattian, Samrala, told HT that Milkfed and other brands have not paid dairy farmers for the last 20 days. After price revision, the procurement price of buffalo milk has been reduced to ₹47.25/litre and that of cow milk to ₹30-32/litre.

Reportedly, milk supplies from Punjab to Himachal Pradesh, Jammu and Kashmir and Delhi are almost nil, which used to be ₹5 lakh litres daily earlier. “We’re in the process of increasing the production of ultra-heat treatment (UHT) milk packs with shelf-life of six months. Nowadays, UHT is majorly bought by the army,” said Sangha.

According to him, Milkfed is currently selling 11 lakh litres of milk daily, while 16 lakh litres go into production of milk powder and white butter. “Every day, the state cooperative procures milk worth ₹10 crore and to keep its operations going in the wake of dwindling sales, it has taken a credit of ₹100 crore and is seeking additional ₹150 crore,” said Sangha.