Demand for 35% import duty on milk products

Stung by large scale milk imports, the dairy industry has asked the government to impose an import duty of 35 per cent to protect the domestic industry. Market sources have noted that the price of milk powder has come down rapidly in recent months. This is surprising as summers are considered lean months for milk production and price generally head upwards in this season. This they attribute large scale milk imports. The industry has also exercised over the government’s attempt to put the import of certain milk products in the OGL category.

Milk production in India is lead by the demand pull factor rather than production push. "Our farmers don’t have the resources to use high quality feed or mechanized milking methods. It’s only because they started getting food prices for milk, that they started adopting better animal rearing practices and have been able to bring the productivity to 4-5 its per animal as reported by market sources.

Cheaper imports would finish off the farmers incentive to produce more and hurt both agriculture and the dairy industry. So, milk is preserved in the form of milk powder in the winter and in summer is reconverted to "fresh" milk and sold. "However, import of milk powder, which are both cheap and better quality, takes away the producers incentive to process milk in the winter months. This down the line hits everybody, most of all the farmers."

Market Update
(Milk Products)