Are you wondering why milk prices in Gujarat are not coming down this winter? In normal circumstances, milk prices in Gujarat during the winter season, when the production hits the maximum, come down around 10 to 20 per cent.
This has not happened this time around. The reason is simple. It is election time in Gujarat. With the Assembly elections slated for December 11 and 16 in the state, no milk cooperative has dared to reduce the milk procurement price during this glut season.
The prices, which are hovering at Rs 310 per kgfat have surpassed even the summer peak prices of Rs 240 per kgfat (Mehsana union prices).
Ask any politician, he will give the arithmetic behind the soaring milk prices. According to state government officials and political party leaders, Gujarat has a milk producing fraternity of over 25 lakh farmers. That means a lot of votes for any political party. So, to keep these farmers in good humour is any party's priority.
So, not a single milk cooperative in the state has reduced the procurement prices, fearing backlash during elections.
Abundant supply of grass during the season leads to heavy production of milk. With supply overtaking demand, prices crash. Historically, milk prices drop by 15-20 per cent during winters as compared to the peak prices during summers. Production drops during summers and prices soar.
This year milk procurement by dairies affiliated to Gujarat Cooperative Milk Marketing Federation is hitting the roof just a month before the Assembly polls.
Milk procurement of 13 co-operative dairies also went up to 80 lakh litres a day compared with about 67 lakh litre during the same period last year.
The milk procurement of almost every dairy has shown growth in two digits. Milk procurement of Amul Dairy of Kaira District Co-operative Milk Producers' Union Ltd has increased by 20 per cent to 12 lakh litre a day now. Similarly, Dudhsagar Dairy of Mehsana District Co-operative Milk Producers' Union is expecting its procurement to rise to over 19 lakh litre a day as against over 17 lakh litres a day during the same period last year.
Dudhsagar Dairy is offering as much as Rs 310 per kg fat to farmers as against just Rs 220 during the corresponding period of the last year.
Dudhsagar Dairy officials claimed that it is probably the highest returns to farmers in the country.
Amul Dairy too has not reduced its procurement prices from Rs 275 per kg fat. Last year, the prices were around Rs 220 during winters.