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Gokul raises price of cow milk by Rs 2 after govt forces higher procurement rate

Monday, 31/07/2017

MUMBAI: Gokul Dairy has announced a two-rupee increase in the retail rate of cow milk from August 1 owing to the higher procurement prices forced by state government. Company officials say they have no option but to pass the increase to consumers.

The rate of cow's milk has risen from Rs 43 to Rs 45 per litre, standard milk from Rs 42 to Rs 44 and toned milk from Rs 40 to Rs 42.

On July 19 the state government had directed its cooperative dairies like Gokul and Mahanand to pay farmers Rs 27 per litre of cow's milk up from Rs 24. For buffalo milk, the government had increased the rate to Rs 36 from Rs 33. The rates came into effect from July 1. The raise was a key demand of farmer groups during their recent agitation.

The ministry may have urged dairies to not pass the increase to consumers but that was clearly impractical. "We approached the government saying we cannot possibly absorb losses of Rs 3 crore per day caused by the procurement rate increase. We purchase 38 crore litres each year. Imagine suffering a loss of Rs 2 per litre," said Dattatraya Ghanekar, managing director of Gokul Dairy.

It will be curious if private dairies like Amul, Gowardhan and Mother Dairy follow suit since they had informed TOI that they were already paying Rs 27 per litre, or more, to farmers.

Meanwhile retailers' union leader Prakash Nayakal said, "There is no transparency in dairies' earnings. Retailers are still not receiving bills of purchase and dairies do not keep official record of distributors and vendors. Moreover, milk is exempt from GST so their dealings are still opaque."


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