Dairy Industry and RCEP

RSTV(The Big Picture)-The Dairy Industry and RCEP

1.A few days ago India decided against joining the Regional Comprehensive Economic Partnership that is RCEP which is a free trade agreement between more than a dozen countries. In run up to the RCEP meet, the domestic Dairy Industry had been very vocal about its apprehensions regarding this FTA. India has been the leading producer and consumer of dairy products with a sustained growth over the years. Estimated production of milk in 2018-19 was 187 million tonnes. Milk is equally important to both farmers and consumers.

2.Reservations of Dairy Industry about joining FTA:

  1. In India per animal production is very low whereas in the New Zealand, Australia it is pretty high and the logic and data which was given earlier that India after say 15 years down the line by 2033 will have a deficit of milk is not right.India will in fact have excess, much more than the demand the country has. As of now also we are highest in milk production.
  2. But, Price of milk is  much less in New Zealand. Hence, Prices will go much below in India to give a competitive market.  Almost 100 million farmers are there in this trade and will not get remunerative price(here fail to compete with cheap imported milk )and almost 50 million peoples will be jobless-some are in the procurement, some are in the transport, some are involved in the value edition. So definitely this is the major loss of livelihood.
  3. In last winter, we have seen in Maharashtra so many farmers were draining milk on the road because they are not getting the remunerative prices. The cost of production was much more the price they were getting.
  4. Our honourable Prime Minister is continuously saying that we have to double the farmers income. By  doubling the farmer income he doesn’t mean that  only through the agriculture but is involving the dairies also as an important part of that.
  5. The Government is  also promoting indigenous breeds . Now days we are talking about a huge market of A2 milk. So these things they are definitely going to be affected if we allow these big dairy companies to work in India.

3.What needs to be done?The Dairy Industry must be modernise itself with the focus to exporting out milk and milk Products.

  • The National Food Security Act gives subsidised quantities of wheat and rice to the BPL families. if there is so much milk to spare why can’t we also bringing the supply of subsidised milk powder to the poor through the National Food Security Act. This will take care of dairy industries, that will take care of interest of farmers with the marketable surplus of milk and also go a long way it towards answering the nourishment needs of people
  • The involvement of women in dairy milk sector is alos very important because we see the example of Gujarat dairy co-operative movement in U.P also large no. of women they are involved in that.
  • We are no.1 in milk production and we are no.1 the animal population also but per animal production is very less in the comparison to New Zealand we produce 3-4 litre. This needs to be improved by sophisticated research and technology, improving breeds by hybridisation, etc .One example for the improvement and conservation of the indigenous breed, is the  Gokul Gram Mission.
  • Government co-operative sector as well as Private sector both are doing a lot of work on AI (artificial Insemination) . By doing the AI yielded per animal is getting increased.

4.Way Forward

  • The pricing mechanism for the dairy industry is not in the favour of farmers. For example for 1 litre of milk we pay about Rs.35 and one litre of water bottle which cost nothing to produce we easily pay 20 Rupees  therefore pricing has to be rectified.
  • We should take advantage of the size of the  vastness of Indian market. If we  are going for mass scale distribution of milk by  encouraging better milk output and buying that milk ,converting milk into powder and then distributing it at s subsidised rate through the National Food Security Act to BPL families it will take care of dairy industry, it will take care of farmers which market surplus of milk.


RCEP and India

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