The government is in the process of chalking out a plan to incentivise dairy exports, reduce GST on milk products, add milk to rations for mid-day meals, and increase the import duty on specific products. This is, effectively, an attempt to ensure that dairy farmers receive better returns.
A high level inter-ministerial meeting was held on Tuesday under the supervision of the transport minister, Mr. Nitin Gadkari, to discuss the proposal. The meeting was attended by several dignitaries, including the railway minister, managing director of Amul, and chairman of the Maharashtra State Commission of Agricultural Costs and Prices. Radha Mohan Singh, the agricultural minister joined the meeting through video conference.
Mr. Gadkari is expected to hold another meeting with the external affairs minister, minister for women and child development, agriculture and railways ministers, and minister for human resource development to come to a conclusion on the proposal.
Gadkari tweeted that the participants in the meeting have discussed on the challenges that dairy farmers are facing in the sector. They have also come to a conclusion that 10% incentive should be offered on dairy exports. He said that there will be a follow-up meeting to chalk out the available options.
Gadkari also stated that the states would be asked to join the initiative. In addition, there are several countries that are recipients of grants from India. Some of these nations have shortage of milk. As part of the grant, India could offer these countries milk powder. The ministers are also exploring ways to increase the retail demand for dairy products.
Gadkari said that people should actively consider replacing cold drinks with milk-based beverages. The government is also considering reducing the GST levied on butter and ghee to 5% from the current rate of 12%. The import duty on lactose will be hiked to 60% from the current value of 40% as well.
The government also revealed that dairy cooperatives have stocks of more than 1.5 lakh tonnes of skimmed milk powder that could be used to prepare milk when supplies are short.