A parliamentary panel has recommended that the government review how milk procurement agencies determine prices to ensure better returns for farmers. The Standing Committee on Agriculture, Animal Husbandry, and Food Processing highlighted that milk price inflation has been significantly lower than overall food inflation, adversely affecting farmer incomes.
In its report on the Demand for Grants related to the Department of Animal Husbandry and Dairy, the committee pointed out that while average food inflation reached about 6% over the past year, milk and milk products were only 1.6%. The report also noted that the average milk price rose from Rs 30 in 2014 to Rs 45.98 in December 2024.
The panel expressed concerns that the slower increase in milk prices has not benefited millions of dairy farmers, whose incomes are not keeping pace with rising food costs. It questioned the fairness of the price determination mechanism adopted by cooperatives and private dairies and urged the department to conduct a thorough examination of this system to ensure farmers receive fair prices.
The report explained that the price of milk paid to farmers is determined based on market conditions, while retail prices include costs such as transportation, processing, packaging, marketing, and infrastructure. According to the department, 70-80% of the retail price is returned to milk producer farmers in the dairy cooperative sector.
The committee also voiced concerns about widespread milk adulteration, which it believes contributes to farmers receiving inadequate prices while posing health risks to consumers. It urged the department to strengthen the enforcement of laws related to milk adulteration and recommended developing a household-level testing instrument to ensure milk purity.
Addressing the suspension of the Delhi Milk Scheme (DMS) license by the FSSAI, the committee questioned why the scheme, which contributes to government revenues, faced such action. The panel asked the department to provide a detailed explanation regarding the suspension, steps taken to ensure FSSAI compliance and plans for the scheme’s revival. It also emphasized the significant brand value DMS holds in Delhi’s retail market.
The Delhi Milk Scheme, established in 1959, operates under the Department of Animal Husbandry and Dairying.