15.58 million tonnes of milk collected by cooperatives

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    operations or scaled down their milk collection causing hardship to the dairy farmers.
    The Government of India took several initiatives to address the issues faced by the dairy
    sector: i) approval of the proposal of reprocessing cost of milk powder under Rashtriya Krishi
    Vikas Yojna; and ii) enhancement of custom duty on butter, butter oil and ghee from 30 per
    cent to 40 per cent.

    THE INTERNATIONAL DAIRY SCENE

    Since early 2014, international prices for milk and dairy products have been declining continuously. The farm gate price of liquid milk has dropped by almost 50 per cent from a peak of NZ$ 646 per tonne in April 2014 to NZ$ 354 per tonne in April 2015 and further to NZ$ 335 a tone by March 2016 in New Zealand. A similar trend has also been observed in other major dairy exporting countries.

    The average price Free-on-Board (FOB) New Zealand of SMP dropped by almost 40 per cent from a peak of US$ 4,988 per tonne in April 2014 to US$ 2,894 per tonne in April 2015 and further to US$ 1,750 a tonne by March 2016. According to the international market report, the world dairy trade of major dairy products other than SMP declined on account of reduced imports by China and the Russian Federation. The surplus liquid milk was channelled into SMP and butter production instead of whole milk powder and cheese. An un-conducive world dairy market discouraged the farmers to raise milk production through herd expansion or feeding supplements and the production is estimated to grow by 1.8 per cent from 789 million tones in 2014 to 803 million tonnes in 2015.

    – NDDB Annual Report 2015-2016

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