The Gujarat government on Friday announced financial assistance to the Gujarat Cooperative Milk Marketing Federation (GCMMF) which owns the 'Amul' brand to offset losses incurred in the export of skimmed milk powder.
The state government has decided to provide an assistance of a maximum of Rs 50 per kg for the export of skimmed milk powder from July 1 to December 31 with a ceiling of Rs 150 crore, said a release from the Chief Minister's Office.
The government has also decided to increase the freight on board (FOB) price for skimmed milk powder by Rs 20 per kg to Rs 200 per kg from the existing Rs 180 per kg given to the GCMMF, it said.
The decision was taken following a demand by milk producers' unions, it said.
If the FOB on skimmed milk powder increases during this period, the export assistance will be reduced accordingly. If, for example, FOB price increases to Rs 210, the assistance will be reduced to Rs 40 from Rs 50 per kg, the government said. The export assistance, however, will remain the same if the FOB decreases.
Managing Director of the GCMMF R.S. Sodhi said this was the third time the Gujarat government has provided such assistance which will benefit 3.6 million farmers.
The GCMMF will be no longer compelled to reduce the farm gate price of milk due to lower returns on skimmed milk powder in the domestic or export markets against its production cost of Rs 250 per kg, Sodhi said.
"We would no longer be under compulsion to reduce the price paid to the farmers who are already under stress (due to the COVID-19 pandemic)," he said.