The Telegraph report on July 31, 2012, on Omfed’s proposal to hike price of milk and dairy products

Bhubaneswar, Sept. 20: Milk prices in the state are set to rise by Rs 2 a litre from September 23. The Odisha State Cooperative Milk Producers Federation Limited, which has a majority stake in the milk market, today made an announcement in this regard.

Now onwards, toned milk will be sold at Rs 26 a litre and double toned at Rs 24.

Chairman-cum-managing director of the Odisha State Cooperative Milk Producers Federation Limited (Omfed), Saswat Mishra, said: “As compared to other states, milkmen in Odisha get less for their product. After considering their demands, with the concurrence of the government, we have decided to raise the price of milk by Rs 2 a litre.”

Around 2.65 lakh registered milkmen will benefit from this hike.

However, the decision has not gone down too well with residents of Bhubaneswar. “If milk prices go up, it will upset our domestic budget,” said Jita Das, 32, a home-maker residing at Nayapalli.

Tea-kiosk owners, too, have said that the hike would force them to charge more from customers. “It would no longer be possible to serve a cup of tea at Rs 4 to the customers,” said Mitu Behera, 34, a tea-kiosk owner at Unit-I. Prices of milk-based sweets are also likely to up.

Sources said Omfed authorities had submitted a proposal to hike milk prices by Rs 4 to Rs 6 a litre following a clamour from milk producers affiliated to it. They found the present rates unfair.

“The state government agreed to hike the milk by Rs 2 a litre,” said a senior government official, adding that Rs 1.75 would go to the milkmen and five paise would be paid to the retailers. The remaining 20 paise will be spent on pasteurisation and packaging.

Omfed is the major player in the distribution of milk and controls nearly 40 per cent of the market share in the state. It sells nearly 4.70 lakh litres of milk per day. The other players in the market are also waiting for the government’s decision on the rise in the price of milk supplied by Omfed.

“Once Omfed’s price hike comes into effect, we will follow,” said Paresh Behera, who has been running his milk business for 40 years.

Omfed is now procuring milk from the milkmen at prices ranging from Rs 16.75 to Rs 22 a litre. The price of milk is mostly decided by its quality.

“A milkman will get a minimum of Rs 18.50 per litre. Milkmen are not willing to supply milk at the prevailing prices, as the input cost, including cattle feed, has gone up in the last six months.” said an Omfed official.