Vijaya Dairy, a key player in Telangana’s dairy sector, is set to revise its milk procurement prices for farmers supplying buffalo milk.
Price Hike for Buffalo Milk Suppliers
Farmers who supply buffalo milk to the Telangana State Dairy Development Co-operative Federation (TSDDCF) under the Vijaya brand are expected to receive an additional ₹3 per litre. The current payment rate is ₹48 per litre, and it will likely increase to ₹51 per litre. However, the retail price for consumers is not expected to change and will remain at the current rate.
Challenges with Cow Milk Procurement
In contrast, the government is considering a reduction in the payment for farmers supplying cow milk to the TSDDCF. Currently, the procurement price for cow milk is the highest in the country, which has resulted in significant losses for the Federation. The revised payment could see a reduction of ₹2 to ₹3 per litre.
Officials noted that the TSDDCF currently pays ₹42.24 per litre for cow milk, which is approximately ₹8 to ₹9 higher than what private dairies pay. This price disparity is causing a loss of around ₹12 crore per month, which has led to delays in payments to farmers.
Impact of Lower Milk Prices
Over the past year, milk production across the country has increased. Milk prices have dropped significantly, particularly in neighbouring states like Karnataka and Maharashtra, where milk is available at lower rates. Private dairies and some cooperatives are procuring milk from these states at ₹27 to ₹32 per litre and offering high commissions to boost sales in Telangana. This has had a negative impact on the sales of the Vijaya brand, which currently sells about 2.8 lakh litres of milk daily.
Additionally, some illegal dairies are selling milk under the Vijaya brand, further affecting its market share.
Proposed Solutions and Future Plans
Given the drop in sales and ongoing financial losses, the TSDDCF management recently met with dairy farmers to discuss potential solutions. Three proposals were discussed, with the main focus being a request to the government to clear outstanding dues, which amount to ₹50 crore. Additionally, the Federation plans to implement a new payment schedule, paying milk bills on the 5th and 20th of each month to ensure timely payments to farmers. This move is expected to help secure support for the proposed price revisions.
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