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Election Milk Price Hike Raises Eyebrows: Strategy or Necessity?

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As soon as the elections concluded, major dairies across India raised milk prices by ₹2 per liter. This move comes despite assurances from the top management of the country’s largest dairy, who recently expressed confidence in stable input prices, citing significant growth in milk availability and ample stocks of dairy commodities nationwide.

The Gujarat Cooperative Milk Marketing Federation (GCMMF), which markets milk and milk products under the brand name Amul, has announced a price increase effective from June 3, 2024. Amul buffalo milk will now cost ₹73 per liter, while cow milk will be priced at ₹58 per liter.

GCMMF attributes this hike to rising input costs. “This price hike is being done due to the increase in the overall cost of operation and production of milk. Our member unions have also increased the farmer’s milk procurement price by approximately 6-8% over the last year,” stated the GCMMF, India’s largest dairy producer. They highlighted that Amul has not increased fresh milk prices since February 2023. On the other side despite significant drops in raw milk prices during that period, Amul didn’t reduce the prices also. The federation emphasized that 80 paise of every rupee paid by consumers is passed on to milk producers. “The price revision shall help in sustaining remunerative milk prices to our milk producers and encourage them to target higher milk production.”

Similarly, other dairies from North India, including Mother Dairy and Verka, have also increased their milk prices by ₹2 per liter. This simultaneous price hike across multiple dairies has raised questions about whether this is a strategic move by politicians to maintain voter satisfaction until elections are over, rather than a response to genuine cost increases.

The pre-election period saw dairy leaders publicly stating that input prices were under control and that there was a significant increase in milk availability. The sudden post-election price hike appears contradictory to these earlier statements, raising skepticism among consumers.

It is crucial to scrutinize the timing and justification of these price hikes. While the dairies cite increased operational costs and higher payments to farmers, the pre-election assurances of price stability and ample supplies suggest a different story. This situation underscores the need for transparency in the dairy sector and a careful examination of how political strategies may influence market prices, especially essential commodities like milk. As the largest milk producer, India must strive for a balance that supports both farmers and consumers without falling prey to political maneuvering.

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Amul Milk Price Hiked By Rs. 2/Litre

The increase of Rs. 2 per litre translates to the range of 3-4 per cent increase in MRP which is much lower than the average

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