Govt scraps incentive on milk powder exports to check prices

With milk prices shooting up, the government today withdrew the incentive on export of skimmed milk powder (SMP) to boost domestic supply and cool prices.

‘Vishesh Krishi and Gram Udyog Yojana (VKGUY) benefit on skimmed milk powder has been withdrawn,’ the Commerce Ministry said in a public notice.

With possibility of shortage of fodder in view of deficient monsoon affecting milk production, the Cabinet Committee on Economic Affairs (CCEA) on 9 June has decided to withdraw 5 per cent incentive offered to SMP exporters.

In June 2012, the previous government had lifted the ban on SMP exports and included this product under VKGUY under which exporters can avail five per cent duty credit scrip on export value.

All the major milk suppliers, including Amul and Mother Dairy, had raised prices of various varieties of milk by Rs 2 per litre to Rs 34-48 per kg in the national capital. A similar increase was seen in other metros.

Milk production in India, the world’s largest producer, stood at 132 million tonnes in 2012-13.