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The Indian dairy industry will oppose permitting imports of dairy products at concessional duty under free trade agreements (FTAs) to ensure the welfare of 10 crore farmers whose livelihood depend on the milk sector, said Jayen Mehta, Managing Director, Amul (Gujarat Cooperative Milk Marketing Federation).

Responding to a question from businessline Editor Raghuvir Srinivasan in the “Fireside Chat” session at the businessline Agriculture and Commodity Summit 2024 on Australia seeking duty concessions for its dairy products for imports into India, he said: “We will demand that Chapter 4 (which deals with dairy products) be kept out.”

‘No offensive interest’

“The government is aware of the nuances and is supportive (of the dairy sector) in negotiations. It has told those taking part in such negotiations that agriculture and dairy are sensitive and no offensive interest can be allowed,” the Amul MD said.

“The European Union does not permit imports. We are ok with it. Canada imposes a 250 per cent import duty (on dairy products) and the US 50–60 per cent. India, on the other hand, imposes 30 per cent duty on the import of butter and 50 per cent on milk powder,” said Mehta, adding that seeking duty concessions for dairy imports was not right.

The Gujarat Cooperative Milk Marketing Federation (GCCMF) has signed memorandums of understanding (MoUs) to invest ₹11,500 crore in the food sector. Amul plans to leverage its brand to tap the vast opportunity available.

“An Amul can be added every year in the Indian ecosystem. We need to have a sense of the consumer trend,” he said. GCCMF, through its 36 lakh farmer-members, accounts for 3 crore litres of the 60 crore litres of milk a day handled nationally.

On its borrowings, Mehta said Amul manages them through internal resources, while the Centre’s scheme for strengthening infrastructure is also helping. “Then, with the strengthening of co-operatives which will create a strong co-operative ecosystem, money will not be an issue,” he said.

On Amul challenging FMCG companies with its expansion, he said the co-operative could be a formidable force in the food and FMCG sectors. “We are building up a block of what consumers consume,” Mehta said.

The company operates high volumes at a low margin in the supply chain, helping retailers and farmers get higher returns. “No other organisation operates with such high returns,” he said.

Source: The Hindu Businessline Jan 5th 2024

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