Centre pitches to ensure cashless transaction in dairy sector

In order to streamline payment to lakhs of milk producers and sale of milk to consumers through cashless transactions, the Centre on Friday asked the Gujarat Cooperative Milk Marketing Federation (GCMMF), which markets the popular Amul brand of milk and dairy products, and other dairy co-operatives across the country to ensure opening of bank accounts of all milk producers\farmers within a time-frame.

The GCMMF – India’s largest food product marketing organisation – has been asked to to ensure opening of accounts of 100% of milk producers by December 30 while the other dairy co-operatives have been asked to do so by January 30 next year.

Since the dairy sector thrives on sheer cash transactions, non-availability of funds with the co-operative banks for making payments to milk producers/farmers against the milk supplied by them post-demonetisation has created lot of problems on the ground.

“Specific instructions have been issued to all the agencies such as National Dairy Development Board (NDDB), Mother Dairy, Delhi Milk Scheme and all state dairy co-operative federations for ensuring direct payment to milk producers bank account at the earliest”, said the agriculture ministry in a statement while emphasising that the low penetration of nationalized banks and co-operative bank accounts in rural areas need adequate financial support with appropriate safeguards.

There are 1.7 lakh dairy cooperative societies (DCS) at village level, having 1.6 crore milk producers, in the country. About 850 lakh litres per day of milk is procured from them. Value of milk procured from the DCS is to the tune of Rs 120 crore per day.

Magnitude of the problem post-demonetisation can be gauged from the fact that the huge amount is to be disbursed to lakhs of milk producers, spread over varied geographical areas, for weekly and 10-days payment cycle. Since it mostly depends on cash transaction, the crisis of payments have, of late, become a tricky issue in many parts of the country.

Underlining the problem of payment after getting feedback from the ground, the Union agriculture minister Radha Mohan Singh reviewed the situation and directed officials of the animal husbandry and dairying department to take appropriate action to deal with the issue.

“Meeting with Mother Dairy, Gujarat Cooperative Milk Marketing Fed (GCMMF)/Amul, Delhi Milk Scheme and other co-operative has been taking place at regular intervals”, said the ministry.

It said, “Using the window of opportunity opened by the demonetization decision, it is high time to accelerate the opening of bank accounts of all those unbanked milk producers to make it cashless and digital sooner than later”.

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