Despite opposition from Congress ministers, the Cabinet Committee on Economic Affairs (CCEA) on Friday allowed export of skimmed milk powder (SMP) apparently due to “coalition compulsion”. The move, which entails subsidy support estimated at about `96.8 crores, would benefit private dairy owners mostly based in Maharashtra, which enjoy patronage of the Nationalist Congress Party (NCP) leaders.
Just hours before the CCEA meeting, a Union Cabinet minister from the Congress said that he along with others would oppose the proposal. “This does not make any sense. Why should we subsidise the export of milk products. But the proposal may be approved due to coalition compulsion and the clout of the agriculture minister Sharad Pawar,” said the Cabinet minister.
The Centre had banned the export of SMP in February 2011 following a rise in price of milk. “The situation has not changed now, as the milk prices are at record high. In fact the domestic demand is not being met by the dairies. So, why should the ban be lifted,” said a senior official of the food ministry.
It was learnt that the Union minister of state for consumer affairs and public distribution K.V. Thomas was also strongly opposed to the proposal. Prof. Thomas, sources said, strongly argued in the CCEA meeting that allowing SMP export could result in fresh spurt in prices of milk products. However, dairy owners had been demanding lifting of the ban on export on the grounds that there was surplus availability of the SMP.
Though the decision would benefit some dairy owners in Gujarat, it will mostly boost the prospect of dairies in Maharashtra, said a senior official of the food ministry. The CCEA has not put any quantitative restriction on export of SMP, sources said, who added that the commerce ministry has been asked to examine the possibility of imposing import duty on SMP.
Food ministry sources said that there is not much of demand for SMP in international market.