Milk retailers' dilemma

Seemingly intrigued by the unrelenting disarray in determining the cost of production of milk at the dairy farms in Karachi, Mohammad Yasin, Senior Vice President of All Karachi Milk Retailers Welfare Association, is reported to have told a press conference that the retailers body was left with no option but to comply with the City Government's directives on the controversial issue of retail price of the commodity.
He also stated that the government wanted the retailers to stop purchasing milk from dairy farmers to make them scale down its price. Contending that neither the government accepts the cost of production as claimed by the dairy farmers nor are the latter willing to sell the product at the officially determined price in the wholesale markets, he wondered at what price the retailers should sell milk to their customers.
According to Yasin, as a sequel to the tussle between the government and the dairy farmers, retailers have fallen victim to penalties on the charge of profiteering. This was what prompted them to stop buying milk from dairy farmers and wholesalers from April 10.
Recalling that the fresh milk price had been increased by dairy farmers on March 31, he argued that if the price of a commodity is already higher in the wholesale market how could it be retailed at lower prices. This should appeal to common-sense.
The same can be said about his contention that in the absence of any price fixation formula of fresh milk sale from production houses to wholesale market and down to retail markets, dairy farmers are selling fresh milk at Rs 37.13 per litre, wholesalers at Rs 38.44 per litre, while retailers are being pressed to offer the same at Rs 34 per litre to their customers.
As for the milk retailers' plight, some idea of this may be had from their claim that their 60 letters to the authorities pointing out in advance price increase by dairy farmers proved of little avail.
It was way back in 2004 when the President of Dairy Farmers Association had expressed indignation over the rejection of the then prevailing price of milk in the market by the City District Government Karachi, which wanted it restored to Rs 22 per litre as fixed in the preceding year.
That decision was reportedly taken in a meeting of CDGK officials with the representatives of Dairy Farmers Association, Consumer Rights bodies and other NGOs, which was held under the chairmanship of DCO, who was apparently determined to check arbitrary increase in the prices of essential edible commodities.
However, as he then pointed out, concrete steps, including delegation of magisterial powers to revenue officials, were being taken. Commenting on the developing situation, we had then noted that, among other things, the hardening of the City Government's stand appeared to have been influenced also by its price check committee report, which viewing the increase in the milk price as unjustified, proposed fixation of the wholesale price at Rs 19.60 per litre.
Again, as pointed out in these columns, recourse to administrative actions to tackle escalation in the prices of consumer items usually failed to provide relief to the consumers. Needless to point out, such situations become inevitable because of the absence of a well-planned market mechanism for food and other agriculture produce vital for sustenance of the people.
The glaring lack of interest in streamlining the market base of the rural economy can be seen as the one reason behind the woes from too frequent steep rises and falls in the prices of agriculture produce. In fact, learning from the past failures, the ambitious tilt towards free economy should have started from agriculture, of which livestock and dairy farming happen to be an integral part.
Significantly, some four months ago, City Nazim Syed Mustafa Kamal had formed a six-member committee to conduct a thorough investigation of the causes of milk price hike, and to include ways of ensuring rational prices in its report within 10 days.
The decision, in this regard, was made at a meeting held with milk producers, with a view to sorting out their problems too. However, the dairy farmers had reportedly expressed doubts about the outcome of the effort, as no notice appeared to have been taken of soaring costs of fodder and utilities which have a large bearing on the prices of dairy and livestock products.
However, certain groups, poultry farmers, for instance, have managed to streamline their marketing system from an enlightened approach. Instead of continuing with the tame pattern of business, they have evolved a system that takes due care of all aspects of their trade, including the factors of supply and demand in an organised manner. In the absence of a similar approach in milk and meat, efforts to ensure stability in the market could not but end up in frustration.