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Agriculture Minister Sharad Pawar on Wednesday indicated that the price of milk would increase in north India on account of a dip in milk production."There is a gap of 18 lakh tonnes between demand and
PTI January 20, 2010 19:35 IST

Agriculture Minister Sharad Pawar on Wednesday indicated that the price of milk would increase in north India on account of a dip in milk production.

"There is a gap of 18 lakh tonnes between demand and the current milk supply," said Pawar in New Delhi while maintaining that the government was looking into the issue of price rise. But a few hours later Pawar said there was no shortfall in supply and procurement had improved in states.

Finance Minister Pranab Mukherjee on Wednesday said inflation was a matter of concern and the government was monitoring the price situation.

"We have already liberalised imports to meet the shortage of essential commodities. Certain items are under strict vigil and most of these items are duty free," said Mukherjee.

Elaborating on the measures taken to keep prices under control, Mukherjee said the Food Corp of India had started distributing wheat and rice to states through an open markets sale scheme.

"It is being done and is under constant review."

Earlier in the day, a Bharatiya Janata Party delegation, led by senior party leader L K Advani and president Nitin Gadkari, met Prime Minister Manmohan Singh at his 7, Race Course Road residence to "convey the concern of the people" on the rising prices of food articles.

The Prime Minister has called a meeting of chief ministers in New Delhi on January 27 to discuss the issue.

India's annual rate of inflation, based on wholesale prices index, rose sharply to 7.31 percent in December from 4.78 percent in the previous month mainly on account of increasing food prices, which rose 19.17 percent in the month.

Latest figures showed annual food inflation at 17.28 percent for the week ended January 2.

Warning that northern India was facing a shortage of milk, Food and Agriculture Minister Sharad Pawar said states will have to decide on the demand for price rise to ensure procurement.

Recalling that some of the states had taken a decision in October to hike prices, he said at a ministers' conference on milk productivity that "unless there is a decision (on prices), I do not know whether the states will be able to procure (milk) to meet the demand."

"We are facing insufficient availability of milk, especially in northern India. In October, we had taken a decision on prices. Today, there is a demand that we should hike the prices".

Branded full-cream milk such as Amul and Mother Dairy is selling in the retail market for Rs 28 per litre in Delhi. Dairy cooperatives are pressing for an increase in rates citing problems they face in procuring milk.

Talking to reporters, Pawar, who is already under attack from his political opponents over surging prices of sugar that breached Rs 50 a kg at retail counters, dismissed suggestions that he was for immediate hike in milk prices.

"It is a state subject. We don't take decision here. No state has demanded a hike milk prices. Some states have said here that 3-4 months back they had raised milk prices which have improved the supply," he said.

Earlier, he criticised states for poor dairy development and wondered why they were not taking all the funds earmarked for the purpose.

"I cannot understand why the states are not taking funds for dairy development. There are funds lying idle," Pawar said at the two-day conference on 'Increasing bovine productivity to meet the rapidly growing demand for milk'.

The Centre had earmarked a corpus of Rs 550 crore for dairy development in the current five-year plan period under Rashtriya Krishi Vikas Yojana. Under the scheme, states are empowered to select schemes in the dairy sector as per their priority.

However, states like Madhya Pradesh, Meghalaya, Sikkim, Maharashtra, Karnataka, West Bengal, Chhattisgarh, Uttarakhand, Goa, Assam and Nagaland have not taken any fund under the scheme so far. Other states have availed of Rs 263 crore under the scheme.

India's milk demand is projected to be 166 million tonnes by 2020 as compared to the actual production of 108.5 million tonnes last year.

The growth of milk production was around five per cent, Pawar said, adding that the country needs to produce more to make sure that every child gets enough nutrition.

In October 2009, the full cream milk price was increased by Rs two a litre in Delhi and some other cities.

Pawar said that the ministry is always encouraging states to increase the production of milk and take advantage of the central schemes.

Speaking on the occasion, National Dairy Development Board Chairperson Amrita Patel warned, "If we cannot meet the demand of milk domestically it may lead to imports of milk in future". PTI