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The All Ceylon Peasants Federation pointed out that dairy farmers’ island-wide were facing a crisis due to the purchase related payments owed to them by the Milco not being made, the low buying price of milk and the high costs involved in milk production. Recently, a group of dairy farmers demonstrated in protest in Medirigiriya over the nonsettlement of arrears by the Milco, following the Milco buying milk from them through their 14 main chilling centres located in the country. National Convener of the Federation, Namal Karunaratne said that although the Milco states that the price at which they purchase a litre of milk is Rs 70, in reality farmers’ end up selling at Rs 60.

This is because of the many conditions imposed on the farmer with regard to the nutritious aspects (such as the fat content) of the milk. Milco lowers the buying price through these conditions, he explained. The cost of production is high owing to the cost of cow feed (punnakku aside to naturally available grass), medicines, care related costs (bathing), manpower costs, the cost of a milk cow (Rs 150,000 to Rs 200,000), and costs pertaining to the construction and maintenance of barns. “Milco buys from the farmers and settles the amounts in two weeks. At present, there is a delay in making payments, of one and a half months. One third of the earnings are spent by the farmers on the cow, as if the cow is not cared for, the amount of milk one can obtain from a cow dwindles.

Milco despite having taken loans for the purpose of development has not seen any development. Instead, it is in a financial crisis owing to the debts, fraud, misappropriation, the latter two matters have come to the attention of the Committee on Public Enterprises, and inefficient management. Minister of Rural Economic Affairs, P. Harrison has informed us that he has ordered the release of the funds for the payments, and that such should materialize within two weeks. We will wait and see,” Karunaratne added.