HYDERABAD, Feb 1 Milk retailers are not abiding by the price fixed by a committee headed by the EDO revenue and charging rates arbitrarily decided by them.

The district government's revenue officials have warned that if wholesalers and retailers do not comply with the rates, section 144 CrPC would be imposed which would not be to their benefit.

A pricing formula has been submitted before the Sindh High Court Karachi by a committee, formed in pursuance of a court order. Although a division bench of the court is still seized of the matter, it indicates that even if formula (that have a significant impact over Hyderabad's milk rate) is implemented as proposed in Karachi, prices of Hyderabad's retail price would be much higher than those in Karachi.

A committee headed by the chief secretary proposed retail price of milk at Rs37 per litre after consulting all stakeholders in Karachi to put forward a pricing formula before Sindh High Court division bench. The committee was constituted and its report submitted in pursuance of the court order on January 28.

After considering various expenses involved, it suggested a price of Rs35 a litre for wholesalers. Expenditure includes initial investment, expenses on fodder and daily recurring cost. Production cost is estimated at Rs31 per litre and projects a profit of Rs4 per litre for the wholesalers. Retailers, who would pay wholesalers Rs35 per litre, would sell it for Rs37 per litre.

Petitioner Milk Sellers and Wholesalers Associations, who had initially challenged price of Rs28 per litre last year, objected to the pricing formula. According to Hyderabad district government claim, retail milk price in the city is to be fixed at Rs2 less than of Karachi's retail milk rate. A committee headed by EDO revenue had fixed retail milk price at Rs38 per litre a few days back but practically its enforcement is not witnessed anywhere as retailers are free to sell milk at Rs40 and in some cases at Rs42.

Retail Milk Sellers Welfare Association general secretary Fahimuddin Sheikh blamed revenue officials for not coming hard on dairy farmers, who he said, are actually responsible for price escalation. “They even don't turn up in the meeting convened by EDO revenue which fixed our retail price at Rs38”, he said.

He confirmed that he is selling milk at Rs40 because he is getting per litre milk from wholesaler at Rs35 while Rs1.50 is paid to middle man. “Given this situation how am I supposed to sell milk at Rs38 per litre”, he contended.

The city's dairy farmers have always been reluctant to comply with the rates and sell milk to retailers on their own terms because they find another market in Karachi to sell their milk. When in 2007, the rates were increased, the district government had imposed penalties on the wholesalers and retailer.

Since they didn't give-in, the district government had imposed section 144 Cr.PC and banned transportation of milk out of the district limits of Hyderabad.

Dairy farmers are apparently reluctant to review increase in per litre cost of milk saying that they are facing the brunt of inflation in the shape of increased tariff of electricity, cost of wheat, transport and fodder that has forced them to register an increase in milk price whereas retailers linked any decision on their part to reduce their margin of profit provided cattle farmers agreed to it.

Although Rs38 per litre is fixed by a revenue committee, headed by DCO Hyderabad, its enforcement is nowhere to be seen. EDO revenue Syed Barkat Ahmed Rizvi, who had chaired the meeting, admitted that retailers and wholesalers are violating the official rates which should have been Rs2 less than Karachi's rate.

“We will have no option but to impost section 144 Cr.PC over transportation of milk to other cities from here. It will not benefit dairy farmers since milk is a perishable commodity”, he said. He warned the retailers and wholesalers to abide by the official prices or get ready to face action.

However, Fahim Sheikh has another argument that the difference of Rs2 in the city is on account of the fact wholesalers give 38 litres of milk to retailers in Karachi while in Hyderabad they get 40 litres of milk. “Therefore, this theory that our rate should be Rs2 less than Karachi's can't be applied each time”, he said.

Retailers argue that they could curtail their profit by Rs2 and would sell the commodity accordingly provided dairy farmers review their cost. They said that after purchasing milk from farmers they incurred an expenditure of Rs1.50 per litre in shape of labour, electricity, rubber bands and shopping bags. They told revenue officials that in view of disruption in power supply spoils their milk.

The quality of milk, on the other hand, in the city remained below par and hardly a few of shopkeepers might be selling unadulterated milk even though they are charging Rs40. The district government has so far not obtained milk's samples randomly for chemical analyses to determine its quality.