The Government today lifted the ban on exports of skimmed milk powder,smp. The decision was taken in the meeting of the cabinet committee on economic affairs chaired by the Prime Minister Dr Manmohan singh in New Delhi. The lifting of ban amid surplus availability, of skimmed milk powder (SMP) will improve the finances of dairy firms and help milk producers. The government had banned SMP exports in February 2011 to contain rise in domestic milk prices.

Agriculture minister Sharad Pawar said the Commerce Ministry has been asked to consider providing incentives to the exports of SMP in line with other farm produce. He said, the ministry has also been asked to examine the possibility of imposing import duty on SMP.

The dairy industry has been facing liquidity crunch as it could not make profit through sale of skimmed milk powder due to steep fall in domestic prices following surplus supplies.

Domestic prices of SMP have declined to 150 Rupees per kg now as against 190-200 rupees per kg in the same period last year.

Milk production in India, the world's biggest producer, is estimated at over 120 million tonnes in 2011. Our corresondent reports there is strong demand for milk produced in India in countries including Pakistan, Bangladesh and other east asian countries.