A total of 5,800 tonnes of milk by-products, worth around ₹180 crore, have remained unsold at Mandya Milk Union Ltd. (MANMUL). This has prompted the union to reduce the procurement price by ₹2 a litre to offset the losses caused by excess procurement of milk.
The union on the Bengaluru-Mysuru highway at Gejjalgere near Maddur in Mandya district is establishing a mega dairy with a processing capacity of 12 lakh litres of milk a day at a cost ₹227.47 crore.
Nevertheless, it has been struggling to dispose of a huge stock of by-products. The demand for milk powder, butter and ghee is “very poor” in the market. Hence, the procurement price of milk has been reduced, said Kadaluru Ramakrishna, chairman of MANMUL.
Speaking to The Hindu on Friday, he said: “Around 3,000 tonnes of milk powder worth ₹75 crore, nearly 2,500 tonnes of butter, and 300 tonnes of ghee worth ₹20 crore are at the union. There is no demand for the stocked by-products by Karnataka Milk Federation (KMF) or private buyers.”
Citing the reason of incurring heavy loss owing to excess procurement of milk and increasing expenditure, the union slashed the procurement price from January 1. The present procurement price is ₹21 per litre, according to Mr. Ramakrishna.
The union had cut the milk procurement price by ₹5 per litre in October 2017.
9 lakh litres
The union has established 1,200 milk producers’ cooperative societies across the district through which at least 1.2 lakh dairy farmers supply around 9 lakh litres of milk every day.
The excess milk procurement has been causing a loss because of issues linked to preserving, processing and conversation of milk, and transportation to other places, officials at the union said.
Meanwhile, the continuous reduction was severely condemned by milk producers.
On Friday, Mandya district milk producers’ committee urged the union to restore the original procurement price immediately.
Shambhunahalli Suresh, district Karnataka Rajya Raitha Sangha president, said the decision has come as a big blow to dairy farmers who are in severe financial constraints owing to increasing fodder and feed cost. The State government should procure milk at a minimum of ₹40 per litre, he said.
Mr. Ramakrishna said: “There are signs of KMF buying the stocks and the union will increase the procurement price [after disposing of stocks] in the coming days.”
