Staring at losses, several district cooperative milk unions in the State have reduced the milk procurement price provided to dairy farmers. The reduction in prices ranges between ₹1.5 per litre in Bengaluru and Belagavi unions and ₹2.5 per litre of milk in Mysuru union.
Besides the three unions, Karnataka Milk Federation (KMF) sources said that the procurement price has been reduced in different quantum in Mandya, Chamarajanagar, Hassan, Shivamogga, and Belagavi, affecting the dairy farmers, KMF sources said. It is likely that Tumakuru and Kolar unions will also announce the reduction shortly, sources added. KMF Chairman Balachandra Jarkiholi had earlier indicated that the unions could reduce the procurement price due to the ongoing COVID-19 crisis.
There are around two million farmer families in the State that supply milk to KMF through village-level societies, and farmers get between ₹29 and ₹31 per litre, besides ₹5 given as incentive by the State government. In January, when KMF increased the sale price of milk by ₹2 per litre, it had transferred more than one rupee to farmers, who had seen their input cost go up.
The reduction effected over the last one week comes in the light of several factors that have besieged KMF, the apex body of dairy farmers in the State. While in the last fortnight, the procurement by KMF increased from about 63 lakh litres a day to around 68 lakh litres a day now, the sale of milk continues to be restricted to liquid milk, which remains less than 35 lakh litres a day. The sale of milk itself has come down by about 10 lakh litres daily due to closure of hotels, tea stalls and hostels besides the return of labour and employees of factories. In big cities such as Bengaluru and Mangaluru, the daily sale of milk has reduced by about 1.5 lakh litres and about 70,000 litres, respectively.
“Most unions distributed the profits among the farmers till March 31, which otherwise would have attracted income tax at the rate of 30%. In most cases, the additional profits have been withdrawn,” a KMF Director told The Hindu . The reduction in procurement price is temporary, and the unions will have to manage with whatever income they get till the end of lockdown, he said, adding, “Profitability of the unions have taken a hit as value added products are not being produced and sale of milk itself has come down.”
If the milk unions are getting milk from dairy farmers who would otherwise supply to private dairies, good rainfall in major milk producing districts in South Karnataka has increased the procurement. “We are expecting the milk procurement to increase in the coming weeks with availability of green fodder and our sales could remain almost the same. In such a scenario, milk has to be converted into Skimmed Milk Powder (SMP), which has seen price drop from ₹338 per kg in 2019 to ₹220 now,” a senior official explained. “The more we convert milk into SMP, the more it will affect our financial condition. Even at a reduced price, there are not many takers for SMP. In nearly one month of the lockdown, KMF has produced about 3,000 tonnes of SMP, which is in addition to similar stock it had earlier,” the official said.
Govt yet to decide on free milk scheme
Karnataka Milk Federation is keeping its fingers crossed as it is yet to hear from the State government on continuation of the scheme to supply over 7 lakh litres of milk to poor people for free. So far, the government committed amount to KMF towards supply of free milk has been around ₹44 crore. “The Government Order is to supply milk till April 21. The free supply of milk will not only help poorer sections, but also milk unions and in turn milk farmers. If the scheme is discontinued, it means an additional 7 lakh litres have to be converted into SMP,” a KMF Director said.
