KMF faces uphill task to keep both customers and farmers happy

The Karnataka government is yet to notify the ₹1 hike in financial assistance to milk farmers announced by the previous Janata Dal(S)-Congress government.

The Karnataka government is yet to notify the ₹1 hike in financial assistance to milk farmers announced by the previous Janata Dal(S)-Congress government.   | Photo Credit: File Photo

Centre is against further increase in input subsidy

The Karnataka Milk Federation (KMF) is trying to juggle keeping farmers happy while not burdening its customers. For, the Centre has conveyed its unhappiness over the grant of ₹5 per litre as financial assistance to farmers, which has made the already cash-strapped State government wary of increasing the assistance, according to top KMF sources.

The State government is yet to notify the additional ₹1 hike announced by the previous Janata Dal (S)-Congress government, and KMF sources say that it is very unlikely that the BJP government will do so. On the other hand, the federation is under pressure from milk unions and farmers to get the hike implemented.

“The Centre has informally expressed unhappiness over the financial assistance being given to farmers. Its argument is that such a mechanism does not exist in any other State milk federation. We are not confident of the government agreeing to the ₹1 hike announced by the earlier regime,” a KMF source said.

Sources said that instead of depending on government support, the federation was now asking for a price hike of ₹3 per litre, with ₹1 being transferred to farmers. “This will take the financial assistance to ₹6 per litre,” the source said.

Cattle insurance

Meanwhile, a proposal to insure cattle or compensate their death, expected to cost the exchequer about ₹120 crore a year, has also been made to the government. This is also not expected to be accepted. According to sources, the issue was discussed at an informal meeting between the KMF chairman and the Chief Minister, but the federation is not hopeful of it being cleared.

“The ₹3 hike is keenly awaited by the KMF because it will not only help pass on the additional ₹1 to farmers, but will also create a fund to secure them in case of cattle death. Of the ₹3 hike, 50 paise could be used to create a pool to provide a compensation of ₹50,000 to ₹60,000 in case of a cow death,” a source in KMF said.

There are about 25 lakh head of cattle belonging to farmers who sell milk to the federation, and about 20,000 cattle deaths are reported each year.

There are plans, sources said, to utilise the rest of the money by giving 50 paise per litre to village-level milk societies, which occupy an important role in milk procurement. A similar amount will be used to increase the commission of agents who sell milk and milk products in the market. “The federation will keep 50 paise for its operational costs. Every one in the value chain benefits,” the source said.

Decision on hike

A decision on hiking the price of milk could be made in a couple of days as the KMF board, which met on Friday, authorised chairman Balachandra Jarkiholi to discuss the matter with Chief Minister B.S. Yediyurappa.

After the board meeting, Mr. Jarkiholi told The Hindu that he, along with the KMF managing director and the Secretary of Animal Husbandry, would discuss the issue before taking it up with the CM. “He has assured us of arriving at a decision in a couple of days,” Mr. Jarkiholi said, adding that milk price hike was inevitable.

He said that the hike demand from 14 district milk unions varies from ₹2 to ₹4 a litre.

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Printable version | Feb 24, 2020 10:40:02 AM | https://www.thehindu.com/news/national/karnataka/kmf-faces-uphill-task-to-keep-both-customers-and-farmers-happy/article30588002.ece

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