Yet another attempt by the Karnataka Milk Federation (KMF) to raise milk prices to provide relief to farmers across the State has been, for now, spiked by the government.
While KMF had sought permission of the State government to increase the price of milk by ₹5 a litre, Minister for Cooperation S.T. Somashekhar told The Hindu that they had received the proposal, but the government had decided not to act on it immediately. “We will take a call after reviewing the pros and cons with Chief Minister Basvaraj Bommai,” he said.
Fifth attempt
The proposal was made about a fortnight ago. In April, KMF Chairman Balachandra Jarkiholi met Mr. Bommai seeking to convince him on the price hike, but in vain. The fresh proposal has come again, since the last time that the milk price had been increased in Karnataka was in 2020. Since then, the farmers federation has approached the government to raise the price at least four times. Currently, a litre of milk sold under Nandini brand costs ₹37.
A senior KMF official acknowledged that the federation had placed a proposal to increase the price by ₹5 of which ₹3 is proposed to be passed on to the farmers if the government accepts the proposal. “In the last three years, input cost in the dairy industry had seen an increase and ₹3 per litre would bring the much needed relief to farmers affected by the general price rise. The operating costs of KMF and milk unions have also gone up,” he said.
The official also pointed out that the KMF’s target to procure 1.3 crore litres of milk every day by 2027 could be met as more farmers could be attracted into dairy farming. On an average, KMF procured 92.82 lakh litres in June, highest so far. In recent years, the procurement has been growing between 10% and 14% annually.
Farmer’s demand
Bengaluru Milk Union Ltd. president Narasimhamurthy told The Hindu that the unions have been asking for price rise, but the State government has been turning a blind eye on the issue. “The milk price in all the States is above ₹40 a litre. If a scientific price has to be fixed, farmers should get at least ₹35 per litre. Besides ₹5 given by the government as incentive per litre, farmers get varying amount between ₹23 and ₹29 a litre depending on the district milk union,” he said.
Mr. Narasimhamurthy said that the unions are under pressure to cut the procurement cost at the expense of farmers in the absence of a price hike. “The only way to protect the unions from collapsing is to reduce procurement price given to farmers. A proposal has been moved to reduce the procurement price by ₹1.5 in BAMUL, which currently pays farmers ₹28.5 per litre.”
Problem of loose change
Post the revision of the price of curd, buttermilk and lassi, KMF agents are finding a problem of providing change to the customers. While the KMF had initially rounded off the cost after calculating the GST, after the rollback, a 200 ml sachet of curd cost ₹10.50. The 200 ml buttermilk depending on packaging cost ₹7.50 for sachet, ₹10.50 in multi-layered packaging and ₹12.50 in a pet bottle. The 200 ml mango lassi in multi-layered packaging now costs ₹26.50.
KMF sources said that though they were aware of the problem, the rollback had been necessitated due to government direction. “We will discuss the problem in the board and take suitable action. We are also aware of the problem of lose change in the market.”
Farmers lose feed subsidy
While input costs have gone up by about 30%, milk farmers in Karnataka have had to face another blow with the government withdrawing input subsidy of ₹75 for 50 kg of feed that they used to get earlier, said Bengaluru Milk Union Ltd. president Narasimhamurthy. This comes at a time when the unions are also under pressure to cut the procurement cost by ₹1.50.
