To bail out Karnataka Cooperative Milk Producers’ Federation Ltd. (KMF) and 13 milk unions, which have been facing severe financial crisis owing to a glut in milk production, the government has proposed to borrow Rs. 2,000 crore from financial institutions.
The government would raise the loan either from the National Bank for Agriculture and Rural Development (NABARD) or the National Cooperative Development Corporation (NCDC) to bail out the milk unions and to develop infrastructure for storing surplus milk, according to Minister for Cooperation H.S. Mahadev Prasad.
The KMF and all milk unions have been incurring losses following surplus milk production during the last one year. Even as several parts of Karnataka had been declared drought-hit, the State’s milk procurement is at an all-time high owing to bumper production. The State has a daily surplus of 35 lakh litres of milk.
Mr. Prasad told presspersons that on an average, the State produces more than 70 lakh litres of milk a day against the demand of 35 lakh litres. Thirteen district-level milk unions and 14,000-odd milk cooperatives have been facing financial difficulties as there are no takers for surplus milk. Some of the milk unions have not cleared pending dues of farmers running into a few crores of rupees. Paying incentive of Rs. 4 a litre of milk is said to be one the major reasons for surplus milk production.
With poor infrastructure in districts, the unions have been transporting milk to neighbouring Maharashtra and Andhra Pradesh for converting it into powder. Currently, Karnataka is sending more than 10 lakh litres of milk to other States for converting it into powder.
Mr. Prasad ruled out slashing retail milk price to boost local consumption. Bulk of the milk produced in the State is consumed in cities such as Bengaluru, Msyuru, Kolar, Tumakuru, and Hassan. Farmers in Bengaluru region are supplying the highest quantity of milk at 14.3 lakh litres a day followed by Kolar and Tumakuru (nine lakh litres each), Mysuru (eight lakh litres) and Hassan (six lakh litres a day).
He said the KMF would try to bag the contract for supplying ghee to Tirumala Tirupati Devasthanams (TTD) in the next six months as the TTD was not happy with the current supplies from a Maharashtra-based dairy, he said.
To manage excess milk, he said ultra-high temperature plants with a capacity of one lakh litre each would be established in Bengaluru, Mysuru and Chamarajanagar. The proposed plants would store milk safely for three to six months in normal temperature.
