Bengaluru: Karnataka’s cooperative milk producers’ unions have sought an increase of Rs 8 to Rs 10 per litre in the procurement and retail prices of Nandini milk, citing rising cattle feed, fodder, veterinary, processing and other dairy-farming costs.

The demand has been placed before the state government as milk unions and dairy farmers face increasing financial pressure, particularly amid drought-related fodder shortages. The government, however, has not approved the proposed hike yet and is examining detailed cost and pricing data before taking a decision.

Milk unions seek higher prices

Representatives of Karnataka’s cooperative milk producers’ unions met Chief Minister D.K. Shivakumar and sought a substantial revision in Nandini milk prices.

The unions initially sought an increase of Rs 8 to Rs 10 per litre, arguing that the existing prices were no longer sufficient to cover rising production and operational expenses.

The demand includes higher returns for dairy farmers as well as improved financial viability for cooperative milk unions. Farmers and unions have argued that milk procurement rates in Karnataka remain lower than those offered in several neighbouring states.

The government has asked officials to collect detailed information on cattle feed prices, the cost of producing a litre of milk, milk procurement and sales volumes and pricing structures in other states.

Rising cattle feed and farming costs

Milk producers have pointed to a sharp increase in the cost of maintaining dairy cattle.

Expenses on cattle feed, fodder, veterinary medicines, transportation and other farm requirements have risen, increasing the cost of producing milk.

The drought situation has added to the pressure by reducing the availability of fodder. Farmers have also faced losses in agriculture, making dairy income increasingly important for many rural households.

Milk unions have therefore argued that a revision in procurement prices is necessary to ensure that dairy farmers continue to supply milk to the cooperative network.

Karnataka procurement rate lower than neighbouring states

The unions have highlighted differences between Karnataka’s milk procurement rates and those in neighbouring states.

According to figures cited by the delegation, Karnataka’s cooperative milk unions procure toned milk from producers at around Rs 35 per litre. The corresponding rates cited for Andhra Pradesh, Kerala, Maharashtra and Tamil Nadu were Rs 41.50, Rs 41.80, Rs 41 and Rs 42.24 per litre respectively.

Milk union representatives said the difference was making it difficult for Karnataka’s cooperatives to compete for milk, particularly as private dairies have been offering higher procurement prices in some areas.

The unions have also claimed that the retail price of milk in Karnataka is lower than in several neighbouring states.

Drought adds to dairy farmers’ burden

The demand for a price revision comes at a time when Karnataka is dealing with widespread drought conditions.

Reduced fodder availability has affected dairy farmers and contributed to a decline in milk procurement by KMF. A September report said daily procurement had fallen from around 1.11 crore litres to 1.03 crore litres over a three-month period.

Farmers also reported declining milk quality and lower total solids and fat content, which they attributed partly to difficulties in maintaining adequate feed supplies.

The situation has increased pressure on the cooperative dairy system to maintain milk procurement while ensuring that farmers receive adequate returns.

Government seeks detailed data

The state government has not accepted the proposed Rs 8-10 hike outright.

Chief Minister D.K. Shivakumar has asked officials to prepare detailed data covering the increase in cattle feed costs over the past decade, production costs, milk procurement and sales volumes and the prices prevailing in other states.

The government is also examining the impact of any increase on consumers. The proposed revision will therefore have to balance the financial requirements of dairy farmers and cooperative unions with the effect of higher milk prices on households.

Proposal may change before final decision

The amount under discussion has also changed during the consultations.

While unions initially demanded Rs 8-10 per litre, later reports indicated that the milk cooperatives had considered a Rs 5 per litre increase as a possible revision. The government has continued to examine the matter rather than immediately approving the original demand.

This means the final increase, if approved, could differ from the Rs 8-10 per litre initially sought by the unions.

The government is expected to consider comparative prices, procurement costs and the financial condition of KMF and its district unions before taking a final decision.

Private dairies increase competition

Another concern raised by milk unions is competition from private dairy companies.

Union representatives said private dairies have been attempting to procure larger quantities of milk by offering farmers higher rates in some regions. This could make it harder for cooperative unions to maintain their procurement volumes.

A KMF official cited in a recent report said private companies in parts of North Karnataka were paying farmers Rs 8-10 more per litre than KMF, adding to pressure on the cooperative network.

For KMF and its member unions, maintaining adequate procurement is important to ensure a consistent supply of milk and dairy products under the Nandini brand.

Consumer impact remains a concern

Any increase in Nandini milk prices would directly affect household budgets because milk is a daily-use essential commodity.

The state government has therefore indicated that consumer interests will also be considered while examining the unions’ demand. The challenge is to provide better returns to farmers without imposing an excessive price burden on consumers.

The final decision is expected to depend on the cost data being compiled by the government and the recommendations placed before the state Cabinet.

Conclusion

Karnataka’s milk unions have sought an Rs 8-10 per litre increase in Nandini milk prices, citing rising cattle feed, fodder, veterinary and production costs and the financial difficulties faced by dairy farmers.

However, the hike has not been finally approved. The state government is examining procurement costs, prices in neighbouring states and the financial condition of milk unions before deciding the extent of any revision.