The dairy sector in Karnataka is currently embroiled in a heated dispute between milk unions and producers over pricing and incentives.
Key Issues:
- Price Increase: Karnataka Milk Federation (KMF) raised milk prices by Rs 2 in June, adding 50ml to every 500ml packet. Despite this, milk unions argue that the hike is insufficient due to excessive milk production and mounting financial losses from unsold skimmed milk powder (SMP).
- Procurement Prices: Many of the state’s 15 milk unions have reduced procurement prices by Rs 2 per litre, causing frustration among farmers. Rates have dropped to Rs 30 per litre in some districts, while most unions procure at Rs 32.5 per litre.
- Incentives: Farmers are unhappy with the government’s unchanged Rs 5 per litre incentive, which has been stagnant for over a decade despite rising input costs. They are demanding an increase to Rs 10 per litre and threatening protests if their demands are not met.
Recent Developments:
- Bamul’s Appeal: Bangalore Milk Union Ltd (Bamul) is set to submit a memorandum to Chief Minister Siddaramaiah, requesting a Rs 5 increase in the retail price of Nandini milk, currently sold at Rs 42 per litre.
- Production and Sales: Daily milk production has risen from 83 lakh litres to 93 lakh litres. Unions are struggling with a price crash in SMP, which is sold at Rs 220 per kg despite production costs of around Rs 300 per kg.
- Farmer Protests: Farmers are pushing for a Rs 10 per litre incentive and have threatened a statewide protest and a ‘Vidhana Soudha Chalo’ march if their demands are not met. They also criticize the government for delays in incentive payments, with four months of arrears still pending.
