Milk unions in Karnataka will be reducing the purchase price of milk from farmers by Rs 1.5/litre from June 1. They are doing it due to the decline in dairy consumption amid the pandemic-induced lockdown.
The bad news is that this low demand has occurred during a glut in production because of decent rains. The Karnataka Milk Federation is receiving about 87 lakh litres daily as against normal inflow of 73 lakh litres. Daily sales, on the other hand for milk and milk products have dropped from 60 lakh to 49 lakh litres. KMF is now converting excess supply into SMP and butter which also does not have any market today.

“This distressing situation has forced the Bamul milk union to reduce the milk purchase price. Bengaluru Milk Union Limited (Bamul) covers three districts — Bengaluru Urban, Bengaluru Rural and Ramanagar. Hassan and Mandya milk unions too have decided to cut purchase prices. It is expected that other 11 unions will also be reducing the prices soon.

Dairy Farmers wish the government to hike incentive for milk producers from Rs 5 per litre to Rs 10. Milk unions including Bamul need a government consent to increase retail price from Rs 37 to Rs 45.

KMF, in order to continue procurement, has appealed to the Centre to allow unions to use the interest subvention scheme . This will be done on the lines of last year’s lockdown package when the milk unions availed Rs 800 crore. The federation has got an assurance from the center that unions may be allowed to borrow around Rs 900 crores. This will be done as the last year’s scheme will be extended during this lockdown period also.