Karnataka's Dairy Sector Faces Challenges Amidst Overproduction Due to Excessive Rainfall

Following a brief respite in September, the resumption of heavy rains in October pushed milk procurement back above the 10 million litre mark, according to the Karnataka Milk Federation (KMF). "The concern is that overproduction will continue, as more rain is forecasted," said HS Rajkumar, president of Bangalore Milk Union Ltd (Bamul). He added that without an increase in retail prices, as recently promised by Chief Minister Siddaramaiah, milk unions cannot sustain such large procurement volumes.

Karnataka has received 54% more rainfall than usual from October 1 to 21, with the state recording 153.7 mm of rain compared to the typical 100 mm. The excessive rain has also impacted crop harvesting, with paddy and ragi crops now wet and delayed, according to Prof. MN Thimme Gowda from the University of Agricultural Sciences.

The overproduction of milk has become a double-edged sword for the dairy sector. Milk unions are under pressure to continue procuring excess milk, even as the prices of dairy products, such as milk powder, have dropped. Milk producers are also facing challenges, as they are not receiving fair prices for their produce. Several milk unions, including those in Mandya, Ballari, and Kolar, have reduced procurement prices from Rs 34 per litre to below Rs 29. Additionally, the government has yet to increase the Rs 5 per litre incentive to Rs 10, as requested, and has not paid out incentives for over three months.

Although Chief Minister Siddaramaiah pledged last month to raise the retail price of milk from Rs 42 to Rs 47, with the extra Rs 5 going directly to farmers, a final decision is pending consultation with KMF officials and is unlikely to occur before the assembly bypolls on November 13.

The combination of overproduction, lower prices, and delayed government action continues to create uncertainty in Karnataka's dairy industry, raising concerns over long-term sustainability.