Karnataka Milk Federation Faces Mounting Financial Strain
Kolar’s Dairy Farmers Bear the Brunt
Among the hardest hit are dairy farmers in Kolar, Karnataka’s second-largest milk-producing district. With surplus milk redirected into powder production due to weak demand, the oversupply has compounded financial difficulties. The Kolar-Chikkaballapur Milk Cooperative, comprising 1,200 self-help groups and producing 600,000 liters of milk daily, has seen a significant drop in demand. As a result, milk powder—produced at a cost of ₹240 per kilogram—is being sold below cost, further straining the federation’s finances.
Adding to the distress, ₹44 crores in incentive payments for Kolar’s dairy farmers have remained unpaid for five months, exacerbating economic hardships in the region. Farmers are increasingly calling for urgent government intervention to prevent a worsening crisis.
Policy Intervention and Market Stabilization Needed
KMF’s predicament highlights the fragile economics of dairy cooperatives in India. The sector, which relies heavily on government incentives and price controls, is vulnerable to supply chain disruptions and market imbalances. To mitigate losses, KMF has urged state authorities to introduce immediate relief measures, including subsidies for surplus milk powder and direct financial assistance for struggling farmers.
With India’s dairy sector playing a critical role in rural livelihoods, policymakers face growing pressure to stabilize prices and ensure sustainable demand. Whether Karnataka’s government will step in to rescue KMF remains to be seen, but without intervention, the state’s dairy industry could face prolonged financial uncertainty.
