Karnataka lawmakers press for higher raw-milk prices

Karnataka lawmakers are pressing for a higher raw-milk price amid rising costs faced by primary dairy producers. Compound cattle-feed prices have increased from about 700–750 rupees a bag to 1,250 rupees. The price of replacing productive dairy cattle has also risen, with a single animal now costing more than 150,000 rupees.

Producers are additionally paying compulsory livestock-insurance premiums, while some areas have reported shortages of fodder. Climate-related pressures have added to the cost of producing milk. These conditions have placed pressure on the ability of rural producers to retain dairy herds.

The cooperative processing system is also recording financial losses. The 16 district milk-producers’ unions linked to the central dairy federation have accumulated annual losses approaching 1.8 billion rupees. Their combined daily operating deficit is close to 5 million rupees, attributed to unsold stocks of liquid milk and the fixed costs of processing facilities.

Cooperative leaders are asking that at least 60% of any approved increase in retail milk prices be transferred directly to the manufacturing unions. They say the allocation is needed to address the unions’ balance-sheet pressures. The request concerns the distribution of additional retail revenue rather than only the level of the farmgate price.

Cooperative milk is sold through state-backed distribution networks at 46 rupees a litre. Prices in neighbouring markets range from 52 to 67 rupees a litre. The difference has created a gap between cooperative retail prices and those charged elsewhere, while private dairy processors are procuring farm milk at levels that draw supply away from cooperative collection routes.