Profits of farmers are likely to shrink with Raichur, Bellary & Koppal Districts Cooperative Milk Producers’ Societies Union Ltd (RBKMUL) reducing the milk procurement price by Rs 1.50 per litre.

The decision was taken a few days ago. The other milk unions in the state are expected to take a similar decision in the coming days. The reason for this is fluctuations in the rates of skimmed milk powder and butter in the global market.

A senior official from Karnataka Milk Federation (KMF) said, “The procurement price has been slashed by Rs 1.50 for a litre of milk procured from Ballari, Koppal, Raichur and surrounding areas. It is based on the profit and losses balance sheet. The RBKMUL is unable to make up for losses amounting to Rs 3 crore. As we were unable to increase the milk price, it was inevitable to reduce the procurement cost.”

The official said the same will be done by other unions also in the coming days. Reduction in procurement cost will depend on the balance sheet. It could vary from 50 paise to even Rs 2 per litre. The rate will also vary depending on the facilities set up by the unions such as ice-cream making unit, where excess milk, skimmed milk powder and other products will be absorbed to manage the costs. Although the decision to reduce the procurement rate was taken after holding the board meeting, it has not gone down well with the farmers, who are crying foul over the losses they will incur.

‘Milk purchase price may be cut across state soon’

KMF sources said discussions on the matter were being held in unions in Hassan and Mysuru. The official said, “The MRP cannot be reduced or increased without the consent of the state government. The unions, however, have the discretion to reduce the procurement rate based on their boards’ decision.”

In June, the KMF increased the milk quantity by 50ml in 500ml and one litre packets while increasing the cost per packet by Rs 2. It took the decision stating that milk production and procurement had increased to one crore litres per day. At present, the procurement is between 95 and 98 lakh litres per day.

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