Over 3,000 liters of milk produced in Karnataka’s border regions are being sold daily to neighboring Kerala due to higher purchase rates. Dairy farmers in the southern border regions of Dakshina Kannada district have found a profitable market in Kerala’s milk collection centers, where milk is priced higher than in Karnataka.
Why is Milk Flowing to Kerala?
In Karnataka, milk fetches around Rs 40 per liter (including a Rs 5 government subsidy), while in Kerala, it sells for approximately Rs 50 per liter. Many dairy farmers within a 5-7 km radius of the Karnataka-Kerala border prefer to sell milk in Kerala as it allows them to cover transportation costs and still earn a profit. Due to delayed subsidies and low purchase rates in Karnataka, farmers are increasingly seeking profitable avenues.
In Dakshina Kannada, high-quality milk is bought at Rs 38 per liter, with a Rs 5 subsidy from the Karnataka government. In contrast, Kerala offers Rs 50 or more per liter for the same quality milk, encouraging farmers to sell across the border.
Higher Profits in Kerala
Gerald D’Souza, a dairy farmer from Alike Muliya near the Karnataka border, explains, “Selling milk to Kerala depots gives us around Rs 10 extra per liter. If the milk quality is excellent, we get over Rs 50 per liter. Currently, the subsidy payments in Karnataka are inconsistent, and animal feed prices are also rising. Dairy farming here is becoming unsustainable, with many farmers opting out.”
Quality-Based Pricing System in Kerala
A milk producer from Kerala’s Vorkady region stated, “Milk rates in Kerala are based on quality and are generally higher than Karnataka’s rates. Thus, many Karnataka border residents bring their milk here, sometimes even fetching higher-than-market prices for it.”
A manager from a milk depot in Manjeshwar, Kasaragod, added, “In Kerala, quality milk prices can range between Rs 44 and Rs 60 per liter, attracting Karnataka’s border farmers. Although Kerala cooperatives offer a state subsidy, it is unavailable to Karnataka farmers due to interstate regulations.”
Quality Standards Relaxed in Kerala
Kerala has recently allowed lower-quality milk to be purchased for the benefit of local farmers, a practice not permitted in Karnataka. This price and policy disparity is driving about 3,000 liters of Karnataka’s milk into the Kerala market daily. Leaders in the Dakshina Kannada dairy industry believe that raising Karnataka’s milk purchase rate by Rs 5 per liter could significantly support local dairy farmers’ livelihoods.
“If Karnataka could increase milk rates by Rs 5 per liter, it would greatly benefit dairy farming in Dakshina Kannada and Udupi districts,” said Sucharita Shetty, President of Dakshina Kannada District Cooperative Milk Producers Union.
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