Escalating feed and fodder inflation sits at the center of the agitation. Dairy farmers across Karnataka are grappling with steep price surges in commercial cattle feed and concentrates, compounded by widespread seasonal green fodder shortages and limited grazing access. These feed deficits have inflated the baseline cost of milk production while curbing daily lactation volumes, driving down aggregate milk output across the state. Shivakumar noted that primary village milk cooperative societies are absorbing the financial squeeze as well, reportedly incurring operational losses of ₹6 to ₹7 per litre under current pricing mechanisms.

The procurement debate is further exacerbated by competitive pricing dynamics in neighboring southern states. Highlighting neighboring benchmarks, Shivakumar pointed out that Tamil Nadu recently lifted its dairy procurement rates by ₹9 to ₹10 per litre. Because Karnataka’s statutory cooperative payout now lags regional competitors, substantial volumes of raw milk are being diverted away from the Karnataka Milk Federation (KMF) cooperative network, with farmers choosing to sell to private dairy processors or cross-border buyers offering immediate cash premiums.

This leakage of raw milk solids poses an operational risk for Karnataka’s organized cooperative processing infrastructure. The KMF and its constituent district milk unions rely on high daily procurement volumes to service retail pouch demand under the flagship Nandini brand, maintain powder-drying plants, and supply institutional welfare schemes. Sustained supply diversions not only threaten downstream processing throughput but also risk eroding KMF’s market share in urban liquid milk and value-added dairy segments.