Rs 2-3/litre rise on the cards, as KMF profits dip.

Our Bureau

Bangalore, Jan. 28

Milk prices in Karnataka are slated to rise by Rs 2-3 a litre, with the State Government accepting a request to this effect from the Karnataka Milk Federation (KMF). KMF has been asked to prepare a detailed proposal.

Addressing presspersons here on Thursday, the Minister for Cooperation, Mr Laxman S. Savadi, said the KMF had mooted the proposal in the wake of reduction in its profits. At present, Nandini milk is priced between Rs 16 and Rs 22 a litre, depending on the fat content.

Mr Savadi said the hike was unavoidable as producers were burdened by rising production costs, which make dairy farming unviable. The benefit of the price hike would be shared between the farmers and the KMF at the ratio 70:30. Of the 14 milk unions in the State, the profits of Gulbarga and Belgaum district milk unions declined sharply, the Minister said.

The price of Nandini milk was last hiked by Rs 2 a litre in November 2007. KMF's attempts to increase prices were stalled last year by the Government, which instead announced Rs 2 a litre as incentive for farmers.

Procurement

Sources said milk procurement by the KMF has registered a sharp decline in the last three weeks owing to shortage of fodder and water , particularly in districts of Bangalore, Kolar and Shimoga.

Milk procurement by the KMF increased 14 per cent to an average of 36.71 lakh litres a day in April-December 2009 compared with the same period in 2008, when average procurement a day was 32.11 lakh litres.

Currently, the procurement is about 33.54 lakh litres a day, about 11 per cent lower than the average procurement in April-December 2009. A KMF official said such a decline is “normal, after a period of drought”.

KMF officials say the State can manage the situation because Karnataka has been milk-surplus since 1996. They claim that the State has “excess production” of 5.46 lakh litres of milk a day despite the recent decline in procurement.

(This article was published in the Business Line print edition dated January 29, 2010)
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