Karnataka’s RBKMUL reduces milk procurement prices by ₹1.50 per liter due to global market fluctuations, impacting farmer profits and leading to criticism from Union Minister Pralhad Joshi.
In Karnataka, India, the Raichur, Bellary & Koppal Districts Cooperative Milk Producers’ Societies Union Ltd (RBKMUL) has announced a reduction in milk procurement prices, which will affect dairy farmers across the state. The decision to lower the procurement rate by ₹1.50 (approximately $0.02) per liter comes in response to fluctuations in global prices for skimmed milk powder and butter. This price adjustment is expected to prompt other milk unions in Karnataka to implement similar reductions.
RBKMUL, a key cooperative involved in milk procurement for the districts of Raichur, Bellary, and Koppal, faced a ₹3 crore ($3.6 million) financial loss that it could not offset. A senior official from the Karnataka Milk Federation (KMF) explained that due to the impracticality of increasing consumer milk prices, reducing procurement costs became necessary.
Farmers Express Discontent Over Price Cuts
The decision to reduce procurement prices has been met with considerable dissatisfaction from farmers, who are concerned about the impact on their profits. With other milk unions likely to follow suit, price reductions may vary from ₹0.50 ($0.01) to ₹2 ($0.02) per liter based on individual financial conditions. This move, although necessary for financial stability, highlights the ongoing struggles within the dairy sector.
Union Minister Pralhad Joshi has criticized the Karnataka government for the decision, arguing that it undermines efforts to support farmers. The backlash reflects broader concerns about the financial pressures faced by dairy farmers, who are already dealing with rising production costs and uncertain market conditions.
In June 2024, KMF had increased the quantity of milk in consumer packets and raised prices due to increased production, now at 95-98 lakh (9.5 to 9.8 million) liters per day. Despite these adjustments, the recent price cuts in procurement have added to the challenges faced by farmers.
