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KMF to meet state govt to deliberate on price rise issue as incentive to milk producers or retail price
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Wednesday, 25 September, 2024, 08 : 00 AM [IST]
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Nandita Vijayasimha, Bengaluru
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Karnataka Milk Federation (KMF) has called on the state government to hold meeting to deliberate pricing of milk. This is at a time when the Karnataka milk producers are advocating for higher prices to cover their dairy farm expenses, while KMF and the government are concerned about maintaining affordability for consumers.
Rising input costs such as feed, labour, and transportation can significantly impact dairy farmers' profitability. Their request for increased government incentives reflects their need for support without passing the burden onto consumers through higher retail prices.
Finding a solution that balances the needs of farmers, the dairy federation, and consumers will be crucial. This might involve the government exploring subsidies or alternative funding methods that don’t lead to increased milk prices, said the dairy industry observers.
It is gathered that Karnataka Chief Minister Siddaramaiah now is taking a careful approach by consulting with senior KMF officials before making a decision. His statement about ensuring that any retail price hike would directly benefit dairy farmers shows an understanding of their plight and the need for fair compensation. The involvement of the 15 milk unions also suggests that this is a coordinated effort among various stakeholders. It’ll be important to see how these discussions unfold and whether they can reach a compromise that satisfies both farmers and consumers.
In June this year, the Federation’s approach was to add extra volume rather than a straightforward price hike. It had added 20 ml extra milk to each one litre sachet and priced it as Rs 42 per litre. However, the milk unions’ demand for a Rs 5 increase per litre indicates that they feel the current compensation still isn’t sufficient to cover their rising costs.
If the price increases to Rs 47 per litre, it could put additional financial strain on consumers, especially in a context where people are already facing inflation in other areas. Balancing the needs of farmers for fair compensation with consumer affordability will be key, stated observers in the dairy industry.
“Although KMF is technically an autonomous body and can fix milk prices on its own. But there are reservations among the unions about passing the entire price increase to the producers with only Rs 3 of a potential price increase to the farmers,” reported a media news.
The current situation seems quite complex, especially with the glut in milk production. When supply exceeds demand, it can lead to lower procurement prices, which adds more pressure on both milk unions and farmers. The reductions in procurement prices by certain unions show that they are feeling the strain and may not be able to sustain their operations without some relief.
By urging the state government to increase retail prices and ensure that producers benefit from any hikes, the unions are seeking a more sustainable solution that can support farmers while addressing the current market conditions. The challenge will be finding a way to stabilise prices without alienating consumers, said the dairy sector.
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