Milk unions cut procurement rates as market shrinks during lockdown

The shrinking market for milk and milk merchandise during the lockdown interval and mounting losses has compelled the district milk unions to scale back procurement worth paid to farmers.

While Hassan, Mandya and Shivamogga district unions have already lowered the procurement worth, the Bangalore Milk Union Ltd. (BAMUL), among the many largest procurer of milk within the State, on Wednesday introduced discount of procurement worth by ₹1.5 per litre beginning June 1, KMF sources mentioned.

Kolar and Tumakuru district unions are additionally anticipated to comply with go well with.

This will hit farmers instantly as they’ve seen their revenue decline since March final 12 months. In Bengaluru, a dairy farmer obtained on common ₹29 per litre of milk relying on fats content material in March 2020, which got here right down to ₹24 per litre as the union cut procurement worth. It had climbed again to ₹27.5 per litre. With the most recent announcement, their incomes per litre will probably be ₹26. This is moreover ₹5 per litre given by the State authorities. According to KMF sources, the price of manufacturing of milk within the State is about ₹35 per litre.

“On an average, unions are losing about ₹5 for every litre of milk being converted into milk powder as the cost of powder has crashed from ₹260 per kg to ₹180,” Bengaluru milk union president Narasimhamurthy informed The Puucho. Further, he mentioned because the State has obtained good pre-monsoon showers, milk procurement has additionally gone up.

About 15 lakh litres of milk that was offered free or in a variety of milk merchandise is now being transformed to exploit powder at a loss. KMF sources mentioned that near 40 lakh litres of milk of about 85 lakh litres procured day by day is being transformed into milk powder.

While BAMUL’s procurement has gone up from about 15 lakh litres to 19 lakh litres day by day, the gross sales has dropped from earlier 11 lakh to 9 lakh litres day by day. The sale of cheese has stopped, leading to about two lakh litres of milk as well as. Currently, it converts near 10 lakh litres of milk day by day.

Mr. Narasimhamurthy mentioned: “BAMUL reported losses to a tune of ₹10 crore in April and is set to lose about ₹15 crore in May. By reducing procurement price by ₹1.5 per litre, we hope to keep the monthly loss below ₹5 crore.”

Many unions, together with BAMUL, which have run out of capability to transform milk into powder are taking milk to Andhra Pradesh and Tamil Nadu. Unions are paying between ₹18 and ₹20 per kg for powder transformed from milk.

Unions search worth hike

The KMF and unions have sought a hike by ₹5 per litre of milk within the State, BAMUL president Narasimhamurthy mentioned. In comparability to neighbouring States the place milk prices about ₹50 per litre, the value in Karnataka is between ₹35 and ₹40 a litre. “Considering the high input cost and decline in earning of farmers, we have sought a hike,” he added.