KMF wants to hike price of milk ‘to help farmers in Karnataka’

KMF Chairman Balachandra Jarkiholi has requested Karnataka CM to approve the proposal citing the need to support farmers

Karnataka Cooperative Milk Producers’ Federation Limited (KMF) plans to increase the selling price of milk by ₹3 per litre.

KMF Chairman Balachandra Jarkiholi sent a letter to Chief Minister Basavaraj Bommai on April 25, two weeks after Cooperative Minister S T Somashekar refused to approve the proposed hike. Mr Jarkiholi had also met the CM earlier this week with the request, say KMF officials.

In a statement released to the media, the chairman said that KMF was constrained to raise the price as its input costs had increased in the last two years. Nandini branded milk is the cheapest in the market. All other brands are costlier by at least ₹8. Most milk brands, including Amul, have increased their sale price.

Mr Jarkiholi claimed that the extra ₹3 would be used to pay its suppliers. Of this, ₹2 would go to farmers and ₹1 to agents, the federation and milk cooperative societies.

Officials, however, say there are other factors. The most pressing is the demand of milk selling agents.

“Among all the players in the milk business, KMF gives the least commission. Even among the premium brands, our payment is lesser than others. While private dairies are offering up to ₹5 per litre, we are able to pay only ₹1.07. This could drive away our agents to private players. The only way to keep our flock together is to increase the commission amount,’’ said a senior official.

“Among the reasons for payment of lower commission is that operating cost of KMF is higher than others. The staff to volume ratio is higher than others. We have 15,000 employees for the 81 lakh litres of milk collected per day, which means each employee handles an average of only 540 litres. But some private companies have one employee handling up to 1,2000 litres. Their cost of operation is obviously less than ours,” said the officer.