Karnataka Government Approves ₹8 Per Litre Milk Price Hike to Support Drought-Hit Dairy Farmers

The Karnataka government has approved an ₹8 per litre increase in milk prices across all categories, with the revised rates set to come into effect from November 1. Karnataka Chief Minister D K Shivakumar defended the decision, stating it was necessary to protect the interests of dairy farmers while the state reels under severe drought.

According to the Chief Minister, milk producers had initially sought a hike of ₹12 per litre. Shivakumar noted that milk availability and production have declined due to the drought conditions, and higher prices in neighbouring states were causing farmers to divert their milk supply outside Karnataka.

"We have no other option. If we want to protect our cows, we must provide them with good food. To provide them with food, we need fodder. For fodder to be available, farmers must be in a good financial position and have money in their hands," Shivakumar told reporters.

The price revision was also prompted by rising fodder and labour costs, increased fuel and packaging expenses, and a decline in daily milk procurement. Shivakumar clarified that milk prices had not been revised for several years.

Out of the ₹8 per litre increase, ₹7 will go directly to farmers, raising the procurement price from ₹35 to ₹42 per litre. The remaining Re 1 will go toward operational expenses for milk unions. Including the ₹5 government incentive, farmers will receive ₹47 per litre. This adjustment is expected to provide an additional annual income of ₹1,850 crore to ₹2,100 crore for dairy farming families across the state.

Karnataka has a total of 28.84 lakh dairy farmers, with 67 percent of Karnataka Milk Federation (KMF) members comprising small and marginal farmers. The government stated that a farmer supplying 10 litres of milk a day will earn an additional ₹2,100 a month.

Despite the price increase, the state maintained that Nandini milk products will remain competitively priced. Nandini toned milk will cost ₹54 per litre, while Nandini Shubham milk (with 4.5 percent fat content) will cost ₹60 per litre, remaining lower than the average prices seen in several other states.

Addressing curd prices, Shivakumar stated that the ₹14 per kg increase in Nandini curd prices was decided by the Karnataka Milk Federation based on fat content and other factors, noting that the government intervened only in the pricing of milk.

"The decision to increase milk procurement prices highlights the critical economic pressures facing the agricultural and dairy sectors during natural calamities like droughts. Ensuring that the majority of the price hike goes directly to small and marginal farmers helps sustain rural livelihoods and protects primary supply chains from collapsing. For businesses operating in the rural economy, input cost adjustments are often necessary to maintain operational viability, balance supply deficits, and protect long-term producer interests." — Dr. Shishir Gupta, Founder & CEO, StartupLanes