Karnataka to invest INR900 crore to increase milk procurement | SupportBiz


Karnataka to invest INR900 crore to increase milk procurement

Every morning, some seven lakh farmers across Karnataka carry pails of milk to collection points in their villages. Through these farmers, the Karnataka Co-operative Milk Producers' Federation (KMF) procures 44 lakh litres of milk each day. Milk requirement in the country is expected to double in 10 years. And the Federation is ready with an INR900 crore plan to more than double its procurement of milk over a five year period and to upgrade the entire supply chain across the state.

The National Dairy Development Board’s (NDDB) 15-year-long National Dairy Plan (NDP) will roll out on April 19, in Anand, Gujarat. With an envisaged outlay of INR17,300 crore, NDP aims to increase the productivity of milch animals by adopting focused, scientific and systematic processes and help provide rural milk producers with greater access to the organized milk processing sector, according to an April 17 Business Line article.

KMF’s plan to increase milk procurement, from 4.5 million litres to 10 million litres, will necessitate an estimated investment of INR900 crore in developing infrastructure over five years, the KMF official said -- infrastructure that will assist the state’s 13 milk unions more than  double their procurement; upgrade facilities that store, processes and package milk and milk products; alongside investments for higher procurement and storage of cattle feed.

Funds for the same will be sourced from the state government, from various central schemes, loans from the National Cooperative Development Corporation, from the NDP, from the 13 milk unions and from the Zilla Panchayat at the district level as well.

KMF’s Milk procurement in February 2012 went up 20 percent year-on-year. It reported an INR88 crore profit during the 2011-12 fiscal, according to a Business Standard article.

KMF has a well organized three-tier procurement system, where the farmer sells to the milk producer’s co-operative society, which in turn sells to the milk unions. Surplus milk at any one union is sold to another through the Federation (KMF). “Such an organized system is unique to Gujarat and Karnataka,” the KMF official added.

Furthermore a state government policy that gives an additional INR2 to farmers for every litre procured; and state-support to KMF allowing it to increase both procurement prices and the selling price of milk twice in the last two years, have all helped the Federation ink a success story.

Of the seven lakh farmers who supply milk in Karnataka, 5.75 lakh fall in the ‘small, marginalized and landless’ category, the official said. Furthermore, KMF has over the years empowered rural women too, given that 30 percent of the monies paid goes to wome, the official added.

At INR20 per litre, about INR8.5 crore finds its way back to the villages each day in the southern state, said the KMF official.