Karnataka to Stop Supplying Milk to Andhra Pradesh as Dues Mount to Rs 130 crore

The Karnataka Milk Federation (KMF) has stated that it will be unable to deliver milk to Anganwadis in Andhra Pradesh unless the latter immediately clears the Rs.130 crore of payment outstanding and increases the price by Rs.5 per litre.

If the milk supply from Karnataka is disrupted, it might deprive over 20 lakh children under the age of six of nutritious meals as part of the Sampoorna Poshana scheme. 

Every month, the AP government purchases 110 lakh litres of ultra-high temperature milk from KMF under the brand Nandini. 

However, for the last four months, the state government has not made any payments to KMF, with the overdue amount now approaching Rs.130 crore, even as a dispute erupted over the modification of milk prices, according to official sources here. 

The KMF has been charging Rs.5 per litre "less than the real cost" since the Sampoorna Poshana scheme is a "noble social cause" under an agreement signed with the AP government in June 2020. 

In February of this year, the KMF requested an increase of Rs.5 per litre in the milk prices due to the increase in procurement costs, diesel prices, corrugated packaging, and other raw materials. 

The AP government, on the other hand, requested that the former price be extended until May 2021 in exchange for an advance payment. 

"Despite the fact that we did not agree with AP's proposal, we continued to supply milk at the previous price on the oral assurance of AP Dairy Development Cooperative Federation (to raise the rate) because it was a noble social cause. Despite several letters and discussions, the milk production price has still to be reduced "In a letter to Praveen Prakash, Principal Secretary to the AP Chief Minister, KMF Managing Director B C Sateesh said. 

According to Sateesh, the Karnataka milk unions have been facing substantial losses as a result of increasing input costs combined with an increase in fuel prices, which has badly impacted their working capital and profitability. 

"The milk unions have notified us that they will be unable to deliver milk at the current price. In addition, delayed payment (from the AP government) is causing inconsistent payments to milk farmers "The Managing Director of KMF emphasised this. 

He stated that dairy farmers in Karnataka were suffering greatly, and the milk unions notified (the KMF) that they would be unable to supply milk to AP Anganwadis unless the price was raised by Rs.5 per liter. 

Satessh demanded that the AP Government promptly pay the Rs.130crore owed to the milk unions and extra Rs.2.33 crore to the milk unions directly.

According to official sources, the KMF MD had already sent many letters to Women and Child Development Principal Secretary A R Anuradha on the subject, but to no avail. 

Officials are concerned that if payments are delayed further, milk shipments from Karnataka may be disrupted.