The Karnataka government has announced an ₹8 increase in the price of Nandini milk per litre across all categories, alongside a ₹14 rise in the price of Nandini curd per kilogram. This decision was approved by the Karnataka Cabinet on Thursday, October 29, and the new prices will take effect from November 1. Following this revision, the cost of Nandini toned milk will be ₹54 per litre, while Nandini Shubham milk, which contains 4.5 per cent fat, will be priced at ₹60 per litre. Chief Minister D K Shivakumar noted that this pricing remains below the average price of ₹62.80 in ten other states.

The Karnataka Milk Federation (KMF) has also revised the price of curd, with a 500-gram pouch now costing ₹34, up from ₹28, and a one-kilogram pouch rising from ₹54 to ₹68. This increase has raised concerns regarding the impact on daily consumer expenses, particularly for those who rely on milk for beverages and meals.

Impact on Food and Beverage Prices

The Bengaluru Hotels Association has expressed concerns that the hike in milk prices may necessitate price adjustments for various food and beverage items, particularly those that require significant quantities of milk, such as coffee, tea, and snacks. In a press release, the association stated that a more modest increase of ₹2-3 per litre would have mitigated the need for price hikes in hotels. The current increase, however, is likely to compel establishments to raise their prices for all milk-based offerings.

While the price hike does not automatically imply that every hotel or restaurant will increase menu prices starting November 1, individual businesses will assess their operating costs, milk usage, and profit margins to determine whether to adjust their prices. As the costs of other essential ingredients are also rising, consumers in Bengaluru may experience higher bills at cafes, bakeries, and eateries in the near future.

PC Rao, honorary president of the Bangalore Hotels Association, has described the curd price increase as unjustified, warning that it could negatively affect both the hotel industry and consumers. This sentiment reflects broader concerns regarding the affordability of essential food items in light of rising prices.

Government Justification for Price Hike

In response to the criticism surrounding the price increase, Chief Minister D K Shivakumar defended the decision, stating that it was essential to protect the interests of farmers, especially given the severe drought affecting the state. He explained that the Cabinet’s decision to raise milk prices by ₹8 per litre was made in light of demands for a ₹12 increase. The Chief Minister highlighted that milk prices had not been adjusted for several years, necessitating this revision.

Regarding the ₹14 increase in curd prices, Shivakumar clarified that the KMF is responsible for setting those rates. He noted that the government intervened solely in the pricing of milk, while other factors, such as fat content, determine curd prices.

Shivakumar identified several key factors contributing to the price hike, including rising fodder and labour costs, increased fuel and packaging expenses, and a decrease in daily milk procurement due to drought conditions. Of the ₹8 increase, ₹7 will be allocated directly to farmers, raising their procurement price from ₹35 to ₹42 per litre. The remaining Re 1 will be used for operational expenses of milk unions.

With the government’s additional ₹5 incentive, farmers will receive ₹47 per litre of milk. For a farmer supplying ten litres daily, this translates to an extra ₹2,100 monthly. The price revision is expected to yield an additional annual income of ₹1,850 crore to ₹2,100 crore for dairy farming families in Karnataka, benefitting a significant number of the state’s 28.84 lakh dairy farmers, many of whom are small and marginal producers.

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