Karnataka to stop milk supply to AP as dues mount to Rs 130 cr

Amaravati: The Karnataka Milk Federation (KMF) has expressed its inability to supply milk to Anganwadis in Andhra Pradesh unless the latter immediately cleared the Rs 130 crore payment due and also increased the price by Rs 5 a litre.

The milk supply from Karnataka, if stalled, could deprive over 20 lakh children under the age of six of nutritious food as part of the Sampoorna Poshana scheme.

The AP government has been procuring 110 lakh litres of ultra-high temperature milk every month from KMF under the brand Nandini.

For the past four months, however, the state government did not make any payment to KMF, the outstanding amount now touching Rs 130 crore, even as a row broke out over the revision of milk price, official sources here told PTI.

The KMF, under an agreement with the AP government signed in June 2020, had been charging Rs 5 per litre ”less than the actual cost” since the Sampoorna Poshana scheme is a ”noble social cause.” In February this year, the KMF sought an increase in the milk price by Rs 5 a litre in view of the increase in procurement price, hike in diesel price, corrugated boxes and other raw materials.

The AP government, however, requested that the old price be continued till May 2021 against advance payment.

”Though we did not agree to AP’s proposal, we continued supplying milk at the older price on the oral assurance of AP Dairy Development Cooperative Federation (to enhance the rate) as it was a noble social cause. Despite a number of letters and meetings, the milk supply price has not been revised,” KMF Managing Director BC Sateesh said in a letter to Praveen Prakash, Principal Secretary to the AP Chief Minister.

Sateesh said the Karnataka milk unions have been incurring heavy losses due to higher input costs, coupled with the hike in fuel prices, which severely dent their working capital and profitability.

”The milk unions have informed us that they will not be able to supply milk at the existing price. Also, delayed payment (from AP government) is leading to irregular payment to the milk producers,” the KMF Managing Director pointed out.

He said dairy farmers in Karnataka were going through a lot of hardship and the milk unions informed (the KMF) that they would not be able to supply milk to AP Anganwadis unless there was an upward revision in price by Rs 5 a litre.

Sateesh wanted the AP government to immediately clear the Rs 130 crore due and another Rs 2.33 crore to the milk unions directly.

Official sources here said the KMF MD had previously written many letters to Women and Child Development Principal Secretary A R Anuradha on the issue but to no avail.

”We have raised the bills and submitted them to the Finance Department. But the payments are not cleared for long, though tokens have been issued from the Comprehensive Financial Management System,” the official sources said.

Officials fear that if the payments get delayed further, the milk supplies from Karnataka could stop.