The Tamil Nadu government has stepped in to fill Kerala’s milk deficit, at the point, where Karnataka Milk Federation fell short. Tamil Nadu’s milk co-operative Aavin has started supplying 1.5 lakh litre of milk per day to Kerala government’s milk arm Milma, at the rate of Rs 40 per litre.

Nandini, Karnataka’s Milk Federation, had been supplying 2.5 lakh litre to Kerala till recently. Following shortage, it had to cut the supply to 95,000 litre per day. Milma, which procures 12 lakh litre per day for the state’s market, is hard-pressed to meet its13.5 lakh litre per day demand, which also includes supply for the school nutrition project. Kerala chief minister Pinarayi Vijayan had sought the good office of Tamil Nadu chief minister Edapadi K Palaniswami to open parleys on milk supply.

“We have signed up Tamil Nadu’s Aavin co-operative for supplying 1.5 lakh litre of milk per day, although `40 per litre rate is much higher than what is viable for us,” Milma chairman PA Balan told FE.  Milma had recently hiked its milk retail prices and so is unable to pass on the cost burden to the end-consumer. Moreover, processing costs of the milk procured from Tamil Nadu would add Rs 1 per litre to Milma milk’s production cost. Karnataka, which usually enjoys a glut situation in milk, commands the country’s lowest milk prices. But, earlier in 2008 and 2011, when the milk production was grim, Kerala had sourced its milk from Maharashtra.

“Shortage in milk seems in Kerala to be driven by the unusual surge in mercury, even from December. Affected by heat, cows have been yielding less milk,” says S Srikumar, director, Dairy Development, Kerala. Fodder availability had gone down as grasslands had been going sun-browned. “Price rise in cattle-feed has also impacted milk production,” says Balamani Rajan, a cattle farm owner.

A recent Crisil study points out that at 19% increase, 2019-20 saw the country’s steepest rise in milk procurement prices in a decade. The report estimates retail prices to stabilise by first quarter of 2020-21 as it anticipates milk procurement to improve soon.