Kerala Set to Hike Milk Prices to Support Farmers
Kerala is likely to raise milk prices soon, as announced by Minister J. Chinchu Rani in the state assembly. The revision, to be finalized by Milma, aims to benefit dairy farmers who face rising production costs. Kerala Minister J. Chinchu Rani has confirmed that the state government will raise the milk procurement price by Rs 5 per litre, effective from December. The hike is being proposed in response to escalating production costs faced by dairy farmers. Presently, farmers receive about Rs 44/litre in Kerala, while the cost of milk production has reportedly crossed Rs 49/litre.
Industry Insights
Kerala already pays one of the highest milk procurement rates in India, reflecting the state’s commitment to farmer welfare. However, another price hike could increase consumer spending pressures, especially among lower-income households.
Milk procurement price for cow milk ( in Rs per liter)Tamil Nadu: Rs 34
Karnataka: Rs 35
Kerala : Rs 44
From an industry perspective, such hikes often stimulate farmer confidence and stabilize milk supply, but they also raise input costs for processors and downstream sectors like sweets, bakery, and packaged dairy. Price-sensitive consumers may shift towards cheaper private suppliers or alternative products, slightly denting demand growth.
Policymakers will need to balance farmer remuneration with consumer affordability. The timing and quantum of the hike will be crucial to avoid adding to food inflation, which could have wider economic and political implications.
Source : Dairynews7x7 Sep 20th 2025