ERCMPU Boosts Milk Procurement Incentive to ₹15, Strengthening Kerala Dairy Sector
In a significant move to support dairy farmers and strengthen the cooperative dairy sector, the Ernakulam Regional Co-operative Milk Producers’ Union (ERCMPU) of Milma has increased its milk procurement incentive to ₹15 per litre. This revised incentive, effective from February 1 to March 31, 2025, marks a crucial step in ensuring fair remuneration for farmers and sustaining the dairy industry in Kerala. The decision, approved by the ERCMPU director board, underscores the cooperative’s commitment to enhancing financial stability for milk producers amidst rising input costs. Previously, dairy farmers were receiving an additional ₹10 per litre, a rate that had been in place since August 2024.
This revision directly benefits dairy farmers and cooperative societies across Ernakulam, Thrissur, Kottayam, and Idukki districts. Out of the ₹15 incentive, ₹8 will be allocated to farmers, while ₹7 will be disbursed to the cooperative societies, ensuring that the entire dairy supply chain benefits from the initiative. Furthermore, ₹1 from the society’s share will be converted into equity in the Regional Union, reinforcing the financial health of the cooperative network. The additional incentive, estimated to cost ₹24 crore, will be drawn from ERCMPU’s working profits, reflecting its strong financial position and commitment to fair pricing in the dairy cooperative sector.
Civic and Economic Impact on the Dairy Sector
The increase in milk procurement incentives is expected to provide much-needed relief to Kerala’s dairy farmers, who have been grappling with rising operational costs, including cattle feed, healthcare, and labour. Dairy farming plays a crucial role in the rural economy, serving as a primary source of income for thousands of families. The hike in incentives is likely to encourage more farmers to continue dairy production, ensuring steady milk supply in the region. Additionally, cooperative societies stand to gain financial strength, enabling them to invest in better storage, distribution, and farmer welfare initiatives.
By setting one of the highest incentive rates in the country’s dairy cooperative sector, ERCMPU is also positioning Kerala as a model for farmer-centric policies. Compared to other states where incentives remain lower, this move highlights the cooperative’s ability to balance profitability while ensuring fair returns for milk producers. The decision comes at a time when fluctuating milk prices and production challenges have been a concern nationwide, making ERCMPU’s approach a benchmark for other cooperative unions to follow.
Sustainability and Long-Term Dairy Development
Beyond financial incentives, ERCMPU is actively working on sustainable dairy sector growth through diversification and value-added ventures. The ongoing expansion of Milma’s operations, including its Milma Refresh vegetarian restaurant chain and bakery units, highlights a broader vision to strengthen dairy-based businesses and ensure steady revenue streams for cooperatives. The upcoming restaurant in Thrissur, expected to be operational by March 2025, will be the second in the chain, reflecting the growing market for dairy-based food services. Additionally, new bakery units in Muvattupuzha and Marangattupally will further boost value addition within the sector.
From a sustainability standpoint, dairy cooperatives play a crucial role in ensuring ethical and environment-friendly farming practices. By incentivising milk production at higher rates, ERCMPU is not only supporting farmers but also promoting sustainable dairy farming methods. Strengthening local milk procurement reduces dependence on external supplies, ensuring food security while minimising the carbon footprint associated with long-distance milk transportation. Moreover, investments in processing units and value-added dairy products contribute to a more circular economy, reducing wastage and maximising resource utilisation within the dairy industry.
A Model for Future Dairy Growth
The increase in incentives is a testament to ERCMPU’s proactive approach in safeguarding the interests of Kerala’s dairy farmers. By ensuring fair pricing and reinvesting in cooperative societies, the move strengthens the cooperative model and ensures long-term sustainability. The ₹24 crore commitment from the working profits highlights the resilience of the cooperative’s financial structure, reinforcing trust among farmers and stakeholders.
With India’s dairy sector facing challenges such as fluctuating procurement rates and increasing production costs, ERCMPU’s initiative sets an example of how cooperative models can balance farmer welfare, economic growth, and sustainability. The strategic expansion into value-added products and food services further enhances revenue stability for cooperatives, ensuring that the dairy sector remains resilient and competitive. As the financial year progresses, the impact of these incentives will be closely monitored, potentially shaping future policy decisions in the cooperative dairy industry nationwide.
