Minister Krishna Byre Gowda told reporters that the cabinet’s decision will increase the price farmers receive to ₹42 per litre, while the state’s milk cooperatives will get an additional ₹1.
The move follows weeks of street protests by dairy farmers who had earlier demanded a hike of at least ₹10 per litre, and pressure from cooperatives that had lobbied the chief minister.
Under the new scheme, farmers will now get ₹7 of the increase, bringing their net payment to ₹47 per litre when the ₹5 state incentive is added.
The decision, announced on Thursday, is expected to ease tensions that have seen local milk producers block routes and sit outside government offices.
The cabinet met twice over the issue, and the final figure of ₹8 per litre was agreed after weighing the farmers’ demands against the state’s fiscal limits.
The change will take effect on 1 November, with the government preparing to monitor the impact on milk supply chains and farmer income.