Further increase in procurement price, announced by Chief Minister C. Joseph Vijay in the State Assembly on Monday, is set to boost the milk procurement of the Tamil Nadu Cooperative Milk Producers Federation Limited, which markets milk under the Aavin brand.
The State government had increased the procurement price on August 19 from ₹39 to ₹ 41 a litre. However, it did not go well with farmers and cooperative societies. They contended that it was highly insufficient as input cost went up sharply in recent years. Aavin officials felt that it was not proportionate to the prices offered by the private dairies that offered ₹44 to ₹45 a litre.
Taking into account various factors, Mr. Vijay announced a further increase in procurement price to ₹44 a litre. It means that the average procurement price goes up by ₹6 a litre. As per the statement by the Chief Minister, it will cost ₹60 crore a month and ₹720 crore a year and the government will compensate Aavin for the additional amount.
The federation procures 38 lakh litres a day in normal circumstances. It reaches its peak in December and January. The procurement, according to official sources, came down to 32 lakh litres a day in February. It has come down to about 28 lakh litres, forcing the federation to trim its supply to the agents for daily sales. As against the 16 lakh litres of requirement of milk in Chennai, the federation markets only 14 lakh litres.
Though the prevailing dry weather and hot conditions were said to be the main reason for the slump in milk procurement, better prices offered by private dairies was a major reason. Officials said the increase in procurement price will certainly bring back farmers who had switched over to private dairies.
An Aavin official told The Hindu that it was a great relief to the federation. With the competitive prices, farmers would again supply milk to cooperative societies. It would gradually improve the average procurement. However, the State government should increase the selling prices correspondingly. Otherwise, the financial health of the federation would bet hit severely.
Published – September 01, 2026 07:05 pm IST
