Tamil Nadu’s dairy procurement economics are under pressure, with Aavin likely to increase the price paid to milk producers by ₹5 per litre for cow milk and ₹7 per litre for buffalo milk. The proposed revision is aimed at encouraging farmers to increase supplies to Aavin amid declining procurement.
Under the proposed revision, Aavin’s effective procurement price could rise from the current ₹38 to ₹43 per litre for cow milk, and from ₹47 to ₹54 per litre for buffalo milk. The existing rates include a ₹3-per-litre incentive for milk meeting prescribed quality standards.
Aavin’s daily milk procurement has been under pressure, with the cooperative facing a decline compared with the corresponding period last year. Earlier reports also indicated that heatwave conditions had affected milk production in parts of Tamil Nadu, adding to supply-side challenges.
Officials expect higher procurement prices to help address milk adulteration concerns by making milk supply more attractive to producers. The proposed revision is expected to be announced by Tamil Nadu Chief Minister C. Joseph Vijay under Rule 110 of the Tamil Nadu Assembly in the coming days, according to official sources cited by TNIE. (The New Indian Express)
The move highlights a continuing challenge for dairy cooperatives: maintaining adequate milk procurement while ensuring remunerative returns for farmers and controlling consumer prices. For Aavin, strengthening the farmer procurement base will be critical to sustaining milk availability and competing effectively in Tamil Nadu’s increasingly competitive dairy market.
Source: Dairynews7x7 18 Aug, 2026 Read full story here
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