Tamil Nadu Chief Minister C. Joseph Vijay has announced a ₹3-per-litre increase in the milk procurement price, raising the effective rate paid to producers supplying milk to cooperative societies from ₹38 to ₹41 per litre. The decision was announced in the Tamil Nadu Assembly under Rule 110 and is expected to benefit around 3.16 lakh milk producers across the state.
Under the revised structure, the procurement price paid through cooperative societies will increase by ₹1 per litre, while the government incentive for farmers will rise from ₹3 to ₹5 per litre. The earlier effective rate of ₹38 comprised a ₹35 procurement price plus the ₹3 government incentive for milk meeting the prescribed 4.3% fat and 8.2% solids-not-fat (SNF) specifications.
The move comes as Aavin’s milk procurement has been declining, amid competition from private dairy companies offering procurement prices of up to ₹45 per litre. Tamil Nadu has around 8,800 milk cooperative societies, procuring approximately 34 lakh litres of milk daily from 3.16 lakh producers, while Aavin sells around 31 lakh litres per day to consumers and uses the remaining milk for dairy products.
The government said the higher procurement price is intended to ease the burden of rising cattle-feed and labour costs and provide dairy farmers with a fair and remunerative return. The revised procurement structure will increase the government’s expenditure by approximately ₹30 crore per month or ₹360 crore annually.
The procurement rate had remained at ₹35 per litre plus a ₹3-per-litre incentive since 2022, making the effective payment ₹38 per litre. However, the latest increase has already drawn criticism from PMK president Anbumani Ramadoss, who said the hike was insufficient and argued that the price should increase by at least ₹7 per litre, noting that private milk companies were paying producers at least ₹12 more per litre. (The Times of India)
The revision highlights a continuing challenge for Tamil Nadu’s dairy cooperative sector: balancing farmer remuneration, milk procurement, competition from private dairies and the financial burden on the state, while ensuring a stable supply of milk to consumers.
Source: Dairynews7x7 20 Aug, 2026 Read full story here
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