Tamil Nadu Hikes Milk Procurement Price to ₹41 per Litre

Chief Minister C Joseph Vijay announced in the Tamil Nadu assembly in Chennai on Wednesday a ₹3-per-litre hike in the procurement price of milk procured by cooperative societies from dairy farmers. The decision raises the effective procurement price from ₹38 to ₹41 per litre.

Making the announcement under Rule 110 in the assembly, Vijay stated that the government decided to increase the base procurement price by ₹1 per litre through cooperative societies. In addition, the incentive provided to farmers by the government has been raised from ₹3 to ₹5 per litre.

The price revision is intended to ease the financial burden on 3.16 lakh dairy farmers who have been facing rising costs of cattle feed and labour. The move will entail an additional expenditure for the state government of ₹30 crore each month, amounting to ₹360 crore per year.

The hike comes amid challenges faced by state milk federation Aavin, whose daily procurement has seen a steady decline due to competition from private dairies. Private players in the market have been offering procurement prices of up to ₹45 per litre to producers.

According to government figures, Tamil Nadu has 8,800 milk cooperative societies that together procure approximately 34 lakh litres of milk daily from 3.16 lakh producers. Aavin sells around 31 lakh litres of milk to consumers every day, while the remaining quantity is utilized for manufacturing various milk products.

Prior to the latest revision, the state government had been paying ₹35 per litre as the procurement price along with a ₹3-per-litre incentive since 2022 for milk containing 4.3 per cent fat and 8.2 per cent other solids, resulting in an effective rate of ₹38 per litre.

Reacting to the announcement, PMK president Anbumani Ramadoss stated that the ₹3 hike was insufficient to support producers. He called for the procurement price to be increased by at least ₹7 per litre, pointing out that private milk companies continue to pay at least ₹12 more per litre to dairy farmers.