Tamil Nadu Farmers Demand Higher Aavin Milk Price Due to Rising Costs

Farmers are losing ₹1.25 per litre for cow milk and ₹12 per litre for buffalo milk. This is because costs like feed have almost doubled.
By Newsroom | Agriculture, Tamil Nadu |

Tamil Nadu's dairy producers are demanding an urgent hike in the milk procurement price paid by the state-run Aavin cooperative. Farmers claim they are losing money on every litre supplied, with production costs significantly outpacing the current rates.

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Dairy farmers report a shortfall of approximately ₹1.25 per litre for cow's milk and ₹12 per litre for buffalo milk. This gap, they assert, is directly attributable to the rising expenses of essential inputs.

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Key points from recent reports indicate:

  • Production Costs vs. Procurement Prices: Farmers state their production cost for cow milk averages ₹50 per litre and for buffalo milk ₹60 per litre. Aavin's current procurement prices stand at ₹38 per litre for cow milk and ₹47 per litre for buffalo milk, with a ₹3 incentive included. This creates a deficit, leaving farmers financially strained.

  • Input Cost Escalation: The price of crucial dairy inputs has surged dramatically. Cotton seed cake, for example, has risen from ₹28 per kg to nearly ₹47 per kg. Similarly, feed costs have climbed from ₹700 per sack to approximately ₹1,200.

  • Aavin's Procurement Volume: Aavin has the capacity to process 50 lakh litres of milk daily but currently procures only around 32 to 36 lakh litres from approximately 3.5 lakh dairy farmers across the state.

  • Private Market Lure: Farmers note that private milk buyers offer more competitive prices, ranging from ₹42–₹45 per litre for cow milk, compelling producers to consider diverting their supply away from the cooperative system.

  • Demand for Direct Price Pass-Through: Farmer associations are advocating for any future increase in Aavin's retail milk prices to be directly channeled to producers as a higher procurement price. They argue this is essential to protect rural livelihoods.

Calls for Government Action and Studies

Dairy farmer associations have repeatedly petitioned the government to address these financial pressures. They have called for an immediate revision of procurement prices to reflect the current market realities and prevent further economic distress within the dairy community.

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"The cost of feed, which was ₹700 per sack earlier, is now nearly ₹1,200," stated R Velusamy, president of an association, highlighting the steep increase in operational expenses.

Farmers have urged the Tamil Nadu government to conduct a scientific study to accurately determine the actual milk production costs and subsequently revise procurement prices accordingly. Delays in incentive payments and inadequate pricing, they warn, are weakening the cooperative dairy structure in Tamil Nadu.

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Past Promises and Government Review

The issue of Aavin's procurement price has been on the government's agenda. In August 2025, State Minister for Milk and Dairy Development Mano Thangaraj announced that the government was actively reviewing a proposal to increase the milk procurement price, aiming to provide relief to farmers and strengthen the dairy sector. Previously, in April 2023, State Dairy Minister S M Nasar had informed the Assembly that the ministry would consult with the Chief Minister on the matter.

Aavin's Operational Capacity and Future Outlook

While Aavin processes a significant volume of milk, the current procurement level suggests an underutilization of its capacity. Industry observers have also suggested that Aavin should focus on increasing milk production and promoting native breeds and A2 milk varieties to enhance its product portfolio and market reach.

Minister Mano Thangaraj has also sought to counter rumours regarding milk adulteration, terming them baseless, and confirmed that Aavin management is working on enhancing milk-handling capacities and expanding sales team reach to build consumer trust.

The Anand Pattern, a three-tier cooperative structure prevalent in India's dairy sector, aims to ensure farmers receive a fair share of the consumer rupee. However, the current situation in Tamil Nadu suggests a disconnect between this model's ideals and the economic realities faced by its dairy producers. The dairy sector remains a significant contributor to the rural economy and farmer incomes in India, the world's largest milk producer.

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Frequently Asked Questions

Q: Why are Tamil Nadu farmers unhappy with Aavin's milk prices?
Farmers say their costs to produce milk have gone up a lot, especially for feed, but Aavin is not paying them enough. They lose money on every litre they sell.
Q: How much money are farmers losing per litre of milk?
Farmers report losing about ₹1.25 per litre for cow's milk and ₹12 per litre for buffalo's milk. This is because their costs are much higher than what Aavin pays.
Q: What has caused the increase in farmers' production costs?
The price of important things farmers need, like cotton seed cake and animal feed, has increased a lot. For example, feed costs went from ₹700 per sack to about ₹1,200.
Q: What do farmers want the government to do about Aavin's milk prices?
Farmers want the government to quickly raise the price Aavin pays for milk to match their higher costs. They also want the government to do a study to find the real cost of producing milk and adjust prices based on that.
Q: Have there been past promises to increase milk prices?
Yes, in August 2025, the State Minister said the government was looking at a proposal to increase milk prices. In April 2023, another minister said the matter would be discussed with the Chief Minister.
Q: Why are farmers considering selling milk to private buyers instead of Aavin?
Private buyers are offering better prices for milk, around ₹42–₹45 per litre for cow's milk, while Aavin's price is lower. This makes it hard for farmers to make money with Aavin.