Price increase under consideration
Tamil Nadu is considering raising Aavin’s milk procurement price to ₹44 a litre from the current ₹41. The dairy department says a final decision will be taken after weighing the financial position of the cooperative network against the need to improve returns to milk producers.
Producer pressure
Farmers have been seeking higher procurement prices as feed and operating costs rise. The government says the earlier increase from ₹38 to ₹41 already adds roughly ₹300 crore a year to public expenditure.
The underlying challenge
A procurement-price increase can help retain supply within the cooperative system, but it also raises questions about subsidy, retail pricing, dairy finances and whether productivity gains can offset the added cost. The decision will therefore affect both producers and consumers.