CHENNAI: Justifying Aavin milk price hike, Chief Minister O Panneerselvam on Thursday said it was necessary to compensate the rise in procurement prices.
Aavin is selling 22 lakh litres of milk, butter, ghee and ice cream per day and it requires about 23 lakh litre of milk every day. But, intake had fallen gradually to 20.70 lakh litre as its procurement price was lesser than those given by Milk Manufacturers Co-operatives of Gujarat, Kerala and Karnataka, besides that of private dairies in the State, the Chief Minister told the Assembly.
Aavin purchased milk powder and butter from other States to meet the demands of consumers, resulting in decrease of funds and delay in payment for milk producers. The income of milk producers too had come down due to the rise in fodder prices and wages for workers. Hiking milk procurement price resulted in an additional expenditure of `456 crore per annum for Aavin.
Aavin incurs expenses for cold storages, pasteurisation and standardisation of milk. Even after hiking milk price to `34 per litre, the price of aavin is less than those fixed by private companies and cooperative societies of other States, he pointed out. Aavin was paying 80 per cent of the amount from sales to milk producers and the rest was spent on standardisation of milk and transport charges, he explained.