CHENNAI: Chief Minister O Panneerselvam on Saturday announced that the State government is left with no option but to increase the price of a litre of milk sold by Aavin from Rs 24 to Rs 34. He said the increase was made inevitable by rising milk production and procurement costs, changing market dynamics and poor financial state that the previous DMK government had left Aavin in.
Panneerselvam said the hike in milk price, the first in three years, would benefit producers, enabling Aavin to not only counteract rising production costs, but also ensure timely payment to milk producers. He added that the hike would translate to an increase in the procurement price of cow’s milk from Rs 23 to Rs 28 and buffalo milk from Rs 31 to Rs 35, and the new price would come into effect from November 1.
The Rs 10 hike, he said, would also cover the processing and marketing costs of Aavin. “However, despite this hike, the cost of milk sold by Aavin will be lower than the price at which it is sold by private players and milk cooperatives in other states,” he said.
Sources in the State government said the hike had become unavoidable. “We have to take it into account the unprecedented hike in the production cost of milk which includes a steep increase in the price of cattle feed,” said an official, noting that even after the hike, Aavin’s price would be lower than the price of other milk unions, particularly that of Amul, which sells milk at Rs 38 per litre.
“The hike will benefit farmers. Milk procurement by Aavin has been dwindling because of the low procurement price, which forced milk producers to start selling milk to private players,” the official added.