Aavin milk procurement hit as private firms lure farmers with better price

CHENNAI: The nearly Rs 4 to Rs 6 lower price offered by Aavin compared to private dairies for each litre of milk may force more farmers to reduce their supply to the State-owned entity and this may affect Aavin’s milk supplies in the coming months, industry sources said. Compared to last year, milk supply from Kanniyakumari, Theni, Thoothukudi and Virudhunagar district co-operative unions to Aavin is already down by 20% to 30% in March.

While private milk companies offer Rs 36 to Rs 38 for a litre of cow milk, Aavin’s price is Rs 32. Similarly, the retail price of private milk brands is also higher by Rs 8 to Rs 12/litre compared to Aavin. N Subbaiyan, Managing Director, Aavin,  said, “At present, we get 35 lakh litres of milk a day. During summer months, milk procurement drops slightly every year. We have ensured uninterrupted milk supply to our customers.”

On an average, Aavin procures 37 lakh litres of milk per day. As per official data, though 20 lakh dairy farmers are enrolled in primary cooperatives societies across TN, only 20% (four lakhs) supply milk to Aavin. Due to higher procurement price offered by Kerala, farmers of border districts of Kanniyakumari and Theni are diverting their milk to the neighbouring State, sources said. Subbaiyan said private dairies have increased their quantity of milk procurement. “Kanniyakumari and Theni district unions supply nearly 5,000 litres a day each. The drop in milk supply in these areas is being looked into.”

As per Aavin’s last price revision, procurement price of cow milk was hiked from Rs 28 to Rs 32 per litre and buffalo milk from Rs 35 to Rs 41 per litre. Official sources said the DMK government, which reduced the selling price of milk by Rs 3/litre, may not hike it. Apart from the higher procurement price offered by private firms, the soaring cost of cattle feed and erratic payment made by district dairy cooperatives discourage farmers from supplying milk to Aavin, sources said. 

A Salem-based dairy farmer said, “On multiple occasions, we have been assured that payment will be released in 15 to 20 days. But it takes nearly 40 to 60 days. The cattle feed offered by Aavin is also inadequate. We have to shell out money for feed.” Besides better procurement price, private companies also offer monthly incentives and quality feed, the farmer said. 

The Aavin MD said, “Efforts are being made to release payments within 15 days. The capacity of cattle feed manufacturing plant in Erode had also been enhanced from 150 to 300 tonnes. We will increase cattle feed supply to farmers. We are working to revive all dormant cooperative milk societies.”