Farmers want state dairy Aavin to hike milk procurement price

Say it costs Rs 51.44 to produce a litre of milk, but price offered is Rs 35 to Rs 44 per litre
Tendering process is underway to upgrade Aavin Madhavaram dairy unit | Express
Tendering process is underway to upgrade Aavin Madhavaram dairy unit | Express

CHENNAI: With the State budget a few days away, dairy farmers who supply milk to Aavin are demanding a hike in milk procurement prices to ensure the sustainability of their livelihoods. A section of dairy farmers said they have been struggling to make ends meet, as some have even been forced to leave the industry in the past few years due to rising milk production costs and low procurement prices.

Aavin procures cow milk for Rs 35 per litre and buffalo milk for Rs 44 per litre from dairy farmers. However, farmers claim they spend Rs 51.44 to produce a litre of milk, resulting in a loss of Rs 15 per litre for them. As a result, many milk producers have diverted their milk to private companies, causing a decline in Aavin’s daily milk procurement from 36 lakh to 27 lakh litres in the last few months, according to the Milk Producers Association.

Out of 27 lakh registered members, Aavin receives milk from 4.5 lakh dairy farmers through cooperative societies. Milk sold by Aavin is cheaper by Rs 12 to Rs 15 a litre compared to private brands. “If the government fails to intervene in fixing the procurement price, the three-tier cooperative structure that was built four decades ago to protect the rural economy will collapse,”  said M G Rajendran, general secretary of TN Milk Producers Welfare Association.

At a pre-budget meeting held at the secretariat last week, members of the association submitted a list of demands to be considered in the upcoming budget. One of the demands pertains to the National Livestock Mission programme, which provides a 50% subsidy for insurance premiums for milch cows from the union government.

“We have requested the government to facilitate implementation of this insurance programme in Tamil Nadu by collecting the remaining 50% of the premium from farmers, societies, district unions, and federations,” added Rajendran.

Aavin used to procure approximately 36 to 37 lakh litres per day (LLPD) until a few months ago, of which, 26 lakh litres was sold as milk, and the remaining was processed into ghee, curd, milk powder and other value-added products.

During the 2021-22 and 2022-23 budgets, milk and dairy development minister S M Nasar had announced to increase the milk handling capacity of dairy plants in Madhavaram, Selam, Thanjavur and Tiruchy in order to increase the total milk processing capacity to 50 LLPD from 41. He also revealed plans to build new dairies in Tiruvarur, Cuddalore, Salem and Chengalpattu. The works are to be funded by the National Dairy Development Board (NDDB).

A senior Aavin official said the tendering process is underway to increase the milk handling capacity of Madhavaram dairy from the current 4.5 to 10 LLPD, with provisions for expansion up to 15 LLPD.
“Other budget announcements, including the construction of new Aavin dairy plants at Tiruvarur and Cuddalore with handling capacity of 50,000 litres of milk each, are also underway. However, approvals for the proposed two new dairies at Salem and Chengalpattu are still pending,” added the official.

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