CHENNAI: With Aavin’s milk procurement declining by 4.35 lakh litres a day in May-July in the current financial year compared to the corresponding period last year, the Tamil Nadu government is likely to increase the procurement price of cow milk by Rs 5 per litre and buffalo milk by Rs 7 per litre to encourage dairy farmers to supply more to the cooperative.
Official sources said Chief Minister C Joseph Vijay is expected to announce the revision under Rule 110 of TN Assembly in the next few days. Currently, Aavin pays Rs 38 per litre for cow milk and Rs 47 for buffalo milk, including a Rs 3 incentive. Following the proposed revision, the procurement price is expected to rise to Rs 43 per litre for cow milk and Rs 54 for buffalo milk.
Officials expect higher purchase prices will help address adulteration issues
The move is aimed at increasing Aavin’s daily milk procurement from the current level of around 30 lakh litres to 39 lakh litres. Private dairy companies offer around Rs 42 to Rs 45 per litre for cow milk and Rs 50 to Rs 55 per litre for buffalo milk. “The decision may also prompt private dairies to raise their procurement prices,” an official said.
“It has also been decided to increase procurement by 100 litres from each village milk producers’ cooperative society. There are around 9,500 such societies in the state. Through these, Aavin is expected to increase procurement by about nine lakh litres a day within a few weeks,” an official said. Around 3.6 lakh dairy farmers who supply milk to Aavin are expected to benefit.
While the proposed increase in procurement prices is expected to raise Aavin’s expenditure by around Rs 580 to Rs 590 crore annually, a final decision on the revision of milk selling price is yet to be taken, sources said. Aavin had last increased the retail prices of standardised and toned milk by Rs 6 per litre in August 2019.
After the DMK government assumed office in May 2021, the prices were reduced by Rs 3 per litre.
“Since then, standardised milk has been sold at Rs 44 per litre and toned milk at Rs 40 per litre. Aavin milk is priced Rs 20 to Rs 22 per litre lower than that of private dairy brands.
For nearly seven years, Aavin’s milk prices have remained unchanged. The decision on any revision rests with the state,” a source added. In May-July in the 2025-26 financial year, Aavin procured around 34.3 lakh litres of milk a day. However, this declined to 30.2 lakh litres a day between this May-July.
Officials expect the higher procurement price to help address the issue of suspected mixing of water in several districts. Since April, around 90% of the milk procured by the Kanniyakumari and Virudhunagar district milk unions has failed to meet the minimum quality standards of 4% fat and 8% solids-not-fat (SNF).
It may be noted that Aavin last increased its procurement price on November 3, 2022, when the price of cow milk was raised from Rs 32 to Rs 35 per litre and buffalo milk from Rs 41 to Rs 44. From December 2023, the state government provided an additional Rs 3 incentive for milk meeting the quality requirement of 4% fat and 8% SNF. This took the effective procurement price to Rs 38 per litre for cow milk and Rs 47 for buffalo milk.
