SALEM: The Tamil Nadu Milk Producers Welfare Association has raised concerns over rising production costs, stating that farmers across the state are incurring losses as procurement prices remain significantly lower than the production cost.
According to the association, the cost of producing one litre of milk has increased to around Rs 61, but procurement prices offered by Aavin, private dairy firms and small-scale traders are much lower, resulting in sustained losses for farmers.
The association said nearly 30 lakh farmers in Tamil Nadu are involved in milk production and related activities. Of these, around 4.5 lakh farmers supply milk to Aavin, which procures an average of 35 to 36 lakh litres per day. Farmers said Aavin pays about Rs 36.75 per litre, which translates to a loss of around Rs 24.25 per litre when compared to the production cost.
Another large section, comprising over eight lakh farmers, supplies milk directly to private dairy companies. While the procurement price is relatively higher at around Rs 45 per litre, farmers still face a loss of about Rs 16 per litre.
A significant number of small and marginal farmers, who produce limited quantities of milk, depend on local traders who collect milk directly from farms. This segment forms a major share of the supply chain, but farmers say they receive only around Rs 28 per litre, with losses of nearly Rs 32 per litre.
MG Rajendran, general secretary of the association, said farmers have been facing losses for several years. "We have been supplying milk at a loss for a long time. Many farmers are now moving away from dairy farming and shifting to other occupations as there is no profit. If this continues, milk production will be affected," he said.
He added that the association has been demanding a revision of procurement prices in line with the rising production cost. "We want political parties to assure a fair procurement price that will ensure at least minimum profit for farmers," he said.