Tamil Nadu dairy farmers say low Aavin milk prices are causing heavy losses as costs continue to rise.
Dairy farmers in Tamil Nadu are facing mounting financial pressure as milk procurement prices fail to keep pace with rising production costs. Producers supplying state-run cooperative Aavin say they are now losing money on every litre of milk sold, driven by higher feed, fodder, labour and veterinary expenses. Farmer groups estimate that around 3 million people linked to the state’s dairy sector are being affected.
According to producer associations, the cost of producing cow milk has climbed to about ₹50 per litre, while buffalo milk costs nearly ₹60 per litre. By comparison, Aavin currently pays about ₹38 per litre for cow milk and ₹47 per litre for buffalo milk, including incentives. Farmers estimate the average loss at roughly ₹1.25 per litre, creating a widening gap between farmgate returns and actual production costs.
The financial impact is substantial because Aavin procures between 3.5 million and 3.6 million litres of milk every day from nearly 350,000 farmers across the state. Producer groups calculate that the current pricing system is generating collective losses of more than ₹43 million per day. Many farmers argue that private dairies are paying higher rates, typically between ₹42 and ₹45 per litre for cow milk, making the cooperative increasingly uncompetitive.
Farmer organizations are now urging the state government to conduct a formal cost-of-production study and revise milk procurement prices. They have also asked Chief Minister M. K. Stalin to allocate ₹1,000 crore to the state’s Milk and Dairy Development Department in the next budget to help offset rising input costs and stabilize the sector.
The dispute comes at a time when India’s broader dairy industry is entering a period of tighter milk supplies and higher procurement costs. Analysts expect pressure on dairy companies and cooperatives to intensify through 2026, especially as strong consumer demand and higher feed prices continue to squeeze margins. For Tamil Nadu’s producers, however, the immediate concern remains simple: unless procurement prices rise, more dairy farms could struggle to remain viable.
Source: The New Indian Express – original article
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