The financial architecture behind the revised ₹44 per litre cow milk price separates the return into two distinct mechanisms: a base procurement rate of ₹36 per litre and an incentive payment of ₹8 per litre. To cushion the cooperative from acute balance-sheet strain, the state government will provide ₹600 crore annually directly to Aavin to underwrite the incentive component, with constituent district milk producers’ cooperative unions absorbing an additional ₹120 crore per year. Crucially for urban consumers and regional inflation metrics, the state confirmed that the retail selling price of packaged Aavin milk will remain strictly unchanged, avoiding immediate price pass-throughs onto household budgets.

Eligibility for the top procurement rate is linked to stringent compositional quality parameters. To receive the full ₹44 per litre rate, cow milk delivered to primary collection centres must contain a minimum of 4.3% fat and 8.2% Solid-Not-Fat (SNF). To safeguard quality and eliminate adulteration or excessive dilution, the GO stipulates that any milk testing below 3% fat and 7.5% SNF must not be procured, must be confiscated by cooperative officials, and will forfeit all supplier remuneration.

The order also recalibrates operational and administrative deductions across the cooperative tier. Contributions collected from milk suppliers toward the administrative operating expenses of primary milk producers’ cooperative societies have been raised from ₹1.25 to ₹1.75 per litre. Furthermore, district unions will execute a ₹1 per litre deduction from suppliers that will be credited back to farmers through cooperative accounts. To ensure financial transparency and eliminate intermediary leakages, the government has mandated that primary cooperative societies disburse all net procurement payments directly into farmers’ bank accounts via Direct Benefit Transfer (DBT).