Archive · 19 Aug 2026
Tamil Nadu Raises Aavin Milk Procurement Price, Farmers Seek More
Tamil Nadu has decided to pay farmers more for milk supplied to Aavin.
The payment will rise from ₹38 to ₹41 for each litre.
The government says farmers are facing higher costs for cattle feed and labour.
It expects to spend about ₹30 crore every month on the increase.
Farmers’ representatives said the change is helpful but smaller than the ₹10 increase they requested.
They also wanted a subsidy for cattle feed.
Aavin is collecting less milk in some places, including Madurai.
The cooperative also faces competition from private dairies and losses on some subsidised products.
The higher price may help, but Aavin still needs to improve its collection, operations and finances.
Tamil Nadu will raise Aavin’s payment to dairy farmers from ₹38 to ₹41 per litre.
The increase is the first in four years and affects more than 3.16 lakh milk producers.
The government expects the revision to cost about ₹30 crore monthly, or ₹360 crore annually.
Farmers’ representatives welcomed the relief but said they had sought a ₹10 increase and a 50% cattle-feed subsidy.
Aavin’s procurement and finances remain under pressure amid competition from private dairies, rising costs and supply problems.
- Who
- The Tamil Nadu government, Aavin and more than 3.16 lakh milk producers are involved.
- What
- The government announced a ₹3-per-litre increase in Aavin’s payment to dairy farmers, from ₹38 to ₹41.
- When
- The announcement was made today; it is the first such increase in four years.
- Where
- Tamil Nadu, including Aavin’s procurement operations in Madurai.
- Why
- The government cited higher cattle-feed and labour costs; the increase also aims to support Aavin’s milk procurement.
Farmers’ representatives
Government and Aavin perspective
Size of the increase
Farmers’ representatives
The Tamil Nadu Milk Producers Association said farmers had requested a ₹10-per-litre increase, so the ₹3 revision is insufficient.
Government and Aavin perspective
The government approved a ₹3 increase, raising the payment to ₹41 per litre, citing higher feed and labour expenses.
Additional support
Farmers’ representatives
Farmers’ representatives also sought a 50% subsidy on cattle feed and said rising feed and cattle-related costs continue to pressure producers.
Government and Aavin perspective
The announced support increases the government contribution from ₹3 to ₹5 per litre, while the cooperative component rises by ₹1.
Aavin’s wider challenge
Farmers’ representatives
Farmers and officials have linked falling procurement in places such as Madurai to heat, inadequate pasture and water shortages.
Government and Aavin perspective
The price increase may help Aavin retain farmers and encourage quality procurement, but the cooperative also needs stronger operations, cost control and reliable supply.
- New farmer payment
- ₹41 per litre
- Previous farmer payment
- ₹38 per litre
- Monthly government cost
- About ₹30 crore
- Annual government cost
- About ₹360 crore
- Farmers affected
- More than 3.16 lakh milk producers
- Aavin procurement share
- Around 10–12% of Tamil Nadu’s milk procurement, according to the farmers’ association cited
- Madurai procurement decline
- From about 1.7 lakh litres daily in the first week of July to 1.39 lakh litres by August 5