Dairy farmers across Tamil Nadu have urged the state government to urgently revise Aavin's milk procurement price, warning that the current rate of approximately ₹34 per litre is no longer viable against sharply rising production costs. The appeal, voiced by farmer organisations across the state, underscores a deepening crisis within Tamil Nadu's flagship dairy cooperative network.

The Price Gap Driving Farmers Away

Aavin, the state-run dairy cooperative, procures milk at an average of around ₹34 per litre — well below the ₹50 per litre offered by several private dairy companies. Farmers who sell directly to households reportedly earn close to ₹62 per litre. This widening price differential has prompted a steady migration of milk producers away from the cooperative network toward private buyers and direct retail channels.

For decades, Aavin's cooperative societies provided farmers with an assured, reliable market. Critics now argue that stagnant procurement rates have effectively eroded that assurance, leaving the cooperative structurally weakened at a time when input costs have surged.

Rising Costs Squeeze Margins to Near Zero

Farmers point to a structural shift in the economics of cattle rearing. Village livestock once grazed freely on common lands, keeping fodder costs minimal. Shrinking grazing areas have since forced producers to purchase green fodder year-round. During shortage periods, dependence on commercial feed — including rice bran and oil cake — intensifies further.

According to farmers, a 50-kg bag of oil cake now costs around ₹1,800, a figure that has climbed steeply in recent years. Combined with rising labour charges, veterinary fees, and routine cattle maintenance expenses, many dairy households say the present procurement price barely covers production costs, leaving little or no net income from milk sales.

Declining Herd Sizes and Abandoned Farms

The financial pressure has had visible consequences on the ground. Several farmers have reportedly reduced the number of milch animals they maintain, while others have exited dairy farming altogether. Disease-related cattle deaths and falling milk yields have compounded the strain, further reducing the volume of milk flowing into Aavin's collection network.

This is not an isolated local grievance — it reflects a pattern seen in several state cooperative dairy systems across India, where private sector competition and rising input costs have gradually eroded cooperative market share without a corresponding policy response on procurement pricing.

What Farmer Organisations Are Demanding

Farmer bodies have called on the Tamil Nadu state government to revise Aavin's procurement price to a level comparable with private dairy companies. They argue that a meaningful upward revision would incentivise producers to return to the cooperative fold, stabilise Aavin's milk collection volumes, and safeguard a consistent milk supply for consumers across the state.

As of now, the state government has not publicly responded to the demand. How Tamil Nadu's administration balances Aavin's financial sustainability against farmer welfare — and consumer pricing — will determine whether the cooperative can retain its relevance in the state's dairy economy.