TN milk price hike: Tiruchy dairy farmers get less than ₹44 rate amid deductions
Synopsis
Tamil Nadu raised cow milk procurement rates by ₹6 to ₹44 per litre — but Tiruchy farmers say cooperative societies are pocketing up to ₹4 per litre in deductions, leaving them with just ₹40. Aavin says the actual deduction is ₹2.75. Either way, the promised relief is arriving incomplete, and the discrepancy is now a test of the state's commitment to its own price revision.
Key Takeaways
Tamil Nadu raised cow milk procurement price by ₹6 — from ₹38 to ₹44 per litre ; buffalo milk fixed at ₹53 per litre .
Tiruchy farmers allege cooperative milk societies withheld ₹4 per litre , reducing receipts to ₹40 per litre .
Aavin's Tiruchy management says total deductions are ₹2.75 per litre , leaving farmers with ₹41.25 per litre .
Deductions reportedly cover society administration ( ₹1.75 ), Pongal bonus allocation, and a ₹1 incentive held for later payment.
Farmers are urging the government to absorb society costs so the full revised rate reaches producers directly.
Aavin said explanatory handbills are being prepared to clarify the payment structure for farmers.
Dairy farmers in Tiruchy are receiving less than the revised procurement price for cow milk announced by the Tamil Nadu government, after cooperative milk societies began deducting amounts from their payments. The dispute came to light on 3 October 2026, when payments hit farmers' bank accounts following the government's decision to raise the cow milk procurement rate by ₹6 per litre — from ₹38 to ₹44.
What the Price Revision Promised
The Tamil Nadu government recently revised milk procurement rates, fixing cow milk at ₹44 per litre and buffalo milk at ₹53 per litre. The hike was widely welcomed by the dairy farming community as a measure to cushion rising input costs, including fodder and cattle feed. However, farmers say the relief has not translated fully into their accounts.
The Deductions Dispute
Producers allege that cooperative milk societies withheld ₹4 per litre of cow milk supplied, bringing their effective receipts down to ₹40 per litre. When farmers sought clarification, society officials reportedly explained the deduction comprised ₹1.85 per litre towards salaries and administration, ₹1.15 for a Pongal bonus, and ₹1 retained for disbursement as an incentive later in the month.
Farmers argued that these deductions diluted the purpose of the price revision. They maintained that the government — not individual producers — should bear administrative and related costs, particularly at a time when expenditure on inputs has risen sharply.
What Aavin's Management Said
Aavin's Tiruchy management offered a different accounting. According to the milk union, ₹1.75 per litre is being collected for cooperative society administrative expenses, and another ₹1 per litre is being retained for later payment to farmers. Under this structure, producers would receive ₹41.25 per litre — after total deductions of ₹2.75 — directly in their bank accounts.
Aavin clarified that no separate deduction is being made for bonuses. Half of the ₹1.75 collected would meet society operating expenses, while the remainder would be used to distribute bonuses to milk producers. The management said explanatory handbills were being prepared to detail the payment calculation for farmers.
Farmers Push Back
Producers' representatives questioned why ₹1 per litre was being withheld and returned later as an incentive rather than paid upfront. They urged the milk union to release the full payment immediately. Farmers also noted that earlier deductions were relatively modest, and the scale of current withholdings was straining household finances in a difficult agricultural season.
They appealed to the government to absorb society expenses so that the full benefit of the price hike reaches producers — as was reportedly the intent behind the revision.
What Happens Next
The disagreement over deduction amounts — with farmers citing ₹4 per litre withheld against Aavin's figure of ₹2.75 — reflects a transparency gap in how cooperative societies communicate payment structures. With Aavin's Tiruchy management committing to clarificatory handbills, the episode is likely to pressure the milk union and the state government to standardise and publish payment breakdowns. Dairy farmer representatives are expected to escalate their concerns if the full revised rate does not reach producers by the next payment cycle.
Point of View
Not a policy win. The gap between what the Tamil Nadu government announced — ₹44 per litre — and what farmers are actually receiving points to a structural flaw: cooperative societies are being funded off the producer's margin rather than from a separate administrative budget. The discrepancy in figures cited by farmers and Aavin (₹4 versus ₹2.75 per litre) also suggests that payment communication at the society level has broken down, which risks eroding trust in the entire cooperative system. Unless the state explicitly ring-fences administrative costs from procurement payments, every future price hike will carry the same asterisk.
NationPress
7 Oct 2026
Frequently Asked Questions
What is the new milk procurement price in Tamil Nadu?
The Tamil Nadu government revised the cow milk procurement rate to ₹44 per litre — an increase of ₹6 from the earlier ₹38. The procurement price for buffalo milk was fixed at ₹53 per litre.
Why are Tiruchy dairy farmers receiving less than ₹44 per litre?
Cooperative milk societies have been deducting amounts from farmers' payments to cover administrative costs, salaries, a Pongal bonus component, and a deferred incentive. Farmers say this reduces their receipts to as low as ₹40 per litre despite the revised rate.
How much does Aavin say is being deducted from farmers' payments?
Aavin's Tiruchy management says total deductions amount to ₹2.75 per litre — comprising ₹1.75 for cooperative society administrative expenses and ₹1 retained as a deferred incentive — leaving farmers with ₹41.25 per litre in their bank accounts.
What are farmers demanding from the government?
Farmers are urging the Tamil Nadu government to absorb cooperative society administrative and related costs from its own budget rather than deducting them from producers' procurement payments. They also want the ₹1 per litre retained as an incentive to be released immediately rather than held back to month-end.
What is Aavin doing to resolve the confusion over milk payment calculations?
Aavin's Tiruchy management said it is preparing explanatory handbills to provide farmers with a detailed, transparent breakdown of how procurement payments are calculated, including how deductions are applied and when deferred amounts will be paid.
