The Tamil Nadu government has announced an increase in the state's milk procurement price by ₹3, bringing the total purchase price to ₹41 per litre. Chief Minister C. Joseph Vijay made the announcement in the Assembly on Wednesday.
Under the revised pricing structure, the purchase price of milk through cooperatives will increase by ₹1 per litre. Additionally, the government incentive will be raised from ₹3 to ₹5 per litre. Combined, these adjustments increase the total purchase price from ₹38 to ₹41 per litre.
The policy change is designed to benefit 316,000 milk producers who supply milk to primary milk producers’ cooperatives across the state.
According to government figures, 3.4 million litres of milk are purchased daily from 3.16 million milk producers operating within 8,800 milk cooperatives in Tamil Nadu. Furthermore, Aavin distributes 3.1 million litres of milk daily to consumers.
The state government has estimated that this procurement price hike will result in an additional financial commitment of ₹30 crore per month, totaling ₹360 crore annually.
"Adjusting procurement prices in the cooperative dairy sector is a critical step to support primary producers against rising operational costs. By increasing both the base purchase price and state incentives, the Tamil Nadu government is injecting an additional ₹360 crore annually into the rural economy. While this significantly impacts state finances, it helps sustain the livelihood of over 300,000 milk producers and ensures the stability of the supply chain managed through cooperatives like Aavin." — Dr. Shishir Gupta, Founder & CEO, StartupLanes
