Suppliers yet to get their incentive dues
Major district unions, including Salem, Tiruchy and Madurai, have reported a daily procurement drop of 40,000 to 60,000 litres, while Vellore and Namakkal witnessed a decline of 10,000 to 15,000 litres a day.
To tackle severe milk shortage during 2022-2023, Aavin introduced a Rs 3-per-litre incentive in December 2023, following which the daily milk procurement increased from 26.6 lakh litres in January 2024 to 35 lakh litres in October 2024.
However, Rs 140 crore in incentive dues, from July to October 2024, are yet to be fully settled to suppliers. Despite a government order (G.O.) issued in March 2025 to release said dues, farmers claim the payment has not been fully disbursed yet.
M G Rajendran of TN Milk Producers’ Welfare Association told TNIE, “As a result [of incentive delay], during milk shortage, a section of farmers have shifted their supply to private dairies offering slightly higher procurement prices.” However, Rajendran admitted that private dairy companies too have seen a marginal decline in procurement since early March.
At present, Aavin pays Rs 38 per litre for cow milk and Rs 47 for buffalo milk, including the Rs 3 incentive. In contrast, private brands offer Rs 40 per litre for cow milk. However, their selling prices of milk are higher by Rs 8-16 a litre, when compared to Aavin.
Meanwhile, industry sources revealed that the dairy sector relies heavily on exotic and crossbred cows, such as Jersey and Holstein Friesian. These breeds are less tolerant to heat than indigenous cattle breeds. While native cows yield two to three litres of milk a day, exotic and crossbred cattle produce six to eight litres daily.
A veterinarian from the animal husbandry depat said, “Native cow breeds are more adaptable to hot climate. In contrast, crossbred and exotic breeds, due to their higher metabolic rates and larger body sizes, find it more challenging to cope with the heat. As a result, their food intake decreases, leading to a decline in milk yield.”
Fact file
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Aavin procures milk from about 3.85 lakh producers, through 9,189 primary milk producer cooperative societies across TN
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Daily milk procurement till February: 35-36 lakh litres, including 3.5 lakh litres in local sales
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Current daily procurement: 31 lakh litres, including local sales
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Heat affects the milk yield of crossbreed and exotic breed cattle
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The payment of Aavin’s incentive to milk suppliers for November 2024-February 2025 is expected to be delayed further, said sources
