Aavin: over 90% of extra dairy price revenue will support producers

The state-owned Tamil Nadu Co-operative Milk Producers’ Federation Limited, which operates as Aavin, issued its explanation following public debate over the retail changes. The federation said protecting the livelihoods of rural milk-producing households remained its principal institutional objective, rather than maximising commercial profits.

Before approving the increases, Aavin said it reviewed production inputs, packaging expenditure and prices charged by privately owned dairies and dairy cooperatives operating in other states. Its assessment covered the costs of bringing products to market as well as competing retail offers. The affected product range includes ghee, butter, paneer and traditional sweets sold during the festive season.

According to the federation, its products remain substantially less expensive than comparable items offered by private competitors and regional brands following the revisions. Aavin said its pricing approach was intended to preserve access to pure dairy foods for urban customers while maintaining its position in the festive market. The increases were applied selectively to value-added products, while everyday liquid-milk pouches were kept affordable.

The cooperative’s processing operations include facilities serving metropolitan Chennai and district milk unions. Their running costs encompass automated packing equipment, refrigerated storage and temperature-controlled distribution vehicles. Packaging suitable for food, corrugated transport boxes, fuel for freight and electricity have all become more expensive, putting pressure on processing margins. The retail adjustments form part of the federation’s response to these operating expenses.

Dairy farming supplies a main or supplementary income to hundreds of thousands of smallholder and landless households in Tamil Nadu. Producers have faced rising prices for manufactured cattle feed, shortages of fodder and greater veterinary expenses in recent quarters. The additional revenue is intended to support payments for milk purchased from farmers, producer welfare and rural infrastructure, including the village cooperative network through which milk is collected.

Aavin appealed to urban customers to continue buying its dairy products, linking their purchases to support for rural households. The federation presented the allocation of additional income to producers as part of its cooperative role and its efforts to sustain milk procurement across the state.