Tamil Nadu dairy farmers challenge milk-price deductions
Dairy farmers across Tamil Nadu have objected to deductions made by primary cooperative milk societies from recently increased procurement payments. Cooperative managers said Rs 2.75 per litre is being withheld at the primary-society level: Rs 1.75 for local administration and Re 1 linked to delayed payment. Some societies in rural areas are reportedly deducting amounts close to Rs 4 per litre.
The state government recently raised its benchmark price for cow milk from Rs 38 to Rs 44 per litre. The benchmark for buffalo milk was set at Rs 53 per litre. After the standard deduction of Rs 2.75, a cow-milk producer would receive Rs 41.25 per litre in a bank transfer. Farmer representatives said the deductions reduced the value of the government’s revised procurement rates.
Primary societies use the administrative charge to finance collection and processing-related activities at village facilities. The reported expenses include electricity for small bulk milk coolers, staff salaries, calibration of equipment that measures fat and solids, and sanitation and transport arrangements for deliveries to union processing plants. Half of the Rs 1.75 charge is also set aside for annual bonuses for registered suppliers, according to the account of the cooperative arrangements.
Farmers said their operating cash is under pressure from spending on commercial cattle feed, dry fodder and green forage. Producer organisations have also pointed to higher prices for oilcakes, maize-based concentrates and coarse roughage during recent production seasons. They attributed those increases to local weather disruptions and shortages of fodder supplies.
Cooperative processing unions and retail brands periodically change prices for packaged milk in urban markets, while farmgate payments remain subject to the deductions. Producer groups said the net receipts available to smallholders do not cover the full burden of maintaining their herds. Some farmers use microfinance loans to buy high-yielding dairy animals, making lower weekly milk payments a further constraint on their cash flow.
Representatives of the producers are asking the state government to ensure that the full cow-milk procurement rate of Rs 44 per litre reaches farmers’ bank accounts. They want public funds to cover the operating expenses of primary societies instead of deductions from milk proceeds. The dispute concerns the financing of village collection centres, where societies must continue daily collection, milk testing and chilling operations while farmers seek payment without the stated withholdings.
