Tamil Nadu Farmers Demand Increased Milk Procurement Prices Amid Rising Costs

Recent discussions among dairy farmers in Tamil Nadu have raised significant concerns regarding the viability of milk production in the region. Members of the Katchi Sarbatra Tamizhaga Vivasayigal Sangam have formally requested that the Tamil Nadu government increase the procurement prices for milk to Rs 50 per litre for cow milk and Rs 70 per litre for buffalo milk. This appeal comes on the heels of increasing input costs, particularly for feed, which have been exerting financial strain on smaller dairy farms across the state.

For context, the dairy sector in Tamil Nadu is vital, with key producing districts like Coimbatore and Tirupur contributing more than five lakh litres of milk daily, supported by a network of over 25,000 farmers. The farmers have highlighted that the procurement prices have not changed for the past two to three years despite inflationary pressures that have driven costs significantly higher, thereby threatening the sustainability of their operations. M. Suresh, the state vice-president of the farmers' organization, indicated that the cost of feed has risen significantly, with the 60kg cottonseed cake bag priced at Rs 2,830, along with increases in the prices of other essential ingredients like rice bran and maize flour.

Moreover, Suresh has pointed out that the declining availability of grazing land—largely due to urban development and land-use conversion into residential and commercial spaces—is leading to a greater dependency on purchased feed. This reality means that dairy farmers are often caught in a cycle where their production costs continue to increase while the prices they receive for their milk remain stagnant. He noted that annual maintenance and labor costs have risen by approximately 5-10%, further exacerbating their financial woes.

The discrepancy between procurement prices, paid by entities like Aavin and private firms, currently ranging from Rs 32-36 per litre, and the retail prices—which can reach Rs 60 per litre—highlights an alarming gap that affects not just farmers' incomes but also poses questions about the economic sustainability of the entire dairy supply chain in the region. The farmers believe that revising the procurement prices is necessary not only to protect their livelihoods but also to ensure that the local supply can meet the ongoing demand.

Any potential change in the procurement pricing policies set forth by the Tamil Nadu government could lead to significant implications for contract negotiations, supplier payment structures, and profitability for both farmers and regional dairy companies. For procurement officials and agricultural stakeholders, anticipating such changes is crucial to maintaining competitive and effective operations that align with current market conditions.

As the dairy sector grapples with these challenges, it underscores the urgent need for public policy to adapt to the realities faced by local producers. Support from state agencies could help stabilize the agricultural economy and ensure the continued stability of milk supplies.