|
|
|
You can get e-magazine links on WhatsApp. Click here
|
|
|
|
|
|
Delayed incentive payments & price cuts put TN dairy farmers under severe strain
|
|
Wednesday, 07 January, 2026, 14 : 00 PM [IST]
|
|
Our Bureau, Mumbai
|
Nearly four lakh dairy farmers in Tamil Nadu are facing mounting financial distress due to delays in government incentive payments and reduced milk prices, raising concerns over the stability of the state’s cooperative dairy sector. Farmer organisations report that the government has failed to release more than Rs 200 crore in promised incentive payments for the past four months, causing cash-flow problems at the grassroots level and squeezing household incomes.
The financial crunch has hit village-level primary milk producers’ cooperative societies hard, with many now operating at a loss due to a combination of low procurement prices and unpaid dues. The troubles intensified after the state reduced the retail price of milk by Rs 3 per litre, which contributed to an estimated annual loss of nearly Rs 550 crore for Aavin, the state-run dairy cooperative. Unlike other state-run corporations that receive direct fiscal support, Aavin has not been compensated for sustaining losses following the price reduction.
Under pressure from farmers, the government permitted Aavin to use internal funds from the Milk Cooperative Federation and profit-making district cooperative unions to clear some arrears. While incentives from June to August were eventually paid using these internal resources, payments for subsequent months remain pending, exacerbating financial challenges for cooperatives.
Aavin’s managing director John Louis has stated that the cooperative must strike a balance between supporting milk producers and keeping prices affordable for consumers, especially in urban centres such as Chennai, and has assured that pending dues will be settled soon. However, farmer leaders dispute claims that most primary cooperatives are profitable and argue that diverting funds has reduced dividends and pushed several societies into losses.
In response to the crisis, the government introduced a Rs 3 per litre incentive from December 2023 and raised procurement prices to Rs 38 per litre for cow milk and Rs 47 per litre for buffalo milk, but farmers warn that without timely release of dues and stronger government support, the cooperative dairy ecosystem could face deeper instability, potentially impacting both producers and consumers across the state.
|
|
|
|
|
|
|
|
|
|