TN People Not Happy With Price Hike of Aavin Milk & Ghee, Demand Rollback

Aavin produces a wide range of products, including milk, butter, yogurt, ice cream, ghee and sweets.

(Image: Vibhushita Singh/ The Quint)

“It is Christmas season and I was looking forward to making payasam for the kids, but I don’t think I can anymore,” a dejected construction worker Vanaja was heard telling her friend outside the Aavin booth in Chennai’s Vannanthurai.

The price hike announced by Aavin, a state government cooperative under the ownership of Tamil Nadu Cooperative Milk Producers Federation Limited, for butter, ghee and milk has led to a lot of opposition from consumers and political parties. Consumer forums in Chennai are planning to request the state government to issue a rollback.

Here is all you need to know about the issue.

What is Aavin?

Aavin produces a wide range of products, including milk, butter, yogurt, ice cream, ghee and sweets. Aavin procures about 40 lakh litres of milk a day, and offers the most affordable prices in the state.

Hike or Just at Par with Others?

Aavin on Thursday announced an increase in milk procurement prices by ₹3 a litre. The price of one litre jar of ghee was hiked by ₹50 and so the price rose to ₹680 from ₹630. This is the third revision made in the last one year. The price of full-fat milk was increased from ₹48/litre to ₹60. The price of unsalted cooking butter rose by ₹10 per half kilogram packet.

An official at Aavin told The Quint that the price of ghee is being sold at  par with that of Nandini, the brand name of products by Karnataka Cooperative Milk Producers’ Federation Limited. The price of one litre of ghee being sold by private dairies ranges from ₹760 to ₹850.

Call for Rollback

Edappadi Palaniswami, All India Anna Dravida Munnetra Kazhagam (AIADMK) chief said that people get nutrition through milk and dairy products and so why was there an attempt to deny this to them?

O Panneerselvam, AIADMK's deposed coordinator said that the state was imposing financial burden on people and warned that the hardship faced by people would result in the downfall of the DMK rule.

TTV Dhinakaran, leader of Amma Makkal Munnetra Kazhagam (AMMK) called this "an act of punishment."

Anbumani Ramadoss of Pattali Makkal Katchi (PMK) said the supply of green milk packets should be ensured by Aavin to keep up with the demand to prevent shortage and profiteering by milk companies.

K. Annamalai, Bharatiya Janata Party (BJP) state president, alleged that the continued hike is to make the firm non-competitive in a bid to promote private players. He had also raised the alleged issue of a few Aavin milk packets being underweight that had caused public distrust in the state government.

Milk Producers to Benefit

A total of ₹2 is given as commission to wholesalers, dealers and retailers, which is much lower that what private dairies are giving, said an Aavin official to The Quint. The hike will benefit over 4.20 lakh farmers attached to 9,345 primary cooperative societies, he added.

A milk supplier told The Quint that the prices are being raised after two years. “Prices should be increased annually so that we don’t suffer huge losses. The prices of all commodities are increasing and we are running on losses,” he added. He suggested that suppliers should be provided a minimum support price every year.

The Justification

Of the 27 District Co-operative Milk Producers’ Unions (DCMPUs), five of them are running in losses. Last year, the Federation incurred a loss of ₹40 crore and the DCMPUs lost ₹15 crore.

The total sales revenue (a sum of sales achieved by the Federation as well as the DCMPUs) was ₹7,887 crore. An official told The Hindu that while there has been a revenue surplus of ₹18 crore this year, the accumulated losses stand at ₹190 crore.

A milk-producing farmer from Chengalpattu said the profits from cattle farming have dwindled so much that they have to do multiple jobs to support their families.

Since October, there have been several protests in Salem, Coimbatore and Chennai where members of the Tamil Nadu Milk Producers’ Welfare Association demanded regularising the jobs of workers in the cooperative societies, free insurance coverage for all cattle, providing fodder at 50% subsidy to the farmers and paying farmers at par with private players.