Aavin milk sales up by 7% after reforms; but procurement dips

The state-run Aavin’s daily milk sale is up by seven per cent in districts outside Chennai but a sharp decline in procurement remains a challenge.

To stop Amul’s market penetration, Tamil Nadu Cooperative Milk Producers’ Federation (TNCMPF), which manufactures Aavin products, introduced a slew of administrative reforms recently to avoid delays and improve quality.

The efforts have started to pay off with TNCMPF’s daily sales figure in rural areas and tier-II cities has touched 16 lakhs now. It was around 15 lakhs in August 2021, according to official data. Chennai’s daily sales figure crossed pre-Covid levels last month.

However, there has been a 24% drop in milk procured from dairy farmers through registered societies. Last August, TNCMPF procured over 38 lakh litres of milk every day. At present, it has bought only 28.7 lakh. This implies that district-level unions have not planned appropriately for market expansion and procurement augmentation, said S Vineeth, managing director of TNCMPF in a letter to his staff last week.

Still, over 8,000 villages in the state are not having Primary Milk Producers Cooperative Societies (to procure milk) when the state’s milk production is abundant, he said. Corroborating this, government data suggest that out of the total milk production in Tamil Nadu, Aavin is procuring only 12% of the milk. Criticizing this, SA Ponnusamy of TN Milk Dealers’ Welfare Association said that decline in milk procurement has forced Aavin to buy more butter and milk powder which will not only increase the production cost but affect product quality.

To resolve this, Aavin has directed all district-level unions to intensify procurement drives, deploy maximum staff, conduct surveys to identify potential farmers willing to supply milk to Aavin and avoid payment delays. TN Dairy Development Minister Mano Thangaraj, in a meeting on Wednesday, told the federation officials to ensure that the ‘spot acknowledgment’ method is expanded to all procurement centres. Under this initiative, the quality of milk is assessed and payment to farmers supplying milk is made within seven working days. “If at all Aavin is serious about expanding its market, it should increase procurement prices and change retail prices accordingly,” said Ponnusamy.