Study costs involved in milk production and fix procurement price

Milk producers, distributors and retailers have called for adequate compensation for everyone involved in the production and supply of Aavin milk. This should be done after a detailed study of the expenses involved, said M.G. Rajendran, member of the Tamil Nadu Milk Producers’ Welfare Association.

Aavin had recently increased the procurement prices but this had been done after months of parlaying and discussions, he added.

An expert committee should look into the expenses involved to determine an adequate compensation amount. “Prices should be increased annually to ensure that farmers don’t supply at a loss. Similarly, the price should be fixed based on the wholesale price index. Paddy and sugarcane farmers get a minimum support price every year. It should be the same case for milk supplying farmers too,” he said.

S.A. Ponnusamy of the Tamil Nadu Milk Dealers and Employees’ Welfare Association said Aavin was providing a total of ₹2 as commission to wholesalers, dealers and retailers, with the first channel getting 75 paise per litre additionally towards transport. This was quite low when compared with what private dairies were giving.

“The entire supply chain gets close to ₹5 per litre as commission from private brands. If Aavin can match that, it will definitely bring down sale of milk above MRP,” he said. Mr. Ponnusamy added that the price of Aavin milk should be uniform throughout the State. At present, different unions decided the MRP and commissions for the distribution channels, he said.

Consumer activist T. Sadagopan said for the consumers, this would also mean gradual increase in milk prices rather than a sudden hike of ₹15 per litre, which was effected recently. “When milk is sold at the correct prices, and not above MRP as is being done at present, it is an advantage for consumers, and more families will opt for Aavin knowing they are an honest brand,” he said.

Source : The Hindu 27th Nov 2022