Joseph Vijay announced a further ₹3 per litre hike in the Aavin milk procurement price, raising the rate to ₹44 per litre. The decision, effective August 31, 2026, aims to offset rising cattle feed costs for more than 3.16 lakh dairy producers across the state.
Tamil Nadu dairy farmers supplying milk through cooperative societies are receiving a total increase of ₹6 per litre under policy decisions announced by the state government. Chief Minister C. Joseph Vijay made the announcement in the Assembly, addressing mounting financial pressures on rural producers. The TVK govt on Monday announced a further Rs 3 per litre hike in procurement prices, taking the rate paid to milk producers from Rs 41 to Rs 44. The move is aimed at benefiting more than 3.16 lakh producers supplying milk to primary dairy cooperative societies across Tamil Nadu. Announcing the decision under Rule 110 in the Assembly, chief minister C Joseph Vijay said the govt had decided to increase the procurement price considering the rising cost of cattle feed and other inputs.
Phased Price Revisions and Rising Input Pressures
The latest adjustment follows an earlier revision announced on August 19, which had raised procurement prices from ₹38 to ₹41 per litre. That initial adjustment included a ₹1 increase through cooperative societies alongside an increase in the government incentive from ₹3 to ₹5 per litre, taking the overall procurement price from Rs 38 to Rs 41. The latest hike comes just days after the government announced an increase in the procurement price on Aug 19.
Producers had argued that those adjustments fell short of covering soaring operational expenses. Representatives from various cooperative milk producers’ welfare associations pressed authorities for another revision, citing sharp spikes in the cost of green fodder, dry fodder, bran, oil cakes, and other essential farm inputs. The latest decision follows representations from various cooperative milk producers’ welfare associations and milk producers, who sought a further revision citing a sharp increase in the cost of green fodder, dry fodder, bran, oil cakes and other farm inputs.
State Financial Burden and Cooperative Support
To implement the latest procurement price increase without straining cooperative finances, the govt said it would fully compensate Aavin for the additional expenditure arising from the latest procurement price increase. State data shows that the cumulative ₹6 per litre hike will impose an additional financial burden of ₹60 crore a month, translating to an annual expenditure of ₹720 crore. The hike will impose an additional burden of Rs 60 crore a month and Rs 720 crore annually on the government.
Chief Minister C. Joseph Vijay stated that the government had taken the decision keeping the welfare of milk producers in mind.
The revised procurement structure directly affects 3.16 lakh milk producers associated with primary milk producers’ cooperative societies across the state’s 8,800 milk cooperative societies. Aavin, the state-owned dairy cooperative, sells around 3.1 million litres of milk to consumers each day.
Fulfillment of Electoral Commitments and Fostering Stability
The policy decision delivers on an electoral promise made by the ruling TVK, which assured voters in its manifesto that Aavin’s milk procurement price would reach ₹44 a litre. The move also fulfils an electoral promise of the ruling TVK, which had assured in its manifesto that Aavin’s milk procurement price would be increased to Rs. 44 a litre. The announcement also responds directly to recent protests by dairy farmers who had staged demonstrations in several parts of the state and threatened to halt milk supplies over inadequate initial payouts. The latest announcement comes amid protests by a section of dairy farmers who had opposed the earlier Rs. 3 a litre hike, claiming it was inadequate in view of rising input costs. Farmers in several parts of the state had staged protests and threatened to halt milk supplies, following which the government held discussions with their representatives.
Regarding the demand for an increase in the milk procurement price of milk producers, it has been decided to hold negotiations to reach an amicable decision by speaking with them in person within two or three days. Therefore, I kindly request you to immediately give up the milk strike protest, looking forward to your request being considered. C. Joseph Vijay, Chief Minister of Tamil Nadu
Broader Infrastructure Investments Unveiled
Alongside the dairy sector announcements, the Chief Minister unveiled a wide-ranging, multi-crore infrastructure push spanning power generation, manufacturing, and logistics to bolster the rural and industrial economy. A multi-crore infrastructure push spanning power, semiconductors, and logistics across the state was also announced. Unveiling major investments to boost the state’s power grid, manufacturing base, and tech ecosystem, he said Rs 33,066 crore has been earmarked for the Tamil Nadu Transmission Improvement Scheme to set up 196 new substations and lay 15,000 km of power lines.
- ₹33,066 crore earmarked for the Tamil Nadu Transmission Improvement Scheme to establish 196 new substations and lay 15,000 km of power lines.
- ₹20,800 crore dedicated to setting up a 1,600 MW Super Critical Thermal Power Station in Tuticorin through a Public-Private Partnership model, involving an investment of Rs 20,800 crore.
- ₹1,762 crore allocated for upgrading Chennai’s distribution network to improve urban flood resilience and manage high load demands, with Chennai’s distribution network receiving upgrades worth Rs 1,762 crore.
- ₹175 crore for a Semiconductor and Electronics Manufacturing Park to be set up at Maduramangalam in Kanchipuram district at a cost of Rs 175 crore.
- Rs 400-crore designated for a FinTech Hub in Coimbatore to accelerate digital financial services.
