State hikes milk price by Rs10 per litre
DMK ruined Aavin finances, says Chief Minister
By : DC Correspondent
Update: 2014-10-26 03:32 GMT
Chennai: The government has increased the price of Aavin toned milk by Rs10 a litre from November 1. In a statement on Saturday, Chief Minister O. Panneerselvam said the toned milk would now cost Rs 34 a litre as against the present Rs24. While the announcement was greeted with protest by the DMK , PMK and consumers, Mr Panneerselvam justified the hike saying it was inevitable owing to the rising milk procurement, processing and operation costs of the state-run Aavin company.
Accusingthe previous DMK regime of ruining Aavin’s finances, he said the AIADMK government had to pump in Rs192 crore to sustain it over the past three years. “The price revision will not only help Aavin provide quality milk but also benefit the 22.5 lakh farmers, who supply milk to it,” he added.When contacted , minister for milk and dairy development, B. V. Ramanaa, too claimed that Aavin was on the verge of collapse three years ago. “Only after Amma (former Chief Minister, Jayalalithaa) intervened and revised the procurement price were the farmers happy.
To sustain Aavin, she ordered bail- out funds. And now every month, the government is pumping in Rs15 crore to supplement its operations. Even after the price revision, it is still the cheapest milk available in the market. When compared to the cost of milk supplied by other state co-operative societies in Kerala and Andhra Pradesh, Aavin is relatively cheap,” he argued. According to official sources, Aavin’s procurement has fallen to 21 lakh litres from 24 lakh litres over the past few months with dairy farmers switching to private milk manufacturers
A profit of only 23 paise per litre
In 2013, Aavin suffered a loss of Rs1.77 per litre, when the milk procurement price was around Rs24 based on the fat content in milk. Since 2014, farmers and livestock owners have been demanding rise in milk procurement price by Rs9 per litre. In January 2014, the procurement price was hiked by Rs3 and it pushed Aavin's losses to Rs4.77 per litre. Now with a further increase of Rs 5 in procurement price and the Rs10 hike, Aavin will just make a profit of 23 paise per litre.
Aavin price relatively cheaper
A resident of Bengaluru pays Rs 29 for one litre of Nandini toned milk. In Kerala, Milma’s price is Rs38 per litre and in Hyderabad Vijaya milk is available at Rs 44 per litre. All the three brands are run by state cooperatives.