Why TN, Kerala and Karnataka are battling a crippling milk shortage

A severe milk shortage is sweeping Tamil Nadu, Kerala and Karnataka, and the situation could worsen in the coming summer months. 

Despite a strong dairy movement, consumers in all three states are suffering a dramatic fall in milk supply due to protests by dairy farmers seeking better procurement prices. A cattle disease is adding to the woes.

At stake is not only the supply of milk for consumers and eatery businesses, but also a vast section of the rural economy. Dairy farming presents a viable alternative to growing water-intensive crops such as paddy. Procurement issues, as well as rampant cattle diseases, are driving many dairy farmers away from the sector, fear experts.

Aavin blues

The situation is arguably most serious in Tamil Nadu. On the warpath, dairy farmers have emptied cans of milk on several roads in western Tamil Nadu. In a unique protest, some farmers are now giving away milk for free.

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They want more money for the milk they sell to the state-run Aavin dairy cooperative. The farmers say they are sick and tired of what they call Aavin’s delaying tactics vis-à-vis the procurement price. The rise in cattle feed prices, and its impact on the margins, have put them under severe economic stress, they point out.

Poor procurement prices and a labour crunch have hit Aavin, the flagship brand of India’s fourth largest milk cooperative society, the Tamil Nadu Cooperative Milk Producers Federation. Many regular buyers of Aavin are forced to opt for other private brands amid a shortfall.

The shortage is not only of milk, but also butter. Aavin’s unsalted butter is a staple in numerous Tamil Nadu households that are now forced to buy other brands. When they do spot an outlet that has stock, they hoard the butter.

Tamil Nadu tea and coffee shop owners as well as consumers are worried. Street vendors have increased the price of a cup of tea from ₹10 to ₹12 and coffee from ₹12 to ₹15. Noth shop owners and customers fear further hikes.

“I buy full cream milk (which suits tea shops) from a private dairy at ₹72 per litre. If we are forced to increase the price of tea and coffee again, our revenue will be hit,” S Arumugam, who runs a petty shop which sells tea, coffee and snacks in Chennai, told The Federal.

Just like brand Nandhini in Karnataka and Amul in Gujarat, Aavin has a loyal customer base. That it is run by a cooperative society under the state government increases its credibility. But problems afflict Aavin, too.

Private dairies

“Private companies are setting up collection centres nearby Aavin centres to take away the supply,” SA Ponnusami, founder-President of the Tamil Nadu Milk Dealers Association, told The Federal. But Aavin is allegedly slow to respond.

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The 19 lakh members of the Tamil Nadu Cooperative Milk Producers Federation are caught between private players and government administered Aavin. Producers allege that private players cut down the procurement price when there is an oversupply of milk. “That’s why we want a minimum production cost to be fixed by the government,” said MG Rajendran, General Secretary of the Tamil Nadu Milk Producers Welfare Association.

A ballpark calculation suggests a farmer incurs ₹50 to produce 1 litre of milk, he told The Federal. “But we are open to the government forming a panel, studying the issue and coming up with a minimum price for milk procurement periodically, just like MSP offered for paddy. This would protect milk producers a lot.”  

Lumpy skin disease (LSD) is said to have led to a drastic reduction of cattle population in North India, making the region dependent on milk from the South, said Ponnusami. 

The Tamil Nadu government in November hiked the procurement price by ₹3 a litre. The milk producers want more. They want the services of 25,000 employees of milk producers and cooperative societies in villages to be regularised, and supply of cattle feed at 50 per cent subsidy. They also want to be offered by Aavin what the private dairies pay.  

The possibilities of milk scarcity this summer are high a la last year, said N Murugesan, a dairy farmer from Coimbatore. “Yield from a cow would go down drastically each summer,” he said.

The Kerala story

In Kerala, too, dairy farmers say they are struggling due to rising costs of feed. This is despite having high yielding breeds of milch cattle like its own Sunandini and high-yielding cattle like Jersey and Holstein Friesian.

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The exotic and cross-bred cows need adequate feed to produce milk to their full potential. Sunandini was a part of Indo-Swiss venture and evolved after around three decades of research and breeding that truly transformed the dairy industry in Kerala.

Animal Husbandry Minister J Chinchurani said in her answer to a question in the Kerala Assembly on March 15. Kerala is the most expensive state for dairy farming. This is why the Kerala Co-operative Milk Marketing Federation (MILMA) hiked prices in December. According to the Minister, 83.75 per cent of the hiked amount would go to farmers, who will get ₹5.025 of the hiked ₹6. 

“We had put up a proposal before the Union government to include dairy farming in the MGNREGA job list but did not get a positive response,” said Chinchurani. “We have already included some of the subsidiary works, such as building of azolla tanks and stables, farming and cutting of cattle grass, etc in the MGNREGA list locally.”

Smuggling of adulterated milk, which poses serious health risks, is another issue faced by Milma (Kerala Cooperative Milk Marketing Federation).

Tankers from the neighboring states transport this milk for a low price. In January 2023, the dairy development department seized 15,300 litres of milk at the Aryankavu checkpoint in Kollam that had been taken from Vadiyur village in Tamil Nadu.

According to a dairy development department, chemicals like Urea, Maltodextrin and Hydrogen Peroxide have been detected in the milk sold by MRC dairy products, Cavins (toned milk) and Agrosoft Edappon between July 2022 and February 2023. Chemical contamination was also detected in milk transported in tanker trucks by MRC dairy products and Agrosoft Edappon, according to an RTI reply given by the dairy development department to Raju Vazhakkala, a RTI activist on March 9 2023.

Karnataka crisis

Neighbour Karnataka, home to the largest number of dairy co-operatives and producer members in South India, is also feeling the pinch of dwindling milk supply. Fierce competition from private dairies, rising input costs and lack of price revision are adding to dairy farmers’ woes and contributing to milk scarcity.

Thousands of cattle have reportedly died due to water scarcity, excess heat and lumpy skin disease.

There are 16 district cooperative milk unions under the Karnataka Milk Federation (KMF). KMF collected up to 94 lakh litres of milk a day in June 2022. It had set a target of 99 lakh litres per day by March 2023. But all the calculations crashed, leading to a steep fall in milk output. 

Now, KMF is also struggling to meet local demand. The federation sells milk and milk products to Tamil Nadu, Kerala, Telangana, Uttar Pradesh, Maharashtra, Jammu and Kashmir, Assam and Mizoram besides several countries. In the wake of the milk shortage, the production of value-added products including butter, ghee and paneer has been cut. In addition, exports and sales to other states have come down.

The price of Nandini milk is very low compared to the price of private dairies. Compared to last year, the sales of Nandini milk have increased by 18 per cent. KMF sold 38.47 lakh litres of milk daily in the state last year. This has gone up to 40.95 lakh litres. But the shortage is not helping the numbers.

Shunning standards

Private dairies are buying milk from farmers at higher prices. In addition, they are buying milk without adhering to the ‘SNF’ (Solid Fat Content) standard, said industry insiders.

Farmers prefer them due to higher profit margins and lack of SNF standards. This move by the farmers has led to a decline in milk collection. This in turn has led to a shortage of milk in many parts of Karnataka including Bengaluru, they added.