Section Overview
Procurement price raised by ₹5/litre, 5,000 small dairy farms, ₹1,000 crore AAVIN modernisation, daily milk production to 4.5 crore litres, and dairy exports doubled.
Summary Ratings
| Fiscal Pressure | Economic Benefit | Social Benefit | Implementation Risk |
| MEDIUM | HIGH | HIGH | LOW |
Proposal-by-Proposal Analysis
The table below provides fiscal cost estimates and impact ratings for the principal proposals in this section.
| Key Proposal | Fiscal Cost Estimate | Economic Benefit | Social Benefit |
| Milk procurement price: +₹5/litre | TN daily procurement ~75 lakh litres. ₹5 × 75L litres × 365 = ₹1,369 cr/yr additional subsidy/support. | HIGH | HIGH |
| ₹1,000 crore AAVIN modernisation over 5 years | ₹200 cr/yr capital investment. Revenue return via higher margin products (cheese, ghee, UHT milk). | MEDIUM | MEDIUM |
| 5,000 small dairy farms over 5 years | Loan + subsidy package ~₹5 lakh/farm × 5,000 = ₹250 cr over 5 years. | LOW | HIGH |
| Daily milk production: 3 cr → 4.5 cr litres | Requires 50% herd expansion + productivity improvement. Investment: ₹800–1,200 cr over 5 years. | HIGH | HIGH |
| Dairy exports: ₹450 crore → ₹850 crore | Export infrastructure + certification: ₹30–50 cr. Revenue gain if achieved: ₹400 cr/yr. | LOW | HIGH |
Analytical Notes
⚑ Analytical Note: AAVIN is already India’s second-largest dairy cooperative. The ₹5/litre procurement increase is fiscally significant at ₹1,369 crore/year but is partially offset by improved farmer loyalty and reduced adulteration. Comparable Gujarat AMUL pays approximately ₹6–8 more per litre than TN procurement – the TN dairy sector has been losing farmers to private players partly on this basis. Modernisation investment is overdue.
