The latest increase in Aavin milk prices will affect cardholders more than those who make cash purchase. As the wide gap between card price and cash price is believed to be the root cause of malpractices in retail of milk, the government took a conscious decision to narrow the price difference between card and cash for different varieties of milk.

With the hike in selling price of milk and milk products, the Tamil Nadu Co-operative Milk Producers' Federation (Aavin) will turn into a profit-making organisation, according to officials. “While the exact quantum of additional revenue is yet to be worked out, we are pretty confident that the organisation would become robust soon,” an official said.

Though it procures on an average about 24 lakh litres of milk a day, it sells only 20 lakh litres and processes the rest. It retails 5.5 lakh litres of toned milk (three per cent fat and 8.5 per cent solid non-fat (SNF) in the city. Hereafter, Aavin would be able to get Rs 24 a litre from cardholders who have been paying only Rs 17.75 so far. Besides, it would receive Rs 27 per litre from those who have been buying at Rs 21 a litre for cash.

Aavin retails 1.5 lakh litres of standardised milk (4.5 per cent fat and 8.5 per cent SNF) for cardholders for Rs 22. It is selling 2.3 lakh litres of this milk for cash at Rs 26 a litre. Hereafter cardholders would have to shell out Rs 29 and those paying cash Rs 31. “Thus a conscious decision has been taken to narrow down the difference between the price for cardholders and those who pay cash as the vast difference between these two so far has been the cause of malpractices.”

The double–toned milk (1.5 per cent fat and 9 per cent SNF), which is sold only around 7,000 litres, will hereafter fetch Rs 23 as against Rs 18.50 supplied till date for cardholders .This milk, which is sold at Rs 22 a litre for cash, will hereafter cost Rs 24. In this variety also, the price difference between the cardholders and the cash- and- carry customers has been narrowed down.

Full cream milk (six per cent fat and 9 per cent SNF), retailed around 75,000 litres, is sold for cards at Rs 24 a litre and for cash at Rs 28 a litre. This would hereafter fetch Rs 33 a litre for card and Rs 35 a litre for cash. This is a steep rise as it is rarely used by below-poverty line or even middle class people. From the automatic vending machines, that were selling a litre at Rs 21.50 for cards as well as for cash, the cardholders will be able to collect at Rs 29 a litre and cash customers at Rs 31.

Besides, butter will hereafter be sold at Rs 260 a kg (old price Rs 200) and ghee would cost Rs 290 a litre (old price Rs 230).

Of about 10 lakh litres sold in the districts, only about one lakh litres is toned milk. “The district unions are at liberty to sell milk of their choice and the head office won't interfere.” The sources said that the authorities are contemplating enhancing the quantum of toned milk for retailing in the State. They confided that 95 per cent of the milk co-operative societies are already running in profit. Similarly, most of the district co-operative milk producers' unions are also making profits. “The current price hike will definitely improve their financial position. We are trying to restructure the two unions which are in the red”.