Ahead of the Deepavali festival, Aavin has settled milk dues of farmers, who are members of the Tamil Nadu Cooperative Milk Producers’ Federation. Around ₹340 crore has been disbursed using reserve funds and by availing top-up loan from a bank on the skimmed milk and butter stocks of the unions. Both these sources contributed equally for the settlement.
M. G. Rajendran of the Tamil Nadu Milk Producers Association expressed happiness over this development. “Farmers had managed to tide over the pandemic due to income from the milk. A kind of permanent system should be put in place to ensure that the dues do not pile up,” he said.
However, a section of dairy farmers said they were unhappy with the way the dues were settled.
They had sought government intervention to settle the dues. “Before the pandemic, many unions were running at a profit. However, the government announced a reduction in milk prices by ₹3 a litre, which was a populist one. But it did not step in to support the federation financially,” said a farmer from Salem, who did not want to be named.
To ensure timely payments to farmers, Aavin has planned to put in place a system, including opening of a separate account for the same.
The federation had begun implementing austerity measures, including stoppage of free sweets to its staff.
“We will be reducing fringe benefits of staff when the unions are running at a loss. These benefits were introduced when the milk major was making profits. They cannot claim such things as a right when overhead expenses are higher than income from sale of milk,” said K. S. Kandasamy, Managing Director, Aavin.
