Tamil Nadu is preparing a new state dairy policy aimed at addressing persistent milk adulteration concerns while strengthening the formal procurement and distribution ecosystem. The proposed framework seeks to reduce the role of middlemen in milk trade by routing procurement through cooperative institutions, improving quality monitoring and ensuring fairer outcomes for farmers and consumers alike.
At present, a significant portion of milk sold through informal channels lacks effective monitoring for pathogens, adulteration and quality compliance. Industry stakeholders note that milk handled by intermediaries often bypasses systematic testing, creating both food safety risks and price distortions.
According to Louis, a senior industry representative, channelising milk through cooperative societies would allow even smaller dairy companies to procure directly from farmers. “There is currently no robust mechanism to monitor milk quality when it is traded through middlemen. Routing milk via cooperatives will improve traceability, quality assurance and transparency,” he said.
Addressing the Gap Between Large and Small Dairies
Large private dairy companies operating in the state already possess the infrastructure required for comprehensive quality testing at the procurement stage. However, smaller players procuring between 5,000 and 10,000 litres per day remain heavily dependent on intermediaries, limiting their ability to enforce quality standards.
The proposed policy aims to streamline these transactions by integrating smaller dairies into cooperative-led procurement systems. This move is expected to reduce adulteration risks, stabilise farmer payments and create a more level playing field across the sector.
Under the existing system, suppliers to Aavin, Tamil Nadu’s state-run dairy cooperative, receive spot acknowledgement after quality testing, with payments typically released within seven to ten days. Policymakers are examining whether similar transparent mechanisms can be extended across a wider procurement base.
Focus on Production Inputs and Breeding Practices
Beyond adulteration control, the draft policy will also assess structural factors influencing milk production in the state. These include rising input costs, semen production capacity, bull selection, the use of sex-sorted semen, availability of cattle feed, fodder management, and breed-specific mineral mixtures.
Based on these evaluations, the policy is expected to recommend optimised feed formulations to improve milk yield and animal health. It will also align mating practices with Tamil Nadu’s breeding policy announced in 2020, aiming to enhance genetic productivity while maintaining sustainability.
Regulatory Oversight Likely to Expand
Currently, the Dairy Development Department regulates cooperative societies under the Tamil Nadu Cooperative Societies Act, 1983, while private dairies fall under the jurisdiction of FSSAI. Sources indicate that once milk procurement and sales are routed through cooperative societies, private firms sourcing milk via these institutions may also come under the Dairy Development Department’s oversight.
This could result in tighter state-level supervision over a larger share of the milk economy, particularly in areas related to procurement practices and quality compliance.
Informal Market Dominance Remains a Challenge
Despite Aavin holding approximately 12% market share, nearly 60% of milk production and distribution in Tamil Nadu remains unorganised. This fragmented structure has long posed challenges for food safety enforcement, farmer remuneration and supply chain transparency.
The proposed dairy policy signals a strategic shift towards formalisation, positioning cooperative institutions as the backbone of quality assurance and market stability. If implemented effectively, it could play a critical role in curbing adulteration while supporting sustainable growth in one of India’s key dairy-producing states.
