According to the Prevention of Food Adulteration Act, milk should have an SNF content of 8.5 per cent at any given time. Earlier, two years ago, when milk availability was far short of demand, Aavin agreed to procuring milk of any quantity which it then reconstituted to the required percentage of SNF by adding milk powder and storing it adequately etc.

While there were substantial increases in procurement last year ataround 14.5 lakh litres a day (the demand and supply being balanced), the current year has brought in milk to the tune of 20.5 lakh litres. The marketing arm of Aavin is floundering, unable to sell such large quantities. Payments are getting delayed, with the state government not releasing the subsidy of Rs 35 crore it had promised the federation. To add to the problem, Chennai consumers who do not like standing in queues for advance payment of milk every month as also the advance notification and other cumbersome procedures to stop milk supply during holidays, have slowly shifted to private suppliers and department stores.

As a result, Aavin actually lost its market share in Chennai and is selling only 7.5 lakh litres in the city, 1 lakh litres less than last year according to president of the TN Milk producers' Welfare union, KA Senguttuvel. Districts are being encouraged to dispose of their milk in areas of procurement, instead of depending on the city.

Aavin is now reluctant in paying good money formilk below par which it has to reconstitute and then refrigerate to keep from spoiling, which according to senior officials is done nowhere else.

With quality norms relaxed, providing substandard milk became the norm. According to Aavin officials, milk unions which were giving good milk earlier, had now consistently started giving milk with low SNF. While a study undertaken by National Dairy Development Research in various milk producing districts has proved that the most emaciated cow or a cross bred cow in Tamil Nadu was capable of giving an SNF of more than 8 per cent.Farmers who had taken the slab rates of payment for granted have been taken aback by the federation circular. The federation had weaned back milk procurers and pouring members back into its fold after increasing procurement price in April 1998. Despite delayed payments, farmers preferred Aavin because the money though belated was assured.

While the circular has not been implemented yet, farmers are hoping that the federation would relaxits stance. Otherwise farmers could well leave its fold, Senguttuvel said.