AMUL

AMUL
THE TASTE OF INDIA
THE TASTE OF INDIA
1
A MUL PRODUCTS
AMUL means "priceless" in Sanskrit. The brand name "Amul," from the Sanskrit
"Amoolya," was suggested by a quality control expert in Anand. ariants, all meaning
"priceless", are found in se!eral "ndian languages. Amul products ha!e been in use in
millions of homes since 1#$%. Amul &utter, Amul 'ilk (owder, Amul )hee, Amulspray,
Amul *heese, Amul *hocolates, Amul Shrikhand, Amul "ce cream, +utramul, Amul
'ilk and Amulya ha!e made Amul a leading food brand in "ndia. ,Turno!er- .s. /#
billion in /00$1. Today Amul is a symbol of many things. 2f high3quality products sold at
reasonable prices. 2f the genesis of a !ast co3operati!e network. 2f the triumph of
indigenous technology. 2f the marketing sa!!y of a farmers4 organi5ation. And of a
pro!en model for dairy de!elopment.
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A MUL EXPORT
6xports of your 7ederation ha!e performed creditably during the year. 8e ha!e become
the first "ndian dairy products exporter to achie!e a mark of .s 100 crore in re!enues.
The year ended with an export turno!er of .s 119 crore ,.s.1.19 billion13more than
trebling our export turno!er as compared to the pre!ious year. The reduced subsidies in
6: ha!e gi!en us excellent opportunities for export of S'( and 7*'(. 8e ha!e shown
that if a le!el playing field is granted, "ndian dairy products would be successful in the
global market. 8e ha!e also grown by $0 percent in consumer pack exports and
consolidated our exports of :;T 'ilk, )hee and (aneer in particular.
<
A WARDS
.amkrishna &a=a= +ational >ality Award3/00<
Amul 3 The Taste 2f "ndia ,)cmmf1.ecei!es "nternational *io 100 Award 7or
.esourcefulness
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T HE AMUL INDIA STORY
"So persevere, if necessary. For success attends only those who persevere, who see their
goal steadily and aim for it unswervingly... who persevere with dedication and faith in
the cause they are fighting for..."
The author, .uth ;eredia4s connection with Amul dates back to the inauguration of the
Amul ?airy when, aged four, she presented a bouquet to the guest of honour, (andit
@awaharlal +ehru. She and her family ha!e sampled the taste of Amul *ondensed 'ilk
and Amul *heese through their !arious progressi!e stages.
's ;eredia is an occasional writer, and sometimes lectures on her fa!ourite sub=ects-
music, literature and history. She has a post graduate degree in 6nglish, has been a
librarian, lo!es animals ,especially dogs1, and en=oys a good mo!ie or a tennis match.
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The Amul "ndia Story is a stimulating excursion into a dream that is now reality. &lessed
with the !ision of Sardar allabhbhai (atel, a patriot, the book traces the birth of a small
mo!ement in )u=arat, the Aaira ?istrict *ooperati!e 'ilk (roducer4s :nion and its
e!olution into a fantastic new paradigm of de!elopment. A fast3paced narrati!e, laced
with se!eral fascinating anecdotes, the book chronicles the daring initiati!es and
dynamism displayed by a team of committed indi!iduals 3 a farmer, Tribhu!andas (atel, a
professional manager, .Aurien and a technologist, ;.'.?alaya. This is a story of faith,
empowerment, and dream reali5ation, with all the elements that make a story more
interesting 3 passion, humour and the thrill of anticipation...
%
A MUL PARLOURS
"Amul :tterly ?elicious" parlours are an excellent business opportunity for in!estors,
shopkeepers and organi5ations. "n order to come closer to the customer, we ha!e decided
to create a model for retail outlets, which would be known as "Amul (referred
2utlets",A(21.
To ha!e a better idea please go through the following-
1. The criteria for selection of A(2s would be 3
a. isibility 3 ;ow prominent is the location of your shopB
b. Shop area- 100 3 <00 sq. ft.
c. )ood &usiness potential
d. 6xclusi!e Amul outlet 3 no other products
e. 8illingness to sell the entire range of Amul (roducts
f. *reditworthiness and past business experience
/. 2n your inquiry 3 our 7ield force would !isit your site. ;eCShe would fill the A(2
proposal form with your passport si5e photograph. Dou would require-
i. Shops and 6stablishment license
ii. Eayout of the shop and frontage 3 The layout of the shop designed by a
local architectClocal contractor.
iii. / (assport si5e photographs
F
/. Renovation Work of the Shop to give it a standard look 3 would be done to
meet the design and specifications at your cost. The cost of reno!ation of a typical
shop would normally be between .s. %0,000 to .s. 1 lac.
<. Branding3 The A(2s would be branded as "Amul :tterly ?elicious". The cost of
the signage fabrication and installation would be borne by )*''7 office
operating in your region.
$. Equipment3 Dou would require the following equipment-
a. 1or / deep free5ers can be purchased through ;amara Apna ?eep 7ree5er
Scheme
b. 1 .efrigerator through ;amara Apna .efrigerator Scheme
c. 1 pi55a o!en
d. 1 *hest 'ilk *ooler for (ouch 'ilk
/. Security eposit3 Dou would be required to furnish an interest free refundable
security deposit of .s. /9,000 to us. An amount of .s. 9000C3 would be deducted
towards refurbishing the signage, in the e!ent of closure of A(2 before <3year of
operation.
<. Supplies3 The deli!ery of products would be done through our wholesale dealers
$. 8e feel that the shop has good potential, and needs support in the initial days, we
can offer additional margins upto ma!imum of "# on dairy products and $#
on %ce cream. The additional margin shall be target based and shall be gi!en in
kind. The support at best would be gi!en only for he first year of business.
Agreement3 An agreement bringing us together would be signed
G
C HAIRMENS SPEECH: 31 ANNUAL
GENERAL BODY MEETING ON 23
rd

JUNE 2005
)entlemen,
" feel pri!ileged to welcome you to the <1st Annual )eneral
&ody 'eeting of your 7ederation.
"t is with great sadness that " ha!e to mention the recent
passing away of one of the pillars of the Amul (attern3Shri
'otibhai . *haudhary. 'otibhai had played a crucial role at
e!ery stage in the e!olution of your 7ederation. ;is
complete dedication to his work, his unyielding adherence to principles and his strong
will power made him a true champion of farmers, especially of milk producers. 8e will
all miss him as a wise leader, as our colleague and friend.
Eooking back, " cannot but recall the last <0 annual meetings that ha!e been witness to
the firm establishment of the 4Amul (attern4 as a uniquely appropriate model for rural
de!elopment. The success of this model has attracted its own share of admirers,
emulators3and e!en mudslingers. &ut " am happy that the Amul (attern, and the
associated institutions that reflect it, ha!e risen to a le!el where neither adulation nor
censure need affect us. .ather, we must remain true to our principles and our mission.
" ha!e always been a firm belie!er of the dictum that 4&rand is power4. A cooperati!e
without a "brand" can ne!er aspire to sur!i!e3let alone thri!e3while marketing
commodities in today4s competiti!e en!ironment. 2nly by nurturing its marketing skills
and building solid brands can cooperati!es make their own growing space in the market.
And we must ne!er forget that quality and !alue are the foundation for successful brands.
"t should be a matter of both pride and satisfaction to all of us that the Amul pattern has
helped !arious state federations in "ndia to acquire and nurture this soft asset.
#
State 7ederations are responsible towards their member unions3their owners3for
profitable and timely disposal of surplus milk procured during flush seasons. "f
federations are unable to face the price and demand shocks inherent in a commodity
market, they will most certainly fail. Again, we can take considerable pride and
satisfaction in ha!ing helped make a!ailable to 7ederations the production planning and
marketing skills they need to ser!e their members. .ural managers from the "nstitute of
.ural 'anagement, Anand ,".'A13an integral part of the Amul (attern3ha!e been
instrumental in building these capacities in the 7ederations. " personally draw immense
satisfaction from my association with the progress of this unique institution. Dour
7ederation, which has supported ".'A from the outset, should share that satisfaction.
A large proportion of rural li!elihoods in "ndia are at the mercy of the law of diminishing
marginal returns from land. This has led to the bleak phenomena of rural3urban
migration, casualisation of urban labour and feminisation of agricultural labour etc. with
the net effect of extremely insecure rural li!elihoods. A successful rural de!elopment
programme must help rural people stay on !oluntarily and profitably in the !illages.
*ooperati!e dairy de!elopment on the Amul (attern has been instrumental in securing
rural li!elihoods in many parts of "ndia through income generation, agricultural
di!ersification, risk distribution, female empowerment and assured employment.
*onsider for a moment the case of a subsistence farmer blessed with =ust a pair of
buffaloes. At an a!erage yield of 93% liters daily from each animal, an additional income
of almost .s.9000 per month is assured for <00 days in the year. This does not compare
too badly with any rural employment programme implemented by the go!ernment.
8hen we talk of assured employment in the context of cooperati!e dairying, it is !ery
easy to underestimate the reliability of this economic acti!ity. 6mployment generation in
"ndia has seen a spurt e!en through the much !aunted &usiness (rocess 2utsourcing
,&(21 organi5ations and "nformation Technology ,"T1 setups. ;owe!er, one must ne!er
forget that these acti!ities suffer from the inherent disad!antage of working under
business cycles. 7urther, the underpinning of these businesses is cheap and skilled
manpower that is both highly mobile as well as susceptible to replication by other
nations. Thus, e!en were outsourcing and information technology to reach our rural poor,
they can ne!er offer our country a sustainable competiti!e ad!antage, lea!ing us
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!ulnerable to massi!e disruption should the business mo!e on to other countries where
skilled labor is less costly. 2n the other hand, the underpinning of a successful
cooperati!e dairy business is comprised of farmers who ha!e a collecti!e consciousness
and a shared !ision towards the domain centrality of milk and the need for cooperation in
dairying. +either they nor their milch animals can be relocated or replicated in the short
or medium term by any other nation. " therefore put forward my case that cooperati!e
dairying on the Amul (attern forms a source of assured employment and a sustainable
basis of competiti!e ad!antage for "ndia. ;ere, " quote ?r. 8illiam Eewis of 'ckinsey
)lobal "nstitute from his book 4The (ower of (roducti!ity4- 4;ours worked producing
milk in "ndia are equi!alent to $9 million full3time employees. That means dairy in "ndia
has more employment than any other sector in any economy in the 8orld4.
Apart from being a source of assured employment and competiti!e ad!antage, a
successful cooperati!e mo!ement also instills the self3confidence and self3respect that
spring from self3reliance. These qualities are reflected in the better deals for electricity
and irrigation water that )u=arat4s farmers ha!e negotiated when compared with what has
been imposed by authorities on the less3well organi5ed farmers in other states
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AMUL MILK
1/
AMUL MIL PRODUCTS
This is the most hygienic milk a!ailable in the market. (asteurised in state3of3the3art
processing plants and pouch3packed for con!enience.
Amul &resh Milk

1<
1$
19
A MUL ORGANISATION
Gujarat Cooperative Milk Marketing Federation
GCMMF: An Overview
)u=arat *ooperati!e 'ilk 'arketing 7ederation ,)*''71 is "ndia4s largest food
products marketing organisation. "t is a state le!el apex body of milk cooperati!es in
)u=arat which aims to pro!ide remunerati!e returns to the farmers and also ser!e the
interest of consumers by pro!iding quality products which are good !alue for money.
Mem'ers( 1/ district cooperati!e milk producers4 :nion
)o* of +roducer Mem'ers( /.$1 million
)o* of ,illage Societies( 11,%19
-otal Milk handling capacity( F.$ million litres per day
Milk collection .-otal / $001/023( /.0G billion litres
Milk collection .aily Average
$001/023(
9.F1 million litres
Milk rying 4apacity( 911 metric Tons per day
4attlefeed manufacturing
4apacity(
/<$0 'ts per day
1%
A MUL MIL SALE TURNO!ER
Sales -urnover Rs .million3 US 5 .in million3
1##$3#9 111$0 <99
1##93#% 1<F#0 $00
1##%3#F 199$0 $90
1##F3#G 1GG$0 $99
1##G3## //1#/ $#<
1###300 //1G9 $#<
/000301 //9GG 900
/00130/ /<<%9 900
/00/30< /F$9F 9F9
/00<30$ /G#$1 %1%
/00$309 /#//9 %F/
1F
M%L6 +R74UREME)-
Total milk procurement by our 'ember :nions during the year /00$309 a!eraged 9G.G#
lakh kilograms ,9.# million kg1 per day, representing a growth of 19./ percent o!er 91.1<
lakh kilograms ,9.1 million kg1 per day achie!ed during /00<30$. 8e look forward to an
e!en better procurement during the current year owing to expectations of a good
monsoon this year.
SALES
?uring the year, your 7ederation4s sales registered a growth of 1.$ percent to reach .s.
/,#//.9< crores ,.s./#.// billion1 including consignment sales of .s.1.9< crores ,.s.0.0/
billion1. This lower than expected o!erall growth was owing firstly to low procurement of
milk during the first half of the year, and secondly to unfa!ourable commodity market
prices when procurement normali5ed. ;owe!er, " am pleased to note your 7ederation has
done remarkably well in most of the consumer packs. As " ha!e stated earlier, a
cooperati!e must increasingly rely upon branded products3rather than upon commodities3
to achie!e power in the market. Thus, the dairy line in consumer packs grew by 11.G
percent during the year. Sales of Amul 'ilk in pouches increased by <% percent in !alue
terms. A notable de!elopment in the area of liquid milk in pouches has been the
successful launch of Amul 'ilk in the Aolkata market during ?ecember /00$. :;T 'ilk
has grown in !alue terms by /< percent. Amul ice cream achie!ed a sales !alue growth of
10 percent, and has strengthened its position as the undisputed market leader. ?espite
intense competition, sales !alue of Amul &utter grew by $.9 percent. The sales of the
Amul *heese range increased by /1 percent. (roducts like 7la!oured 'ilk, Amul 7resh
*ream, (aneer, 'ithaimate, Softy 'ix, and fresh curd demonstrated their potential to
become dominant brands in the coming few years. 8e ha!e launched a promising new
product called Amul 'asti Spiced &uttermilk during the year.

1G
%S-R%BU-%7)
Alignment of our four ?istribution ;ighways of fresh, chilled, fro5en and ambient
products was a ma=or de!elopment during the year. This was a significant achie!ement in
order to de!elop synergies amongst all our product lines so as to le!erage these highways
to introduce and increase the reach of new products as per market demand. " am happy to
say that today you will not find a comparable distribution set up in any other organi5ation
in the country.
This year our ma=or initiati!e was to further increase our ?istributor +etwork in smaller
towns. "t was in line with the fast changing market scenario resulting from rise in
household incomes leading to metamorphosis of rural and smaller markets, significant
increase of middle class families and migration from rural areas to smaller de!eloping
towns. This has resulted in the emergence of growing markets in smaller towns all across
the country. An addition of almost #00 distributors in small towns was undertaken on a
Time &ased 'ilitary ,T'T1 technique. This initiati!e has already started yielding results
in the form increasing a!ailability of our products in smaller towns and thereby
generating additional business.
Amul Datra programme is conducted to bring our channel partners to Amul so that they
get an exposure to our cooperati!e institutions and also come to know about our
achie!ements. This year our emphasis was upon top retailers from across the country. So
far, 1$0% retailers from all o!er "ndia ha!e !isited Anand out of which #90 top retailers
came during this year. This also included a group of top retailers from &hutan.
1#
477+ERA-%,E E,EL7+ME)-
?uring the year, 'ember :nions continued to implement the module on ision 'ission
Strategy ,'S1 for primary milk producer members and illage ?airy *ooperati!es.
7acilitated by specially trained consultants, 1<1< illage ?airy *ooperati!e Societies
,?*S1 ha!e conducted their 'S workshops and prepared their mission statements and
business plans for the next fi!e years.
*ontinuing the cleanliness dri!e at !illage le!el, 'ember :nions identified and imparted
training to G$F$ *ore groups comprised of milk producers and representati!es from the
'anagement of the ?*S during last fi!e years. To enhance the le!el of cleanliness,
$<G% ?*S celebrated .ed Tag ?ay on /nd 2ctober with awards for the best performing
?*S.
As a part of the &reeding Ser!ices "mpro!ement (rogramme,training was imparted to
<$91 *ore groups at !illage le!el in impro!ement in Artificial "nsemination ,A"1
Ser!ices. 'ember :nions implemented the A" Audit *ompetition during the year and in
the process, identified H awarded the best performing ?*S and A" 8orkers of these
Societies.
?uring the year, /<11 *hairmen and Secretaries from 1/01 ?*S ha!e been co!ered
under the *hairmen and Secretaries4 2rientation (rogramme at 'other ?airy,
)andhinagar3so as to bolster their leadership skills and knowledge of the dairy industry
scenario.
2ur 'ember :nions continued to encourage increased participation of women milk
producers in the ?airy *ooperati!e Societies. To de!elop their skills and to enhance their
leadership qualities, 'ember :nions organised Self3'anaging Eeadership ,S'E1
programmes at (ra=apita &rahmakumaris, 'ount Abu. <1G# women resource persons
along with *hairmen and Secretaries of 900 ?*S were in!ol!ed.
/0
E8+7R-S
6xports of your 7ederation ha!e performed creditably during the year. 8e ha!e become
the first "ndian dairy products exporter to achie!e a mark of .s 100 crore in re!enues.
The year ended with an export turno!er of .s 119 crore ,.s.1.19 billion13more than
trebling our export turno!er as compared to the pre!ious year. The reduced subsidies in
6: ha!e gi!en us excellent opportunities for export of S'( and 7*'(. 8e ha!e shown
that if a le!el playing field is granted, "ndian dairy products would be successful in the
global market. 8e ha!e also grown by $0 percent in consumer pack exports and
consolidated our exports of :;T 'ilk, )hee and (aneer in particular.
+7U49 M%L6
Amul pouch milk has become the largest contributor to our turno!er with annual sales of
about .s.%/% crores ,.s.%./% billion1 during /00$309 as against .s. $%/ crores ,.s.$.%/
billion1 during the pre!ious year implying a growth of about <% percent.
?uring last year we had sur!eyed ma=or markets for exploring possibility of opening new
markets. Taking into consideration our strong brand equity, experience of milk marketing
and our association with milk in the consumer4s mind, we are planning to open se!eral
new markets and will focus on distribution expansion in the existing metro markets.
%)&7RMA-%7) -E49)7L7:; %)-E:RA-%7)
Dour 7ederation has further ad!anced its "nformation Technology solutions by
implementing )eographical "nformation System ,)"S1 with digital city maps at ma=or
cities of "ndia so as to excel in distribution planning.
"t has also taken a ma=or initiati!e in deploying process dri!en 6nterprise .esource
(lanning ,6.(1 software systems at its member unions in order to bring efficiency in
manufacturing processes.
/1
AMUL A) -9E 477+ERA-%,E M7,EME)-
Amul embarked upon its illustrious =ourney as a beacon for the "ndian cooperati!e
mo!ement in 1#$%. Since then, it has been undergoing a multidimensional e!olution
whose o!erarching ob=ecti!e has been the same throughout- ser!ing the farmer and
catering to consumer requirements. A structural landmark in this e!olution process was
the formation of the )*''7 in 1#F$. Throughout these last <1 years, we ha!e
demonstrated3again and again3that Amul both represents and reconciles di!erse
expectations and aspirations.
7or the farmers, Amul brings the power to direct their own destinies. 'embership brings
them the freedom that arises from secure li!elihoods. 7or our women members, Amul
means assured employment, additional income in the household kitty and the growing
empowerment from creating and controlling that income. 7or the girl child, Amul
translates into education and consequent emancipation. The consumer sees Amul as a
guarantor of assured quality and of !alue for her hard earned money. 7or cooperati!es
across "ndia, Amul is an inspiration to excel in procurement, processing, marketing and
brand building. 7inally, our nation takes pride in Amul as proof that our own "ndian
!ision, backed by hard work, management skill and honest capable leadership can
achie!e miracles.
+otwithstanding the achie!ements of Amul and the Amul (attern, their true essence
remains elusi!e to most who are outside the cooperati!e mo!ement, and to some who had
seemed to comprise an integral part of it.
Amul is the epitome of a unique model of cooperati!e de!elopment called the Amul
(attern. "t is also the spearhead of the cooperati!e mo!ement in "ndia. Starting with
(olson, it has decimated the e!il presence of rent3seeking middlemen from dairy business
in "ndia. "t has empowered farmers through skills of procurement, processing, marketing3
and more recently3of being in direct touch with the customer through retailing. This
ensures not only fair returns for milk produced, but also a ne!er before closeness to the
//
market facilitating a real time feel of its pulse. The diffusion of this !isionary experiment
has ensured the proliferation of numerous Amuls across "ndia. Thus, Aa!in, ;im,
'ahananda, 'ilma, +andini, 2mfed, (arag, Sanchi, Saras, Snowcap, Sudha, erka,
i=aya, ita3all are manifestations of Amul in its regional a!atars. All of these brands and
the cooperati!es that produce them ser!e their farmer members while growing steadily in
si5e, strength, expertise and market presence.
2ur fledgling cooperati!es ha!e often been derided as innocent of marketing skills. 8hile
the marketing of high profile products like ice cream may be seen as glamorous and
en!iable, the achie!ements of the cooperati!es that do not make it regularly to the news
are not less than miraculous. A massi!e network collecting milk from almost 1/ million
farmers, testing it, grading it, transporting it twice a day from 100,000 !illages o!er
10000 routes to about /00 dairy plants, processing it, packing it and sending it to the
market in almost G00 big and small towns e!ery single day of the year3" hope you will
agree that this is no mean task in marketing. 7urther, the !ision that ga!e this network a
solid shape and the management skills that keep it running like a well3oiled machinery
are hard to underestimate. ?eli!ering wholesome nutrition to the consumers at the most
reasonable prices to be seen anywhere in the world, while transferring the bulk of the
!alue reali5ed back to the farmer is a feat both in marketing as well as in social
de!elopment. Det, " will not claim that e!ery task that our cooperati!es perform is
performed in the most efficient manner possible. Scope for impro!ement is there, and
certain antecedent conditions are required to achie!e these impro!ements.
*ooperati!es must be headed only by professionals armed with tenures long enough to
achie!e meaningful changes and to put in place comprehensi!e systems. An officer
deputed with ad hoc powers and sub=ect to sudden transfers to head a cooperati!e can
hardly be expected to measure up to the task. As a corollary, no political consideration
must colour the policies, ob=ecti!es, strategies and functioning of a cooperati!e. The
(rime 'inister of "ndia has made a significant contribution to this end by announcing
that after bringing about progressi!e amendments to the 'ulti State *ooperati!e Act, the
go!ernment was also working on suitable constitutional amendments to ensure autonomy
for cooperati!es in "ndia. +eedless to say, we would look forward eagerly towards
de!elopments in this regard.
/<
A lot has been achie!ed and a lot is being achie!ed in the arena of cooperation. ;owe!er,
a painful paradox stares at us today in the form of the !ery organi5ation set up by an Act
of (arliament with a mandate to replicate the Amul (attern doing e!erything in its power
to sub!ert it3and thereby con!erting its institutions into (ublic Sector :ndertakings. A lot
of a!oidable contro!ersies and confusions ha!e been kicked up in this regard. So " must
make a small point in clarification- it is my firm and unshakeable belief that the entire
Amul (attern dairy !alue chain from procurement through marketing3along with the
associated brand3is the sole and exclusi!e domain of the farmer. The moment the farmer
loses or dilutes her right o!er it, being a small producer of perishable commodity, she
becomes nothing better than a contract labourer. A great opportunity lies in letting the
farmers own and operate their own cooperati!es. They will surely make mistakes. And
they will learn to do it in a better way e!ery time. This will be true de!elopment for our
people.
7inally, " shall make a small obser!ation on an institution that has been quietly ser!ing as
the intellectual and managerial backbone of the Amul (attern for the last /9 years. The
"nstitute of .ural 'anagement, Anand is the soul of the Amul (attern. ".'A li!es in the
collecti!e consciousness of the farmers of Amul (attern cooperati!es and in the success
of Amul. "t represents the !ery spirit of Amul. 'aintaining and defending its essence is
the responsibility of e!ery person who has a stake in the de!elopment of rural "ndia
/$
I NDIA MIL RE!OLUTION
"ndiaIs 8hite .e!olution, which has quietly swept the country during the past few
decades, deser!es attention equal to that gi!en to the better3known )reen .e!olution.
The 8hite .e!olution holds the promise of raising the nutritional status of
underpri!ileged sections of our people. 8ith a production forecast of F$ million tonnes in
1##G3##, "ndia has become the largest milk producer in the world. 7rom being a ma=or
importer of dairy products in the 1#90s, "ndia has now become an exporter. 'ilk has
become "ndiaIs most important farm commodity, the !alue of its output ,in 1##$3#91 of
.s 900,000 million exceeding that of paddy. These achie!ements ha!e been realised
against great odds- a national herd of poor yielders, crop residues and agricultural by3
products as the main feed, and a lack of adequate marketing support and finance. The true
heroes of our rural transformation are not the grain or oil seed farmers, they are the
women and men who ha!e raised the producti!ity of our nationIs cattle and buffaloes.
+resent Scenario
The success achie!ed in the augmentation of milk production in the country is reflected
by the fact that milk production has risen from a mere 1% million tonnes in 1#90 to F$.<
million tonnes in 1###. As against a per capita a!ailability of 1</ g per day in 1#90, the
present per capita a!ailability is almost /1$ g per day, despite tremendous increase in
population in the last 90 years. This milk was produced by F0 million dairy farmers from
a milch herd comprising 9F million cows ,<1 million in milk1 and <# million buffaloes
,/9 million in milk1 with an a!erage milk yield of 1,/90 kg. Almost the entire quantity
,#G per cent1 was produced in the rural sector. 2nly 10 per cent of the milk produced ,/0
million litres per day1 was processed in dairy plants. The !alue of the output of the dairy
plants was .s 1,090,000 million. 2n the consumption side, $$ per cent of the total
production was consumed in the rural sector either as liquid milk or after local con!ersion
into productsJ the remaining 9% per cent was consumed in the urban sector.
/9
&y far the ma=or part ,G$.< per cent1 of the liquid milk consumed in urban areas is
supplied by the traditional or unorganised sector of dudhiyas and milk shops. "n the
organised sector, while cooperati!e dairies sell #0 per cent of the milk they process as
liquid milk, the pri!ate sector con!erts G0 per cent of its throughput into products. The
organised sector processes milk in <F0 milk plants and product factories and is growing
at an a!erage annual rate of 10 to 19 per cent. "n the last /9 years, its throughput has
increased by six times. The a!erage installed capacity of dairy plants has also increased-
from 10,000 to /0,000 litres per day in the 1#90s, it climbed to 100,000 litres per day in
the 1#F0s, to 900,000 litres per day and finally to 1 million litres per day ,mlpd1 in the
1#G0s and 1##0s. "ndiaIs first automated dairy plant of 1 million litres per day capacity,
the 'other ?airy at )andhinagar in )u=arat, was commissioned in 1##%. Amul3""", which
with its satellite dairies has a total installed capacity of 1.9 mlpd, was commissioned in
1##F.
2f the liquid milk consumed in "ndia, a substantial part is used for whitening coffee or
tea. 7or the economically weaker sections, this use accounts for almost all milk
consumed. The fat content of milk is not of much consequence for this usage, hence the
si5eable demand for lower cost toned and double3toned milks.
"ndia has made praiseworthy inno!ations in liquid milk distribution systems. Sachets and
bulk !ending ha!e replaced bottles, lowering and eliminating packing costs. *urrently,
sachets account for G/ per cent and bulk !ending for 1$ per cent of the milk sold.
, #9 per cent of the organised sector products are accounted for by liquid milk, ghee,
butter, dahi, khoa and paneer, all being traditional. The remaining 9 per cent of the
KwesternI type of products such as table butter, cheese, baby food and milk powders are
gaining importance, especially among urban consumers. These products also ha!e export
potential.
/%
Amul And -he Anand +attern
"ndiaIs 8hite .e!olution had its origin in a single small enterprise started in )u=arat
State. "n 1#$%, at the suggestion of Sardar allabhbhai (atel, the farmers in Aaira district
formed a cooperati!e union to supply milk directly to the &ombay 'ilk Scheme ,&'S1,
cutting out pri!ate dairy and middlemen who were then supplying to &'S. The Aaria
:nion began with two societies and a daily milk collection of not more than /00 litres of
milk, under the chairmanship of Shri Tribhu!andas (atel
%
. .ight from the inception of the
dairy cooperati!e itself, a !ital link was established between the producer and &ombayIs
market, ensuring the incenti!e of a stable and remunerati!e price to the farmer. The bulk
of the milk is produced during the winter flush season while demand remains relati!ely
constant throughout the year, peaking in the summer when production is lowest. The
trade exploited this situation by paying the producer 90 per cent of the summer prices
during winters thus taking away the incenti!e to produce more milk. &y installing drying
equipment, the cooperati!e was able to conser!e surplus flush season milk, marketing it
during the lean season. "n winter, the cooperati!e paid the farmers G0 per cent of the lean
season price, which meant they earned 90 per cent more for their yearIs production
F
. As
the demand grew, the cooperati!e installed processing facilities to match it. The basic
principle of matching the rising demand by enhancing supplies has characterised pre3 and
post32peration 7lood de!elopments. "n fact, the shift in the supply function from the
policy changes introduced with 27 resulted in an e!en larger shift in the supply function
and stable real consumer prices
G
.
The structure of the Anand pattern was established from the beginning. "nitially it
included two tiers, the primary !illage ?airy *ooperati!e Societies ,?*S1 of milk
producers at the base, with a cluster of such societies forming a ?istrict 'ilk (roducersI
:nion entrusted with procurement and processing. As Aaira ?istrict was =oined by other
unions in )u=arat, an apex 7ederation of :nions was created to market their milk and
milk products. The organisations at each le!el are go!erned by their own bylaws and are
managed by democratically elected boards. The facilities at all le!els are entirely farmer
owned#. &y appointing qualified technologists and professional managers, the
cooperati!es also made sure that the farmersI producti!e genius was linked to modern
/F
management and technology
%
. " consider myself fortunate to ha!e had the opportunity of
being associated with this cooperati!e enterprise almost at the beginning and working
with Shri Tribhu!andas (atel and to lead the team of highly3skilled and dedicated
professionals that we were able to assemble.
7rom the modest beginning in 1#$%, Aaira ?istrict *ooperati!e 'ilk (roducersI :nion,
or Amul as it became popularly known, has made exceptional progress. irtually e!ery
!illage has a cooperati!e to which members bring their milk e!ery morning and e!ening.
The quantity of milk is measured ,or lately, weighed1 and a sample is drawn from each
farmer to test the fat content of his supply. "n tune with its policy of bringing the latest
technological ad!ance to the doorstep of the farmer, each society is pro!ided with an
electronic fat tester. &ased on the quantity and fat content the amount to be paid is
calculated. (ayment for morning milk is made in the e!eningJ that for e!ening milk is
made the following morning. 8ith the introduction of computers, many societies weigh
and measure fat simultaneously and milk is paid for immediately on receipt. The :nion
has always ensured that producti!ity enhancement measures are a!ailable to its members.
'odern plants produce high protein concentrate feeds and make them a!ailable at the
cooperati!es. The :nion pro!ides animal health care and breeding facilities. Artificial
insemination ser!ice with good quality semen was introduced through trained !illage
society workers. A mobile !eterinary ser!ice was pro!ided for !eterinary first aid. Abo!e
all, the best incenti!e for enhanced production was the :nionIs undertaking to buy the
entire quantity offered by the farmer irrespecti!e of the season. &y the year 1#%93%%,
Amul had 91G ?*s with 110,000 members. "t collected %9,#09 tonnes of milk and could
process 900,000 litres of milk a day. "t sold products of a total !alue of .s #/./ million
/
.
These products ranged from milk to baby food, whole milk and skimmed milk powders,
condensed milk and cheese.
/G
7peration &lood
"n contrast to AmulIs remarkable progress, the go!ernment tried !arious animal
husbandry and dairy de!elopment schemes during the period 1#913F0 at a total cost of .s
11,$00 million, but none of them yielded the desired resultsJ many were dismal failures
10
.
"t was at this =uncture that the then (rime 'inister of "ndia, late Shri Eal &ahadur Shastri,
paid a !isit to Aaira district on 2ctober <03<1, 1#%$. ;e came at Aaira :nionIs in!itation
to inaugurate a modern cattle feed plant, then 33 as now 33 the largest in the country.
Spending a night in a !illage in the company of farmers and unaccompanied by officials,
the (rime 'inister saw and heard first hand from the farmers the transformation brought
about by the Anand pattern of milk cooperati!es. 2n his return to ?elhi, he set in motion
the effort to create Anands in all parts of "ndia. The +ational ?airy ?e!elopment &oard
,+??&1 was formed in 1#%9 and was charged with the responsibility of building
cooperati!e dairies in "ndia on the Anand pattern.
"n the beginning, the +??& faced many obstacles. The ?airy &oard had few financial
resourcesJ state go!ernments and departments had little interest in turning o!er their
responsibilities to farmers and, e!en more, in becoming employees of farmers. "n )u=arat,
farmer initiati!es, supported by the Aaira :nion, resulted in significant progressJ
elsewhere little change occurred. "t was about this time that mountains of powder and
lakes of butter oil were accumulating in 6urope. "t was, we feared, =ust a matter of time
until some kindly 6uropean gentleman decided that this should be donated, or sold at
subsidised prices, to help the Kpoor people of "ndiaI. 8ere that to happen, it would ha!e
been the death knell of our nascent dairy industry. "t was to face this potential threat that
the idea arose of using food aid to generate the financial resources necessary to create
Anands throughout "ndia. 7ortunately there were indi!iduals of wisdom and foresight in
both "ndia and 6urope who supported the idea. So, donated commodities were
reconstituted as liquid milk and sold at prices comparable to those in the domestic
market. The funds that were generated were used to finance the de!elopment of our
cooperati!e dairy industry. Thus, what was a serious threat was successfully turned into
an asset
%
.
/#
2peration 7lood, the programme to replicate Anand and create a flood of milk in "ndiaIs
!illages, was launched in 1#F0. The Amul experience had established, tested and pro!ed
the guiding principles for dairy de!elopment- a three3tier cooperati!e structure owned
and controlled by farmers, professionally managed, pro!iding the inputs for production
enhancement, purchasing all the farmersI milk, processing and marketing it in urban
markets. As the 8orld &ank recently acknowledged, there was thus already a model in
place to implement dairy de!elopment and the programme in!ol!ed institution building
as distinct from institution creation
G
.
The targets for the first phase of 2peration 7lood included-
organising !illage3le!el dairy cooperati!es with the required physical and
institutional infrastructure to support production and procure milk
creation of union3owned and managed modern production enhancement,
processing and marketing facilities
establishment of metro dairies. The thrust was to link &ombay, *alcutta, ?elhi
and 'adras with the countryIs 1G best milksheds, capturing commanding shares
of these urban milk3markets.
2peration 7loodIs second phase, implemented during 1#G13G9, targeted a rapid expansion
to 1<% milksheds linked to o!er /#0 urban markets with a total population of o!er 19
million. The numbers of societies, members and !olumes of milk procured, all more than
doubled. The third phase, implemented during 1#G9 to 1##%, in!ol!ed strengthening the
basic infrastructure and measures for production enhancement and animal healthcare and
nutrition and thus consolidating the gains of the first two phases.
linked to o!er /#0 urban markets with a total population of o!er 19 million. The numbers
of societies, members and !olumes of milk procured, all more than doubled. The third
phase, implemented during 1#G9 to 1##%, in!ol!ed strengthening the basic infrastructure
and measures for production enhancement and animal healthcare and nutrition and thus
consolidating the gains of the first two phases.
"n the /9 years since the launch of 2peration 7lood, national milk production has more
than trebled and per capita a!ailability almost doubled. A robust infrastructure with rural
processing capacity of 1#.$ mlpd and %.F mlpd equi!alent of chilling capacity to ensure
good quality of milk has been set up. 7or the urban consumers, milk marketing facilities
<0
of F./ mlpd are in operation. The entire 2peraton 7ood programme was financed by
funds generated from the gifts of butter oil and S'( from the 8orld 7ood (rogramme
and the 6uropean 6conomic *ommunity, supplemented in the last phase by 8orld &ank
loans. The internal resources employed increased from phase to phase. 7uture dairy
de!elopment will be self3financing without dependence on external aid or loan
11
. Today,
27 is a huge undertaking in!ol!ing ,in 1##G3##1 10.1 million farm members supplying
an a!erage of 1<,%9# metric tonnes of milk per day through more than G1,000 cooperati!e
societies to 1F0 milk producer unions who process and market it as liquid milk and
processed products. "n 1##F3#G, the system included 1<,<FF Artificial "nsemination
*entres and FGF mobile !eterinary clinics.
<1
Support Role 7f )B
As the prime mo!er of the 27 programme, in addition to financing the unions on a grant3
cum3loan basis, +??& pro!ides extensi!e support for their successful performance. "t
coordinates its acti!ities with those of the Technology 'ission for ?airy ?e!elopment
and other go!ernment agencies. +??& assists the unions in recruitment and training of
personnelJ technical help is pro!ided in design and selection of equipment as well as in
construction of dairy plants on a turnkey basis.
.esearch in products, processes and biotechnologies, both in3house and in collaboration
with other go!ernment and non3go!ernment agencies, supports the cooperati!e dairy
industry. (roduct research is aimed at di!ersification, extension of the product range and
shelf life through suitable packaging. 7ro5en sliced paneer and continental cheese are
recent additions to the long3established product range of baby food, processed cheese,
condensed milk, milk powders and a number of traditional milk products. (rocesses ha!e
been established for the mechanised and hygienic production of traditional products
including ghee, paneer and lassi, and sweets such as peda, gulab jamun, shrikhand, and
mishti dohi, as well as fla!oured milk drinks
1/
. These products are now marketed in long3
life packaging.
8e ha!e come a long way from the early days of Amul when some multinationals and
exporters of milk products to "ndia, with !ested interests, declared that buffalo milk was
unsuited e!en for powder production, let alone baby food and condensed milk. Amul met
that challenge and pro!ed them wrong
1<
. "t has been amply demonstrated that the "ndian
dairy industry is capable of making products of a standard equi!alent to the best in the
world
/
. "n fact, based on this performance the *odex had to amend its definition of milk
from the mammary secretion of the cow alone 33 as was the case till recently 33 to that
adopted in the "ndian (re!ention of 7ood Adultration ,(7A1 .ules, namely, the mammary
secretion of milking animals
1$
. "nternational ?airy 7ederation has appro!ed cow and
buffalo milk as raw material for a !ariety of cheeses.
.esearch in biotechnology has yielded !aluable results, in all the three areas of
production enhancement, namely, feeding, animal health and breeding. Simple and
</
inexpensi!e inno!ations such as bypass protein feed, urea molasses blocks and the urea
treatment of straw, all impro!e the nutritional quality of the animalsI normal feed.
Through the 7oot3and3'outh control pro=ect $/.1 million !accinations ha!e been carried
out.
"ndian "mmunological, a subsidiary of +??&, produces a !ariety of !accines including
rabies and theileriasis as well as a number of !eterinary formulations
/
. :pgrading of Surti
and Murrah buffaloes as well as cross3breeding of Bos ebu with Bos taurus is being
undertaken in a number of research institutions. ?+A finger printing is used to select
bulls with desirable breeding traits. 7ield3based techniques such as embryo transfer are
adopted for the rapid multiplication of breeding stocks. 7armers are progressi!ely
in!esting in crossbred cows because of their high yields. "ncrease in the supply of cow
milk is ha!ing the salutary effect of an e!en intake of milk by the dairies throughout the
year
19
.
'ilk production in "ndia is sub=ect to not only seasonal !ariations but also to regional
disparities . The +ational 'ilk )rid ,+')1 is designed to mo!e milk from surplus to
deficit areas. Adequate storage facilities for fro5en butter and milk powder ha!e been set
up at strategic locations. "ndiaIs achie!ement in dairy de!elopment has attracted the
attention of other de!eloping nations who are dependent on imports and are keen on
indigenous dairy de!elopment. Sri Eanka has set up Airiya 'ilk "ndustries of Sri Eanka
in collaboration with +??&.
<<
Looking Ahead
"ndia en=oys a competiti!e ad!antage due to the low farm gate price of milk. "n much of
"ndia, milk production is symbiotically integrated into agriculture. The farming system
pro!ides low cost residues as feed and fodder for animals. 'ilk production, in turn,
supports draught power and organic fertilisers. 7or two3thirds of the /G0 million rural
"ndians engaged in agriculture, the farming system generates employment for only a
minor part of the year. ?airying sets right the imbalance in employment. "t assures a
regular income to landless as well as small and marginal farmers. The buffalo is an
efficient con!erter of low3grade fibrous feed into high !alue milk$. 6conomic
liberalisation and the dairy industryIs rapid growth has attracted "ndian business and
multinationals. Their entry carries the risk that big business will transform the dairy
industry production by the masses to mass production
/
.
2peration 7lood has been one of the largest and most successful rural employment
schemes in the world. *ooperati!e dairying means regular income to lakhs and lakhs of
small farmers. *ooperati!e dairying has not been merely the modernisation of milk
production but has larger technological, economic and social dimensions. "t has created
and nurtured democratic structures at grass root le!els
%
. Such gains should not be
endangered. Abo!e all, the future of "ndiaIs dairy farmer is a trust that each of us holds.
8e cannot and must not let them down
/
. The dairy industryIs future depends on
expanding and meeting the domestic demand and carefully building a sustainable export
for "ndian milk and milk products. The tendency to exploit our competiti!e ad!antage by
unbridled emphasis on exports should be curbed.
Though, thanks largely to Dr Kuriens efforts, India today is the largest milk
producer in the world, milk production still falls far short of national
requirements for adequate nutrition. As against the present production of
about ! million tonnes, national requirement will be as high as "# million
tonnes by $%$%. &ilk producti'ity per animal in India (",$)%*lactation+ is still
'ery poor compared to international le'els ($,%#, kg*lactation+ due to
gradual breed deterioration.
<$
Amul airy / a farmers< success story
Amul is an embodiment of faith L faith in the ability of our farmers to break the shackles
of po!erty and oppression and to create a socio3economic re!olution in rural "ndia. At the
same time, it had multidimensional impact on rural economy and society- 3 generating
higher income and employment opportunities, facilitating education, enhancing nutrition
le!els, addressing gender issues and contributing to !illage3le!el social amenities.
Through the MAnand (atternN diary cooperati!es, our farmers demonstrated to the world,
the key to successful M'anagement of ?e!elopmentN. ?iary cooperati!es ha!e pro!ided
the farmers, a steady source of income, enhancing their earning and enabling them to
impro!e their standard of li!ing.
2peration 7lood, which was perhaps, worldIs largest de!elopment programme, was based
on the rich experience gained from the Amul model, also popularly known as KAnand
(atternI. KAnand (atternI is an inno!ati!e three3tier organisation structure combines the
producti!e genius of farmers with professional management and modern technology. The
facilities at all le!els are entirely farmer3owned. The cooperati!es are able to build
markets, supply inputs and create !alue3added processing. (rompt and remunerati!e
payment for produce of good quality has ensured the best incenti!e for the farmer to
increase production and quality.
The three3tier MAnand (atternI structure consists of a *ooperati!e Society at !illage le!el
affiliated to a 'ilk :nion at ?istrict le!el and they are further federated into a 'ilk
7ederation at State le!el. The abo!e three3tier structure was formed in order to delegate
responsibilities at !arious le!els such that there is no internal competition and economics
of scale is achie!ed.
The illage *ooperati!e is the primary society under the three3tier structure. "t has
membership of milk producers of the !illage ,approximately /00 member milk producers
per !illage1 and is go!erned by an elected 'anagement *ommittee consisting of # to 1/
elected representati!es of the milk producers. The main function of this cooperati!e
society is to collect surplus milk from the milk producers of the !illage and make
payment based on quality and quantity. "t also pro!ide support ser!ices to the members
like eterinary 7irst Aid, Artificial "nsemination Ser!ices, *attle3feed sales, mineral
<9
mixture sales, fodder H fodder seed sales, conducting training on Animal ;usbandry and
?airying, etc.
The district3le!el 'ilk :nion is the second tier under the three3tier structure. "t has
membership of illage Societies of the ?istrict and is go!erned by a &oard of ?irectors
consisting of # to 1G elected representati!es of the illage Societies. The main function of
the 'ilk :nion is to process milk into !arious milk and milk products as per the market
requirement. The :nion procures milk from the illage Societies of the ?istrict and
arranges for the transportation of raw milk from the !illages to the 'ilk :nion. "t also
pro!ides input ser!ices to the producers and other support to the !illage le!el societies.
The State3le!el 7ederation is the apex tier under the three3tier structure. "t has
membership of 'ilk :nions of the State and is go!erned by a &oard of ?irectors
consisting of one elected representati!e of each 'ilk :nion. The main function of the
7ederation is to market the milk and milk products, manufactured by 'ilk :nions. The
7ederation establishes distribution network for marketing of milk and milk products and
maintains the supply chair network. "t also pro!ides support ser!ices to the 'ilk :nions
and members like Technical "nputs, 'anagement support and Ad!isory ser!ices.
As a direct consequence of K2peration 7loodI and the Amul model, "ndia is now the
leading milk producer in the world, with a milk production of #1 million 'TsC annum.
The cooperati!e structure now touches the li!es of 11 million farmer households across
"ndia. "n )u=arat itself, /.$ million farmer households form a part of the large Amul
family. ?airying has now become an attracti!e source of li!elihoodJ bring prosperity and
economic de!elopment to rural "ndia.
<%
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