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AMUL Overview

By: Gaurav Kacholia

Amul the co-operative registered on 1 December 1946 as a response to the exploitation of

marginal milk producers by traders or agents of the only existing dairy, the Polson dairy, in thesmall city distances to deliver milk, which often went sour in summer, to Polson. The prices of

milk were arbitrarily determined. Moreover, the government had given monopoly rights toPolson to collect milk from mikka and supply it to Bombay city. GCMMF (AMUL) has the

largest distribution network for any FMCG company. It has nearly 50 sales offices spread all

over the country, more than 5000 wholesale dealers and more than 700000 retailers. Amulbecame the world's largest vegetarian cheese and the largest pouched-milk brand. AMUL is also

the largest exporter of dairy products in the country. AMUL is available today in over 40

countries of the world. AMUL is exporting a wide variety of products which include whole and

skimmed milk powder, cottage cheese (Paneer), UHT milk, clarified butter (Ghee) andindigenous sweets.

The Three-Tier StructureThe Amul Model is a three-tier cooperative structure. This structure consists of a dairy

cooperative society at the village level affiliated to a milk union at the district level which in turn

is federated into a milk federation at the state level. This Amul model has helped India to emergeas the largest milk producer in the world. More than 15 million milk producers pour their milk in

1, 44,500 dairy cooperative societies across the country. Their milk is processed in 184 District

Co-operative Unions and marketed by 22 State Marketing Federations, ensuring a better life for

millions.

Operation Flood

Operation Flood, launched in 1970, has been instrumental in helping the farmers mould theirown development. Thus helping reach milk to consumers in 700 towns and cities through aNational Milk Grid. It also helped eradicate the need for middlemen thereby reducing the

seasonal price variations. As a result of the cooperative structure the whole exercise of

production and distribution of milk and milk products has become economically viable forfarmers to undertake on their own. In this manner the farmer himself can enjoy the fruits of his

own labor, instead of surrendering a majority of the profit to corrupt middlemen.

Three Phases of developmentThe scheme sought to establish milk producers' cooperatives in the villages and make modern

technology available to them. The broad objectives are to increase milk production ("a flood of

milk"), augment rural incomes and transfer to milk producers the profits of milk marketingwhich are hitherto enjoyed by well-to-do-middlemen.

Phase Iof Operation Flood was financed by the sale within India of skimmed milk powder andbutter oil gifted by the EC countries via the World Food Program. As founder-chairman of the

National Dairy Development Board (NDDB) of India, Dr Kurien finalized the plans and

negotiated the details of EEC assistance. He looked after the administration of the scheme as

founder-chairman of the erstwhile Indian Dairy Corporation, the project authority for Operation

http://en.wikipedia.org/wiki/Polson_(brand)http://en.wikipedia.org/wiki/Polson_(brand)

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Flood. During its first phase, the project aimed at linking India's 18 best milksheds with the milk

markets of the four metropolitan cities of Delhi, Mumbai, Calcutta and Madras.

Phase IIof the project, implemented during 1981-85 raised this to some 136 milksheds linked toover 290 urban markets. The seed capital raised from the sale of WFP/EEC gift products and

World Bank loan had created, by end 1985, a self-sustaining system of 43,000 village

cooperatives covering 4.25 million milk producers. Milk powder production went up from22,000 tonnes in the pre project year to 1, 40,000 tonnes in 1989, thanks to dairies set up underOperation Flood. The EEC gifts thus helped to promote self-reliance. Direct marketing of milk

by producers' cooperatives resulting in the transfer of profits from milk contracts --increased by

several million liters per day.

Phase III of Operation Flood (1985-1996) enabled dairy cooperatives to rapidly build up the

basic infrastructure required to procure and market more and more milk daily. Facilities were

created by the cooperatives to provide better veterinary first-aid health care services to theirproducer members.