The success story of the world’s ninth-largest dairy company, Amul

The success story of the world’s ninth-largest dairy company, Amul

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The brand Amul, also known as the Gujarat Cooperative Milk Marketing Federation (GCMMF), needs no introduction. It is the brand which single-handedly helped India change from being a milk-deficit country to become the world’s largest producer of milk and milk product by doubling the country’s production to some 130 million tons annually over the last two decades. Amul is the ninth-largest dairy company in the world.

Infographic courtesy: Youth Motivator

It is the brand that spearheaded what was called the White Revolution, improving lives of rural families and providing a livelihood for marginal farmers with two milk animals or less, and went on to become India’s largest food brand.

With a daily milk procurement was 215.96 lakh litre per day, the consolidated turnover of the Amul brand of products exceeded Rs 52,000 cr in 2019-20. The milk cooperative, last year, went on to become the first Indian diary brand to make it to Rabobank’s Global Top 20 list.

Last year, during the nationwide lockdown, when India was going through one of the worst economic lows, Amul pumped in Rs 8,000 crore back into the rural economy, that too in a span of 60 days.

But what is the history behind this cooperative which is providing an opportunity to its three million milk producers to lift output and meet the increasing demand for milk and its related items?

How was Amul born?

Amul has a storied history, having been created in 1946 in response to the exploitation of marginal milk producers by traders from Polson dairy, which was then the region’s only dairy.

Polson Dairy, a locally-owned dairy in Anand, Gujarat, was procuring milk from farmers at very low rates to sell to the Bombay (now Mumbai) government.

Infograohic courtesy: Youth Motivator

In 1946, Gujarat was in the middle of the nationalist movement. During that time, Polson dairy, which had complete rights to supply milk to Bombay under the Bombay Milk Scheme, was exploiting the Indian dairy farmers by procuring milk from them at very low rates and selling it to the Bombay Government at excessively high rates. While Polson prospered and the middlemen happily made money, it was the poor dairy farmers who suffered.

This continued until Tribhuvandas Kishibhai Patel started a revolution to help poor dairy farmers and landless labourers. He approached Sardar Vallabhbahi Patel and Murarji Desai, who was then Bombay’s home and revenue minister, to seek their permission to form a cooperative with their own pasteurisation plant. After getting support from the duo, the cooperative – Kaira District Co‑operative Milk Producers’ Union – was formed.

Infographic courtesy: Youth Motivator

Any farmer was free to join the Kaira Union irrespective of his or her caste, religion or financial status.

Tribhuvandas Kishibhai Patel demanded the Bombay government to procure milk from this cooperative.

The whole of Gujarat was in a rebellious mood and was not contributing milk to the Polson Dairy, by which the Polson Dairy was on the verge of breaking down. The British government initially tried to dread the protesting farmers. They threatened the farmers to quit the movement or face dire consequences, but the farmers refused to buckle under pressure.

They decided to go on a ‘milk strike’ and suspended milk supply to Bombay. The city went without even a drop of milk from Anand for 15 days.

Later, reluctantly the British allowed the farmers to set up their own cooperative, thinking that the cooperative would not last for even a couple of days because most of the farmers were illiterate. And this is how Kaira District Co‑operative Milk Producers Union, popularly known as Amul Dairy today, was born. Tribhuvandas Kishibhai Patel went on to become the chairman of the Kaira union.

In 1949, Patel sought the help of Dr Verghese Kurien, who was then working at the Government Creamery at Anand, Gujarat, to put the dairy equipment together and run the units. He was also entrusted with the responsibility of marketing and external affairs of the Union.

Patel and Kurien were joined by HM Dalaya. Dalaya looked after the technical and internal aspects of running the dairy. These three went on to become the pillars of the cooperative movement.

Tribhuvandas Patel (M) with Verghese Kurien (L) and HM Dalaya (R) (source: The Hindu Businessline)

New machinery was bought and milk procurement increased from 200 litres in 1948 to 20,000 litres in 1952. However, during this period, the surplus milk found no takers, so farmers had to face the problem of fluctuating milk production. This gave birth to the idea of converting extra milk to milk powder. Kurien’s batchmate from America HM Dalaya invented the process of skimmed milk powder and condensed milk from buffalo milk instead of cow milk and a dairy was set up in 1955 to process excess milk into milk powder and butter. 

With the commercial success of the modern dairy at Anand, the brand name Amul (from the Sanskrit Amulya or priceless, and also an acronym for Anand Milk Union Ltd) was registered in 1957.

Verghese Kurien’s vision of offering thousands of small dairy farmers centralised marketing and quality control facilities took Amul to great heights. The small Kaira District Co-operative Milk Producers Union, which began with merely two village cooperative societies and 247 litres of milk went on to become the world’s ninth-largest dairy company in the world- Amul Dairy.

The Amul Model of dairy development

In 1964, the then PM of India Lal Bahadur Shastri decided that the same approach should become the basis of the National Dairy Development Policy. Lal Bahadur Shastri understood that the success of Amul Dairy could be attributed to four basic factors. Firstly, the farmers owned the dairy. Secondly, their elected representatives managed the village societies and the district unions. Thirdly, the farmers were the ones who employed professionals to operate the dairy and manage its business, And last but not the least, the cooperative was sensitive towards the needs of farmers and responsive to their demands.

Image credit: amul.com

The next year, Prime Minister Lal Bahadur Shastri tasked Kurien to replicate the dairy’s Anand pattern nationwide and this was how the world’s largest dairy development programme known as ‘Operation Flood’ was born. This replicated the success of the ‘Amul Model’ in other parts of the country.

The Amul Model of dairy development is a three-tiered structure with the dairy cooperative societies at the village level federated under a milk union at the district level and a federation of member unions at the state level.

The model has been known to empower thousands of village women, who benefit at the grass-root level by selling milk to Amul. Amul claims that its model helps women gain economic independence.

Image credit: amul.com

This ‘Amul model’ has helped India emerge as the largest producer of milk in the world. More than 16 million milk producers pour in their produce in 185903 dairy cooperatives societies in the country. Their milk is processed in 222 District-Cooperative Milk Unions and marketed by 28 state marketing federation.

Role of technology behind the success of the brand

Technology plays a pivotal role in the success of Amul Dairy. Amul uses Automatic Milk Collection systems, to collect milk from farmers at a swift pace, simultaneously capture details about the farmers and milk, like the lipid content of milk, etc.

On a daily basis, Amul collects around 3.3 million litres of milk from nearly 2.12 million farmers in villages all across India. The farmers get paid instantaneously within a matter of a few seconds.

The milk is examined, grated and transported to many diaries located across the country. The milk delivery trucks deliver milk during the early morning to every nook and corner of the country. And all this occur daily at clock-work precision.

Until today, Amul has a total of 31 plants in India. Gujarat has 13 Amul plants, 4 plants are located in Delhi/NCR region, 2 plants are in UP, 4 plants are located in Maharashtra, Rajasthan has 3 plants and Madhya Pradesh, Assam, Chattisgarh, Jammu and Kashmir and Jharkhand have one Amul plant each.

Who is the owner of the milk cooperative?

In fact, there is no single owner of Amul. Amul is a cooperative society and is jointly owned by 3.6 million milk producers in Gujarat.

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