Cooperative Societies- Amul

introduction Amul formed in 1946, is a dairy cooperative in India. It is a brand name managed by an apex cooperative organisation, Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF), which today is jointly owned by some 2. 8 million milk producers in Gujarat, India[2]. AMUL is based in Anand, Gujarat and has been an example of a co-operative organization’s success in the long term. It is one of the best examples of co-operative achievement in the developing economy. he Amul Pattern has established itself as a uniquely appropriate model for rural development.

Amul has spurred the White Revolution of India, which has made India the largest producer of milk and milk products in the world[citation needed]. It is also the world’s biggest vegetarian cheese brand. Amul is the largest food brand in India and world’s Largest Pouched Milk Brand with an annual turnover of US $1050 million (2006–07). Besides India, Amul has entered overseas markets such as Mauritius, UAE, USA, Bangladesh, Australia, China, Singapore, Hong Kong and a few South African countries. Dr Verghese Kurien, former chairman of the GCMMF, is recognised as a key person behind the success of Amul.

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There are 735 employees of Marketing Arm. However, real pool consist of 2. 8 million milk producers GCMMF TODAY- GCMMF is India’s largest food products marketing organisation. [citation needed]. It is a state level apex body of milk cooperatives in Gujarat, which aims to provide remunerative returns to the farmers and also serve the interest of consumers by providing affordable quality products. GCMMF markets and manages the Amul brand. BIRTH OF AMUL: The birth of Amul at Anand provided the impetus to the cooperative dairy movement in the country.

The Kaira District Cooperative Milk Producers’ Union Limited was registered on December 14, 1946 as a response to exploitation of marginal milk producers by traders or agents of existing dairies in the small town named Anand (in Kaira District of Gujarat). Milk Producers had to travel long distances to deliver milk to the only dairy, the Polson Dairy in Anand. Often milk went sour as producers had to physically carry the milk in individual containers, especially in the summer season. These agents arbitrarily decided the prices depending on the production and the season.

Milk is a commodity that has to be collected twice a day from each cow/buffalo. In winter, the producer was either left with surplus / unsold milk or had to sell it at very low prices. Moreover, the government at that time had given monopoly rights to Polson Dairy to collect milk from Anand and supply it to Bombay city in turn. India ranked nowhere amongst milk producing countries in the world in 1946. Angered by the unfair and manipulative trade practices, the farmers of Kaira District approached Sardar Vallabhbhai Patel under the leadership of the local farmer leader Tribhuvandas Patel.

Sardar Patel advised the farmers to form a Cooperative and supply milk directly to the Bombay Milk Scheme instead of selling it to Polson (who did the same but gave low prices to the producers). He sent Morarji Desai to organize the farmers. In 1946, the farmers of the area went on a milk strike refusing to be further oppressed. Thus the Kaira District Cooperative was established to collect and process milk in the District of Kaira in 1946. Milk collection was also decentralized, as most producers were marginal farmers who were in a position to deliver 1-2 litres of milk per day.

Village level cooperatives were established to organize the marginal milk producers in each of these villages. The Cooperative was further developed & managed by Dr. V Kurien along with Shri H M Dalaya. The first modern dairy of the Kaira Union was established at Anand (which popularly came to be known as AMUL dairy after its brand name). The foundations of a modern dairy industry in India were thus laid since India had one of the largest buffalo populations in the world. The success of the dairy co-operative movement spread rapidly in Gujarat.

Within a short span five other district unions – Mehsana, Banaskantha, Baroda, Sabarkantha and Surat were organized. in 1973, the Gujarat Co-operative Milk Marketing Federation was established. The Kaira District Co-operative Milk Producers’ Union Ltd. which had established the brand name AMUL in 1955 decided to hand over the brand name to GCMMF (AMUL). With the creation of GCMMF (AMUL), we[who? ] managed to eliminate competition between Gujarat’s cooperatives while competing with the private sector as a combined stronger force.

GCMMF (AMUL) has ensured remunerative returns to the farmers while providing consumers with products under the brand name AMUL. This was possible due to the leadership of the founder Chairman of AMUL, Tribhuvandas Patel and the vision of the father of the White Revolution, Dr. Verghese Kurien who worked as a professional manager at AMUL. Numerous people contributed to this movement which would otherwise not have been possible. STRUCTURE The 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 further federated into a Milk Federation at the State level. The above three-tier structure was set-up in order to delegate the various functions, milk collection is done at the Village Dairy Society, Milk Procurement & Processing at the District Milk Union and Milk & Milk Products Marketing at the State Milk Federation. This helps in eliminating not only internal competition but also ensuring that economies of scale is achieved.

As the above structure was first evolved at Amul in Gujarat and thereafter replicated all over the country under the Operation Flood Programme, it is known as the ‘Amul Model’ or ‘Anand Pattern’ of Dairy Cooperatives. Village Dairy Cooperative Society (VDCS) The milk producers of a village, having surplus milk after own consumption, come together and form a Village Dairy Cooperative Society (VDCS). The Village Dairy Cooperative is the primary society under the three-tier structure. It has membership of milk producers of the village and is governed by an elected Management Committee consisting of 9 to 12 elected epresentatives of the milk producers based on the principle of one member, one vote. The village society further appoints a Secretary (a paid employee and member secretary of the Management Committee) for management of the day-to-day functions. It also employs various people for assisting the Secretary in accomplishing his / her daily duties. The main functions of the VDCS are as follows: ? Collection of surplus milk from the milk producers of the village & payment based on quality & quantity ?

Providing support services to the members like Veterinary First Aid, Artificial Insemination services, cattle-feed sales, mineral mixture sales, fodder & fodder seed sales, conducting training on Animal Husbandry & Dairying, etc. ? Selling liquid milk for local consumers of the village ? Supplying milk to the District Milk Union District Cooperative Milk Producers’ Union (Milk Union) The Village Societies of a District (ranging from 75 to 1653 per Milk Union in Gujarat) having surplus milk after local sales come together and form a District Milk Union.

The Milk Union is the second tier under the three-tier structure. It has membership of Village Dairy Societies of the District and is governed by a Board of Directors consisting of 9 to 18 elected representatives of the Village Societies. The Milk Union further appoints a professional Managing Director (paid employee and member secretary of the Board) for management of the day-to-day functions. It also employs various people for assisting the Managing Director in accomplishing his / her daily duties. The main functions of the Milk Union are as follows: Procurement of milk from the Village Dairy Societies of the District ? Arranging transportation of raw milk from the VDCS to the Milk Union. ? Conducting training on Cooperative Development, Animal Husbandry & Dairying for milk producers and conducting specialised skill development & Leadership Development training for VDCS staff & Management Committee members. ? Providing management support to the VDCS along with regular supervision of its activities. ? Establish Chilling Centres & Dairy Plants for processing the milk received from the villages. Selling liquid milk & milk products within the District ? Process milk into various milk & milk products as per the requirement of State Marketing Federation. ? Decide on the prices of milk to be paid to milk producers as well on the prices of support services provided to members. The Milk Unions of a State are federated into a State Cooperative Milk Federation. The Federation is the apex tier under the three-tier structure. It has membership of all the cooperative Milk Unions of the State and is governed by a Board of Directors consisting of one elected representative of each Milk Union.

The State Federation further appoints a Managing Director (paid employee and member secretary of the Board) for management of the day-to-day functions. It also employs various people for assisting the Managing Director in accomplishing his daily duties. The main functions of the Federation are as follows: ? Marketing of milk & milk products processed / manufactured by Milk Unions. ? Establish distribution network for marketing of milk & milk products. ? Pooling surplus milk from the Milk Unions and supplying it to deficit Milk Unions. Establish feeder-balancing Dairy Plants for processing the surplus milk of the Milk Unions. ? Arranging for common purchase of raw materials used in manufacture / packaging of milk products. ? Decide on the prices of milk & milk products to be paid to Milk Unions. ? Decide on the products to be manufactured at various Milk Unions (product-mix) and capacity required for the same. ? Arranging Finance for the Milk Unions and providing them technical know-how. ? Designing & Providing training on Cooperative Development, Technical & Marketing functions. Impact of amul model:

The effects of Operation Flood Programme are more appraised by the World Bank in its recent evaluation report. It has been proved that an investment of Rs. 20 billion over 20 years under Operation Flood Programme in 70s & 80s has contributed in increase of India’s milk production by 40 Million Metric Tonne (MMT) i. e. from about 20 MMT in pre- Operation Flood period to more than 60 MMT at the end of Operation flood Programme. Thus, an incremental return of Rs. 400 billion annually have been generated by an investment of Rs. 20 billion over a period of 20 years.

This has been the most beneficial project funded by the World Bank anywhere in the World. One can continue to see the effect of these efforts as India’s milk production continues to increase and now stands at 90 MMT. Despite this fourfold increase in milk production, there has not been drop in the prices of milk during the period and has continued to grow. Due to this movement, the country’s milk production tripled between the years 1971 to 1996. Similarly, the per capita milk consumption doubled from 111 gms per day in 1973 to 222 gms per day in 2000.

Thus, these cooperatives have not just been instrumental in economic development of the rural society of India but it also has provided vital ingredient for improving health & nutritional requirement of the Indian society. Very few industries of India have such parallels of development encompassing such a large population. These dairy cooperatives have been responsible in uplifting the social & economic status of the women folk in particular as women are basically involved in dairying while the men are busy with their agriculture. This has also provided a definite source of income to the women leading to their economic emancipation.

The three-tier ‘Amul Model’ has been instrumental in bringing about the White Revolution in the country. As per the assessment report of the World Bank on the Impact of Dairy Development in India, the ‘Anand Pattern’ has demonstrated the following benefits: ? The role of dairying in poverty reduction ? The fact that rural development involves more than agricultural production ? The value of national ‘ownership’ in development ? The beneficial effects of higher incomes in relieving the worst aspects of poverty ? The capacity of dairying to create jobs ? The capacity of dairying to benefit the poor at low cost ?

The importance of commercial approach to development ? The capacity of single-commodity projects to have multi-dimensional impacts ? The importance of getting government out of commercial enterprises ? The importance of market failure in agriculture ? The power & problems of participatory organisations ? The importance of policy Achievements of the “Amul Movement” 1. The phenomenal growth of milk production in India – from 20 million MT to 100 million;,,. /,. ,. m,. ,bmmchmlpkml;ghkklMT in a span of just 40 years – has been made possible only because of the dairy cooperative movement.

This has propelled India to emerge as the largest milk producing country in the World today. 2. The dairy cooperative movement has also encouraged Indian dairy farmers to keep more animals, which has resulted in the 500 million cattle & buffalo population in the country – the largest in the World. 3. The dairy cooperative movement has garnered a large base of milk producers, with their membership today boasting of more than 13 million member families. 4. The dairy cooperative movement has spread across the length and breadth of the country, covering more than 125,000 villages of 180 Districts in 22 States. . The dairy cooperatives have been able to maintain democratic structure at least at the grass-root level with the management committee of the village level unit elected from among the members in majority of the villages. 6. The dairy cooperatives have also been instrumental in bridging the social divide of caste, creed, race, religion & language at the villages, by offering open and voluntary membership. 7. The dairy cooperatives have been successfully propagating the concepts of scientific animal husbandry & efficiency of operations, which has resulted in low cost of production & processing of milk. . The movement has been successful because of a well-developed procurement system & supportive federal structures at District & State levels. 9. Dairy Cooperatives have always been proactive in building large processing capacities, which has further propelled growth of milk production. 10. The dairy cooperatives are among those few institutions in India, which still cherish a strong Cooperative identity, values and purpose. They still boast of idealism & good will of members and employees. 11.

The dairy cooperatives have removed the poor farmers of India from the shackles of agents & middlemen and provided an assured market for their produce. As these are the institutions run by farmers themselves, it has also resulted in fair returns to the members for their produce 12. Dairy cooperatives have been able to create a market perception of honesty & transparency with their clean management Products Amul’s product range includes milk powders, milk, butter, ghee, cheese, Masti Dahi, Yoghurt, Buttermilk chocolate, ice cream, cream, shrikhand, paneer, gulab jamuns, flavoured milk, basundi, Nutramul brand and others.

In January 2006, Amul plans to launch India’s first sports drink Stamina, which will be competing with Coca Cola’s Powerade and PepsiCo’sGatorade [8]. In August 2007, Amul introduced Kool Koko, a chocolate milk brand extending its product offering in the milk products segment. Other Amul brands are Amul Kool, a low calorie thirst quenching drink; Masti Butter Milk; Kool Cafe, ready to drink coffee and India’s first sports drink Stamina. Amul’s sugar-free Pro-Biotic Ice-cream won The International Dairy Federation Marketing Award for 2007. citation needed] Mascot Since 1967[9] Amul products’ mascot has been the very recognisable “Amul baby” (a chubby butter girl usually dressed in polka dotted dress) showing up on hoardings and product wrappers with the equally recognisable tagline Utterly Butterly Delicious Amul. The mascot was first used for Amul butter. But in recent years in a second wave of ad campaign for Amul products, she has also been used for other product like ghee and milk. Rivals

The success of Amul resulted in similar organizations being setup by state governments throughout India, most of which had reasonable success. Examples are Milma in Kerala, Vijaya in Andhra Pradesh, Aavin in Tamil Nadu, K. M. F (Nandini) in Karnataka, Sudha in Bihar, Omfed in Orissa, saras in Rajasthan, Parag in Uttar Pradesh, Verka in Punjab, Aanchal in uttaranchal, Vita in Haryana and others. [citation needed] Other co-operative rivals of Amul include National Dairy Development Board (NDDB) (with its Mother Dairy and Sugam brands).

With Amul entering the sports drink market, its rivals now include Coca Cola and PepsiCo. Advertising Its advertising has also started using tongue-in-cheek sketches starring the Amul baby commenting jovially on the latest news or current events. The pun in her words has been popular. Amul outdoor advertising uses billboards, with a humorous take on current events and is updated frequently. The Amul ads are one of the longest running ads based on a theme, now vying for the Guinness records for being the longest running ad campaign ever with Smokey Bear.

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