“The Amul model is very successful in Gujarat. But, nothing much has happened in other States due to government policies and local laws that interfere with professional management,” says P. G. Bhatol, former chairman of Gujarat Co-operative Milk Marketing Federation Ltd (GCMMF), obviously proud of the cooperative effort.
Mercifully, in Gujarat, you don’t have a dairy development department. “You could have all the ingredients of the Amul model, but without professional management, you will not succeed,” explains Rahul Kumar Srivastava, Managing Director of Amul Dairy.
“We replicated Amul model in West Bengal but it is headed by the District Collector. Wherever NDDB replicates the Amul model, there is hardly any professional management,” he laments.
This is the problem with other States. In some States, the chairman is a political appointee. One must understand that people’s trust is paramount in the co-operative model, he argues.
“I am bullish about Gujarat dairy farming. Seen in the national perspective, we consume 131 million tonnes a year and as the demand for milk goes up, we will need at least 200 mt by 2020. So, a lot of milk is required and we need to motivate our farmers,” says Srivastava.
The most notable achievement of the Amul model is that the common farmer gets 80 per cent of what the consumer pays. This is because he controls the supply chain,” he added.
The Amul journey, since it began 67 years back, has been the model of efficiency,” said R.S. Sodhi, Managing Director, GCMMF, the largest food product marketing organisation in India with an annual turnover of Rs 7,500 crore (2011-12).
Entire value chain
Indeed, in no other agriculture commodity does the farmer control the entire value chain, from procurement to processing to marketing.
In the dairy sector, the Gujarati farmer is a link and value adder. Each value addition benefits the farmer, not the middlemen as in other agriculture commodities, says Sodhi. The Amul model ensures that the farmer gets 50 per cent more than any farmer elsewhere in India and the consumer too gets good quality milk and products at a far lower price, he said.
Though the Amul model appears, on the face of it, a sort of monopoly, there is no exploitation of the pricing power.
In contrast, the ‘western’ dairy model relies on relentless labour substitution (such as automated milking and feeding systems, on-farm bulk-cooling tanks), augmentation of both quantity and quality of feed rations, and large investments in animal health, nutrition and breed improvement. Unlike other co-operative activities that were hit by privatisation in 1991, milk co-operatives, as represented by the Amul model, stood its ground with its core strength of 11 million families. The Amul philosophy is successful because it is based on satisfying each and every one of its 32 lakh members, of whom 75 per cent are landless. Only when they are satisfied can they be motivated, said Srivastava.
Given that dairying is the single-largest rural employment provider in the country, the Amul model symbolises village co-operatives at their best, and has brought dramatic changes to the lives of the marginal farmers.
The Amul model of dairy development is no wonder an internationally recognised strategy for promoting the economic and social well-being of poor milk producers.
Amul brand began thriving in the State and in India, outselling all other brands. This low-input/low-output co-operative dairying has indeed worked wonders; farmer suicides are unheard of. One of the reasons is that it provides an ideal employment opportunity for stakeholders who are both owners and suppliers. For the farmers, it has never been so easy, as even cattlefeed can be had at their doorstep, he said.
White revolution
The birth of Amul at Anand happened under the stewardship of Verghese Kurien. Called the “Father of the White Revolution”, he provided the impetus to the co-operative dairy movement in the country. With its indigenous R&D, Amul, the first modern dairy of the Kaira union, produced skimmed milk powder from buffalo milk for the first time on a commercial scale anywhere in the world. Soon, Gujarat saw the rapid expansion of dairy co-operative movement. Five other district unions — Mehsana, Banaskantha, Baroda, Sabarkantha and Surat — were organised.
To avoid duplication on advertising and competition among the milk co-operatives, an apex marketing body of dairy co-operative unions, the Gujarat Co-operative Milk Marketing Federation, was established in 1973.
The Kaira District Co-operative Milk Producers’ Union Ltd, which had established Amul in 1955, decided to hand over the brand name to GCMMF.
With the creation of GCMMF (Amul), competition among co-operatives was eliminated while they could band together and take on the private sector.
GCMMF has ensured remunerative returns to the farmers while providing consumers with quality products under the brand name Amul.
(The author is a freelance writer.)