Docstoc

AMUL - DOC

Document Sample
AMUL - DOC Powered By Docstoc
					   AMUL
THE TASTE OF INDIA




                     1
A     MUL PRODUCT’S


AMUL means "priceless" in Sanskrit. The brand name "Amul," from the Sanskrit
"Amoolya," was suggested by a quality control expert in Anand. Variants, all meaning
"priceless", are found in several Indian languages. Amul products have been in use in
millions of homes since 1946. Amul Butter, Amul Milk Powder, Amul Ghee, Amulspray,
Amul Cheese, Amul Chocolates, Amul Shrikhand, Amul Ice cream, Nutramul, Amul
Milk and Amulya have made Amul a leading food brand in India. (Turnover: Rs. 29
billion in 2004). Today Amul is a symbol of many things. Of high-quality products sold
at reasonable prices. Of the genesis of a vast co-operative network. Of the triumph of
indigenous technology. Of the marketing savvy of a farmers' organization. And of a
proven model for dairy development.




                                                                                     2
A      MUL EXPORT


Exports of your Federation have performed creditably during the year. We have become
the first Indian dairy products exporter to achieve a mark of Rs 100 crore in revenues.
The year ended with an export turnover of Rs 115 crore (Rs.1.15 billion)-more than
trebling our export turnover as compared to the previous year. The reduced subsidies in
EU have given us excellent opportunities for export of SMP and FCMP. We have shown
that if a level playing field is granted, Indian dairy products would be successful in the
global market. We have also grown by 40 percent in consumer pack exports and
consolidated our exports of UHT Milk, Ghee and Paneer in particular.




                                                                                         3
A   WARDS




   Ramkrishna Bajaj National Qality Award-2003

   Amul - The Taste Of India (Gcmmf)Receives International Cio 100 Award For
    Resourcefulness




                                                                                4
THE 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, Ruth Heredia's connection with Amul dates back to the inauguration of the
Amul Dairy when, aged four, she presented a bouquet to the guest of honour, Pandit
Jawaharlal Nehru. She and her family have sampled the taste of Amul Condensed Milk
and Amul Cheese through their various progressive stages.

Ms Heredia is an occasional writer, and sometimes lectures on her favourite subjects:
music, literature and history. She has a post graduate degree in English, has been a
librarian, loves animals (especially dogs), and enjoys a good movie or a tennis match.




                                                                                         5
The Amul India Story is a stimulating excursion into a dream that is now reality. Blessed
with the vision of Sardar Vallabhbhai Patel, a patriot, the book traces the birth of a small
movement in Gujarat, the Kaira District Cooperative Milk Producer's Union and its
evolution into a fantastic new paradigm of development. A fast-paced narrative, laced
with several fascinating anecdotes, the book chronicles the daring initiatives and
dynamism displayed by a team of committed individuals - a farmer, Tribhuvandas Patel,
a professional manager, V.Kurien and a technologist, H.M.Dalaya. This is a story of
faith, empowerment, and dream realization, with all the elements that make a story more
interesting - passion, humour and the thrill of anticipation...




                                                                                          6
A      MUL PARLOURS




"Amul Utterly Delicious" parlours are an excellent business opportunity for investors,
shopkeepers and organizations. In order to come closer to the customer, we have decided
to create a model for retail outlets, which would be known as "Amul Preferred
Outlets"(APO).

To have a better idea please go through the following:

   1. The criteria for selection of APOs would be -
         a. Visibility - How prominent is the location of your shop?
           b. Shop area: 100 - 300 sq. ft.
           c. Good Business potential
           d. Exclusive Amul outlet - no other products
           e. Willingness to sell the entire range of Amul Products
           f. Creditworthiness and past business experience


   2. On your inquiry - our Field force would visit your site. He/She would fill the APO
      proposal form with your passport size photograph. You would require:
        i.   Shops and Establishment license
         ii.   Layout of the shop and frontage - The layout of the shop designed by a
               local architect/local contractor.
        iii.   2 Passport size photographs


                                                                                        7
   3. Renovation Work of the Shop to give it a standard look - would be done to
      meet the design and specifications at your cost. The cost of renovation of a typical
      shop would normally be between Rs. 60,000 to Rs. 1 lac.

   4. Branding- The APOs would be branded as "Amul Utterly Delicious". The cost of
      the signage fabrication and installation would be borne by GCMMF office
      operating in your region.

   5. Equipment- You would require the following equipment:
        .  1or 2 deep freezers can be purchased through Hamara Apna Deep Freezer
           Scheme
        a.    1 Refrigerator through Hamara Apna Refrigerator Scheme
        b.    1 pizza oven
        c.    1 Chest Milk Cooler for Pouch Milk


   6. Security Deposit- You would be required to furnish an interest free refundable
      security deposit of Rs. 25,000 to us. An amount of Rs. 5000/- would be deducted
      towards refurbishing the signage, in the event of closure of APO before 3-year of
      operation.
   7. Supplies- The delivery of products would be done through our wholesale dealers

   8. We feel that the shop has good potential, and needs support in the initial days, we
      can offer additional margins upto maximum of 1% on dairy products and
      2% on Ice cream. The additional margin shall be target based and shall be given
      in kind. The support at best would be given only for he first year of business.

Agreement- An agreement bringing us together would be signed




                                                                                          8
CHAIRMEN’S SPEECH: 31 ANNUAL GENERAL
BODY MEETING ON 23rd JUNE 2005
Gentlemen,

I feel privileged to welcome you to the 31st Annual General
Body Meeting of your Federation.

It is with great sadness that I have to mention the recent
passing away of one of the pillars of the Amul Pattern-Shri
Motibhai R Chaudhary. Motibhai had played a crucial role at
every stage in the evolution of your Federation. His
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. We will
all miss him as a wise leader, as our colleague and friend.

Looking back, I cannot but recall the last 30 annual meetings that have been witness to
the firm establishment of the 'Amul Pattern' as a uniquely appropriate model for rural
development. The success of this model has attracted its own share of admirers,
emulators-and even mudslingers. But I am happy that the Amul Pattern, and the
associated institutions that reflect it, have risen to a level where neither adulation nor
censure need affect us. Rather, we must remain true to our principles and our mission.

I have always been a firm believer of the dictum that 'Brand is power'. A cooperative
without a "brand" can never aspire to survive-let alone thrive-while marketing
commodities in today's competitive environment. Only by nurturing its marketing skills
and building solid brands can cooperatives make their own growing space in the market.
And we must never forget that quality and value are the foundation for successful brands.
It should be a matter of both pride and satisfaction to all of us that the Amul pattern has
helped various state federations in India to acquire and nurture this soft asset.




                                                                                         9
State Federations are responsible towards their member unions-their owners-for
profitable and timely disposal of surplus milk procured during flush seasons. If
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 having helped make available to Federations the production planning and
marketing skills they need to serve their members. Rural managers from the Institute of
Rural Management, Anand (IRMA)-an integral part of the Amul Pattern-have been
instrumental in building these capacities in the Federations. I personally draw immense
satisfaction from my association with the progress of this unique institution. Your
Federation, which has supported IRMA from the outset, should share that satisfaction.

A large proportion of rural livelihoods in India are at the mercy of the law of diminishing
marginal returns from land. This has led to the bleak phenomena of rural-urban
migration, casualisation of urban labour and feminisation of agricultural labour etc. with
the net effect of extremely insecure rural livelihoods. A successful rural development
programme must help rural people stay on voluntarily and profitably in the villages.
Cooperative dairy development on the Amul Pattern has been instrumental in securing
rural livelihoods in many parts of India through income generation, agricultural
diversification, risk distribution, female empowerment and assured employment.
Consider for a moment the case of a subsistence farmer blessed with just a pair of
buffaloes. At an average yield of 5-6 liters daily from each animal, an additional income
of almost Rs.5000 per month is assured for 300 days in the year. This does not compare
too badly with any rural employment programme implemented by the government.

When we talk of assured employment in the context of cooperative dairying, it is very
easy to underestimate the reliability of this economic activity. Employment generation in
India has seen a spurt even through the much vaunted Business Process Outsourcing
(BPO) organizations and Information Technology (IT) setups. However, one must never
forget that these activities suffer from the inherent disadvantage of working under
business cycles. Further, 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, even were outsourcing and information technology to reach our rural poor,
they can never offer our country a sustainable competitive advantage, leaving us


                                                                                        10
vulnerable to massive disruption should the business move on to other countries where
skilled labor is less costly. On the other hand, the underpinning of a successful
cooperative dairy business is comprised of farmers who have a collective consciousness
and a shared vision towards the domain centrality of milk and the need for cooperation in
dairying. Neither they nor their milch animals can be relocated or replicated in the short
or medium term by any other nation. I therefore put forward my case that cooperative
dairying on the Amul Pattern forms a source of assured employment and a sustainable
basis of competitive advantage for India. Here, I quote Dr. William Lewis of Mckinsey
Global Institute from his book 'The Power of Productivity': 'Hours worked producing
milk in India are equivalent to 45 million full-time employees. That means dairy in India
has more employment than any other sector in any economy in the World'.

Apart from being a source of assured employment and competitive advantage, a
successful cooperative movement also instills the self-confidence and self-respect that
spring from self-reliance. These qualities are reflected in the better deals for electricity
and irrigation water that Gujarat's farmers have negotiated when compared with what has
been imposed by authorities on the less-well organized farmers in other states




                                                                                          11
AMUL MILK




        12
AMUL MILK PRODUCTS
This is the most hygienic milk available in the market. Pasteurised in state-of-the-art
processing plants and pouch-packed for convenience.



                                         Amul Fresh Milk




                                                                                          13
14
15
AMUL ORGANISATION
Gujarat Cooperative Milk Marketing Federation


GCMMF: An Overview


Gujarat Cooperative Milk Marketing Federation (GCMMF) is India's largest food
products marketing organisation. 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 quality products which are good value for money.

Members:                             12 district cooperative milk producers' Union
No. of Producer Members:             2.41 million
No. of Village Societies:            11,615
Total Milk handling capacity:        7.4 million litres per day
Milk collection (Total - 2004-05):   2.08 billion litres
Milk collection (Daily Average       5.71 million litres
2004-05):
Milk Drying Capacity:                511 metric Tons per day
Cattlefeed manufacturing             2340 Mts per day
Capacity:




                                                                                      16
AMUL MILK SALE TURNOVER
   Sales Turnover   Rs (million)   US $ (in million)
1994-95                11140             355
1995-96                13790             400
1996-97                15540             450
1997-98                18840             455
1998-99                22192             493
1999-00                22185             493
2000-01                22588             500
2001-02                23365             500
2002-03                27457             575
2003-04                28941             616
2004-05                29225             672




                                                       17
MILK PROCUREMENT

Total milk procurement by our Member Unions during the year 2004-05 averaged 58.89
lakh kilograms (5.9 million kg) per day, representing a growth of 15.2 percent over 51.13
lakh kilograms (5.1 million kg) per day achieved during 2003-04. We look forward to an
even better procurement during the current year owing to expectations of a good
monsoon this year.

SALES

During the year, your Federation's sales registered a growth of 1.4 percent to reach Rs.
2,922.53 crores (Rs.29.22 billion) including consignment sales of Rs.1.53 crores (Rs.0.02
billion). This lower than expected overall growth was owing firstly to low procurement of
milk during the first half of the year, and secondly to unfavourable commodity market
prices when procurement normalized. However, I am pleased to note your Federation has
done remarkably well in most of the consumer packs. As I have stated earlier, a
cooperative must increasingly rely upon branded products-rather than upon commodities-
to achieve power in the market. Thus, the dairy line in consumer packs grew by 11.8
percent during the year. Sales of Amul Milk in pouches increased by 36 percent in value
terms. A notable development in the area of liquid milk in pouches has been the
successful launch of Amul Milk in the Kolkata market during December 2004. UHT Milk
has grown in value terms by 23 percent. Amul ice cream achieved a sales value growth of
10 percent, and has strengthened its position as the undisputed market leader. Despite
intense competition, sales value of Amul Butter grew by 4.5 percent. The sales of the
Amul Cheese range increased by 21 percent. Products like Flavoured Milk, Amul Fresh
Cream, Paneer, Mithaimate, Softy Mix, and fresh curd demonstrated their potential to
become dominant brands in the coming few years. We have launched a promising new
product called Amul Masti Spiced Buttermilk during the year.




                                                                                      18
DISTRIBUTION

Alignment of our four Distribution Highways of fresh, chilled, frozen and ambient
products was a major development during the year. This was a significant achievement in
order to develop synergies amongst all our product lines so as to leverage these highways
to introduce and increase the reach of new products as per market demand. I am happy to
say that today you will not find a comparable distribution set up in any other organization
in the country.

This year our major initiative was to further increase our Distributor Network in smaller
towns. It 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 developing
towns. This has resulted in the emergence of growing markets in smaller towns all across
the country. An addition of almost 900 distributors in small towns was undertaken on a
Time Based Military (TMT) technique. This initiative has already started yielding results
in the form increasing availability of our products in smaller towns and thereby
generating additional business.

Amul Yatra programme is conducted to bring our channel partners to Amul so that they
get an exposure to our cooperative institutions and also come to know about our
achievements. This year our emphasis was upon top retailers from across the country. So
far, 1406 retailers from all over India have visited Anand out of which 950 top retailers
came during this year. This also included a group of top retailers from Bhutan.




                                                                                        19
COOPERATIVE DEVELOPMENT

During the year, Member Unions continued to implement the module on Vision Mission
Strategy (VMS) for primary milk producer members and Village Dairy Cooperatives.
Facilitated by specially trained consultants, 1313 Village Dairy Cooperative Societies
(VDCS) have conducted their VMS workshops and prepared their mission statements and
business plans for the next five years.

Continuing the cleanliness drive at village level, Member Unions identified and imparted
training to 8474 Core groups comprised of milk producers and representatives from the
Management of the VDCS during last five years. To enhance the level of cleanliness,
4386 VDCS celebrated Red Tag Day on 2nd October with awards for the best performing
VDCS.

As a part of the Breeding Services Improvement Programme,training was imparted to
3451 Core groups at village level in improvement in Artificial Insemination (AI)
Services. Member Unions implemented the AI Audit Competition during the year and in
the process, identified & awarded the best performing VDCS and AI Workers of these
Societies.

During the year, 2311 Chairmen and Secretaries from 1201 VDCS have been covered
under the Chairmen and Secretaries' Orientation Programme at Mother Dairy,
Gandhinagar-so as to bolster their leadership skills and knowledge of the dairy industry
scenario.

Our Member Unions continued to encourage increased participation of women milk
producers in the Dairy Cooperative Societies. To develop their skills and to enhance their
leadership qualities, Member Unions organised Self-Managing Leadership (SML)
programmes at Prajapita Brahmakumaris, Mount Abu. 3189 women resource persons
along with Chairmen and Secretaries of 500 VDCS were involved.




                                                                                       20
EXPORTS

Exports of your Federation have performed creditably during the year. We have become
the first Indian dairy products exporter to achieve a mark of Rs 100 crore in revenues.
The year ended with an export turnover of Rs 115 crore (Rs.1.15 billion)-more than
trebling our export turnover as compared to the previous year. The reduced subsidies in
EU have given us excellent opportunities for export of SMP and FCMP. We have shown
that if a level playing field is granted, Indian dairy products would be successful in the
global market. We have also grown by 40 percent in consumer pack exports and
consolidated our exports of UHT Milk, Ghee and Paneer in particular.

POUCH MILK

Amul pouch milk has become the largest contributor to our turnover with annual sales of
about Rs.626 crores (Rs.6.26 billion) during 2004-05 as against Rs. 462 crores (Rs.4.62
billion) during the previous year implying a growth of about 36 percent.

During last year we had surveyed major 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 consumer's mind, we are planning to open several
new markets and will focus on distribution expansion in the existing metro markets.

INFORMATION TECHNOLOGY INTEGRATION

Your Federation has further advanced its Information Technology solutions by
implementing Geographical Information System (GIS) with digital city maps at major
cities of India so as to excel in distribution planning.

It has also taken a major initiative in deploying process driven Enterprise Resource
Planning (ERP) software systems at its member unions in order to bring efficiency in
manufacturing processes.




                                                                                       21
A      MUL AND THE COOPERATIVE MOVEMENT

Amul embarked upon its illustrious journey as a beacon for the Indian cooperative
movement in 1946. Since then, it has been undergoing a multidimensional evolution
whose overarching objective has been the same throughout: serving the farmer and
catering to consumer requirements. A structural landmark in this evolution process was
the formation of the GCMMF in 1974. Throughout these last 31 years, we have
demonstrated-again and again-that Amul both represents and reconciles diverse
expectations and aspirations.

For the farmers, Amul brings the power to direct their own destinies. Membership brings
them the freedom that arises from secure livelihoods. For our women members, Amul
means assured employment, additional income in the household kitty and the growing
empowerment from creating and controlling that income. For the girl child, Amul
translates into education and consequent emancipation. The consumer sees Amul as a
guarantor of assured quality and of value for her hard earned money. For cooperatives
across India, Amul is an inspiration to excel in procurement, processing, marketing and
brand building. Finally, our nation takes pride in Amul as proof that our own Indian
vision, backed by hard work, management skill and honest capable leadership can
achieve miracles.

Notwithstanding the achievements of Amul and the Amul Pattern, their true essence
remains elusive to most who are outside the cooperative movement, and to some who had
seemed to comprise an integral part of it.

Amul is the epitome of a unique model of cooperative development called the Amul
Pattern. It is also the spearhead of the cooperative movement in India. Starting with
Polson, it has decimated the evil presence of rent-seeking middlemen from dairy business
in India. It has empowered farmers through skills of procurement, processing, marketing-
and more recently-of being in direct touch with the customer through retailing. This
ensures not only fair returns for milk produced, but also a never before closeness to the



                                                                                      22
market facilitating a real time feel of its pulse. The diffusion of this visionary experiment
has ensured the proliferation of numerous Amuls across India. Thus, Aavin, Him,
Mahananda, Milma, Nandini, Omfed, Parag, Sanchi, Saras, Snowcap, Sudha, Verka,
Vijaya, Vita-all are manifestations of Amul in its regional avatars. All of these brands and
the cooperatives that produce them serve their farmer members while growing steadily in
size, strength, expertise and market presence.

Our fledgling cooperatives have often been derided as innocent of marketing skills.
While the marketing of high profile products like ice cream may be seen as glamorous
and enviable, the achievements of the cooperatives that do not make it regularly to the
news are not less than miraculous. A massive network collecting milk from almost 12
million farmers, testing it, grading it, transporting it twice a day from 100,000 villages
over 10000 routes to about 200 dairy plants, processing it, packing it and sending it to the
market in almost 800 big and small towns every single day of the year-I hope you will
agree that this is no mean task in marketing. Further, the vision that gave this network a
solid shape and the management skills that keep it running like a well-oiled machinery
are hard to underestimate. Delivering wholesome nutrition to the consumers at the most
reasonable prices to be seen anywhere in the world, while transferring the bulk of the
value realized back to the farmer is a feat both in marketing as well as in social
development. Yet, I will not claim that every task that our cooperatives perform is
performed in the most efficient manner possible. Scope for improvement is there, and
certain antecedent conditions are required to achieve these improvements.

Cooperatives must be headed only by professionals armed with tenures long enough to
achieve meaningful changes and to put in place comprehensive systems. An officer
deputed with ad hoc powers and subject to sudden transfers to head a cooperative can
hardly be expected to measure up to the task. As a corollary, no political consideration
must colour the policies, objectives, strategies and functioning of a cooperative. The
Prime Minister of India has made a significant contribution to this end by announcing
that after bringing about progressive amendments to the Multi State Cooperative Act, the
government was also working on suitable constitutional amendments to ensure autonomy
for cooperatives in India. Needless to say, we would look forward eagerly towards
developments in this regard.


                                                                                          23
A lot has been achieved and a lot is being achieved in the arena of cooperation. However,
a painful paradox stares at us today in the form of the very organization set up by an Act
of Parliament with a mandate to replicate the Amul Pattern doing everything in its power
to subvert it-and thereby converting its institutions into Public Sector Undertakings. A lot
of avoidable controversies and confusions have been kicked up in this regard. So I must
make a small point in clarification: it is my firm and unshakeable belief that the entire
Amul Pattern dairy value chain from procurement through marketing-along with the
associated brand-is the sole and exclusive domain of the farmer. The moment the farmer
loses or dilutes her right over 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 cooperatives. They will surely make mistakes. And
they will learn to do it in a better way every time. This will be true development for our
people.

Finally, I shall make a small observation on an institution that has been quietly serving as
the intellectual and managerial backbone of the Amul Pattern for the last 25 years. The
Institute of Rural Management, Anand is the soul of the Amul Pattern. IRMA lives in the
collective consciousness of the farmers of Amul Pattern cooperatives and in the success
of Amul. It represents the very spirit of Amul. Maintaining and defending its essence is
the responsibility of every person who has a stake in the development of rural India




                                                                                          24
INDIA MILK REVOLUTION
India‟s White Revolution, which has quietly swept the country during the past few
decades, deserves attention equal to that given to the better-known Green Revolution.
The White Revolution holds the promise of raising the nutritional status of
underprivileged sections of our people. With a production forecast of 74 million tonnes in
1998-99, India has become the largest milk producer in the world. From being a major
importer of dairy products in the 1950s, India has now become an exporter. Milk has
become India‟s most important farm commodity, the value of its output (in 1994-95) of
Rs 500,000 million exceeding that of paddy. These achievements have been realised
against great odds: a national herd of poor yielders, crop residues and agricultural by-
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 have raised the productivity of our nation‟s cattle and buffaloes.

Present Scenario

The success achieved in the augmentation of milk production in the country is reflected
by the fact that milk production has risen from a mere 16 million tonnes in 1950 to 74.3
million tonnes in 1999. As against a per capita availability of 132 g per day in 1950, the
present per capita availability is almost 214 g per day, despite tremendous increase in
population in the last 50 years. This milk was produced by 70 million dairy farmers from
a milch herd comprising 57 million cows (31 million in milk) and 39 million buffaloes
(25 million in milk) with an average milk yield of 1,250 kg. Almost the entire quantity
(98 per cent) was produced in the rural sector. Only 10 per cent of the milk produced (20
million litres per day) was processed in dairy plants. The value of the output of the dairy
plants was Rs 1,050,000 million. On the consumption side, 44 per cent of the total
production was consumed in the rural sector either as liquid milk or after local conversion
into products; the remaining 56 per cent was consumed in the urban sector.




                                                                                        25
By far the major part (84.3 per cent) of the liquid milk consumed in urban areas is
supplied by the traditional or unorganised sector of dudhiyas and milk shops. In the
organised sector, while cooperative dairies sell 90 per cent of the milk they process as
liquid milk, the private sector converts 80 per cent of its throughput into products. The
organised sector processes milk in 370 milk plants and product factories and is growing
at an average annual rate of 10 to 15 per cent. In the last 25 years, its throughput has
increased by six times. The average installed capacity of dairy plants has also increased:
from 10,000 to 20,000 litres per day in the 1950s, it climbed to 100,000 litres per day in
the 1970s, to 500,000 litres per day and finally to 1 million litres per day (mlpd) in the
1980s and 1990s. India‟s first automated dairy plant of 1 million litres per day capacity,
the Mother Dairy at Gandhinagar in Gujarat, was commissioned in 1996. Amul-III,
which with its satellite dairies has a total installed capacity of 1.5 mlpd, was
commissioned in 1997.

Of the liquid milk consumed in India, a substantial part is used for whitening coffee or
tea. For 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
sizeable demand for lower cost toned and double-toned milks.

India has made praiseworthy innovations in liquid milk distribution systems. Sachets and
bulk vending have replaced bottles, lowering and eliminating packing costs. Currently,
sachets account for 82 per cent and bulk vending for 14 per cent of the milk sold.

, 95 per cent of the organised sector products are accounted for by liquid milk, ghee,
butter, dahi, khoa and paneer, all being traditional. The remaining 5 per cent of the
„western‟ type of products such as table butter, cheese, baby food and milk powders are
gaining importance, especially among urban consumers. These products also have export
potential.




                                                                                       26
Amul And The Anand Pattern
India‟s White Revolution had its origin in a single small enterprise started in Gujarat
State. In 1946, at the suggestion of Sardar Vallabhbhai Patel, the farmers in Kaira district
formed a cooperative union to supply milk directly to the Bombay Milk Scheme (BMS),
cutting out private dairy and middlemen who were then supplying to BMS. The Karia
Union began with two societies and a daily milk collection of not more than 200 litres of
milk, under the chairmanship of Shri Tribhuvandas Patel6. Right from the inception of the
dairy cooperative itself, a vital link was established between the producer and Bombay‟s
market, ensuring the incentive of a stable and remunerative price to the farmer. The bulk
of the milk is produced during the winter flush season while demand remains relatively
constant throughout the year, peaking in the summer when production is lowest. The
trade exploited this situation by paying the producer 50 per cent of the summer prices
during winters thus taking away the incentive to produce more milk. By installing drying
equipment, the cooperative was able to conserve surplus flush season milk, marketing it
during the lean season. In winter, the cooperative paid the farmers 80 per cent of the lean
season price, which meant they earned 50 per cent more for their year‟s production7. As
the demand grew, the cooperative installed processing facilities to match it. The basic
principle of matching the rising demand by enhancing supplies has characterised pre- and
post-Operation Flood developments. In fact, the shift in the supply function from the
policy changes introduced with OF resulted in an even larger shift in the supply function
and stable real consumer prices8.

The structure of the Anand pattern was established from the beginning. Initially it
included two tiers, the primary village Dairy Cooperative Societies (DCS) of milk
producers at the base, with a cluster of such societies forming a District Milk Producers‟
Union entrusted with procurement and processing. As Kaira District was joined by other
unions in Gujarat, an apex Federation of Unions was created to market their milk and
milk products. The organisations at each level are governed by their own bylaws and are
managed by democratically elected boards. The facilities at all levels are entirely farmer
owned9. By appointing qualified technologists and professional managers, the
cooperatives also made sure that the farmers‟ productive genius was linked to modern


                                                                                         27
management and technology6. I consider myself fortunate to have had the opportunity of
being associated with this cooperative enterprise almost at the beginning and working
with Shri Tribhuvandas Patel and to lead the team of highly-skilled and dedicated
professionals that we were able to assemble.

From the modest beginning in 1946, Kaira District Cooperative Milk Producers‟ Union,
or Amul as it became popularly known, has made exceptional progress. Virtually every
village has a cooperative to which members bring their milk every morning and evening.
The quantity of milk is measured (or lately, weighed) and a sample is drawn from each
farmer to test the fat content of his supply. In tune with its policy of bringing the latest
technological advance to the doorstep of the farmer, each society is provided with an
electronic fat tester. Based on the quantity and fat content the amount to be paid is
calculated. Payment for morning milk is made in the evening; that for evening milk is
made the following morning. With the introduction of computers, many societies weigh
and measure fat simultaneously and milk is paid for immediately on receipt. The Union
has always ensured that productivity enhancement measures are available to its members.
Modern plants produce high protein concentrate feeds and make them available at the
cooperatives. The Union provides animal health care and breeding facilities. Artificial
insemination service with good quality semen was introduced through trained village
society workers. A mobile veterinary service was provided for veterinary first aid. Above
all, the best incentive for enhanced production was the Union‟s undertaking to buy the
entire quantity offered by the farmer irrespective of the season. By the year 1965-66,
Amul had 518 DCs with 110,000 members. It collected 65,905 tonnes of milk and could
process 500,000 litres of milk a day. It sold products of a total value of Rs 92.2 million2.
These products ranged from milk to baby food, whole milk and skimmed milk powders,
condensed milk and cheese.




                                                                                         28
Operation Flood
In contrast to Amul‟s remarkable progress, the government tried various animal
husbandry and dairy development schemes during the period 1951-70 at a total cost of Rs
11,400 million, but none of them yielded the desired results; many were dismal failures10.
It was at this juncture that the then Prime Minister of India, late Shri Lal Bahadur Shastri,
paid a visit to Kaira district on October 30-31, 1964. He came at Kaira Union‟s invitation
to inaugurate a modern cattle feed plant, then -- as now -- the largest in the country.
Spending a night in a village in the company of farmers and unaccompanied by officials,
the Prime Minister saw and heard first hand from the farmers the transformation brought
about by the Anand pattern of milk cooperatives. On his return to Delhi, he set in motion
the effort to create Anands in all parts of India. The National Dairy Development Board
(NDDB) was formed in 1965 and was charged with the responsibility of building
cooperative dairies in India on the Anand pattern.

In the beginning, the NDDB faced many obstacles. The Dairy Board had few financial
resources; state governments and departments had little interest in turning over their
responsibilities to farmers and, even more, in becoming employees of farmers. In Gujarat,
farmer initiatives, supported by the Kaira Union, resulted in significant progress;
elsewhere little change occurred. It was about this time that mountains of powder and
lakes of butter oil were accumulating in Europe. It was, we feared, just a matter of time
until some kindly European gentleman decided that this should be donated, or sold at
subsidised prices, to help the „poor people of India‟. Were that to happen, it would have
been the death knell of our nascent dairy industry. It was to face this potential threat that
the idea arose of using food aid to generate the financial resources necessary to create
Anands throughout India. Fortunately there were individuals of wisdom and foresight in
both India and Europe 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 development of our
cooperative dairy industry. Thus, what was a serious threat was successfully turned into
an asset6.




                                                                                          29
Operation Flood, the programme to replicate Anand and create a flood of milk in India‟s
villages, was launched in 1970. The Amul experience had established, tested and proved
the guiding principles for dairy development: a three-tier cooperative structure owned
and controlled by farmers, professionally managed, providing the inputs for production
enhancement, purchasing all the farmers‟ milk, processing and marketing it in urban
markets. As the World Bank recently acknowledged, there was thus already a model in
place to implement dairy development and the programme involved institution building
as distinct from institution creation8.

The targets for the first phase of Operation Flood included:

       organising village-level dairy cooperatives with the required physical and
        institutional infrastructure to support production and procure milk
       creation of union-owned and managed modern production enhancement,
        processing and marketing facilities
       establishment of metro dairies. The thrust was to link Bombay, Calcutta, Delhi
        and Madras with the country‟s 18 best milksheds, capturing commanding shares
        of these urban milk-markets.

Operation Flood‟s second phase, implemented during 1981-85, targeted a rapid
expansion to 136 milksheds linked to over 290 urban markets with a total population of
over 15 million. The numbers of societies, members and volumes of milk procured, all
more than doubled. The third phase, implemented during 1985 to 1996, involved
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 over 290 urban markets with a total population of over 15 million. The numbers
of societies, members and volumes of milk procured, all more than doubled. The third
phase, implemented during 1985 to 1996, involved strengthening the basic infrastructure
and measures for production enhancement and animal healthcare and nutrition and thus
consolidating the gains of the first two phases.

In the 25 years since the launch of Operation Flood, national milk production has more
than trebled and per capita availability almost doubled. A robust infrastructure with rural
processing capacity of 19.4 mlpd and 6.7 mlpd equivalent of chilling capacity to ensure
good quality of milk has been set up. For the urban consumers, milk marketing facilities


                                                                                            30
of 7.2 mlpd are in operation. The entire Operaton Food programme was financed by
funds generated from the gifts of butter oil and SMP from the World Food Programme
and the European Economic Community, supplemented in the last phase by World Bank
loans. The internal resources employed increased from phase to phase. Future dairy
development will be self-financing without dependence on external aid or loan11. Today,
OF is a huge undertaking involving (in 1998-99) 10.1 million farm members supplying
an average of 13,659 metric tonnes of milk per day through more than 81,000 cooperative
societies to 170 milk producer unions who process and market it as liquid milk and
processed products. In 1997-98, the system included 13,377 Artificial Insemination
Centres and 787 mobile veterinary clinics.




                                                                                    31
Support Role Of NDDB

As the prime mover of the OF programme, in addition to financing the unions on a grant-
cum-loan basis, NDDB provides extensive support for their successful performance. It
coordinates its activities with those of the Technology Mission for Dairy Development
and other government agencies. NDDB assists the unions in recruitment and training of
personnel; technical help is provided in design and selection of equipment as well as in
construction of dairy plants on a turnkey basis.

Research in products, processes and biotechnologies, both in-house and in collaboration
with other government and non-government agencies, supports the cooperative dairy
industry. Product research is aimed at diversification, extension of the product range and
shelf life through suitable packaging. Frozen sliced paneer and continental cheese are
recent additions to the long-established product range of baby food, processed cheese,
condensed milk, milk powders and a number of traditional milk products. Processes have
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 flavoured milk drinks12. These products are now marketed in long-
life packaging.

We have come a long way from the early days of Amul when some multinationals and
exporters of milk products to India, with vested interests, declared that buffalo milk was
unsuited even for powder production, let alone baby food and condensed milk. Amul met
that challenge and proved them wrong13. It has been amply demonstrated that the Indian
dairy industry is capable of making products of a standard equivalent to the best in the
world2. In fact, based on this performance the Codex had to amend its definition of milk
from the mammary secretion of the cow alone -- as was the case till recently -- to that
adopted in the Indian Prevention of Food Adultration (PFA) Rules, namely, the
mammary secretion of milking animals14. International Dairy Federation has approved
cow and buffalo milk as raw material for a variety of cheeses.

Research in biotechnology has yielded valuable results, in all the three areas of
production enhancement, namely, feeding, animal health and breeding. Simple and



                                                                                       32
inexpensive innovations such as bypass protein feed, urea molasses blocks and the urea
treatment of straw, all improve the nutritional quality of the animals‟ normal feed.
Through the Foot-and-Mouth control project 42.1 million vaccinations have been carried
out.

Indian Immunological, a subsidiary of NDDB, produces a variety of vaccines including
rabies and theileriasis as well as a number of veterinary formulations2. Upgrading of Surti
and Murrah buffaloes as well as cross-breeding of Bos zebu with Bos taurus is being
undertaken in a number of research institutions. DNA finger printing is used to select
bulls with desirable breeding traits. Field-based techniques such as embryo transfer are
adopted for the rapid multiplication of breeding stocks. Farmers are progressively
investing in crossbred cows because of their high yields. Increase in the supply of cow
milk is having the salutary effect of an even intake of milk by the dairies throughout the
year15.

Milk production in India is subject to not only seasonal variations but also to regional
disparities . The National Milk Grid (NMG) is designed to move milk from surplus to
deficit areas. Adequate storage facilities for frozen butter and milk powder have been set
up at strategic locations. India‟s achievement in dairy development has attracted the
attention of other developing nations who are dependent on imports and are keen on
indigenous dairy development. Sri Lanka has set up Kiriya Milk Industries of Sri Lanka
in collaboration with NDDB.




                                                                                        33
Looking Ahead

India enjoys a competitive advantage due to the low farm gate price of milk. In much of
India, milk production is symbiotically integrated into agriculture. The farming system
provides low cost residues as feed and fodder for animals. Milk production, in turn,
supports draught power and organic fertilisers. For two-thirds of the 280 million rural
Indians engaged in agriculture, the farming system generates employment for only a
minor part of the year. Dairying sets right the imbalance in employment. It assures a
regular income to landless as well as small and marginal farmers. The buffalo is an
efficient converter of low-grade fibrous feed into high value milk4. Economic
liberalisation and the dairy industry‟s rapid growth has attracted Indian business and
multinationals. Their entry carries the risk that big business will transform the dairy
industry production by the masses to mass production2.

Operation Flood has been one of the largest and most successful rural employment
schemes in the world. Cooperative dairying means regular income to lakhs and lakhs of
small farmers. Cooperative dairying has not been merely the modernisation of milk
production but has larger technological, economic and social dimensions. It has created
and nurtured democratic structures at grass root levels6. Such gains should not be
endangered. Above all, the future of India‟s dairy farmer is a trust that each of us holds.
We cannot and must not let them down2. The dairy industry‟s future depends on
expanding and meeting the domestic demand and carefully building a sustainable export
for Indian milk and milk products. The tendency to exploit our competitive advantage by
unbridled emphasis on exports should be curbed.

Though, thanks largely to Dr Kurien’s 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 74 million tonnes, national requirement will be as high as 173 million
tonnes by 2020. Milk productivity per animal in India (1,250/lactation) is still
very poor compared to international levels (2,038 kg/lactation) due to
gradual breed deterioration.




                                                                                        34
                         Amul Dairy - a farmers' success story




Amul is an embodiment of faith – faith in the ability of our farmers to break the shackles
of poverty and oppression and to create a socio-economic revolution in rural India. At the
same time, it had multidimensional impact on rural economy and society: - generating
higher income and employment opportunities, facilitating education, enhancing nutrition
levels, addressing gender issues and contributing to village-level social amenities.
Through the “Anand Pattern” diary cooperatives, our farmers demonstrated to the world,
the key to successful “Management of Development”. Diary cooperatives have provided
the farmers, a steady source of income, enhancing their earning and enabling them to
improve their standard of living.

Operation Flood, which was perhaps, world‟s largest development programme, was
based on the rich experience gained from the Amul model, also popularly known as
„Anand Pattern‟. „Anand Pattern‟ is an innovative three-tier organisation structure
combines the productive genius of farmers with professional management and modern
technology. The facilities at all levels are entirely farmer-owned. The cooperatives are
able to build markets, supply inputs and create value-added processing. Prompt and
remunerative payment for produce of good quality has ensured the best incentive for the
farmer to increase production and quality.

The three-tier “Anand Pattern‟ structure consists of a Cooperative Society at village level
affiliated to a Milk Union at District level and they are further federated into a Milk
Federation at State level. The above three-tier structure was formed in order to delegate
responsibilities at various levels such that there is no internal competition and economics
of scale is achieved.

The Village Cooperative is the primary society under the three-tier structure. It has
membership of milk producers of the village (approximately 200 member milk producers
per village) and is governed by an elected Management Committee consisting of 9 to 12
elected representatives of the milk producers. The main function of this cooperative
society is to collect surplus milk from the milk producers of the village and make
payment based on quality and quantity. It also provide support services to the members
like Veterinary First Aid, Artificial Insemination Services, Cattle-feed sales, mineral



                                                                                        35
mixture sales, fodder & fodder seed sales, conducting training on Animal Husbandry and
Dairying, etc.

The district-level Milk Union is the second tier under the three-tier structure. It has
membership of Village Societies of the District and is governed by a Board of Directors
consisting of 9 to 18 elected representatives of the Village Societies. The main function
of the Milk Union is to process milk into various milk and milk products as per the
market requirement. The Union procures milk from the Village Societies of the District
and arranges for the transportation of raw milk from the villages to the Milk Union. It
also provides input services to the producers and other support to the village level
societies.

The State-level Federation is the apex tier under the three-tier structure. It has
membership of Milk Unions of the State and is governed by a Board of Directors
consisting of one elected representative of each Milk Union. The main function of the
Federation is to market the milk and milk products, manufactured by Milk Unions. The
Federation establishes distribution network for marketing of milk and milk products and
maintains the supply chair network. It also provides support services to the Milk Unions
and members like Technical Inputs, Management support and Advisory services.

As a direct consequence of „Operation Flood‟ and the Amul model, India is now the
leading milk producer in the world, with a milk production of 91 million MTs/ annum.
The cooperative structure now touches the lives of 11 million farmer households across
India. In Gujarat itself, 2.4 million farmer households form a part of the large Amul
family. Dairying has now become an attractive source of livelihood; bring prosperity and
economic development to rural India.




                                                                                      36
37

				
DOCUMENT INFO
Shared By:
Categories:
Stats:
views:916
posted:4/30/2011
language:English
pages:37