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Amul a Great Story in Rural Development

Posted on 08 May 2017 by admin

Amul a Great Story in Rural Development

India’s Milk Co-Operative a Success Story in Rural Employment

Amul was started in pre independence era in India to help the farmers from the businessmen who are exploiting them. These pre independence efforts are basically initiatives of local congress leaders with the blessings of Mahatma Gandhi. This small effort of the people has developed into world’s largest cooperative. Amul is world’s largest dairy processing highest milk. It has generated employment for the farmers and villages and changed their life. Amul pattern which was replicated later on has become success story of development and growth in rural India. It has generated millions of jobs in villages. It has reduced migration from villages.

India is country of villages and still 72 percent population is living in villages. Development of villages is really most important challenge for the India’s economy. Dairy Cooperatives in general and Amul is particular has done this job very successfully. It has created jobs, and stopped migration from villages and given new face to village life.

India lives in villages. Developing these villages is very important for long term sustainable growth in India. Today these villages are facing real challenges. The growth and development in rain fed areas remain poor and migration is high which is pressing urban infrastructure. The rate of suicide is increasing every year in these villages. India needs to develop these villages.

Amul was started in December 1946 with two dairies and 250 liters of milk.

Amul collect milks from 962 villages in Gujarat.

There are 542000 farmer members.

Marketing is controlled by cooperatives.

Kheda District Co-operative Milk Producers’ Union Limited (popularly known as AMUL) was formally registered on December 14, 1946.  The Kheda Union began pasteurizing milk for the Bombay Milk Scheme in June 1948.  An assured market proved a great incentive to the milk producers of the district.

By the end of 1948, more than 400 farmers joined in more village societies, and the quantity of milk handled by the Union increased from 250 to 5000 liters a day.  Union has 16 mobile dispensaries. Amul gives training to farmers on taking care for their animals.

Veterinary hospital and semen production center has helped to grow the quality of animal and so is milk production.

A balanced feed concentrate is manufactured in the Union’s Cattle Feed Plant and sold to the members through the societies at cost price.  There are more than 900 village co-operatives operating presently.

It has created jobs for nearly 5000 people in their own villages — without disturbing the socio-agro system — and thereby the exodus from the rural areas has been arrested to a greater extent.

Amul supply chain is easily one of the most complicated in the world.

Three Phases of development

This project is designed to developed cooperative milk societies across India. It has been very successful and implemented over three phases.

Phase I- Is an innovative idea where threat is converted to best opportunity by Verghese Kurien the head of Amul. The milk powder donated by the European Commission is converted to opportunity. and the operation flood is developed through the money generated through this operation. Milk Cooperatives are established across the India.

Phase II – This is basically developing marketing potential of the milk product across India. This phase developed new milk shades across the country. It is implemented during 1981-85.

Phase III – This phase advancement of technology and developing new infrastructure for the dairy cooperative across the country. New technology is implemented during 1985-1996 phase so that the operation flood becomes full success.

India’s Milk Revolution

India is world largest producer of milk.

India has highest number of cows.

70 million dairy farmers work in this project.

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.

Amul and the Anand Pattern

This is India’s biggest employment generation story. It has reduced poverty in Villages and developed the villages.

Looking Ahead

Amul Product Line Up

Amul has long Product Range

Bread Spread – This is one of the most important line of product for Amul. Amul Butter is famous for its taste. Amul Butter is highest selling butter in the world. Amul Butter is also the one of oldest and still market leader in its category. Amul has introduced other product also in this category but they are new to Indian market and still slowly moving.

Amul Milk Drink – Amul is first to introduce flavored milk drink in India. Amul has at least 11 product in this category. This product range is basically to cover all segments of market from child with Amul Nutramul Energy drink to Amul Cool Thandai for old people. There is flavored milk specially targeted at young girls also. It covers range of product for youths.

Amul Milk Powder -Amul is first dairy in the world to process Buffalo milk and make milk powder from it. This technology was untested before. But Amul did it successfully. Amul Milk powder was again first in the Indian market and it has started white revolution in India. Amul was many product to satisfy different market segment in the milk powder category.

Fresh Milk – Amul fresh milk is its bread and butter and sells very well. Apart from plain milk it sells long life and value added milk different fat content. Amul has at least 6 product in this category.

Amul Cheese – India is basically a country like to eat ghee and butter. Cheese is new in the Indian market. Amul introduced it in the market to increase market reach and for high end health conscious customers. Amul has five different products in this category.

Cooking Range – Amul introduced a coking range of product as value added product. Amul ghee is one of the best sold products in India. Amul has 7 products in this range.

Deserts – Amul has introduced milk base deserts which are value added product. Amul Ice-cream is best known of all deserts. Amul Parlors which are introduced as exclusive shop (franchisee) has done very good business. Amul has 6 products in this category.

Health Drink – Amul Nutramul is health drink targeted towards kids.

Amul Success is basically its chain- the value chain of the product and reach it has created for sourcing and distribution of the product. It has supply chain from villages for sourcing of milk to global markets. Apart from its reach its value chain of the product. It sells fresh milk to high end value added product like deserts. Amul Product range has covered all segments of market who like to have healthy and delicious milk product. 

Written by Zia Ahmed
Investment Banker, Islamic Banker

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