Amul India: A Social

Development Enterprise

PRESENETD BY
Kunal choudhary(ipg_2011054)
Ankit jhaortiya(ipg_2012013)

FLOW OF THE PRESENTATION

Introduction
Cooperative and Social Enterprise
Eminent Leaders
Objectives and Principles
The Three Tier System
National Dairy Development Board
Problems and Solutions
SWOT Analysis

INTRODUCTION
Amul initiated as an experiment in two villages, collecting 250 kg of
milk per day and today Amul boasts of more than six million kilograms
of milk collection daily.
The case provides a vivid example of how a cooperative can become
the catalyst for social change and rural development.
The more than 50 years journey insights into the quality of leadership
and the farmer/management relationships are its defining
characteristic.
The case provides sufficient insights and learnings to develop a
framework to comprehend the basic essence of a prosperous social
enterprise factors that make it successful.

COOPERATIVE AND SOCIAL ENTERPRISE

A cooperative is an autonomous association of persons united voluntarily to meet their
common economic, social, and cultural needs and aspirations through a jointly-owned and
democratically-controlled enterprise.
A social enterprise is an organization that applies commercial strategies to maximize
improvements in human and environmental well-being, rather than maximizing profits for
external shareholders.

HISTORY
AMUL: Anand milk union limited
Formed in 1946 by Dr. Varghese Kurein.
Experiment initiated in the district of Kaira.
Brand name taken from sankrit word amulya meaning precious.
It is managed by the Gujarat Cooperative Milk Marketing
Federation (GCMMF).
With an aggregate milk processing capacity of 10.2 million litres
per day, it is Asia s biggest dairy business venture.
Amul spurred the white revolution making India that largest
producer of milk and milk products in the world.

THE EMINENT LEADERSHIP

SARDAR VALLABHBHAI PATEL:
He advocated farmers co-operatives as early as 1942, advised that they should market their milk
through a cooperative society of their own. His visionary zeal desired an evolutionary change in rural
community by organizing producer cooperatives to augment rural income while developing local
industry.

VERGHESE KUREIN AND TRIBHUVANDAS PATEL:

Cooperative society emerged under the leadership of Tirbhuvandas who was a young freedom fighter
at that time.
Kurein resonated the vision of Vallabhbhai Patel and Tribhuvandas of bringing independence to the
dairy farmers of Kaira.

1946-THE BEGINNING OF RURAL RENAISSANCE IN KAIRA

OBJECTIVE AND PRINCIPLES

OBJECTIVE:
a) Economic liberation from exploitation of money lenders and intermediaries.
b) Well-being and development of its owners,the milk producers themselves.

) PRINCIPLES:
a. Serve the farmers-farmers were primary stakeholders.
b. Quality takes precedence-Quality control had the final decision.

THE AMUL MODEL

The AMUL model is producer-oriented, people- centred and holistic and the three-tier
model has been instrumental in bringing about the White Revolution in the country.
The AMUL model of small-scale dairy production and marketing, as evolved and refined
over the last 50 years in India, offers an appropriate strategy for promoting sustainable,
equitable and gender-sensitive smallholder dairy development.
The salient features of the AMUL model include:
(1) A single commodity approach;
(2) A three-tier organisational structure;
(3) Producer-elected leadership and decentralised decision making;
(4) Employment of professional managers and technicians;

THE AMUL MODEL

(5) Accountability of professional managers, technicians and other employees to
the member-producers through their elected leaders;
(6) Provision of all necessary inputs and services to member-producers at
reasonable, often subsidised rates;
(7) Integration of production, procurement, processing and marketing functions;
(8) Continuous and concurrent audit;
(9) Cash payment to producers for their milkdaily or weekly; and (10)
contribution to village amenities (Singh 1999).

THE THREE TIER SYSTEM

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.
Elected representatives of the farmer members make policy decisions at all three levels, which are
then implemented by professional managers and skilled personnel employed by the farmer members.
This structure eliminates all middlemen.
By placing the farmer members in command, in essence, of the dairy cooperative involves them in the
development process. The farmer members democratically govern the entire cooperative structure to
ensure that the higher tier organizations are geared to serve the purpose of the lower levels and that
the gains at all levels flow ultimately back to the farmers in a significant measure.
The core feature of this structure is farmer involvement in decision-making at all three stages
procurement, processing and marketing of milk and milk products.

1. Village Dairy Cooperative Society (VDCS)

Anyone who owns a cow or a buffalo and makes a one time payment of 11
rupees (10 rupees for the share certificate and 1 rupee for registration) can
become a member of the village cooperative society.
The applicant must agree to provide a set minimum quantity of milk, generally
between 600 and 700 litres, to the society each year.
The farmer members elect a managing committee that then chooses a
chairman. The managing committee appoints a secretary to discharge the
societys administrative functions.

2. District Cooperative Milk Producers Union

At the second tier, there is a district level union
that processes the milk procured from individual
societies.
Each of the 13 unions has a board of directors
chosen by an electoral college drawn from the
chairpersons of its affiliated societies.
The union board in turn elects its chairman.

3. State Cooperative Milk Federation (Federation)

The final tier is constituted by the GCMMF, which is responsible for marketing
the milk procured and processed into various value-added products at the union
dairies.
All the products are sold under the Sagar or Amul umbrella brands.
The federations board consists of the chairpersons of all 13 district unions.
They elect the federation chairperson and appoint the managing director, who
is accountable to the nearly 2.7 million strong Amul dairy society members.

GUJRAT COOPERATIVE MILK MARKETING FEDERATION

Each district union was independently responsible for its production marketing
and sales of dairy products.
To avoid the situation would compete with each other Kurein developed an
agreement where all dairies in Gujrat would employ a common distributor and
a common brand name.
Concentrating on developing and implementing marketing initiatives federation
ensured full utilization of capacity and formulated production priorities and
ensured consumer acceptance by strengthening the brand image.
The federation had ensured remunerative returns to farmers while providing
consumers high quality products under brand name of Amul and Sagar.

GCMMF LOGO

In this logo there are hands supporting

each other in a circle.
This image was specially chosen to imply
support and cooperation among the
farmers.

NATIONAL DAIRY DEVELOPMENT BOARD

The solitary difference between Anand and other cooperatives was that Amul
dairy was owned by the farmers. Elected representatives from the farmers
managed it.
Ownership of the cooperative and farmer professional management relationship
provided the impetus.
Anand should be established in every state of India and so NDDB was created in
1965.
Under operation flood of NDDB milk cooperatives started to work all over India
where Anand pattern of dairy was replicated and backward integration was
followed.

PROBLEMS FACED BY AMUL INDIA

In the early years AMUL had to face many problems .With every
problem came opportunity .The three tier system was not able to
make the farmers completely happy in the initial phase.
The monopoly system adopted under the BMS during the
diversification phase was also a threat for the benefit of the
farmers.
The challenges of supply of milk to children under UNICEF was a
big task to achieve.

SOLUTIONS ADOPTED BY AMUL INDIA

The introduction of the powder milk from cattle and buffalo was a
prime part in order to increase the supply demand for the purpose
of UNICEFS goal.
The dissolution of monopoly and a proper system for well being
of each and every farmer is another step taken by AMUL India .
The sustainability of the firm to its goal Benefit of the farmers is
the key to success.

SWOT Analysis
Strengths
Largest food brand in India
High Quality, Low Price
Worlds Largest Pouched Milk Brand
Annual turnover of US $1504 million
Highly Diverse Product Mix
Decentralized milk production by the small milk producers;
High cooperation amongst farmers
Unity in all cooperatives and Marketing of milk and milk products by the state-level
federation.
The primary milk producers democratically govern this entire federal cooperative structure to
ensure that the higher-tier organizations serve the purpose of the lower levels
Preserved and achieved the principle of economic rural development

Contd.
Weakness
Conflicts between farmer members and professional managers.
Lack of leadership in current generation of professional managers.
Strong dependency on weak infrastructure.
Alliance with third parties who do not belong to the organized
sector.

Contd.
Opportunities
Penetrate international markets
Diversify product portfolio to enter new product categories and
expand existing categories like processed foods, chocolates etc
Farmers can be engaged as entrepreneurs.
Direct sales and marketing via e-business models and amul outlets
in most remote markets.

Contd.
Threats
Potentials of ignorant voting amongst farmers due to lack of
education.
Competitors - Hindustan Lever, Nestle and Britannia
Still competition from MNCs in butter
Growing price of milk and milk products.
Constant pressure to introduce government representatives in
Anand would fade the alignment towards socialistic outlook.

THANK YOU