This is a wonderful and inspiring story. I wonder why Amul does not
enter the field of vegetables and fruits through a cooperative on
these lines ? There is 25 to 30 percent wastage in these fields,
according to experts. Now the government is keen to bring NMCs to
provide logistics to collect and market fruits and vegetables from our
farmers. This does not require any foreign technology and investment.
It is a shame that none of the Indian companies in consumer goods are
not doing it. It is also a challenge for Indian MBAs to show their
enterprising acumen.
June 7,2012
Amul: A Legendary Fable
Posted: 16 Nov 2011 07:01 PM PST
On a beautiful evening in a small remote village in Gujarat, a farmer
who owns some buffaloes goes to a dairy cooperative society (known as
Sahakari Mandali) in his village to sell milk. He collects his
passbook that records the milk poured, fat percentage and money he
would earn. He happily goes back home satisfied with the income his
buffalo is generating. After some time, a growing child in Kolkata
licks the last drop of milk; a family in USA eats a delicious slice of
cheese, while a girl in Australia is delighted to have an ice-cream,
all made from the same milk the farmer gave to the Sahakari Mandali!
If the farmer had lived in a bygone era more than half a century back,
his buffalo would generate lesser milk, most of which would be spoiled
due to lack of proper chilled containers. He would have to travel long
distances to deliver the milk to the only dairy in vicinity, Polson
dairy in Anand and face the unfair and exploitive practices to get
meager amounts. India then was not even capable of fulfilling its own
milk needs. About 60 years later, India today is the world's largest
producer of milk and milk products. How this turnaround happened is
now a legendary story with Dr. Verghese Kurien as its hero and
millions of farmers supporting him to launch a white revolution.
The Amul dairy plant at Anand
The origins
Inspired by India's freedom struggle, it all began when farmers in a
small town near Anand city in Gujarat made milk as a symbol of
protest. They approached Sardar Vallabhbhai Patel for a solution to
combat monopolistic practices of the Polson Dairy. He inspired them to
be united and fight by removing the middle men and supply milk
directly to Bombay. In 1946, under the guidance of Morarji Desai
(Ex-prime minister of India) and Tribhuvandas Patel (local farmer
leader and also the first Chairman of Amul Dairy), this group of
farmers from two villages formed their own cooperative now known as
Anand Milk Union Limited – AMUL. They were then joined by Dr. Verghese
Kurien in 1949. They designed a 3 tier model with milk collection at
village level Dairy Cooperative Society, milk processing in plant at
district level milk union such as Amul and milk distribution plus
marketing done at state level milk federation.
The then Prime Minister Lal Bahadur Shastri studied the Amul Model
during his visit to Anand and impressed by the whole setup and asked
Dr. Kurien to replicate this Amul model in entire country. In 1965,
National Dairy Development Board (NDDB) was formed and Operation Flood
program was launched to make similar cooperative dairies across the
nation and fulfill India's growing milk needs. Dr. Kurien and his team
deliberately lobbied to keep the headquarters of NDDB in Anand, away
from the power hungry and bureaucratic Delhi, and also aimed to draw
the already accumulated expertise at AMUL. It was observed that while
the milk collection is undertaken through various village level dairy
cooperatives, milk products and milk distribution plus marketing must
be through a single entity. Thus Gujarat cooperative Milk Marketing
Federation (GCMMF) was setup in 1973 in which all co-operative dairies
of Gujarat state became members and it has been marketing and managing
Amul brand since then. GCMMF is today, India's largest food product
marketing organisation with a turnover of US$ 2.2 billion in
2010-2011. A host of other organisations have sprouted due to the
white revolution spearheaded by Amul. Indian Dairy Machinery Limited
(IDMC), Institute of Rural Management Anand (IRMA), National
Cooperative Dairy Federation of India (NCDFI), Dhara Vegetable Oil and
Foods Company Limited (DOFCO), Mother Dairy Fruit & Vegetable Private
Limited (MDFVPL), Animal Breeding Centre (ABC), Tribhuvandas
Foundation etc. all have their roots in the operation flood and have
provided job opportunities to thousands.
Outside view of the Amul office
Amul in popular culture
Amul is also credited with a Guiness world record for longest running
ad campaign of the world for its Utterly Butterly girl portraying
day-to-day issues since 1967. In 1977, the Amul story was showcased
through a Hindi movie titledManthan directed by Shyam Benegal starring
Naseeruddin Shah, Girish Karnad, Smita Patil and Amrish Puri which
also won National award for best film. The movie again demonstrated
the power of collective might as the movie was financed by a
contribution of Rs. 2 by 5 lakh farmers.
The contribution of Amul in development of rural India as well as
economic growth of nation is unquestionable. But despite having such a
successful business model with powerful social benefits, this model
has not been successful in any other sector. Why hasn't India
witnessed an Amul in agricultural products, packaged food items,
consumer goods or any other sector?. The co-operative model has been
tried but failed number of times throughout the world in numerous
fields. Then what made Amul so successful which is so difficult to
replicate? What did other equally dedicated efforts lack which Amul
didn't? The answer probably lies with the people behind the efforts.
The people behind Amul's inception
While there are innumerable heroic deeds and stories surrounding Amul,
the two main individuals behind Amul were Dr. Verghese Kurien and Mr.
Tribhuvandas Patel. In 1949, Dr. Kurien, was a 28 year Old Mechanical
Engineer from Kerala posted in Anand as a dairy engineer in government
research creamery. While Mr. Tribhuvandas Patel was a local leader who
had been imprisoned number of times during India's struggle for
freedom. With the help of his supporters, he found a dairy
co-operative in 1946 in Anand. Fed up with his monotonous and
unchallenging job, Dr. Kurien was to leave Anand when Mr. Tribhuvandas
Patel expressed his desire that Dr. Kurien stay back for few months as
they needed an engineer who could oversee installation of the newly
ordered machineries. No one then knew that Dr. Kurien would never
leave Anand and make it the milk capital of India. The strength of
Amul has been this strong bond of friendship between 2 very different
individuals – One in his 40's, born and brought up in a village as
farmer inspired by Gandhi and Sardar while another an engineer in late
20's having done masters in Michigan University, USA, believer of
democracy, already sick of dull government job and looking for a
challenge in life. One united more and more villages to set-up
co-operative societies, while other brought technology and
professionalism to the table. One brought people, other brought
processes. One brought grassroots penetration in supplying milk while
other brought knowledge and expertise in processing and delivering
milk, both keeping bureaucracy and politics at an arm's length.
Together they led a revolution where true power lied in the hands of
people who followed them, a revolution that envisioned national growth
by giving justice and opportunity to the poorest farmer in the
remotest village. Both Mr. Patel and Dr. Kurien have been widely
praised for their efforts. Mr. Patel was awarded Ramon Magsaysay award
(1963) and Padma Bhushan (1964). He has also been member of Rajya
Sabha twice. Dr. Kurien is already a world famous personality and has
received number of national and international awards. The most notable
ones being Padmashri (1965), Padmabhushan (1966), Padmavibhushan
(1999), World Food Prize award (1989), International person of the
year award (1993) etc.
The future
Today, GCMMF collects approximately 12 million litres of milk from
15,712 village cooperatives with 3 million milk producers daily. It
has 47 sales offices and 10 lakh retailers in India. Its product range
has expanded from milk and ghee, butter to cheese, health drinks,
ice-cream, paneer, chocolates, curd, butter milk, and sweets to now
yoghurt and pizza. NDDB now integrates 96,000 dairy co-operatives
across India. Amul is one of the most well-known and trusted brand
names in India. It has already entered various overseas markets such
as USA, Australia, China, Hongkong, Singapore, UAE, Bangladesh, South
Africa etc. Having already achieved all this, what's next for Amul?
Where does GCMMF go from here? While GCMMF plans to enter newer global
markets and launch more products such as Juices and Jams to leverage
the brand name of Amul, there are number of ignored avenues which Amul
can enter. Most of the focus in the past decade has been in
diversification in terms of products and geographical reach. In short,
the focus is in increasing the number of customers and the number of
products used by existing customers. GCMMF has a huge network of
suppliers at grassroot level. While Amul has done tremendous work for
their economic upliftment, there is a need now to alleviate their
educational and healthcare needs. Certain work along these lines is
already done by the Tribhuvandas Foundation, a NGO that primarily
focuses on healthcare of women and infants in few districts. This NGO
is funded by village level dairy cooperative societies and Amul. This
could be the perfect platform to expand into various other districts
on a larger scale and broadening their horizon to provide complete
healthcare services to poor farmers.
Amul has come a long way since its inception. And we hope there are
many more such success stories in India that can then become fables
for future generations to read and get inspired.
Swapnil Shah is an engineer from NIT, Surat currently pursuing an MBA
from Nirma University, Ahmedabad. Inspired by the rising number of
social enterpreneurs across the globe, he wishes to do his bit in
making the world a better place. He is currently involved in two
student social initiatives – Nirvana at NIT, Surat and the Saral
foundation at IMNU, Ahmedabad.
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