The Kaira District Cooperative was started in 1946 to counter the exploitation of milk

producers in Anand by already existing agents. Government back then had given the
monopoly rights to Polson Dairy to collect milk from the producers at Anand and supply
it to Bombay. In this whole process the milk often went sour because of the distance
that had to be covered between Anand and Bombay and moreover, the seasonal crisis
also hampered suppliers income.

The milk producers from Kaira district were then advised by Sardar Patel to form a
cooperative and supply milk to BMS directly instead of involving Polson Dairy. And thus
the Kaira District Cooperative was established to collect and process the milk and at the
same time milk collection was also fragmented.

In growing economies cooperatives are established to provide benefits to marginal
producers or like in the case of AMUL producers coming together and distributing their
products. The cooperatives have played vital role in saving small producers from failing,
especially in the case of milk industry. The AMUL cooperative is the only cooperatives
that is completely independent, no government involvement whatsoever. It has been
also reported that by 1950s veterinary dispensaries plans and by 1960s effective
breeding plans were put to action.

AMULs Strategy

1. Designing a supply chain which looked at the needs of consumers as well as
farmers both.
2. Amuls second strategy was to involve large numbers be it suppliers or
customers. Ofcourse, the chances of failure were high but then it was a educated
risk Amul took.
3. Amuls vision could only be achieved if they were patient and instilled its core
values in people who were involved in the process.
4. They installed a streamlined R&D programs which would give them a competitive
advantage.
5. Amul created a low price strategy to provide value service in the customer base
as well as make their products affordable. This strategy remains successful even
today. A vital step in starting modern dairy revolution.
6. Since most of the marginal farmers were illiterate and had cash problems. To
overcome these challenges Amul first started to educate these farmers and
supplies were made without any delay. This ensured growth of industry as well
as farmers.
7. The product supply was subsequently taken care by a third party while amul
focused on R&D. This is where GCMMF came in and put in there excellent
Marketing strategy.
8. Amul focused on being financially sound at all the time. For this they always dealt
in cash as well as resourced internally for their growth. Amul wanted to be as
self-reliant as possible.

Leadership Style

Tribhuvandas Patel was a pivotal figure in forming cooperatives of small farmers and
competes against big companies then as well as keeping away the bureaucrats away
from the whole scenario. Patel educated the small farmers about the strengths of
cooperatives and the value of trust between networks. The marginal producers
responded and gave their full commitment to Patel.

Another figure who worked day in and day out to address the issues of farmers,
resourced technological advancements within cooperative was Dr. Varghese Kurien. Dr.
Kurien worked with milk producers and always looked for ways to increase milk
production. He worked and shaped the entire milk revolution in India with the help of
NDDB, GCMMF and state cooperatives of Gujarat. Kurien and Patel both convinced the
government to fund the projects that went on in the cooperatives.

Challenges

1. A line of competitors entering the industry and offering higher prices which
shadows Amuls strategy of long term growth while providing their products in
lower prices.
2. Not being able to find out the replacement of marginal farmers who have moved
out of Amul and joined competitors.

Conclusion


Cooperative networks like GCMMF, NDDB and Amul is an example of strong as well as
complex supply chain system. The bigger challenge is to bringing more members in the
cooperative and increasing their capabilities.












The Amul Model

The 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.
Establishment of a direct linkage
between milk producers and consumers
by eliminating middlemen


Milk Producers (farmers) control
procurement, processing and marketing


Professional management



The Amul model has helped India to emerge as the largest milk producer in the
world. More than 15 million milk producers pour their milk in 1,44,500 dairy
cooperative societies across the country. Their milk is processed in 184 District Co-
operative Unions and marketed by 22 State Marketing Federations, ensuring a
better life for millions.

Reference
1. www.amul.com