CSR AT

AMUL
Corporate Social Responsibility
Under the guidance of Dr. S. K.
Tapasvi
R!U" # S$C % A
AKS&'T MAT&UR ()"**+
A,U-&A. -A/"A' ()"**#
KUS&ARA
R!.$R
()"*01
S SAM$$R ()"*)#
T$/AS S&A& ()"*+2
SU,A,DA
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'nde5
1. About the company
2. CSR policy
3. The different CSR initiatives
4. Linkage between core business and its social initiatives
5. Social impacts
6. What in your view should be the focus of company’s CSR
7. !ow it will benefit the company
1 | " a g e
The -irth of A6ul
"t all began when milk became a symbol of protest in the freedom movement# Amul was founded
in $%&' to stop the e(ploitation by middlemen# The seeds of this unusual saga were sown more
than ') years back in Anand* a small town in the state of +u,arat in western "ndia# The
e(ploitative trade practices followed by the local trade cartel triggered off the cooperative
movement# Angered by unfair and manipulative practices followed by the trade* the farmers of
the district approached the great "ndian patriot Sardar -allabhbhai .atel for a solution# !e
advised them to get rid of middlemen and form their own co/operative* which would have
procurement* processing and marketing under their control#
"n $%&'* the farmers of this area went on a milk strike refusing to be cowed down by the cartel#
0nder the inspiration of Sardar .atel* and the guidance of leaders like 1orar,i 2esai and
Tribhuvandas .atel* they formed their own cooperative in $%&'#
This co/operative* the 3aira 2istrict Co/operative 1ilk .roducers 0nion Ltd# began with ,ust two
village dairy co/operative societies and 4&5 litres of milk and is today better known as Amul
2airy# Amul grew from strength to strength thanks to the inspired leadership of Tribhuvandas
.atel* the founder Chairman and the committed professionalism of 2r -erghese 3urien* who was
entrusted the task of running the dairy from $%)6#
The then .rime 1inister of "ndia* Lal 7ahadur Shastri decided that the same approach should
become the basis of a 8ational 2airy 2evelopment policy# !e understood that the success of
Amul could be attributed to four important factors# The farmers owned the dairy* their elected
representatives managed the village societies and the district union* they employed professionals
to operate the dairy and manage its business# 1ost importantly* the co/operatives were sensitive
to the needs of farmers and responsive to their demands#
At his instance in $%') the 8ational 2airy 2evelopment 7oard was set up with the basic ob,ective
of replicating the Amul model# 2r# 3urien was chosen to head the institution as its Chairman and
asked to replicate this model throughout the country#
2 | " a g e
CSR policy 7 The A6ul 8ay
Corporate social responsibility 9CSR: has been defined as the ;commitment of business to
contribute to sustainable economic development working with employees* their families* the local
community* and society at large to improve their <uality of life* in ways that are both good for
business and good for development#=
To meet with the CSR it is e(pected that a business in its entire procurement/production/
processing/marketing chain should focus on human development involving the producer* the
worker* the supplier* the consumer* the civil society* and the environment#
"ndeed* a very tough task# 1ost businesses would certainly flounder in not being able to achieve
at least one or many of those e(pectations# 7ut A10L has shown the way#
The di9erent CSR initiatives
1) CSR-sensitive Organisational Structure
A10L is a three tier co/operative organisation# The first tier is the co/operative society at the
village* of which> milk producers are voluntary members* managing the co/operative through a
democratically elected %/member managing committee* and doing business by purchasing milk
from members and selling it to the district level co/operative# There are more than $$*666 co/
operatives in villages of +u,arat#
The second tier is the district co/operative that processes milk into milk products* markets locally
and sells surplus to the state co/operative for national and international marketing# There are $4
district co/operatives each being managed by a $)/member board elected by the college
comprising the nominated representatives or chairmen of the village co/operatives#
Third tier is the state level co/operative / the +u,arat Co/operative 1ilk 1arketing ?ederation
9+C11?: responsible for national and international marketing of milk and milk products
produced and sold to it# The +C11? is managed by the board democratically elected by and
from amongst the chairmen of the district co/operatives#
3 | " a g e
The entire three/tier structure with the +C11? at its ape(* is a uni<ue institution because it
encompasses the entire chain from production of raw material to reaching the consumer with the
end product# @very function involves human interventionA 4B#'6 lakh primary milk producers>
B)*666 rural workmen in more than $$*&66 village societies> $4*666 workers in $) dairy plants>
5)6 marketing professionals> $6*)66 salesmen in distribution network and '66*666 salesmen in
retail network# Accumulation of human capital is sine <ua non for the development and growth of
any enterprise or economy# The +C11? is sensitive towards CSR# "t believes that technology and
capital are replicable inputs but not the human capital# Since men are the basis for achieving the
CSR* the +C11? lays emphasis on their development into competent* courteous* credible*
reliable* responsive communicators and performers#
2) CSR-sensitive Business Philosophy
The first step towards discharging the CSR is the business philosophy of the +C11?# "t is two/
foldA one* to serve the interests of milk producers and second* to provide <uality products to
consumers as value for money# @volution of an organisational system has ensured that the
corporate social responsibility towards the primary milk producers* village and the ecological
balance is fulfilled# The milk producers are paid for their milk in accordance with market forces
and realisation of value for their produce# "nvariably the price paid to the member/producers in
+u,arat is higher by $) per cent than the national average#
3) CSR-orientation To Distributors Retailers
The +C11? has identified the distributors and retailers are its important link in its vendor
supply chain# Through surveys the +C11? found that %6C of the distributors do not get any
opportunity of e(posure to latest management practices# The +C11? realised that it was a
corporate social responsibility to strengthen the core business process of its distributors so as to
keep them in mainstream business and compete with those with formal training in management#
The +C11? has developed and trained all its distributors through -alue/1ission/Strategy
Workshops* competence building* Amul Datra* Amul Euality Circle meetings* computerisation*
and electronic commerce activities#
Competency 7uilding 1odule of the +C11? is meant to infuse professional selling skills by
making the distributors and their salesmen aware of latest sales management tools and
techni<ues> enhance their knowledge of products> positioning and segmentation strategies for
various products# 0nder Amul Datra the distributors and their salesmen are taken on a visit to
Anand# 2uring this visit they are shown dairy plants* their upkeep* international standards of
4 | " a g e
hygiene and <uality> the practices adopted for clean milk production* and above all the
cooperative philosophy# Through one to one talk with the farmers* the distributors and salesmen
realise A10L is a large business of small farmers# The visit leaves an everlasting impression on
their minds that by selling A10L products* they are discharging a social responsibility towards a
large number of poor farmers whose livelihood depends upon their skill and integrity# They feel
proud that they are participants in development of rural society and thus in nation building#
Earnings of GCMMF
8urturing its primary members / the milk producers / is the first mission of the +C11?#
2ischarge of this responsibility is reflected in the manner in which the +C11? conducts its
business and shares its earnings# The milk from the village co/operatives is purchased at an
interim price# So as to ma(imise the earnings of the milk producers the +C11? changes the
product profile during the fiscal and directs its sales and marketing activities towards those
products that would bring in ma(imum returns# TrueF @very business organisation follows the
same principle# 7ut the +C11? follows it with the central interest of the producers# 2uring the
fiscal* as the +C11? finds that from its earnings it is possible to pay more to the producers for
milk* the final price is declared higher than the interim price being paid# 7efore the +C11?
closes its financial accounts the co/operatives are paid ’price difference’* the amount between the
interim price and the final price# Thus profit of the +C11? is very low# The net profit 9.A2T: of
the +C11? during 466B/6& was Rs 5#B$ crore against a turnover of Rs 4*%&5 crore* a meagre
6#4)C# ?urther out of the net profit of Rs 5#B$ crore* Rs & crore was given as share dividend to the
co/operatives# To fulfil its corporate social responsibility towards its milk producers and co/
operatives the +C11? works on raGor thin profits and retention of funds#
!) CSR-oriente" To Sta##
The +C11? hires and trains people to take advantage over its competitors# "t has developed in/
house modules for training and competence building to improve and upgrade of their knowledge>
communication skills to understand the customer* be responsive to customer re<uirements* and
communicate clearly for trouble shooting of problems# They are e(pected to be courteous*
friendly* respectful* and considerate to the customer# To improve the credibility and
trustworthiness of the managers it is important they perform consistently and accurately every
time and at all times# The structure of salary and per<uisites is altogether different# The first and
foremost the staff must get satisfaction from the ,ob they# They are recognised for their
contribution 9Climate Survey: CSR/A10L WAD
5 | " a g e
5) $R%%& $'()R)T TR%% P*)&T)T+O& C),P)+$&
A6ul Coops plant 6ore than )((.#: la;hs trees
Mil; "roducer 6e6bers of u<arat Dairy Cooperatives% better ;no=n as
AMUL have been celebrating the nation>s 'ndependence Day in a novel
6anner by planting la;hs of saplings across u<arat and have ta;en up an
a6bitious plan to save the environ6ent by planting trees? 6a;ing 'ndia
green and thereby reducing the e9ects of global =ar6ing. The 6il;
producers of u<arat Dairy Cooperatives are conducting 6ass tree
plantation drive every year on 'ndependence Day for last @ve years. 'n
last @ve years A0**1 to 0*((B the 6il; producers have planted around
)((.#: la;hs treesB. The 6ost stri;ing feature of these entire progra66es
=as that it has been initiated by 6il; producer 6e6bers of the dairy
cooperatives. The uniCue fact about the progra66e =as that the 6il;
producer 6e6bers too; up the oath to protect tree saplings till it survives
and gro=s into tree.
!ver the years? due to intensive agriculture and dairying various natural
resources are getting consu6ed at faster pace in u<arat state of 'ndia.
The state level ape5 body of dairy far6ers in u<arat gave a serious
thought in this direction and discovered a novel idea for giving bac; to
nature. The idea =as Done 6e6ber one treeD plantation on our 2*th
'ndependence day % (4th August 0**1.To put this idea in to the practice a
design tea6 constituting of representatives of 6e6ber unions =ere
for6ed. The tea6 accepted the idea by heart and i66ediately decided to
spread it a6ong far6er 6e6bers of village dairy cooperative societies.
Then the idea =as co66unicated to far6er 6e6bers and they all
=elco6ed it and enthusiastically agreed to i6ple6ent the idea.
Eor s6ooth i6ple6entation of the idea? the design tea6 chal;ed out the
road 6ap for various activities. $5ecution tea6s =ere for6ed at district
union level to give @nal shape and put the plan in action. .illage level
coordinators =ere identi@ed and they =ere trained to strea6line activity
of tree plantation. .arious a=areness 6aterials =ere prepared. Through
various co66unication 6edia far6er 6e6bers =ere 6ade a=are of
bene@ts of tree plantation and tree plantation activity schedule
The entire plantation activity =as coordinated at all the three tiers of
Anand pattern % at village? district and state level dairy cooperatives. !n
(4th August? 0**1? after the Fag hoisting cere6ony? each 6e6ber too;
an oath to plant saplings and ensure that they gre= in to trees. Then
individually they planted sapling on their o=n at their identi@ed locations
li;e their far6? near their ho6e? on Ear6 bunds? etc. They have ta;en
necessary care to ensure that this sapling survives and they also reported
regarding the survival to village level coordinator and district 6il; unions
after @ve 6onths. 'n this =ay? (:.# la;h trees =ere planted on (4th
August 0**1. This =as <ust the beginning. &enceforth? the .illage Dairy
6 | " a g e
Cooperative Societies of u<arat as a 6ar; of respect for our nation
decided to conduct such event on every 'ndependence Day and accepted
(4th August A'ndependence DayB as a Dreen Revolution Day by
A9orestation to "rotect Mother $arth fro6 "ollution? Cli6ate change and
lobal 8ar6ingD.
-ut all this reCuired i66aculate planning and e5ecution. An action plan of
tree plantation progra66e =as dra=n up 6onths bac; in advance. After
the identi@cation of the chief coordinator for each district 6il; union? the
organiGation of a tas; force for the progra66e =as put in place. Roles and
responsibilities =ere assigned to each 6e6ber and area of operation
allocated. After preparing the overall action plan? each union issued a
circular to the Dairy Cooperative Societies regarding the progra66e and
arranged 6eetings =ith the societies covered. At the village level?
coordinators =ere identi@ed in respect of the villages to be covered and
the nu6ber of saplings reCuired. Along =ith logistical arrange6ents direct
contact =as established =ith di9erent agencies for receipt of saplings.
"oint=ise 6ethodology for i6ple6entation of tree plantation progra66e
on such a 6ass scale is as follo=ing.
"oint =ise Methodology of e5ecution of progra66e is as follo=ingH
Me6ber Unions =ere infor6ed about the progra66e and channels of
procure6ent of saplings? al6ost si5 6onth before to scheduled date of
progra66e.
Continuous follo= up =ere ta;en fro6 the 6e6ber unions about the
status of activities planned for the progra66e.
A 6eeting on tree plantation progra66e =as held at CMME Ltd.? Anand
al6ost a 6onth ago in =hich status of action plan =as each Me6ber
Union =as discussed at length.
Mil; Unions identi@ed the coordinator for the progra66e and organiGed a
tas; force for the successful i6ple6entation of the progra66e. The
coordinator at Mil; Union level chal;ed out overall action plan for the
progra66e and assigned roles and responsibilities and area of operation
to each 6e6ber of tas; force.
Mil; Unions AMUsB issued circular to their respective .DCSs A.illage Dairy
Cooperative SocietiesB 6entioning the entire activity and procedure
planned for the celebration of the progra66e. 'n circular details for 6il;
producer 6e6bers to 6a;e necessary preparations li;e deciding the
place? digging the pit? ta;ing care of saplings etc. =ell in advance =ere
also provided. The circular =as placed on notice board of .DCSs.
MUs tas; force 6e6bers contacted I co66unicated about the concept to
.DCS and identi@ed the village level coordinator and assigned the6 roles
and responsibilities.
7 | " a g e
MUs Coordinator properly e5plored and co66unicated the saplings
acCuiring sourcesJnursery details to .DCSs. They also ensured that
saplings reach the .DCSs before ) days.
A press note =as prepared by the coordinator of the progra66e at MU
level and =hich =ere given in the ne=spapers on a day before tree
plantation to boost 6orale of producer 6e6bers and 6entally prepare
the6 for the e5ecution of progra66e on ne5t day.
At ti6e of handing over the saplings to 6e6bers fro6 .DCS? the producer
6e6bers too; oath to protect the saplings and accepted the responsibility
for successfully gro=ing the sapling into tree.
!n (4th August? after the 6il; collection process? at a predecided ti6e
sirens at .DCSs =ere sounded or other 6eans li;e beating ThaliJutensil?
loudspea;er etc. =ere used to facilitate the gathering producer 6e6bers
in ti6e at predecided place in the village for celebration of 'ndependence
Day in .DCS pre6ises? co66on plot? school etc. After Fag hoisting
cere6ony? the tree plantation activity =as e5ecuted by the producer
6e6bers.
'n 6any villages the 6il; producer 6e6bers planted the trees after
perfor6ing the "u<a A=orshipB of saplings before planting the6.
To add fervour and enthusias6 in the progra66e at 6any places the
Chair6an? Managing Director and -oard of Directors of Me6ber Unions
participated in the progra66e.
,e5t day after the progra66e on a post progra66e press note =as
prepared giving details of the progra66e celebrations along =ith
photographs. Si6ilar such notes =ere published in house 6agaGinesJ
ne=sletters.
After the co6pletion of the progra66e the MU>s =ere as;ed to sub6it the
report on tree plantation activity.
MUs conducted survey after 4 6onths to @nd out the survival rate of
sapling under the progra66e.
Eirst tree plantation progra66e A(4th August? 0**1B =as carried out on
Done 6e6ber? !ne treeD basis. Second tree plantation progra66e A(4th
August? 0**:B in =hich around 40.1+ la;hs tree =ere planted =as
conducted on Done 6e6ber three treeD basis.
'n year 0**# and in year 0*(*? in 6ass tree plantation progra66e around
:+.0+ and :).4 la;hs tree saplings =ere planted respectively. The
progra66e =as conducted on D!ne 6e6ber? @ve treeD basis. Eurther? this
year 0*(( around 10.2 la;hs trees =ere planted? the progra66e =as
carried out as per the sa6e process and procedures follo=ed in last year.
&ence? in last @ve years? 6il; producers of CMME planted around )((.#:
la;hs tree saplings in 0( districts of u<arat. -y doing so? 6il; producers
8 | " a g e
of u<arat Dairy Cooperatives have sho=n their concern? a=areness and
co66it6ent for better6ent of environ6ent. 3ear =ise details of tree
plantation and survival of tree saplings planted is as under.
Sr. ,o3ear of tree plantation ,o. of trees planted Ain la;hsB ,o. of trees
Survived Ain la;hsB Survival percentage
( 0**1 (:.#*(( 4:
0 0**: 40.1+02 +#
) 0**# :+.0+): +4
+ 0*(* :).4 )# +1
4 0*((K 10.2 )+ +1
Total )((.#: (+:.(00 +1
Kesti6ated Aas survey for survival percentage of the saplings planted in
year 0*(* is ongoingB
According to statistics of Eorest Survey of 'ndia considering on an average
)*%+* c6 dia6eter of these trees? (*2 trees =ould provide one hectare of
green tree cover. Considering +1L survivability of planted trees Abased on
post plantation survey data? around (+:.(0 la;hs out of )((.#: la;hs tree
planted survived during last @ve yearsB? =hen they fully gro= up? =ould
provide additional (?)#?1)4 ha. of green cover =hich is additional 2.+(
percent forest cover of u<arat State of 'ndia.
Achieve6entsH
This e9ort to provide green cover to the earth =as also ac;no=ledged
=hen the state level ape5 body of u<arat Dairy Cooperatives % CMME
received four successive prestigious DSR'S&T'>s %Cube A=ardD%0**1?
0**:? 0**# and 0*(* for ood reen overnance in the DService
CategoryD.
Eurther? DA6ul reenD 6ove6ent has also been a=arded by 'nternational
Dairy Eederation for best environ6ent initiative in the Dsustainability
categoryD during the +th lobal Dairy Conference held at SalGburg
Congress Center? Austria on 0:th April? 0*(*.
't has been esti6ated that =hen one tree is cut? in 6onetary ter6s there
is loss or Rs. )) la;hs A!5ygen =orth of Rs. 4.) la;hs? Land Eertility of Rs.
2.+ la;hs? Rs. (*.4 la;h for reduction of pollution of at6osphere and Rs.
4.) la;h to=ards Elo=ers J Eruits and habitation to birds % ani6alsB. -ut the
bene@ts that accrue to 6an;ind =hen a tree is planted cannot be
6easured in 6oney and is priceless.
9 | " a g e
The producer 6e6bers of CMME have really set an e5a6ple for all the
cooperatives and other institutions to turn 'ndia green in the era of lobal
=ar6ing and environ6ental crisis.
8hen ) 6illion dairy far6ers of u<arat have planted 6ore than )((.#:
la;h trees in <ust @ve years and are planning to plant 6ore trees every
year? they are doing an invaluable % truly A6ul % service to the society.
'n an era of global =ar6ing? A6ul is contributing its share in 6a;ing
u<arat lush green. 'n this =ay? the 6il; producers of u<arat are ushering
in a silent revolution of greening u<arat.
A devastating earthCua;e ARichter scale 7 1.#B hit u<arat on 02th /anuary
0**(. The epicentre of the Cua;e =as located in Kutch district. 't caused
death of thousands of people? tens of thousands =ere in<ured? hundreds of
thousands =ere rendered ho6eless and da6age of billions of Rupees =as
done.
CMME for6ed a speci@c organiGation na6ed DA6ul Relief TrustD AARTB
under the Chair6anship of Dr. .. Kurien in 0**( =ith a donation of Rs. 4*
Millions for reconstruction of the school buildings da6aged in the 0**(
earthCua;e in the Kutch area.
The Trust reconstructed 2 schools da6aged by the above earthCua;e at a
cost of Rs. +(.( 6illions in Kutch area. Eour of these schools started re%
functioning fro6 the last t=o acade6ic sessions and the other t=o schools
fro6 the current session.
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References:
(. httpHJJ===.a6ul.co6J6Jabout%us
0. httpHJJ===.indiacsr.inJenJMpN:+#1
). httpHJJ===.a6ul.co6J6Jtree%plantation
+. httpHJJ===.a6ul.co6J6Ja6ul%relief%trust
4. httpHJJ===.@nanciale5press.co6Jne=sJcorporate%social%
responsibility%the%a6ul%=ayJ((0(10J(
2. httpHJJ===.study6ode.co6JessaysJCsr%Activities%!f%"epsico%'ndia%
And%+*4**4)0.ht6l
1. httpHJJ===.scribd.co6JdocJ0#)(2((0Ja6ul%csr%ppt
:. httpHJJse6inarpro<ects.netJcJcorporate%social%responsibility%of%a6ul%
ppt
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