Operation Flood & Amul India Story

Symposium on Trade Networking for Cooperatives, International Cooperative Alliance 26 July 2007 – Bali, Indonesia

Empowering the Milk Producer
Amul is owned by farmers – the milk producers Amul symbolises faith in the Co-operative system which places the instruments of development in the hands of farmers Amul is the brand of 2.6 million milk producers of Gujarat Annual Turnover – Rs. 5500 crores (US $ 1.25 billion)

Dairying occupation of women mainly Dairying provide women with means of sustenance Enables them to make most household expenditures without having to ask husbands for money Saves small amounts for emergencies Lead role played by all women dairy societies

Beyond a Brand
But Amul is much more than a brand A vehicle for economic and social transformation Amul signifies our farmers’ determination to manage their own resources Amul has a glorious tradition and legacy of more than 60 years

The Genesis It all began when milk became a symbol of protest Inspired by the freedom movement Guidance from Sardar Vallabhbhai Patel and Morarji Desai Implemented by local committed and selfless farmer leaders like Tribhuvandas Patel Founded in 1946 to stop the exploitation of milk producers at the hands of middlemen .

Registered on December 14.The Birth of Amul A humble beginning with 2 village societies and 247 litres of milk. 1946. Became role model for Co-operative Dairy development . as the Kaira District Co-operative Milk Producers’ Union Ltd...

The Turning Point Visit of Prime Minister Lal Bahadur Shastri in 1964 Impressed by the Amul Model. the National Dairy Development Board was set up in 1965 to replicate the Amul Model across the country . he wanted to “transplant the spirit of Anand (Amul)” to other places At his instance.

The Amul Model Establishment of a direct linkage between milk producers and consumers by eliminating middlemen Milk Producers (farmers) control procurement. Fed. Union Vill. Milk Co-op. Milk Mktg. processing and marketing Professional management The Consumer State Co-op. Dairy Co-op. Milk Producer . Dist.

The Village Dairy Co-op. Society Voluntary Association of Milk Producers Any one owning Cow/Buffalo can become member One member – One Vote Managing Committee elected by members who elect Chairman Managing Committee hires employees Milk Collection. sale of cattle feed – key tasks Payment to milk producers on the basis of quality and quantity . testing for milk fat.

semen banks and cattle feed distribution to village dairy co-op. societies – major activities Chairpersons of village societies elect Board of Directors Board of Directors elect the Chairman of the District Union Union managed by professional team headed by Managing Director . health clinics.The District Union Primary Milk Producers Societies affiliated to a District Union Owns and operates a feeder/balancing dairy plant Fixing milk prices for village co-operatives a key task Processing milk/milk products and managing macro-level inputs like vet.

Quality Control and Purchases Efficient Pooling of Milk Chairmen of Milk Unions are Board Members Board Members elect Chairman of Federation CEO is a Professional The State Federation .Federal Body at the state level – Apex body of District Cooperative Milk Unions Marketing of Milk/Milk Products of Member Unions – key task Common branding Centralised marketing.

792 Villages in Gujarat 1. & AH SERVICES 12.AMUL GCMMF in Gujarat SALES REVENUE MODEL SALES REVENUE 22 State Fedns.13.152 Villages in India 2.6 million in Gujarat 12. in India 13 District Unions in Gujarat BONUS DIVIDEND ON SHARES ADDL. PRICE DIFF. CATTLE FEED RURAL HEALTH SCHEMES 176 District Unions in India VET.6 million in India .

Amul and the Regional Avatars .

Operation Flood Launched in 1970 World’s largest Food & Development Programme Producers’ Cooperatives Central Plank Linking Dairy Development to Milk Marketing Innovative Use of Commodity aid as investment to finance dairy development Three phases – 1970 to 1996 .

1154 million Stimulated milk production in hinterland areas .I Aim to capture a commanding share of the milk market in the 4 metro cities Financed by sale of Skimmed Milk Powder and Butter Oil gifted by the EEC through the World Food Programme Gifted commodities – 1.000 tonnes of Butter Oil recombined as Liquid Milk and sold in 4 metros Sold at prevailing market prices generating Rs.Operation Flood .000 tonnes of Skimmed Milk Powder and 40.27.

000 tonnes Butter Oil and 23. viable and selfsustaining dairy industry Extended to cover 136 major milksheds linked to 386 urban consumption centres National Milk Grid formed to eliminate imbalances 5 fold increase in domestic Milk Powder production Seed capital raised from sale of gifted commodities – 242. 68.II Objective to establish modern. 1536 million .Operation Flood .000 tonnes of SMP.000 tonnes Butter Soft loan from World Bank worth Rs.

III Consolidating achievements of OF.Operation Flood . 1893 million .II Rise in Milk Production leads to significant drop in commodity aid Significant funding from internal resources obtained by recycling and reinvesting initial commodity aid World Bank Loan of Rs. 7550 million Sale of EC donated commodities yield Rs.I and OF.

I 19701981 39 13.2 842 9.6 261 2.II 19811985 136 34.6 3.8 OF . Per Day) Processing Capacity in Rural Dairies (Million Ltrs.Salient Features of Operation Flood Features Period No.8 8.9 . Per day) OF . of Milksheds covered No.7 9.6 5.8 508 5 OF .9 19.8 2.3 1. of Members (Million) Average Milk Procurement (Million Kg. of Amul Pattern DCs set up (‘000) No.5 3. Per Day) Drying Capacity ) MTS per day) Liquid Milk Marketing (Million Ltrs.III 19851996 170 72.3 10.

Operation Flood – Heralding Changes Dairying made a remunerative occupation for millions of India’s rural poor More than Rs. 20 billion . 70 billion flows back annually to nearly 12. 400 billion against a total investment of Rs.6 million members of dairy cooperatives Enormous Urban Market stimulus leads to substantial production increase Self-sufficiency in Milk Production Modernisation and expansion of dairy industry Incremental return of Rs.

2 53.8 66.9 31.1 70.3 84 88 91 94 100 1950 1968 1980 1995 1997 2002 2004 2007 MMT .2 23.Milk Production : India 120 100 80 60 40 20 0 17 20 21.6 74.378.

Per Capita Availability: India 250 200 128 150 132 127 113 111 178 208 214 217 199 225 235 100 50 0 1950 1968 1980 1995 1997 2002 gms/day .

Expected 135 MMTs by 2015 278 Million Livestock – 180.5 million cattle.2 million Goats Livestock population to rise to 322 million by 2015 Definition of milk should be enlarged to include SMP.8 million Buffaloes 4 Million Sheep.Statistics Milk Production – 94.5 MMTs. 82. 9. WMP. White Butter .

Lessons from the Amul Model …. Study demand system first rather than production system First mount successful marketing strategy rather than organising producers Superior design concept required to avoid mismatch Member control and professional mgmnt .

Capturing commanding share of milk market must precede growth of Village Dairy Co-operatives Important to capture market through external intervention and then increase procurement commensurate with withdrawal of intervention Milch animals must remain in hinterland Different interventions needed for Dairy Development .Lessons from the Amul Model ….

Key Learnings Dairying has provided gainful employment to millions. in the villages An investment of Rs 2000 Crores under Operation Flood Program over 25 years is yielding annual returns amounting to Rs 90.000 Crores every year The producer price of milk has not dropped despite four fold increase in production Vibrant dairy industry has provided nutrition to the masses Self Sufficiency has been achieved in the vital food sector ! . primarily women.

Coops Empower Farmers through: Strong Brands Market Access to Rural produce Incentive Prices Employment to women Nutrition to masses Democracy in action Education – focus on the girl child .

World Bank observed that the Amul Model has demonstrated that : Rural development involves more than agricultural production High value of national “ownership” in development The beneficial effects of dairy incomes in relieving worst aspects of poverty even during droughts The capacity of dairying to benefit the poor at low cost Source : World Bank Operations Evaluation Dept. 1998 . Report India : The Dairy Revolution.

1998 .Amul Model has also demonstrated : The capacity of single-commodity projects to have multi-dimensional effects The importance of commercial approach to development The importance of getting Government out of commercial enterprises Source : World Bank Operations Evaluation Dept. Report India : The Dairy Revolution.


The Market Leader India’s largest Food Products Marketing Organisation A Billion Dollar Organisation Annual turnover over Rs.1 billion) Milk Procured from 2.6 million farmer members 12792 Village Dairy Co-op. Societies . 4278crores (US$ 1.




Commissioned in September 1994 New 100 MTS per day Powder Plant installed in March 2006 State of the art dairy . Gandhinagar A Unit of Gujarat Co-operative Milk Marketing Federation Ltd.Mother Dairy.

Capacity : 3200 mtd .16 mlpd Milk Collection in 2006-07 : 2.Manufacturing Facilities Own Dairy Plants : 30 Outsourcing from Dairies across India:9 Total Milk Handling Capacity : 10.38 billion ltrs Plants with one mlpd Capacity : 5 Milk Drying Capacity: 600 tpd Cattle Feed Mfg.

GCMMF – Member VDCS 13000 11000 8690 9000 7000 5000 3000 1000 -1000 3 4 6 '05-0 2 5 9 4 8 '02-0 '03-0 5 '01-0 '04-0 '06-0 84-8 88-8 93-9 97-9 7 10180 10852 12340 12792 11200 11400 11615 5580 6240 .

6 .67 1 1.36 1.23 2.5 2.5 2 1.27 2.GCMMF : Milk Producer Members (Million) 3 2.22 2.5 1 0.5 0 84 -8 5 93 -9 4 88 -8 9 '0 304 '0 405 '0 102 '0 203 '0 607 '0 506 2.4 2.

7 3 .3 6.7 4.2 5.1 5.GCMMF:Average Milk Procurement (Million kgs.5 1. per day) 7 6 5 4 3 2 1 0 84 -8 5 89 -9 0 93 -9 4 97 -9 8 -0 2 -0 3 -0 4 -0 5 -0 6 '05 '01 '02 '03 '04 '06 -0 7 6.8 4 2.6 5.

Japan. The Philippines. USA. Hong Kong. Paneer. Singapore. Australia and Africa . Ghee. Vietnam. SAARC Region. Butter. Skimmed Milk Powder in bulk Major Markets : Gulf. Cambodia.The Largest Exporter India’s Largest Exporter Of Dairy Products UHT Milk. China. exported in consumer packs Whole Milk Powder. etc. Cheese.

e-mail and internet connectivity at village level Customized enterprise resource planning for manufacturing units Introduction of cyber-shops all over India and in some parts of USA.IT Company in Food Business Adopted Information Technology Integration as a Strategic Thrust in 1995 I. Singapore and Dubai Geographical Information System with digital city maps at major cities implemented for distribution planning All sales offices spread over the country have e-mail connectivity and send daily reports on sales and inventory to Anand .T. right from Automatic Milk Collection Systems.

Growing from Strength to Strength 47 Sales Offices 3.000 + Retailers Reach extends to all parts of the country and many parts of the world .000+ Dealers 500.

commitment and professionalism in journey towards quality Awards The IMC Ramkrishna Bajaj National Quality Award – 2003 for adopting noteworthy quality management practices for logistics and procurement APEDA Export Award continuously for 10 years .GCMMF bags Rajiv Gandhi National Quality Award 1999 in Best of All Category Award a tribute to vision.


Origin of the Brand .

David Aaker .Brand Responsibility 10 Create 1 Brand Identity Know 2 Value Proposition Have 3 Brand Position 4 Execute Communication Program Consistency 5 Over Time 8 Track Brand Equity Building a Strong Brand Leverage on 7 Existing Brands Synergize 6 Brand System Source.

Create an Identity for the Brand BRAND AS SYMBOL .

Create an Identity for the Brand BRAND AS PERSON – ‘CCC’ .

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