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October 21, 2008 Rural Development


Presented by: Dr.C.N.Ray

Faculty of Planning and Public Policy, CEPT
Dairy Industry Profile, 1997

Human population: 953 million (70 million dairy farmers)

Milk production: 74.3 million tonnes (203.5 million lpd)

Average annual growth rate (1995-2000): 5.6%

Per capita milk availability: 214 g/day or 78 kg/year

Milch animals: 57 million cows; 39 million buffaloes

Milk yield per breedable bovine in-milk: 1,250 kg

Cattle feed production (organized sector): 1.5 million tonnes
Turnover of veterinary pharmaceuticals: Rs. 550 crores
Dairy plants throughput: 20 mlpd
Throughput as percentage of total milk output: 10
Value of output of milk group (1994-95)*: Rs. 50,051 crores
Value of output of dairy industry**: Rs. 105,000 crores 2
Welcome to Amul
While we may justifiably take pride in having built
the largest food product business in the country, we
do not pause to rest upon our laurels. In all that we
do, and will do, we never forget that we face an
increasingly competitive environment. In this
environment, we have survived and grown on the
basis of our greatest strength: co-operative culture,
co-operative networking, market acumen and
respect for both producer and the consumer.

GCMMF: An Overview

Members: 13 district cooperative milk producers' Union

No. of Producer Members: 2.7 million

No. of Village Societies: 13,141
Total Milk handling capacity: 10.21 million litres per

Milk collection (Total - 2007-08): 2.69 billion litres

Milk collection (Daily Average 2007-08): 7.4 million


Milk Drying Capacity: 626 Mts. per day

Cattlefeed manufacturing Capacity: 3090 Mts per day5


Total milk procurement by Member Unions during the year 2007-08 averaged
75.90 lakh kilograms (7.6 million kg) per day, representing a quantum growth
of 12.9 per cent over 67.25 lakh kilograms (6.7 million kg) per day achieved
during 2006-07. The highest procurement as usual was recorded during
January 2008 at 98.81 lakh kilogram (9.9 million kg) per day. This increase in
milk procurement is very impressive, against the backdrop of 4.5 per cent
growth registered during the previous year. During the peak procurement
period, we have successfully demonstrated our ability to process almost 10
million liters of milk per day.

During the year, sales of Federation registered a quantum growth of 22.9 per
cent to reach Rs. 5255.41 crores (Rs. 52.55 billion). This is an extremely
impressive growth, when viewed from the perspective of 13.4 per cent growth
that we had achieved in 2006-07 and 29 per cent growth achieved in 2005-06.
The sales performance has been consistent in recent years and we are
confident of maintaining these excellent results in the coming years, as well.
In global terms turnover is $ 1.3 billion, at the existing currency exchange
rate. 6
List of Products Marketed:

Amul Butter
Amul Lite Low Fat Breadspread
Amul Cooking Butter

Cheese Range:
Amul Pasteurized Processed Cheddar Cheese
Amul Processed Cheese Spread
Amul Pizza (Mozarella) Cheese
Amul Shredded Pizza Cheese
Amul Emmental Cheese
Amul Gouda Cheese
Amul Malai Paneer (cottage cheese)
Utterly Delicious Pizza 7
Mithaee Range (Ethnic sweets):
Amul Shrikhand (Mango, Saffron, Almond Pistachio, Cardamom)
Amul Amrakhand
Amul Mithaee Gulabjamuns
Amul Mithaee Gulabjamun Mix
Amul Mithaee Kulfi Mix
Avsar Ladoos

UHT Milk Range:

Amul Shakti 3% fat Milk
Amul Taaza 1.5% fat Milk
Amul Gold 4.5% fat Milk
Amul Lite Slim-n-Trim Milk 0% fat milk
Amul Shakti Toned Milk
Amul Fresh Cream
Amul Snowcap Softy Mix
Pure Ghee:
Amul Pure Ghee , Sagar Pure Ghee , Amul Cow Ghee

Infant Milk Range:

Amul Infant Milk Formula 1 (0-6 months)
Amul Infant Milk Formula 2 ( 6 months above)
Amulspray Infant Milk Food

Milk Powders:
Amul Full Cream Milk Powder , Amulya Dairy Whitener
Sagar Skimmed Milk Powder , Sagar Tea and Coffee Whitener

Sweetened Condensed Milk:

Amul Mithaimate Sweetened Condensed Milk

Fresh Milk:
Amul Taaza Toned Milk 3% fat
Amul Gold Full Cream Milk 6% fat
Amul Shakti Standardised Milk 4.5% fat
Amul Slim & Trim Double Toned Milk 1.5% fat
Amul Saathi Skimmed Milk 0% fat
Amul Cow Milk
Curd Products:
Yogi Sweetened Flavoured Dahi (Dessert) , Amul Masti Dahi (fresh curd)
Amul Masti Spiced Butter Milk , Amul Lassee

Amul Icecreams:
Royal Treat Range (Butterscotch, Rajbhog, Malai Kulfi)
Nut-o-Mania Range (Kaju Draksh, Kesar Pista Royale, Fruit Bonanza,
Roasted Almond)

Nature's Treat (Alphanso Mango, Fresh Litchi, Shahi Anjir, Fresh

Strawberry, Black Currant, Santra Mantra, Fresh Pineapple)
Sundae Range (Mango, Black Currant, Sundae Magic, Double Sundae)
Assorted Treat (Chocobar, Dollies, Frostik, Ice Candies, Tricone,
Chococrunch, Megabite, Cassatta)

Utterly Delicious (Vanila, Strawberry, Chocolate, Chocochips, Cake Magic)

Chocolate & Confectionery:
Amul Milk Chocolate, Amul Fruit & Nut Chocolate

Brown Beverage:
Nutramul Malted Milk Food

Milk Drink:
Amul Kool Flavoured Milk (Mango, Strawberry,
Saffron, Cardamom, Rose, Chocolate) , Amul
Kool Cafe

Health Beverage:
Amul Shakti White Milk Food
Root Cause….. History

In the forties the dairy industry was dominated by one firm –

Polsons, using the milk produced in Kaira District.

Farmers Contractors Industry Consumer

Kaira District Cooperative Milk Producers' Union (AMUL) was

born, in 1946 to ensure that its producer members received
the highest possible share of the consumers' rupee.

“The focus was on production by the masses, not mass


The National Dairy Development Board was created in 1965 in

response to rural producers which were sensitive to their
needs and responsive to their demands.

National Dairy Development Board
The National Dairy Development Board was
created to promote, finance and support producer
owned and controlled organizations. Fundamental
to NDDB's efforts are cooperative principles and
the Anand Pattern of Cooperation.
Cooperation is the preferred form of enterprise, giving people control over
the resources they create through democratic self-governance.
Self-reliance and accountability is attained when people have financial
Progressive evolution of the society is possible only when development is
directed by those whom it seeks to benefit.
All beneficiaries, particularly women and the less privileged must be involved in
cooperative management and decision making.
Technological innovation and the constant search for better ways to achieve our
objectives is the best way to retain our leading position in a dynamic market
While our methods change to reflect changing conditions, our purpose and
values must remain constant.

National Dairy Development Board
(NDDB) Cont…
The National Dairy Development Board (NDDB) was founded to replace
exploitation with empowerment,
tradition with modernity,
stagnation with growth,
transforming dairying into an instrument for the development of
India's rural people.

It was created in 1965, to fulfill the desire of the then Prime Minister of India –
late Lal Bahadur Shastri - to extend the success of the Kaira Cooperative
Milk Producers‘
Union (Amul) to other parts of India.  
That success combined the wisdom and energy of farmers with professional
to successfully capture liquid milk and milk product markets while supporting
investment with inputs and services.

Dr (Ms) Amrita Patel serves as the Chairman of NDDB;  Dr Verghese Kurien

was the
founder Chairman.
National Dairy Development Board
(NDDB) Cont…
Dairy Cooperatives & Brand Names across Nation
Punjab Milk Federation, Punjab – VERKA
Haryana Dairy Development Cooperative Federation Ltd. – VITA
Himachal Pradesh State Cooperative Milk Producers’ Federation Ltd. – HIM
Gujarat Cooperative Milk Marketing Federation Ltd. – AMUL  
Karnataka Cooperative Milk Producers’ Federation Ltd. – NANDINI
Andhra Pradesh Dairy Development Co-operative Federation Ltd. – VIJAYA
Kerala State Cooperative Milk Marketing Federation Ltd. – MILMA
Maharashtra Rajya Sahakari Dudh Mahasangh Maryadit – GOKUL, KRISHNA, etc
Madhya Pradesh State Cooperative Dairy Federation Ltd. – SNEHA, SANCHI
Orissa State Cooperative Milk Producers’ Federation Ltd. – OMFED
Pradeshik Cooperative Dairy Federation Ltd. (UP) – PARAG  
Rajasthan Cooperative Dairy Federation Ltd. – SARAS
Tamil Nadu Cooperative Milk Producers’ Federation Ltd. – AAVIN
West Bengal Cooperative Milk Production Federation Ltd. – MOTHERDAIRY, etc
Bihar State Cooperative Milk Producers’ Federation Ltd. – SUDHA

Operation Flood

Operation Flood was a rural development programme started by India's

National Dairy Development Board (NDDB) in 1970. One of the largest of its
kind, the programme objective was to create a nationwide milk grid.

It resulted in making India one of the largest producers of milk and milk
products, and hence is also called the White Revolution of India. It also helped
reduce malpractices by milk traders and merchants. This revolution followed
the Indian green revolution and helped in alleviating poverty and famine levels
from their dangerous proportions in India during the era.

Gujarat-based Amul (Anand Milk Union Limited) was the engine behind the
success of Operation Flood and in turn became a mega company based on the
cooperative approach. Verghese Kurien (chairman of NDDB at that time), then
33, gave the professional management skills and necessary thrust to the
cooperative, and is considered the architect of India's 'White Revolution'
(Operation Flood). His work has been recognised by the award of a Padma
Bhushan, the Ramon Magsaysay Award for Community Leadership, the Carnegie-
Wateler World Peace Prize, and the World Food Prize.
Operation Flood has helped dairy farmers, direct their own
development, placing control of the resources they create in their
own hands. A 'National Milk Grid', links milk producers throughout
India with consumers in over 700 towns and cities, reducing
seasonal and regional price variations while ensuring that the
producer gets a major share of the price consumers pay.

The bedrock of Operation Flood has been village milk producers'

cooperatives, which procure milk and provide inputs and services,
making modern management and technology available to members.
Operation Flood's
objectives included :

Increase milk production ("a flood of milk")

Augment rural incomes
Fair prices for consumers 19
Operation Flood was implemented in three phases.

Phase I

Phase I (1970–1980) was financed by the sale of skimmed milk powder and
butter oil gifted by the European Union (then the European Economic
Community) through the World Food Programme. NDDB planned the
programme and negotiated the details of EEC assistance.

During its first phase, Operation Flood linked 18 of India's premier

milksheds with consumers in India's major metropolitan cities: Delhi,
Mumbai, kolkata and Chennai. Thus establishing mother dairies in four

Phase II

Operation Flood Phase II (1981–1985) increased the milksheds from 18 to

136; 290 urban markets expanded the outlets for milk. By the end of 1985,
a self-sustaining system of 43,000 village cooperatives with 4.25 million milk
producers were covered. Domestic milk powder production increased from
22,000 tons in the pre-project year to 140,000 tons by 1989, all of the
increase coming from dairies set up under Operation Flood. In this way EEC
gifts and World Bank loan helped promote self-reliance. Direct marketing of
Phase III

Phase III (1985–1996) enabled dairy cooperatives to expand and

strengthen the infrastructure required to procure and market increasing
volumes of milk. Veterinary first-aid health care services, feed and
artificial insemination services for cooperative members were extended,
along with intensified member education.

Operation Flood's Phase III consolidated India's dairy cooperative

movement, adding 30,000 new dairy cooperatives to the 42,000 existing
societies organized during Phase II. Milksheds peaked to 173 in 1988-89
with the numbers of women members and Women's Dairy Cooperative
Societies increasing significantly.

Phase III gave increased emphasis to research and development in animal

health and animal nutrition. Innovations like vaccine for Theileriosis,
bypassing protein feed and urea-molasses mineral blocks, all contributed to
the enhanced productivity of milch animals. 21
Far reaching consequences

The year 1995-96 marked the termination of Operation Flood III, funded
by a World Bank loan, EEC food aid and internal resources of NDDB. At the
conclusion of Operation Flood III, 72,744 DCSs in 170 milksheds of the country,
having a total membership of 93.14 lakh had been organized. The targets set have
either been effectively achieved or exceeded. However, procurement targets could
not be reached as private agencies started procuring milk from the cooperative
villages, following the new delicensing policy under the Government's program of
economic liberalization.

The conditions for long-term growth in procurement have been created. An

assured market and remunerative producer prices for raw milk, technical input
services including AI, balanced cattle feed and emergency veterinary health services
have all contributed to sustained increases in milk production. Three state-of-the-
art dairies designed to produce quality products for both the domestic and export
markets have been commissioned.

While the demand for milk was rising under Operation Flood the total cattle
population remained more or less static. If milk production had to be increased

The buffalo and milk breeds of cattle had to be upgraded

 Non-descript cows had to be crossbred with exotic semen to
increase their milk production to make them more efficient converters22of
Cattle: From stumbling blocks to building blocks.

Traditionally dairying was a subsidairy occupation of the farmers of Kaira. However,

the contribution to the farmer's income was not as prominent as his attachment to
dairying as a tradition handed down from one generation to the next. The milk yield
from animals, which were maintained mainly on the by products of the farm, was
decidedly low. That together with the lack of facilities to market even the little
produced rendered the scientific practice of animal husbandry irrational as well as
unaffordable. The return on the investment as well as the prospects of being able
to market the product looked very bleak. It was a vicious cycle reinforced by
generations of beliefs.

The Kaira Union broke the cycle by not only taking upon themselves
the responsibility of collecting the marketable surplus of milk but also provided the
members with every provision needed to enhance production. Thus the Kaira Union
has full-fledged machinery geared to provide animal health care and breeding

As early as late fifties, the Union started making high quality buffalo semen.
Through village society workers artificial insemination service was made available to
the rural animal population. The Union started its mobile veterinary services to
render animal health care at the farmers' doorstep. Probably for the first time in
the country, veterinary first aid services, by trained personnel, were made available
in the villages.The Union's 16 mobile veterinary dispensaries are manned by fully
qualified staff. All the villages are visited bi-monthly, on a predetermined day, to
provide animal health care. A 24-hour Emergency Service is also available at a fee
(Rs. 35 for members and Rs. 100 for non-members). All the mobile veterinary vans
are equipped with Radio Telephones.
The Kaira experiment: A new beginning in more ways than one.

A system which involves participation of people on such a large magnitude

does not confine itself to an isolated sector. The ripples of its turbulence
affect other areas of the society as well. The cooperatives in the villages
of Kaira are contributing to various desirable social changes such as:
The yearly elections of the management committee and its chairman, by the
members, are making the participants aware of their rights and educating
them about the democratic process.

Perpetuating the voluntary mix of the various ethnic and social groups twice-
a-day for common causes and mutual betterment has resulted in eroding
many social inequilibria. The rich and the poor, the elite and the ordinary
come together to cooperate for a common cause.
Live exposure to various modern technologies and their application in day-
to-day life has not only made them aware of these developments but also
made it easier for them to adopt these very processes for their own
betterment. One might wonder whether the farmer who knows almost
everything about impregnating a cow or buffalo, is also equally aware of the
process in the humans and works towards planning it.
More than 900 village cooperatives have created jobs for nearly 5000
people in their own villages -- without disturbing the socio-agro-system --
and thereby the exodus from the rural areas has been arrested to a great
National Dairy Development Board
Gujarat Cooperative Milk Haryana Dairy
Marketing Development
Federation Limited
No. of Cooperative Unions = 12  Cooperative Federation
(2.12 million farmers) Limited
No. of Dairy plants = 19
No. of Village Societies = 11,962 No. of Cooperative Unions =
Capacity = 6,595 Thousand Litres 6 
per Day No. of Dairy plants = 5
Turnover during 2005-06 = Rs
37736 million Capacity = 470 Thousand
Milk Product Range: Litres per Day
Infant Milk Food, Instant Milk Mix, Milk Product Range:
Ice-cream, Skim Milk Powder, Ghee,
Dairy Whitener, Paneer Sweetened, Ghee, Paneer, Table Butter,
Condensed Milk, Malai Peda, Dahi, Flavoured Milk, Milk
Gulabjamun Mix, Shrikhand, Pizza, Cake
Cheese, Butter Brand : Vita
Brand : Amul

Anand Pattern
– the three tier cooperative
State Marketing Federation The State Federation
All dairies in a state (GCMMF in Gujarat) Responsible for
22 State Federations in India marketing the fluid milk
and products of member
District Milk Processing Unions
Every district in the state
12 districts unions in Gujarat District Cooperative Milk
170 unions all over India
Producers' Union is owned
by dairy cooperative
Village Co-operative Societies societies
All villages in a district Provide inputs and services
72,774 villages in India to DCSs:  feed, veterinary
Dairy Cooperative Society care, artificial
(DCS) insemination.
Milk Producers
All milk producers in a village is formed by milk producers
2.1 million in Gujarat
9.31 million in India
Each DCS has a milk
Tiers in Anand Pattern collection centre.
Milk is tested for quality &
paid based on the % of fat 26
and SNF.
Operation Flood ….. An
NDDB began its operations with the mission of making dairying a vehicle to a
better future for millions of grassroots milk producers.
“Operation Flood", extending over 26 years and which used World Bank loan
to finance India's emergence as the world's largest milk producing nation. 
Meant to create a flood of milk in India's villages with funds mobilized from
foreign donations.
Rs 200 crores was invested in Operation Flood II, with the returns of Rs. 24,000
crores per year adding to the rural economy
It lead to –
Cost reduction and technology management
Modernization of process and plant technology
Interventions for productivity

Facts at a Glance

Reach The Dairy Cooperative Network...

includes 170 milk unions
operates in over 346 districts
covers around 1,13152  village level societies
is owned by around 12.3 million farmer members.

Milk Production
India's milk production increased from 21.2 million MT in 1968 to
90.7 million MT in 2004-05.
Per capita availability of milk  was 232 grams per day in 2004-
05, up from 112 grams per day in 1968-69.
India's 3.8 percent annual growth of milk production between
1993-94 and 2004-05 surpasses the 2 per cent growth in
population; the net increase in availability is around 2 per cent
per year.

Facts at a Glance Cont…

Bulk-vending - saving money and the environment.
Milk travels as far as 2,200 kilometers to deficit areas, carried by
innovative rail and road milk tankers.
Ninety-five percent of dairy equipment is produced in India, saving
valuable foreign exchange.
Automatic Milk Collection Unit (AMCU) and Bulk Milk Cooler (BMC) at
grass root level – preserve quality and reduces post-procurement losses

Macro Impact
The annual value of India's milk production amounts to about Rs. 950
Dairy cooperatives generate employment opportunities for around
12.3 million farm families.

Effect on Rural Development

The cooperatives have provided gainful employment and

brought the farmers close to the market.
Modern technologies in animal breeding and feeding
Modern consumer processing and marketing facilities
have been created
Reduced the seasonal price variations.
Technical input services including animal insemination,
balanced cattle feed / bypass proteins feed, better fodder
varieties and emergency  veterinary health services
helped in raising and sustaining milk production also
ensuring a better quality of life in the villages.
Created urban employment in dairy plants, marketing,
transport and distribution.

Effect on Rural Development cont…

A sustainable rural employment program.

Dairy as economic activity for landless, marginal or small
The village cooperative is a clean well lit and orderly place,
influencing the transformation of the villages
Milk production and unexploitative marketing through the
cooperatives is an assured source of income to farmers.
The migrating population is settling down.
Operation Flood has, as the largest rural employment scheme
enabled the farmers to address not only the domestic but
also global market opportunities.

Effect on Rural Development
Dairy Farming is benefiting the farmers for the
following reasons:

Requirement of skilled labour is relatively less.

Dairy product market is active round the year.
Minimum investment on inventory. (No need to
stock raw materials in huge quantities.)
Entire establishment can be shifted to a new location (if need
arises e.g. Fire, Floods etc.)
One can insure animals.
Less energy requirement. Biogas plant fed with cow dung
can supply maximum energy to meet farms day to day
requirement. Decomposed slurry of such plant can also be
effectively used as organic manure.
It is eco-friendly and does not cause environmental pollution
as compared to other industries.
A Case

Dairy farmer Surendra Rai says he has always worried

about making ends meet after he stops working.
This was until recently - when he was offered the chance to
take part in a Milk Cooperative scheme in Bihar, one of
India's poorest and most backward states.

Milk to flush out Vidarbha
farmers' woes!
Mumbai, Aug 06:
The national bank for agriculture and rural development (NABARD) believes
that the milk cans can get back the life of farmers in drought hit Vidarbha
region of Maharashtra.
The bank, which conducted a study along with the NDDB, feels that setting
up dairy cooperatives modelled on Gujarat's 'Operation Flood' could ease
agrarian distress and stop suicides by farmers in the region.
The two organisations have decided to create an institutional structure
for collecting, processing and marketing milk in the region.
NABARD and NDDB propose to create the formal linkages, costing about
Rs 100 crore.
Villagers would be motivated to purchase new animals by offering credit
facility through banks. "We have to motivate people to take up the dairy
business and develop a milk-van route and establish linkages with the
dairies and chilling centres," Srinivasan said.

The Winning Edge…..

A vast market for dairy products is being built as disposable incomes increase.
The milk production is pre-dominantly rooted in the cooperative system. It's focus is on the
small rural farmer having one or two cows/buffaloes, yielding 2-3 litres of milk per animal.

Setback …

A very large portion of the milk market in India is still in the hands of the un organized
sector (only 22-24% is accounted for by private companies and cooperatives).
Dairying is perceived as a subsidiary activity by farmers.
Market disorder in the post-liberalization period. Among them are:
Over-capitalization in the private dairy sector
Ineffective enforcement of standards of processing, hygiene and quality
A near absence of any monitoring mechanism to enforce market discipline.
These threats need to be countered to protect the long-term interests of milk
producers, their organizations, as well as of the consumer.

Way Ahead …

Identify the areas in which there is a need for better forward market linkages by
identifying milk producer clusters and encouraging companies to procure milk from
Strengthening the marketing to survive the onslaught of the private sector
Efforts to reduce the growing gap between milk production and its marketing
through the JV’s.
Designing co-operative companies/JVs under the changed economic scenario
Ratify NDDB's new direction in the Parliament to avoid back door privatization.
Raising productivity of the dairy farms.
Access to formal credit at market interest rate.
Recruit, train and motivate increasing numbers of women to work for

Buffalo Milk Vs. Cow Milk

No difference in nutritive value: There is practically no difference in the

nutritive value and digestibility of milk and milk products obtained from cow
and buffalo milks.

Lower cholesterol content: Significantly, cholesterol content of buffalo milk

is 0.65 mg/g as compared to the corresponding value of 3.14 mg/g for cow

More proteins: Animal bioassays have shown the Protein Efficiency Ratio
(PER) value of buffalo milk proteins to be 2.74 and that of cow milk as
2.49. It will be seen that buffalo milk has about 11.42 per cent higher
protein than cow milk.

More important minerals: Buffalo milk is also superior to cow milk in terms
of important minerals, namely calcium, iron and phosphorus which are higher
by 92 per cent, 37.7 per cent and 118 per cent respectively than those
present in cow milk.

More vitamin A: Buffalo metabolizes all the carotein into vitamin A, which is
passed on to milk as such. range of the fat-rich dairy products. 38
More viable commercially: Buffalo milk is commercially
more viable than cow milk for the manufacture of fat-based and SNF-
based milk products, such as butter, ghee and milk powders because of its
lower water content and higher fat content.

Most significantly, the lower cholesterol value should make it more popular
in the health conscious market. By the virtue of greater opacity of casein
miscelles, coupled with higher levels of colloidal proteins, calcium and
phosphorus, buffalo milk is more densely white and has superior whitening
properties as compared to cow milk.

Therefore, unlike the cow milk (which is pale-creamish yellow in color) and
cow milk fat (which is golden yellow in color), buffalo milk is distinctively
whiter. UHT-processed buffalo milk and cream are intrinsically whiter and
more viscous than their cow milk counterparts, because of conversion of
greater levels of calcium and phosphorus into the colloidal form. Buffalo
milk is, therefore, more aptly suitable for the production of tea and
coffee whiteners than cow milk.Higher innate levels of proteins and fat
render buffalo milk a more economical alternative to cow milk for the
production of casein, caseinates, whey protein concentrates and a wide