Lesson 1.

Dairy development in India

1.1 RISE OF COOPERATIVES IN INDIA:

The India District Co-operative Milk Producers' Union was registered on December 14, 1946 as
a response to exploitation of marginal milk producers by traders or agents of existing dairies in
the small town named Anand (in Kaira District of Gujarat). Milk Producers had to travel long
distances to deliver milk to the only dairy, the Polson Dairy in Anand. Often milk went sour as
producers had to physically carry the milk in individual containers, especially in the summer
season. These agents arbitrarily decided the prices depending on the production and the season.
Milk is a commodity that has to be collected twice a day from each cow/buffalo. In winter, the
producer was either left with surplus / unsold milk or had to sell it at very low prices. Moreover,
the government at that time had given monopoly rights to Polson Dairy (around that time Polson
was the most well-known butter brand in the country) to collect milk from Anand and supply it
to Bombay city in turn. India ranked nowhere amongst milk producing countries in the world
because of its limitations in 1946 British Raj.
Angered by the unfair and manipulative trade practices, the farmers of Kaira District approached
Sardar Vallabhbhai Patel under the leadership of the local farmer leader Tribhuvandas Patel.
Sardar Patel advised the farmers to form a Cooperative and supply milk directly to the Bombay
Milk Scheme instead of selling it to Polson. He sent Sh. Morarji Desai to organize the farmers. In
1946, the farmers of the area went on a milk strike refusing to be further oppressed. Thus, the
Kaira District Cooperative was established to collect and process milk in the District of Kaira in
1946. Milk collection was also decentralized, as most producers were marginal farmers who
were in a position to deliver 1-2 litres of milk per day. Village level cooperatives were
established to organize the marginal milk producers in each of these villages.
The Cooperative was further developed and managed by Dr. V Kurien along with Shri H M
Dalaya. The first modern dairy of the Kaira Union was established at Anand. Indigenous
research and development and technology development at the Cooperative had led to the
successful production of skimmed milk powder from buffalo milk – the first time on a
commercial scale anywhere in the world. The success of the dairy co-operative movement spread
rapidly in Gujarat. Within a short span five other district unions – Mehsana, Banaskantha,
Baroda, Sabarkantha and Surat were organized. In order to combine forces and expand the
market while saving on advertising and avoid a situation where milk cooperatives would
compete against each other it was decided to set up an apex marketing body of dairy cooperative
unions in Gujarat. Thus, in 1973, the Gujarat Co-operative Milk Marketing Federation was
established. The Kaira District Co-operative Milk Producers’ Union Ltd. which had established
the brand name Amul in 1955 decided to hand over the brand name to GCMMF (AMUL).
Dr. Verghese Kurien, the World Food Prize and the Magsaysay Award winner, was the architect
of India’s White Revolution, which helped India emerge as the largest milk producer in the
world. Impressed with the development of dairy cooperatives in Kaira District and its success,
Shri Lal Bahadur Shastri, the then Prime Minister of India during his visit to Anand in 1964,
asked Dr. V Kurien to replicate the Anand type dairy cooperatives all over India. Thus, the
National Dairy Developed Board was formed and Operation Flood Programme was launched for
replication of the Amul Model all over India.
1.2 ACHIEVEMENTS OF CO-OPERATIVE MOVEMENT IN INDIA:
1. The phenomenal growth of milk production in India – from 20 million MT to 100 million MT
in a span of just 40 years.
2. Encouraged Indian dairy farmers to keep more animals, which has resulted in the 500 million
cattle & buffalo population in the country – the largest in the World.
3. The dairy cooperative movement has assembled a large base of more than 13 million milk
producer families.
4. The dairy cooperative movement has spread across the length and breadth of the country,
covering more than 125,000 villages of 180 Districts in 22 States.
5. The dairy cooperatives have been able to maintain democratic structure at least at the grass-
root level with the management committee of the village level unit elected from among the
members in majority of the villages.
6. Bridged the social divide of caste, creed, race, religion & language at the villages, by offering
open and voluntary membership.
7. Propagated the concepts of scientific animal husbandry & efficiency of operations, which has
resulted in low cost of production & processing of milk.
8. The movement has been successful because of a well-developed procurement system &
supportive federal structures at District & State levels.
9. Dairy Cooperatives have always been proactive in building large processing capacities, which
has further propelled growth of milk production.
10. The dairy cooperatives are among those few institutions in India, which still cherish a strong
Cooperative identity, values and purpose.
11. The dairy cooperatives have removed the poor farmers of India from the shackles of agents
& middlemen and provided an assured market for their produce.
12. Dairy cooperatives have been able to create a market perception of honesty & transparency
with their clean management.
1.3 NATIONAL DAIRY DEVELOPMENT BOARD (NDDB):
The National Dairy Development Board is an institution of national importance setup by an Act
of Parliament of India. The main office is located in Anand, Gujarat with regional offices
throughout the country. NDDB's subsidiaries include Mother Dairy, Delhi.
It was founded by Dr. Verghese Kurien and Dr. Amrita Patel is the current Chairman of the
National Dairy Development Board, Anand.
The National Dairy Development Board (NDDB) was created in 1965, fulfilling the desire of the
then Prime Minister of India - the 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 management to
successfully capture liquid milk and milk product markets while supporting farmer investment
with inputs and services. The major success of this mission was achieved through the World
Bank financed Operation Flood, which lasted for 26 years from 1970 to 1996 and was
responsible for making India the world's largest producers of milk.
NDDB has now integrated 96,000 dairy co-operatives in what it calls the Anand Pattern, linking
the village society to the state federations in a three-tier structure.
NDDB launched its Perspective Plan 2010 with four thrust areas: Quality Assurance,
Productivity Enhancement, Institution Building and National Information Network.
In addition, NDDB also promotes other commodity-based cooperatives, allied industries and
veterinary biologicals on an intensive and nation-wide basis.
1.4 OPERATION FLOOD/ WHITE REVOLUTION:
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 the largest producer of milk and milk products, and hence is also
called the White Revolution of India.
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. Objectives of Operation Flood's included:
 Increase milk production ("a flood of milk")
 Augment rural incomes
 Fair prices for consumers
1.4.1 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 donated 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 milk-sheds with consumers
in India's major metropolitan cities: Delhi, Mumbai, Kolkata and Chennai. Thus, establishing
mother dairies in four metros.
Operation flood, also referred to as “White Revolution” is a gigantic project propounded by
Government of India for developing dairy industry in the country. The Operation Flood – 1
originally meant to be completed in 1975, actually spanned the period of about nine years from
1970–79, at a total cost of Rs.116 crores.
PHASE II
Operation Flood Phase II (1981–1985) increased the milk-sheds 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 4,250,000 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 milk by producers' cooperatives
increased by several million litres a day.
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. Milk-sheds 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.