How Dreams Turn Reality

 

Unfortunately, we forgot that the biggest asset of India is its people. Any sensible government must learn to unleash the energy of its people and get them to perform instead of trying to get a bureaucracy to perform.      —Dr Verghese Kurien

The half or one litre milk packet that millions of consumers open each day is the output of innumerable dairy farmers and their cattle and buffaloes. This milk packet contains more than milk; it is a symbol of social and economic empowerment of our farmers: the marginal farmer with only one litre milk to spare has as equal an access to the market as a big farmer who may be trading in hundreds of litres. And it is this indomitable strength and spirit of cooperatives that Dr Kurien recognised and built an institution that led the nation towards its journey of becoming the global leader, by several miles, in milk production.

There is a major difference between Indian agriculture and dairying. Milk production has certain inherent and distinct advantages. First, the household that produces milk has the option to use it as family’s food and nutritional security. Secondly, sale of milk ensures regular income on a daily basis rather than awaiting the crop’s harvest. It is not uncommon to read reports of suicide in farmer families that depend exclusively on crops with no milk production to fall back upon. If the farmer family has even two cows or buffaloes, it is assured of some income and food security. It is against this background that one should appreciate that the profile of the dairy sector in India is in true terms a profile in courage of the poor dairy farmers.

In 1965, Dr Kurien and Lal Bahadur Shastri, then India’s Prime Minister, recognised the need to revolutionise India’s dairy system from the bottom up and decided that the Amul approach should become the basis of national dairy development policy. It was understood that Amul’s success could be attributed to four important factors: the farmers owned the dairy; their elected representatives managed the village milk societies and the district union; they employed professionals to operate the dairy and manage its business; and, most importantly, the cooperatives were sensitive to the needs of farmers and responsive to their demands. The National Dairy Development Board (NDDB) was set up with this primary objective of replicating the Amul model.

 

 

As the world’s largest producer, the Indian dairy sector is a marvel in itself. With the launch of Operation Flood in 1970, targeting milk production and growth, our annual milk production has grown from 22 million tonnes (mt) in 1970 to 176.3 mt in 2017-18, a growth of eight times in less than five decades; and what is truly encouraging is the consistency of this growth. This has consequently helped increase the daily per capita milk availability from 114 grams in 1970 to 375 grams in 2017-18, an availability that is higher than the global average of 267 grams. This is again a marvel because the availability of milk has been growing despite the booming population.

For sheer numbers, Indian dairying has no match in the world. The figures are mind-boggling. Some 70 million farmers maintain a milch herd of 125.35 million — 74.18 million cows and 51.17 million buffaloes. Fed largely on crop residues, their milk yield is a whopping 176.3 mt, accounting for some 20 per cent of the world output. Starting as a trickle in some 500,000 remote villages, a unique collection system transforms this feeble flow into a veritable flood of 480 million litres for rural and urban consumers every day. The average holding per farmer is less than two cattle/buffaloes, but the collective output makes us the global leader. In fact, India and its farmers add more milk to the pool each year than the annual production of the entire Europe.

This humungous milk production in India is also creditable because of the meagre resources invested in it. Most of the milk is produced by the small and marginal farmers and landless labourers. Their labour input is accounted for more as an opportunity than a cost. Most research studies have concluded that a large majority of milk producers hardly make any profit. Why do they then produce milk? The answer lies in tradition, wisdom and culture deeply ingrained in our society, especially in the rural India. As the civilisation dawned, India was perhaps the first nation to domesticate cows for milk production. In fact, the domestication as an economic activity in many nations such as the USA and Brazil owes to the Indian Zebu cattle imported during the nineteenth century. Milk has since been an essential component of our food, and was not considered a commodity for sale. Even today, a large number of the milk producing farmers produce milk primarily for home consumption and it is only the balance that gets sold in the market. The money earned by such farmer families is considered more a bonus than a profit. However, realisation has of late dawned upon the rural community that commercial returns and value in milk production is much higher than crop husbandry, while the associated risks much lower. Consequently the quantity of milk that goes for processing and product manufacturing is registering an exponential increase.

India achieved sufficiency in milk production by improving efficiencies in milk production, procurement, processing and marketing through the Anand model of cooperative dairying planned and executed by Dr Kurien as the founder-chairman of NDDB. Dairy cooperatives provided remunerative prices to milk producers even during the flush season and this being an important measure of farmers’ welfare and socio-economic security proved a trigger for increased milk production. Cooperatives also provided inputs and other services to milk producers to increase the productivity of their cattle, thus making dairy farming a profitable business.

The primary milk producer, especially in the cooperative fold, shares nearly 70% of what the consumer pays, quite a contrast to what the remuneration of a crop farmer is where the intermediaries corner the bulk of consumer revenues. We are not only the world’s largest but also the most efficient milk producer. In the harvest season, the farm price of tomatoes, potatoes and onions can go down to 10-20% of the lean season price; a case in point is the berserk pattern of onion prices which have ranged from Rs 10 to 90 per kilogram over the past six to eight months. On the other hand, in case of milk, the flush season price rarely goes below 90% of the lean season price, a price fluctuation that is hardly ever perceptible. And this is not only a rarity in commodity price market but reflective of great efficiency across the production, procurement, processing and marketing value chain of milk. Further, what is encouraging is that the production of milk has been increasing over the decades without any significant diversion of land or water from agricultural crops to dairy.

The challenge before us now is to give our milk producers better returns while expanding the market. Our halwais sell milk solids, better known as mithais which contain 15-20% moisture and 30% sugar, at prices higher than whole milk powder. It, therefore, makes immense business sense that dairy cooperatives now graduate to mechanised manufacture of traditional dairy products. The strength of our traditional products lies in their mass appeal, unlike chocolates or pies etc. The market, as also the operating margins, for the traditional products far outstrips that of western dairy products. It is a unique opportunity for our dairy cooperatives to further upscale the production of our own traditional products and sweets. This would surely be a win-win situation for the farmer and consumer both as well as a tribute to the man whose vision inspired the cooperative revolution in the milk sector. After all, the legacy must be carried forward.

Amul, or the Gujarat Cooperative Milk Marketing Federation, which its official moniker, India’s largest and most reputed dairy brand, established in November 1973 by Dr Kurien, is today a Rs 33,150 crore-turnover cooperative, procuring an average of 23 million litres per day from 3.6 million producer-members. In Gandhinagar, Gujarat, AmulFed Dairy’s capacity expansion from 35 lakh litres per day to 50 lakh litres per day further underlines its status as Asia’s largest dairy plant at a single location. Amul’s marketing successes are recognised as one of independent India’s most outstanding of achievements, and mind you it is a cooperative whose shareholders are neither market speculators nor financial investors, but millions of rural farming households. In the long term, Amul aims to establish itself as the largest dairy organisation in the world, rising up from its current ranking as the ninth-largest dairy organisation globally.

‘Mero gaam kaatha parey,
Jaha doodh ki nadiya baahe,
Jaha koyal kahu kahu gaye,
Mhare ghar angna na bhoolo na’

This title song from the memorable feature film, Manthan (The Churning), is symbolic of the cooperative spirit that permeates the dairy sector. Produced by 500,000 rural milk producers of Gujarat in 1976, this film underlines the basic philosophy that a true cooperative is built on the determined commitment of its members and once established there is no stopping. And, the one person who more or less single handledly organised millions of small and marginal farmers into very successful organisations, like Amul, was Dr Verghese Kurien.

 

Amul, established in 1973 by Dr Verghese Kurien, is today a Rs 33,150-crore turnover cooperative giant, procuring an average of 23 million tonnes litres of milk per day from a 3.60 million produce members

Today, Amul is the most creative farmer cooperative leadership model in the global food system. It has been applauded the world over for not only changing the dairy value chain in India but also throughout the developing and developed world. It is not merely a commodity brand but a movement that is a living embodiment of economic freedom and empowerment of farmers. It has given farmers the courage to dream. Though the private sector, large MNCs and retail chains are rapidly expanding their dairy operations in the country, Amul is destined to continue to dominate as the undisputed market leader for at the heart and soul of this organisation is the primary producer i.e. the farmer and the never say die spirit of cooperation.

The dairy industry owes to Dr Kurien the values of integrity, dedication and commitment, the values he lived by and expected others to imbibe in letter and spirit. The greatest tribute the nation ought to pay him is to instil and reinforce these core values in the entire gamut of cooperative governance for the economic and social betterment of the farmers, especially the small and marginal; and truly realise the laudable objective of doubling farmers’ income, not in notional but in real terms. Today, like the Amul mascot, the entire nation must respectfully salute this real Bharat Ratna and rededicate itself to the empowerment of millions of rural households.