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University Of Mumbai ALKESH DINESH MODY INSTITUTE FOR FINANCIAL AND MANAGEMENT STUDIES

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GUJRAT COOPERATIVE MILK MARKETING FEDRATION LTD.

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Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF) Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF), which today is jointly owned by some 2.8 million milk producers in Gujarat, India. Currently Unions making up GCMMF have 2.8 million producer members with milk collection average of 10.16 million liters per day.

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GCMMF Today GCMMF is India's largest food products marketing organisation. It is a state level apex body of milk cooperatives in Gujarat, which aims to provide remunerative returns to the farmers and also serve the interest of consumers by providing affordable quality products. GCMMF markets and manages the Amul brand. From mid-1990s Amul has entered areas not related directly to its core business.

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Its entry into ice cream was regarded as successful due to the large market share it was able to capture within a short period of time – primarily due to the price differential and the brand name. It also entered the pizza business, where the base and the recipes were made available to restaurant owners who could price it as low as 30 rupees per pizza when the other players were charging upwards of 100 rupees.

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Company info The Gujarat Cooperative Milk Marketing Federation Ltd, Anand (GCMMF) is the largest food products marketing organisation of India. It is the apex organization of the Dairy Cooperatives of Gujarat. This State has been a pioneer in organizing dairy cooperatives and our success has not only been emulated in India but serves as a model for rest of the World.

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Over the last five and a half decades, Dairy Cooperatives in Gujarat have created an economic network that links more than 2.8 million village milk producers with millions of consumers in India and abroad through a cooperative system that includes 13,141 Village Dairy Cooperative Societies (VDCS) at the village level, affiliated to 13 District Cooperative Milk Producers’ Unions at the District level and GCMMF at the State level.

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Company Info. (Turnover) The turnover of GCMMF (AMUL) during 2008-09 was Rs. 67.11 billion. It markets the products, produced by the district milk unions in 30 dairy plants, under the renowned AMUL brand name. The combined processing capacity of these plants is 11.6 million litres per day, with four dairy plants having processing capacity in excess of 1 million Litres per day.

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The farmers of Gujarat own the largest state of the art dairy plant in Asia – Mother Dairy, Gandhinagar, Gujarat – which can handle 2.5 million litres of milk per day and process 100 MTs of milk powder daily. During the last year, 3.1 billion litres of milk was collected by Member Unions of GCMMF. Huge capacities for milk drying, product manufacture and cattle feed manufacture have been installed. All its products are manufactured under the most hygienic conditions.

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All dairy plants of the unions are ISO 9001-2000, ISO 22000 and HACCP certified. GCMMF (AMUL)’s Total Quality Management ensures the quality of products right from the starting point (milk producer) through the value chain until it reaches the consumer.

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The Birth of Amul and development of India’s Dairy Cooperative Movement The birth of Amul at Anand provided the impetus to the cooperative dairy movement in the country. The Kaira District Cooperative Milk Producers’ Union Limited 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).

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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.

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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 in 1946.

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Management of GCMMF The Cooperative was further developed & managed by Dr. V Kurien along with Shri H M Dalaya. The first modern dairy of the Kaira Union was established at Anand (which popularly came to be known as AMUL dairy after its brand name). Indigenous R&D 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.

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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.

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Improvement brought by GCMMF Ever since the movement was launched fifty-five years ago, Gujarat’s Dairy Cooperatives have brought about a significant social and economic change to our rural people. The Dairy Cooperatives have helped in ending the exploitation of farmers and demonstrated that when our rural producers benefit, the community and nation benefits as well.The Gujarat Cooperative Milk Marketing Federation Ltd. cannot be viewed simply as a business enterprise.

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It is an institution created by the milk producers themselves to primarily safeguard their interest economically, socially as well as democratically. Business houses create profit in order to distribute it to the shareholders. In the case of GCMMF the surplus is ploughed back to farmers through the District Unions as well as the village societies. This circulation of capital with value addition within the structure not only benefits the final beneficiary – the farmer – but eventually contributes to the development of the village community. This is the most significant contribution the Amul Model cooperatives has made in building the Nation.

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The Three-tier "Amul Model" Village Dairy Cooperative Society (VDCS) District Cooperative Milk Producers’ Union (Milk Union) State Cooperative Milk Federation (Federation)

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Village Dairy Cooperative Society (VDCS) The milk producers of a village, having surplus milk after own consumption, come together and form a Village Dairy Cooperative Society (VDCS). The Village Dairy Cooperative is the primary society under the three-tier structure. It has membership of milk producers of the village and is governed by an elected Management Committee consisting of 9 to 12 elected representatives of the milk producers based on the principle of one member, one vote. The village society further appoints a Secretary (a paid employee and member secretary of the Management Committee) for management of the day-to-day functions. It also employs various people for assisting the Secretary in accomplishing his / her daily duties. The main functions of the VDCS are as follows:

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Collection of surplus milk from the milk producers of the village & payment based on quality & quantity. Providing support services to the members like Veterinary First Aid, Artificial Insemination services, cattle-feed sales, mineral mixture sales, fodder & fodder seed sales, conducting training on Animal Husbandry & Dairying, etc. Selling liquid milk for local consumers of the village Supplying milk to the District Milk Union.

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District Cooperative Milk Producers’ Union (Milk Union) The Village Societies of a District (ranging from 75 to 1653 per Milk Union in Gujarat) having surplus milk after local sales come together and form a District Milk Union. The Milk Union is the second tier under the three-tier structure. It has membership of Village Dairy Societies of the District and is governed by a Board of Directors consisting of 9 to 18 elected representatives of the Village Societies. The Milk Union further appoints a professional Managing Director (paid employee and member secretary of the Board) for management of the day-to-day functions. It also employs various people for assisting the Managing Director in accomplishing his / her daily duties. The main functions of the Milk Union are as follows:

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Procurement of milk from the Village Dairy Societies of the District Arranging transportation of raw milk from the VDCS to the Milk Union. Providing input services to the producers like Veterinary Care, Artificial Insemination services, cattle-feed sales, mineral mixture sales, fodder & fodder seed sales, etc. Conducting training on Cooperative Development, Animal Husbandry & Dairying for milk producers and conducting specialised skill development & Leadership Development training for VDCS staff & Management Committee members. Providing management support to the VDCS along with regular supervision of its activities. Establish Chilling Centres & Dairy Plants for processing the milk received from the villages.

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State Cooperative Milk Federation (Federation)   The Milk Unions of a State are federated into a State Cooperative Milk Federation. The Federation is the apex tier under the three-tier structure. It has membership of all the cooperative Milk Unions of the State and is governed by a Board of Directors consisting of one elected representative of each Milk Union. The State Federation further appoints a Managing Director (paid employee and member secretary of the Board) for management of the day-to-day functions. It also employs various people for assisting the Managing Director in accomplishing his daily duties. The main functions of the Federation are as follows:

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Marketing of milk & milk products processed / manufactured by Milk Unions. Establish distribution network for marketing of milk & milk products. Arranging transportation of milk & milk products from the Milk Unions to the market. Creating & maintaining a brand for marketing of milk & milk products (brand building). Providing support services to the Milk Unions & members like Technical Inputs, management support & advisory services. Pooling surplus milk from the Milk Unions and supplying it to deficit Milk Unions. Establish feeder-balancing Dairy Plants for processing the surplus milk of the Milk Unions.

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Achievements of GCMMF 2.8 million milk producer member families 13,759 village societies 13 District Unions 8.5 million liters of milk procured per day Rs. 150 million disbursed in cash daily GCMMF is the largest cooperative business of small producers with an annual turnover of Rs. 53 billion The Govt. of India has honoured Amul with the “Best of all categories Rajiv Gandhi National Quality Award”.

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