theindialog

August 27, 2009

Amul (Anand Milk Union Ltd.)

Filed under: Conversation,Economics,F&B,Gujarat — loggers @ 12:20 am

We visited the headquarters of Amul (Asia’s largest food products company) in Anand, Gujarat, and spoke to the MD after touring the milk factory. Unlike other dairy product companies, Amul is a co-operative, wholly owned by thousands of villagers who become members by paying a fee of INR 10. These members are also Amul’s milk suppliers, selling their cattle’s milk to the company. They are paid in cash based on the fat content of the milk they sell. They also receive training on animal husbandry from the company and other welfare benefits. They democratically elect local representatives, who in turn select the firm’s board of directors. The entire retained profits of the firm’s activities thus go back to the villagers, in the form of development aid and/or dividends.

Demonstration of tech infrastructure in Amul lobby

Demonstration of tech infrastructure in Amul lobby

The Amul initiative gives otherwise distressed farmers an opportunity to raise cash for daily sustenance. This cooperative has brought prosperity to the villages it operates in, and reduced farmer suicides, by providing them a second source of income. As advised by the MD of Amul, we plan to visit an ‘Amul village’ and get a true sense of the development that the organization has brought about on the ground level.

The Amul complex in Anand, Gujarat

The Amul complex in Anand, Gujarat

We expected this unusual structure to make the management of the firm a little more challenging. We found out however, that the Board (comprising of ‘illiterate’ villagers) interfered little with the top management. The MD had several opportunities to expand, take on debt and make investments in technology even though this meant lower returns to the cooperative members. Also, political corruption/interference within the electoral procedures of Amul was limited, especially when compared to labor unions, university student councils and other democratic bodies in India.

Cow and milkman figurines in the waiting room

Cow and milkman figurines in the waiting room

We were positively surprised by this level of efficiency, and walked out with a favorable impression of this ‘socialist’ organization, despite having been trained in America to think like die-hard capitalists.

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3 Comments »

  1. […] rest is here:  Amul, Anand […]

    Pingback by Amul, Anand | LatNet.BIZ Internet Business News — August 27, 2009 @ 1:30 am | Reply

  2. hi,great work done by all of u at AMUL.its gud to c pic and know about Anand milk union ltd.and ‘Amul Village’ great scheme by Amul and congrats to MD Amul and good income sources for farmers.

    Bhupi

    Comment by bhupinder — August 28, 2009 @ 1:08 pm | Reply

  3. Quite informative.. great going!

    Comment by Karan — August 29, 2009 @ 1:18 pm | Reply


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