Project on Make a study of two cooperative institutions (for example, milk cooperatives) to compare the organisational and financial structure of the organisations, production capacity and output, marketing strategies, sales, market share, etc.

PROJECT NO. 03 In Frank ISC Economics Class 11^th

PROJECT NO. 03 In Frank ISC Economics Class 11^th

Make a study of two cooperative institutions (for example, milk cooperatives) to compare the organisational and financial structure of the organisations, production capacity and output, marketing strategies, sales, market share, etc.

Answer:-

Milk cooperatives have played an important role in the development of the dairy industry in India. India has achieved significant success in milk production. India is the world's largest milk producer, with 198.4 million tonnes of milk production in 2019-20. Milk cooperatives have emerged as the main organisation for milk production. As on 31 March 2018, there were 18.6 lakh dairy cooperatives societies at the village level across the country with more than 16 million milk producers as their members. Their milk is processed in 218 District Cooperative Unions and marketed by 28 State Marketing Federations. These cooperatives collect and market 23 million litres of milk per day. However, currently, only 35 per cent of Indian villages are covered under the dairy cooperative network.

We take up two cases of milk cooperatives of Gujarat and Punjab with the brand names of their products-AMUL (Gujarat) and VERKA (Punjab). 

Verghese Kurien (1921-2012)

Verghese Kurien was born in Kozikode (Kerala) in 1921. He is known as the Father of White Revolution in India. He was the instrumental force in starting the Amul in 1955 - a brand which the contemporary generations of India can never forget. In the process, he invigorated dairy cooperative movement of milk producers in India. From a small cooperative producing a few hundred litres of milk a day, the Amul brand presently procures 246 million litres a day, with 3.64 million milk producers. Kurien, a young Michigan University alumni, spent his entire life in Anand, the town now known as India's milk city. Kurien launched 'operation flood, which helped transforming India from a milk deficit country into the world's largest milk producers and eventually ushered in India the 'White Revolution.' He transformed lives of women farmers empowering them with financial independence. Kurien's model of cooperatives motivated farmers across several states into milk cooperatives-a feat acclaimed by many countries of the world. He is remembered as the world's great agricultural leader of India. He was awarded Padma Shri (1965), Padma Bhushan (1966), Padma Vibhushan (1999) and Magsaysay Award (1963), World Food Prize (1989), among others numerous other awards, for his 'priceless' services to the people in India. 26th November, the birth day of the legend Kurien, is celebrated as National Milk Day.

Kaira District Cooperative Milk Producers' Union-Amul Brand

Kaira milk cooperative was established in September 1946 in a small town named Anand in the Kaira district of Gujarat to collect and process milk. It made a small beginning in collecting 250 litres of milk from two villages of Anand. Polson Dairy was the biggest dairy, which secured the rights of the government to procure milk from the entire Kaira district. It was set up to save the marginal milk farmers from exploitation at the hands of traders and dairy owners. Milk producers in Anand organised themselves into village dairy cooperatives. These village-level cooperatives federated into the Kaira District Cooperative Milk Producers' Union. It started producing and marketing milk products under the brand name Amul (which means priceless in Sanskrit) in 1955. The success of the Kaira cooperative movement spread rapidly in Gujarat. Five other district unions were organised subsequently. The milk cooperative of Gujarat organised itself into Gujarat Cooperative Milk Marketing Federation (GCMMF) in 1973 at the initiative of Verghese Kurien, who is known as the architect of India's white (milk) revolution. GCMMF is the apex organisation of the dairy cooperatives of Gujarat.

There are the three-tier organisational structures of milk cooperatives of Gujarat:

1. Dairy cooperative society at the village level for the collection of milk.
2. District producers' union at the district level for milk procurement and processing into milk and milk products. There are 18 District Cooperative Milk Producers Unions. Kaira District Cooperative Milk Producers' union is one of the 18 such unions.
3. Milk Federation is an apex body at the state level, known as Gujarat Cooperative Milk Marketing Federation (GCMMF), for marketing milk and milk products processed/manufactured by milk unions.

The objectives of GCMMF are:                

• It provides remunerative returns to the farmers/milk producers by eliminating middlemen and thereby getting them competitive milk prices.
• It serves the interest of the consumers by providing affordable quality milk and milk products.
• It procures about 24.6 million litres of milk per day (2020-21) from the producer members.
• More than 70 per cent of the milk producers are small and marginal farmers and landless.
• The annual sales turnover of GCMME was 3,92,480 million during 2020-21.
• Amul's product range includes milk, milk powder, butter, ghee, cheese, pizza cheese, Dahi, yoghurt, chocolate, ice cream, Gulab Jamuns, Shrikhand, flavoured milk and other products.
• There is an elaborate distribution network for marketing Amul products. Amul products are available in over 7.2 lakh retail outlets across the country through its network of 9,200 wholesale distributors/ stockists and 61 sales offices. GCMMF handles the distribution of final products and coordinates with retailers and dealers.
• Amul is the largest food brand in India and the world's largest pouched milk producer, with an annual turnover of 769,660 million during 2018-19. Amul has emerged as the No. 1 brand in the country with a market share of 80 per cent in butter and over 60 per cent in milk powder and cheese in 2017-18. Amul butter brand ranks sixth in the global butter market.
• The Amul model has enabled India to become the world's largest producer of milk in the world. It has brought about the 'White Revolution' in India.

MILKFED-Verka Brand

Working on the Anand pattern, milk cooperatives at the village level started in Punjab in 1963 with the setting up of the first milk plant at Verka, a small village near Amritsar. The Punjab State Cooperative Milk Producers' Federation Ltd, popularly known as MILKFED, came into existence effectively in 1983 (though it was started in 1973) and it is based in Chandigarh. Verka is a flagship brand of MILKFED.

The organisational structure of MILKFED is a three-tier system:

1. Milk producers' cooperative societies at the village level.
2. Milk producers' unions at the district level. There are 11 such District Cooperative Milk Unions.
3. Milk Federation is an apex body at the state level.

The objectives of MILKFED are:

1. To provide a remunerative market to the milk producers to give a better deal and to motivate them to increase milk production,
2. To promote the production, procurement and processing of milk within the framework of milk cooperatives,
3. To provide technical inputs to the milk producers for enhancement of milk production.
4. To provide quality milk and milk products to consumers at rates.

The important facets and activities of MILKFED are:

• There is a strong network of milk producers' cooperative societies at the village level. There were over 7300 milk producers cooperatives at the village level with over 4 lakh milk producers in October 2021.
• Milk unions at the state level procure on average 13 lakh litres of milk per day. In terms of procurement of milk, MILKFED holds the 7th position among different states of the country (after Gujarat, Rajasthan, Maharashtra and Tamil Nadu, etc.).
• MILKFED markets on average 9.27 lakh litres of packed milk per day in different varieties (2013-14).
• MILKFED produces and markets milk and milk products under the brand name 'Verka'.
• Verka has more than 400 products. The product range of Verka includes pasteurised milk, ghee, butter, skimmed milk powder, whole milk powder, cheese, flavoured milk, ice cream, lassi, dahi, kheer, sweets, etc.
• MILKFED has a good network of regional offices and a strong distribution channel.
• The annual sales turnover of MILKFED was around 3100 crore in 2018.
• Verka products are available not only in the nearby markets but some of the products are available throughout the national market. Verka brand has reached foreign markets as well. Verka ghee, for instance, is exported to markets in Middle-East countries, Australia, Malaysia, New Zealand, Japan, etc.

In light of the two milk cooperatives operating in Gujarat and Punjab, you may also study the milk cooperatives operating in other states such as Rajasthan, Maharashtra, etc. You may compare different milk cooperatives in terms of their organisational structure, number of cooperatives and their membership, the volume of production, annual turnover, range of products produced, market share, etc.

 

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