The Prayas ePathshala

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17 January 2023 – The Indian Express

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Amul as a model of a good Cooperative

Context:

  • At the most fundamental level, cooperative organisations play a critical role in the organised and inclusive development of society.
  • Businesses known as cooperatives are owned by its members, who may be producers or consumers. These members regard the cooperative largely for the services it provides, despite the fact that they may own shares.
  • These services, if provided by a producer-owned cooperative, can include purchasing, processing, and marketing the members’ produce or providing them with access to raw materials.
  • Success criteria in this scenario are not earnings per share or dividend payout ratios, but rather the cost of the produce and the speed with which it is paid for, or the provision of high-quality cow feed, farm extension and animal healthcare support, fertilisers, and credit at least cost.
  • Contrarily, businesses are investor-owned entities whose main objective is to maximise return on money.
  • This is reflected in the value of those shares, regardless of whether or not they are traded on an exchange.
  • The investor-owned ultimately seeks capital growth and the highest price for the shares he might choose to sell or commit to purchase in order to raise additional funds.
  • Gujarat Cooperative Milk Marketing Federation (GCMMF). AMUL is a fantastic example of collaboration.
  • The largest dairy cooperative in Gujarat, it would eventually be owned by 36.4 lakh farmers. 18.154 village-level organisations across the state receive milk from it.
  • Between 2001-02 and 2021-22, GCMMF’s sales turnover went from Rs 2,336 crore to Rs 46,481 crore, and the average daily volume of milk purchased rose from 47.32 lakh litres to 263.66 lakh litres, including 42.68 lakh litres from outside Gujarat.
  • However, the price at which her milk is purchased is significant to the farmer-owner, just as the share price of a firm is important to an investor-owner.
  • Over the past 20 years, the district milk unions of the GCMMF have boosted the average procurement price paid to farmers from Rs 184 to Rs 820 per kg of fat.
  • It was enabled by capable management.
  • Since Verghese Kurien to B M Vyas and R S Sodhi, the Amul organisational model has been built on an elected board of directors acting through a chief executive and his team, which comprises marketing and financial experts, project engineers, veterinarians, agronomists, and nutritionists.
  • This paradigm distinguishes the managing directors of other state dairy cooperative federations from GCMMF, who are primarily Indian Administrative Service personnel who answer to secretaries of the animal husbandry and dairying departments.

The outcomes of the AMUL model are as follows, which other cooperative societies ought to imitate:

  • Contribution of cooperative societies to the socioeconomic uplift of impoverished segments in society, as well as the empowerment of women and farmers
  • The participants must feel a sense of ownership and belonging for a group or programme, such as the Swachh Bharat Abhiyan, Self Help Groups, etc., to be successful.
  • It also emphasises the importance of organisational democracy, a positive work environment, and a focus on quality control and customers for the long-term expansion and success of a company.
  • The concept of Farmer Producer Organizations (FPO) is also supported and strengthened in order to give farmers more negotiating power, better market pricing, and simpler access to high-quality inputs.
  • the importance of staying current in your field by integrating the newest technologies and changing with the times.
  • being open and responsible to the management and board.
  • Corporate social responsibility’s significance (CSR).

Conclusion:

  • The Amul approach has been about both farmer empowerment and valuing professional management in organisations operated by and benefiting producers.
  • As a reflection of the times, the National Dairy Development Board, which helped launch India’s White Revolution, has probably lost all significance. Despite having IAS officers in charge of it after 2014, it does not currently have a permanent chairperson.

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