1. The Cooperative System and the Evolution of the Indian Dairy
Industry
From being milk deficient, with both producers and consumers being regularly exploited by
middle men, the cooperative movement brought about a paradigm shift in the Indian dairy
Industry. The country is now the world’s biggest producer of Milk with the dairy industry
becoming one of the most lucrative ventures for investors.
India was declared the world’s largest producer of milk in 1999. This was a moment of pride
for India as it was a milk-deficit country earlier. This transformation was a result of the
collective efforts of various government and semi-government bodies to promote milk
production. In 1970 ‘Operation Flood’ was initiated by the National Dairy Development Board
(NDDB) with the aim of replicating the Anand/Amul Model across the country.

2. This model was first implemented in the Kheda (formerly Khaira) district in Gujarat and was
the first step taken by the Indian government to regularise the milk production and supply.
This model was built around a group of cooperatives or institutions owned by rural farmers,
who wanted to market their milk collectively. The basic philosophy of the Anand Model was
the establishment of a vertically integrated structure which created a direct link between the
milk producers and the ultimate consumers. The purpose of the `Operation Flood’ was to
revitalise the dairy industry in India by using cooperatives as a catalyst for converting India
from a milk-deficit country to a milk-surplus country.
Operation Flood became a very successful initiative and led to dairying become a leading
economic activity in the country. The Operation Flood was implemented in three phases and
it led to capitalizing the success of running diaries as cooperatives. The success of the
Operation Flood and the cooperative movement became an inspiration for several other
Asian countries such as Sri Lanka, Bangladesh, Nepal, Philippines and some African countries.

3. But, why was it felt that there is the need for such an initiative? During the pre-Operation
Flood period - middle-men between the producers, mainly the rural farmers, and the
ultimate consumers were prevalent. Both, the producer and the consumers were exploited
by these middle-men. The producers of milk were concentrated in the rural areas and they
were exploited by those who were involved in procuring the milk from them and supplying
them to the dairies. On the other hand, the dairies exploited the consumers by charging
high prices. There was also the need to make India self-sufficient in milk. Since the late
1990s and the success of the Operation Flood, NDDB has taken the cooperatives movement
to other agricultural products too.
It has been offering guidance and training to all parties involved in the dairy and agricultural
industry. The Operation Flood created a new policy environment in the dairy sector and linked
rural and urban populations, introduced market orientation and technological advancements,
developed extension services, and supported the growth of cooperatives in a sustainable
manner.
This movement also opened new employment and income avenues in the vulnerable sections
in rural areas, thus slowing down the mass migration to the cities. It has also spawned a
flourishing dairy machinery industry which is exporting equipment. It is expected that the
government will continue to support the dairy industry in India with various initiatives and
policies, not only due to its contribution to the growth of the economy, but also to continue
improving the well-being of the rural population.
For further information on the Indian dairy industry you can buy our latest report titled
“Dairy Industry in India: Market Size, Growth, Prices, Segments, Cooperatives, Private
Dairies, Procurement and Distribution”. This report is the fourth edition of our highly
acclaimed publication. The study is an outcome of an intensive research of the Indian dairy
industry that draws upon a comprehensive analysis of every major dairy segment in the
country.

4. Make an Inquiry of this Report At: http://www.imarcgroup.com/dairy-industry-in-india