India should try the Amul model for all agricultural commodities

The cooperative model behind Amul's success needs to be adopted across India's farm sector. It'll ease credit for farmers too

- B.S. SIVAKUMAR

Indian farmers get only one-third of the final selling price, with the rest being enjoyed by the traders, wholesalers and retailers among themselves. Having worked closely with the agrarian economy for over two decades now, I found the conclusions of this research paper published by the Reserve Bank of India (RBI) to be an affirmation of my frequent observations and pre-suppositions about general practices in the country's agriculture sector.

Creating essential market linkages and consolidating farmers under umbrella bodies should have helped solve much of that problem. While markets under Agricultural Produce Market Committees (APMCs) were set up in states with this intent, the actual outcome has not been as envisaged. In fact, it only increased layers of middlemen, imposing fresh burdens on farmers. In many states, farmers have fared better without the APMC mechanism.

The 'taste' that India needs: At the same time, a cooperative society of farmers has worked well as an alternative model in India's dairy sector, thanks to which we have a highly successful dairy-product marketing federation that is counted among the world's largest in terms of volume and has a great national brand to be proud of. Amul is ranked as the world's strongest food-and-dairy brand by the UK's Brand Finance. Amul clocked a turnover of ₹159,445 crore in 2023-24, with a group turnover of ₹80,000 crore. Its strength is drawn from the world's largest farmer-owned dairy cooperative, with 3.6 million farmers across 18,600 villages of Gujarat who supply around 30 million litres of milk every day.