Amul Md says cooperative business model is best for rural India

Expressing concern over the growing income disparity between urban and rural India, MD RS Sodhi of the Gujarat Cooperative Milk Marketing Federation (GCMF) said on March 2 that the business model of cooperatives should be strengthened for the development of small farmers, workers, retailers and consumers. GCMMF markets its milk and other dairy products under the Amul brand. It is a leading dairy player in the country.

Addressing a conference organized by ICN, the Anand Institute of Rural Management (IRMA) and the International Labor Organization (ILO), Sodhi said: “If India is to develop, we must ensure that that Bharat also develops. doing business because this model only takes care of the little people.”

He noted that the cooperative sector has been talking about him everywhere for a year. Sodhi pointed out that the Prime Minister gave a slogan of “Sahakar se Samriddhi”, meaning prosperity through cooperatives, also created a separate Ministry of Cooperation with Union Home Minister Amit Shah at the helm.

This shows the government’s commitment to the idea of ​​prosperity through cooperatives. “So can you ask why this sudden change and why this interest in cooperatives? India is growing. Our growth rate is much, much higher than other parts of the world. Per capita income So why? I think our policy makers and political leaders have realized that India is growing but Bharat is not growing,” Sodhi said.

“Income is growing, but income is going more to people who are already wealthy. It’s type K growth. People who have wealth, they grow at a much, much faster rate. People at the bottom of the scale, their wealth is shrinking,” he said.

Sodhi pointed out that income disparity is increasing, especially between urban and rural India, or between India and Bharat. Amul’s MD said India’s economy is based on three ‘S’s: small farmers, small traders and small workers; small retailers and small intermediaries; and small consumers.

“If India is to develop, we must ensure that these three ‘S’s are involved in the development process. They share India’s wealth and prosperity. Now people have realized that only the model business that succeeds in taking care of these “three S’s” is a cooperative way of doing business,” Sodhi said.

He described cooperatives, which are owned by the masses and run democratically, as a business model with a development angle, while corporations are for the growing wealth of a few shareholders who own the business.

“Government has found that if Bharat is to grow, we don’t need more businesses, but we need more cooperatives in all areas,” Sodhi said, adding that the cooperative business model can be reproduced anywhere and not just in the world. agricultural sector. Talking about Indian dairy cooperatives, MD of Amul said the reason for their success is that they own 100% of the supply chain, unlike other countries. Indian farmers get 75-80% of sales achievement.

“The Indian way of dairy cooperatives is way ahead and fulfills the purpose for which the cooperatives were formed,” he said. As a result, Sodhi said India has become the largest milk producer in the world thanks to the success of dairy cooperatives.

Dairy cooperatives have provided jobs for 365 days in rural India, a guaranteed market for perishable goods like milk, as well as assured cash flow to farmers throughout the year, empowerment of women and food security, he noted. If India would not have been self-sufficient in milk, the import bill for dairy products would have been Rs 5-6 million, far more than that for cooking oils, Sodhi said.

He said aggregation under the co-operative business model has huge advantages in securing resources such as technology and finance as well as marketing. Sodhi also emphasized the role of dedicated and selfless leadership for the success of cooperatives.

Regarding the challenges of the cooperative sector, the Managing Director of GCMMF said that the first was how to change the mindset from regulation to development, how to make cooperatives more modern and contemporary and replicate the business model in the Urban India. For the formation of new cooperatives, there are challenges related to the provision of easy capital, digital technology and marketing support.

“Sahakar se Samriddhi is not a slogan…or a ‘jumla’. It is an instrument that will improve rural prosperity, reduce disparities. It will provide livelihoods for millions of people in Bharat. It will work for a fair distribution of wealth,” Sodhi said. He said the aim of forming a separate Ministry of Cooperation is development of this sector and not regulation.

Sodhi stressed that states should also focus on promoting the cooperative sector.

First post: STI

Virginia S. Braud