Examples of Cooperative Participation in Policy Making

When farmers speak with a unified voice, governments listen. This is the central lesson from decades of cooperative development across India and beyond. Two organizations – AMUL and MARKFED – stand as compelling examples of how cooperatives can move beyond simply selling produce to actively shaping the agricultural policies that govern millions of lives. Their stories are not just about institutional success; they are about what becomes possible when farmers are organized, informed, and empowered to participate in the decisions that affect them.

Why cooperative participation in policy matters
AMUL: from milk strike to national policy model
The three-tier structure that shaped national policy
Operation Flood: policy built on a cooperative blueprint
Advocacy for policy protection
MARKFED: a multi-role cooperative influencing agricultural support systems
From humble origins to Asia’s largest marketing cooperative
State procurement agency under MSP: policy participation in practice
Input supply and the fertilizer distribution network
Diverse services and policy-level engagement
Common threads: what AMUL and MARKFED teach us about cooperative policy participation

Why cooperative participation in policy matters

Agricultural policy is rarely made in a vacuum. Governments need ground-level data, farmer perspectives, and sector-specific knowledge to craft effective schemes. According to the International Cooperative Alliance (ICA), both cooperative policy and cooperative law are recognized as essential ingredients for the growth of the cooperative movement – and cooperatives themselves must be active participants in shaping that policy landscape. Without organized bodies representing farmers, smallholders risk being excluded from decisions about pricing, subsidies, trade, and infrastructure. Large cooperatives fill precisely that gap: they aggregate farmer voices, bring data to the table, and negotiate on behalf of members in ways that individual farmers never could.

Research published in the Journal of Economic Surveys confirms that agricultural cooperatives play a significant role not only in farm economic sustainability but also in influencing the adoption of better practices – and that public policy and cooperative initiatives tend to work best when they are complementary rather than separate. The examples of AMUL and MARKFED demonstrate this partnership in action.

AMUL: from milk strike to national policy model

AMUL traces its origin to 1946, when dairy farmers in the Kaira district of Gujarat refused to be exploited by a private dairy cartel. Under the guidance of Sardar Vallabhbhai Patel, Morarji Desai, and Tribhuvandas Patel, they formed the Kaira District Cooperative Milk Producers Union – starting with just two village societies and 247 litres of milk per day. What made this cooperative historic was not just its commercial success, but the fact that its model directly influenced India’s national dairy policy.

The three-tier structure that shaped national policy

AMUL operates on a three-tier cooperative model: village-level dairy cooperative societies collect milk and elect their own management councils; district-level milk unions procure and process the milk; and the state federation – the Gujarat Cooperative Milk Marketing Federation (GCMMF) – handles marketing and distribution. This structure, known as the Anand Pattern, became the template for cooperative dairy development across India.

The policy impact of this model became national when Prime Minister Lal Bahadur Shastri visited Anand in 1964 and was so impressed by how the cooperative worked that he directed the creation of the National Dairy Development Board (NDDB) specifically to replicate it. The NDDB was established at Anand with the mandate to expand the Anand Pattern to other states – a direct case of a cooperative’s operational model becoming government policy.

Operation Flood: policy built on a cooperative blueprint

The most tangible outcome of AMUL’s policy influence was Operation Flood, launched in 1970 under the leadership of Dr. Verghese Kurien. The programme established milk producer cooperatives in villages across the country and made modern dairy technology available to them, with the explicit objectives of increasing milk production, augmenting rural incomes, and cutting out middlemen. India went from a milk-deficient country to the world’s largest producer of milk – a transformation driven by policy that was itself modeled on the cooperative AMUL had already built.

AMUL takes a farmers-first approach, returning 85% of every rupee earned back to the dairy farmers – well above the global cooperative average of 33%. This farmer-centric financial model has itself become a policy reference point, used by governments and development agencies to benchmark fair pricing in dairy sectors globally.

Advocacy for policy protection

AMUL has also been a consistent voice in policy advocacy, arguing that dairy cooperatives – as limited-resource farmer organizations – require government protection from unfair competition by private and multinational companies. The cooperative has specifically called on governments to prevent new private entrants from operating in milk sheds that cooperatives have already developed with their own investments. This kind of advocacy is a direct form of policy participation: using cooperative experience and data to shape the regulatory environment in favor of small farmers.

Today, AMUL represents 36 lakh milk producers across more than 18,500 villages, and its convergence with government technology initiatives – including the recent launch of Amul AI – reflects a continuing, evolving relationship between the cooperative and national policy priorities.

MARKFED: a multi-role cooperative influencing agricultural support systems

While AMUL’s policy influence is closely tied to the dairy sector, MARKFED – the Punjab State Co-operative Supply and Marketing Federation Ltd. – demonstrates something different: how a cooperative can participate in policy by taking on critical government functions across multiple dimensions of agricultural support.

From humble origins to Asia’s largest marketing cooperative

MARKFED was registered in 1954 with just 13 members, three employees, one bicycle, and a share capital of Rs. 54,000. It has since grown into one of Asia’s largest marketing cooperatives. With a turnover of approximately ₹22,000 crores in 2024, MARKFED’s operations span procurement, processing, input distribution, and international exports – making it far more than a marketing body.

State procurement agency under MSP: policy participation in practice

One of MARKFED’s most direct forms of policy participation is its role as a State Procurement Agency. Since 1967, MARKFED has been responsible for purchasing wheat and paddy under the Minimum Support Price (MSP) scheme on behalf of the Central Government – procuring around 25% of Punjab’s total foodgrain output. This is not a passive role. By implementing MSP procurement, MARKFED actively protects farmers from market price volatility, providing price stability that individual farmers could never negotiate on their own. The cooperative’s involvement in MSP operations also gives it substantial data on farmer income, crop volumes, and market dynamics – data it can use to inform government decisions on support prices and procurement policies.

Input supply and the fertilizer distribution network

MARKFED covers nearly 60% of all cooperative-distributed fertilizer stocks in Punjab, reaching small and marginal farmers through a network of Primary Agricultural Credit Societies (PACS). Its main objective is to help farmers secure better prices for their produce while supplying agricultural inputs – including fertilizers, seeds, and pesticides – through the cooperative network. This dual role in both input supply and produce marketing places MARKFED in a unique position to comment on and influence policies covering the entire agricultural value chain, from farm inputs to final sale.

Diverse services and policy-level engagement

MARKFED’s activities extend well beyond marketing. The cooperative introduced combine harvesters to Punjab, pioneering mechanized farming in India. It has built large-scale storage infrastructure, processed fruits and vegetables, set up cattle feed plants, and developed its own branded product lines under the SOHNA label. MARKFED also contributes to research and development through Punjab Agricultural University, positioning itself as a partner in evidence-based agricultural policy rather than simply an implementing agency.

The cooperative regularly distributes profits as dividends to its members and contributes to the cooperative development fund – a practice that reinforces member loyalty and demonstrates that cooperative financial health and farmer welfare can be pursued together. These outcomes feed directly into policy debates about the viability of cooperative models versus private market alternatives.

Common threads: what AMUL and MARKFED teach us about cooperative policy participation

Both AMUL and MARKFED show that cooperative participation in policy is not simply about lobbying or submitting memoranda to government committees – though that is part of it. It is fundamentally about building credibility through scale, consistency, and demonstrated impact. India’s cooperative movement, with more than 8 lakh cooperatives and significant presence across socio-economic activities, has the institutional weight to engage with governments as genuine partners in policy design.

AMUL influenced policy by creating a model so successful that the government chose to replicate it nationwide. MARKFED participates in policy by functioning as an arm of the state’s agricultural procurement and distribution system. Together, they illustrate two complementary pathways: model-building, where cooperative success becomes policy inspiration, and functional integration, where cooperatives become direct participants in government programs.

As the International Cooperative Alliance and development organizations like FAO have noted, cooperatives are essential to achieving goals like food security and rural poverty reduction – but only when policies are farmer-friendly and cooperatives are transparent and supported. The experiences of AMUL and MARKFED make a strong empirical case for governments to actively involve cooperative bodies in agricultural policy design, not as passive beneficiaries of programs, but as informed co-architects of the systems that shape rural economies.

What do you think? Given that AMUL’s cooperative model was directly adopted as the basis of India’s national dairy policy, should governments in other countries be more deliberate about studying and replicating successful cooperative models before designing new agricultural programs? And beyond dairy and marketing, which other agricultural sectors do you think could benefit most from cooperative-led policy participation?

References

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Table of Contents

Why cooperative participation in policy matters 🔗

AMUL: from milk strike to national policy model 🔗

The three-tier structure that shaped national policy 🔗

Operation Flood: policy built on a cooperative blueprint 🔗

Advocacy for policy protection 🔗

MARKFED: a multi-role cooperative influencing agricultural support systems 🔗

From humble origins to Asia’s largest marketing cooperative 🔗

State procurement agency under MSP: policy participation in practice 🔗

Input supply and the fertilizer distribution network 🔗

Diverse services and policy-level engagement 🔗

Common threads: what AMUL and MARKFED teach us about cooperative policy participation 🔗