Growth and Impact of the Co-operative Movement in India

India is today the world’s largest producer of milk, contributing over 23% of global milk output. But this didn’t happen by accident. Behind this achievement is a cooperative movement that began with a group of exploited farmers in Gujarat who decided they had had enough. Their struggle gave birth to a model that reshaped rural India – and its lessons still resonate today.

Origins of the cooperative movement in India 🔗

The cooperative movement in India has its formal roots in the early 20th century. The movement was set in motion by the Co-operative Credit Societies Act of 1904, modelled on the German Raiffeisen cooperative banking system, with the primary purpose of protecting small farmers from exploitative moneylenders and improving their economic standing. The movement was first established in the Madras province and gradually spread to other parts of the country.

The cooperative structure proved especially relevant in agriculture, where individual farmers had little bargaining power against traders, contractors, and private companies. According to estimates, more than half a million cooperative societies are active in India today, spanning agriculture, banking, housing, and processing. But the most celebrated and influential of these has been in the dairy sector.

How dairy cooperatives took root 🔗

Before independence, India’s dairy sector was fragmented and exploitative. Milk was collected by private contractors and middlemen who paid farmers arbitrarily low prices and kept the bulk of the profits for themselves. During flush seasons, surplus milk fetched even lower prices, and without cold storage or processing facilities, much of it went to waste.

The turning point came in Kaira district, Gujarat. The Bombay Municipal Corporation had arranged to supply milk to the city, but had awarded the procurement contract to Polson Limited, a private dairy. Polson controlled prices completely, and the farmers – who were doing all the work – received almost nothing. Milk contractors took the biggest cut. No mechanism existed to fix the price paid to the producers. The discontent among farmers grew steadily.

In 1945, a group of frustrated farmers approached Sardar Vallabhbhai Patel, who had long advocated for farmers’ cooperatives. On his advice, the farmers of Kaira district resolved to stop selling milk to Polson and to set up a cooperative in every village of the district. They launched a 15-day milk strike, during which not a single drop reached the market. The strike crippled Polson and forced the government to relent. By December 1946, the Kaira District Cooperative Milk Producers’ Union Limited (KDCMPUL) – later known as Amul – was formally registered.

The Anand pattern: A three-tier cooperative model 🔗

What made the Kaira experiment so significant was not just that it worked, but that it was designed to be replicated. The Anand Pattern, as it came to be known, established a three-tier cooperative structure that gave farmers control over the entire value chain – from milk collection to processing to marketing.

Village dairy cooperative society (VDCS) 🔗

The base unit is the village dairy cooperative society, where any milk producer can become a member by purchasing a share and committing to sell milk only to the society. Each member’s milk is tested for fat and solid-not-fat (SNF) content, and payment is based on quality. At year’s end, members also receive a patronage bonus based on the quantity they supplied. This transparency was revolutionary – it replaced arbitrary pricing with a measurable, fair system.

District cooperative milk producers’ union 🔗

The village societies federate into a district-level union, which buys the collected milk, then processes and markets it. Most district unions also supply cattle feed, veterinary care, and artificial insemination services to their member societies, supporting farmers beyond just milk collection.

State cooperative milk federation 🔗

At the top of the structure, a state-level federation handles the marketing of fluid milk and processed dairy products across all member district unions. The core feature of the Anand Pattern is farmer control over all three stages: procurement, processing, and marketing. Unlike many dairy cooperatives elsewhere in the world that end up as raw material suppliers to private brands, the Anand Pattern gives farmers ownership of the entire chain – including the brand.

The rise of Amul and the White Revolution 🔗

The success of the Kaira cooperative attracted national attention. Verghese Kurien joined the union in 1949 as general manager and guided its technical and marketing growth. A key technological breakthrough came from H.M. Dalaya, who innovated a process to produce skim milk powder from buffalo milk – something previously thought impossible. This meant that surplus milk could be converted into storable, exportable products, fundamentally changing what a dairy cooperative could achieve.

In 1964, Prime Minister Lal Bahadur Shastri visited Anand and was deeply impressed. Following that visit, the National Dairy Development Board (NDDB) was established in 1965, with Dr. Verghese Kurien – widely regarded as the “Father of the White Revolution” – as its first chairman. The NDDB’s mandate was clear: replicate the Anand Pattern across the entire country.

This effort took the form of Operation Flood, launched in 1970. Operation Flood helped dairy farmers direct their own development by placing control of resources in their own hands. A National Milk Grid linked producers throughout India with consumers in over 700 towns and cities, reducing seasonal and regional price variations.

Three phases of Operation Flood 🔗

Phase I (1970-1980) was financed through the sale of skimmed milk powder and butter oil donated by the European Economic Community via the World Food Programme. It linked 18 major milksheds to India’s four metropolitan cities – Delhi, Mumbai, Kolkata, and Chennai.

Phase II (1981-1985) expanded the number of milksheds from 18 to 136, with 290 urban markets opened for milk distribution. By the end of this phase, a self-sustaining system of 43,000 village cooperatives covering 4.25 million milk producers was in place.

Phase III (1985-1996) added 30,000 new cooperatives to the existing network, with increased focus on women’s participation, animal health research, and innovations like urea-molasses mineral blocks and Theileriosis vaccines to boost animal productivity.

Impact on milk production and rural livelihoods 🔗

The numbers tell a dramatic story. India was a milk-deficit nation in the 1960s, with per capita availability dropping to just 107 grams per day by 1970 – well below minimum nutritional standards. Milk production stood at only 21.2 million tonnes at the start of Operation Flood. Decades later, the picture is entirely different.

India is now the world’s largest milk producer, with annual production exceeding 248 million tonnes and accounting for 23% of global output. Per capita availability of milk has risen to 445 grams per day in 2021-22, up from just 112 grams in 1968-69. Milk production is currently growing at more than six percent annually in India, compared to just two percent globally.

The cooperative network itself has grown substantially. As of 2025, India’s dairy cooperative sector includes 22 milk federations, 241 district cooperative unions, and coverage across approximately 2.35 lakh villages, with 1.72 crore dairy farmers as members. Dairy cooperatives generate employment for around 15 million farm families, and livestock contributes 22.4% to GDP from agriculture and allied activities.

Women and dairy cooperatives 🔗

One of the most significant social impacts of the cooperative movement has been the empowerment of women. Nearly 70% of India’s dairy farming workforce consists of women, and about 35% are active participants in dairy cooperatives. More than 48,000 women-led dairy cooperative societies currently operate at the village level.

Several all-women cooperatives have emerged as models of inclusive rural development. In Muzaffarpur district, Bihar, a women’s cooperative that started in the early 2000s with just 32 members pouring 40 litres a day grew to over 150 members supplying more than 500 litres daily within a decade. The all-women Shreeja Milk Producer Organisation received the Dairy Innovation Award from the International Dairy Federation at the World Dairy Summit in Chicago, reflecting how far women’s leadership in Indian dairy cooperatives has come.

The Anand model’s wider reach 🔗

The principles pioneered in Kaira district have inspired dairy cooperatives not just across India but around the world. With the Anand pattern, three-fourths of the price paid by urban consumers goes to millions of small dairy farmers, who are the owners of the brand and the cooperative itself. This is a fundamental inversion of the pre-1946 system, where almost none of the consumer price reached the farmer.

Within India, the model has produced successful state-level federations beyond Gujarat. Karnataka Milk Federation (KMF), which markets under the brand Nandini, currently has 15 district unions and over 16,000 village societies procuring around 10 million litres of milk per day, making it the second-largest milk cooperative in India. Similar federations operate in Rajasthan (Saras), Kerala (Milma), Andhra Pradesh (Vijaya), and other states.

Looking ahead, the government has launched White Revolution 2.0, a five-year initiative (2024-29) aimed at strengthening dairy cooperatives further, generating rural employment, and scaling up milk procurement by cooperatives to new heights. By 2028-29, milk procurement by dairy cooperatives is targeted to reach 1,007 lakh kilograms per day from current levels.

From a 15-day milk strike in a single district to a national network of nearly 2.4 lakh villages – the cooperative movement in India’s dairy sector stands as one of the most compelling examples of how organized, farmer-owned institutions can transform an entire sector. What started as resistance to exploitation became the engine of a revolution.

What do you think? Given that the Anand Pattern has been credited with transforming India from a milk-deficit to the world’s largest milk-producing nation, what do you think were the most critical factors that made this model succeed where other rural development programmes have struggled? And with White Revolution 2.0 now underway, how should cooperatives evolve to address challenges like climate-induced fodder scarcity and the rise of private dairy companies competing for the same farmers?

References

1. https://www.pib.gov.in/FeaturesDeatils.aspx?NoteId=151137
2. https://www.srpublication.com/role-and-contribution-of-dairy-cooperatives-in-development-of-india/
3. https://en.wikipedia.org/wiki/Cooperative_movement_in_India
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5. https://www.nddb.coop/farmer/dairying/movement
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9. https://en.wikipedia.org/wiki/Amul
10. https://www.nddb.coop/about/genesis/flood
11. https://en.wikipedia.org/wiki/White_revolution_(India)
12. https://beta.nddb.coop/about-us/who-we-are/operation-flood/
13. https://www.imarcgroup.com/dairy-industry-in-india
14. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2172546
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16. https://www.agriculturaljournals.com/archives/2025/vol7issue9/PartA/7-8-100-606.pdf