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Sahkar thi samruddhi: As PM Modi inaugurated new cooperative dairy plants, read the great success story in cooperative sector in Gujarat

Gujarat has large number of cooperative unions in several sectors, including dairy, livestock, credit, banking, sugar, farming, housing, irrigation etc

Prime Minister Narendra Modi today inaugurated multiple dairy projects of Sabar Dairy in Sabarkhanta in Gujarat. He inaugurated a milk powder manufacturing plant and an Aseptic Milk Packaging Plant of the milk cooperative society. The PM also laid the foundation stone of the Sabar Cheese and Whey Drying Plant Project.

The total investment in all these projects is over Rs 1000 crore. The 120 metric tonne per day milk powder plant has been set up at the cost of Rs 300 crore, while the 3 Lakh Litre per day packaging plant cost Rs 125 crore. And, the cheese and whey plant will cost Rs 600 crore.

The Prime Minister said that these dairy projects will empower local farmers and milk producers, and increase their income. The projects will also give a boost to the rural economy in the region, the PM said.

Sabar Dairy, or Sabarkantha District Co-operative Milk Producers’ Union Limited, is a district-level cooperative society of milk producers registered under Gujarat State Cooperative Societies Act, 1964. The member farmers own Sabar Dairy, and their elected representatives manage the Village Societies and the District Union. The organisation employs professionals to operate the dairy and manage its business.

Sabar Dairy is a part of Gujarat Cooperative Milk Marketing Federation (GCMMF), which makes and markets a whole range of milk and milk products under the Amul brand. The investments of over Rs 1000 crore by the dairy union in three new projects underscore the success of milk cooperative unions in particular, and cooperative unions in general in the state of Gujarat.

The Gujarat Cooperative Milk Marketing Federation (GCMMF) under the brand Amul, led by Verghese Kurien, had spearheaded the White Revolution in India. This revolution in dairy sector made India the largest producer of milk, which was earlier a milk-deficient country.

The milk cooperatives in the state had started with the Kaira District Co-operative Milk Producers’ Union set up in 1946, which was formed to supply milk directly to Mumbai, as the traders were arbitrarily setting milk prices at that time and were paying very less to the producers. After its success, such unions were replicated in several other states, all of which became member unions of the Gujarat Cooperative Milk Marketing Federation, the state-level organisation.

Today GCMMF has 18 district unions under it. All district unions are composed of village societies. The total number of such societies in the state is 18,600, and they collectively represent over 36.4 lakh milk producer. GCCMF collected an average of 246 lakh litres of milk every day in 2020-21, while it has a daily capacity of 390 lakh litres. The federation also runs cattle feed manufacturing plants.

The milk sourcing by GCMMF works on a highly decentralised model, as individual small milk producers supply their milk to the plants of GCMMF. The system works in a three-tier structure. The milk is collected at village-level cooperative societies and processed by district unions themselves. The district unions supply the liquid milk directly to the market, and the remaining milk is sent to state-level GCMMF, which process and market the milk and various dairy products that it manufactures.

All the 18 districts under this structure have dairy plants, 12 of them are under GCMMF and the rest 6 are under Gujarat Dairy Development Corporation (GDDC).

While the unions are owned by the producers, they are managed by qualified professionals. This model has proven so successful that it has made GCMMF the largest food processing company in the country. The GCMMF model has now been replicated in several other states to boost dairy production.

While the success of the co-operative model in the dairy sector in Gujarat is well known, actually this model has also been successful in several other sectors. One such sector is sugar, and Gujarat is considered to be one of the leading states in India in cooperative sugar factories. Just like the milk producer co-operative unions run dairy plants, sugar co-operative societies formed by sugarcane farmers run sugar mills in the state.

Gujarat State Federation of Co-op Sugar Factories ltd, the state-level body, has 22 member sugar factories in various districts. These mills work for their own members on a no-profit-no-loss basis. Gujarat is the only state in India where there are a large number of cooperative sugar factories.

Bardoli Sugar Factory was the first cooperative factory in Gujarat, and it had started that ‘white sweet’ revolution in the state. Bardoli Sugar Factory played an active role in setting up of other sugar cooperatives in different parts of the state by providing necessary assistance, information and guidance.

Another sector where the cooperative movement excelled in Gujarat is the banking sector. However, cooperative banks are now in a declining trend due to overall changes in the banking sector. Catering to local traders, the state has a large number of urban cooperative banks.

Reserve bank of India lists 211 Non-Scheduled Urban Co-operative Banks in Gujarat with registered offices in Ahmedabad. This number is more than 196 Urban Co-operative Banks registered in Mumbai, the financial capital of the country.

However, the cooperative banking sector has faced several challenges in recent past, like competition from private banks offering better services, the inability to keep up with recent banking technology, increase scrutiny by RBI etc. Several scams that hit multiple cooperative banks also didn’t help.

However, as a whole, the cooperative sector in Gujarat keeps flourishing. As per Gujarat govt data, major sectors with a significant presence of cooperative Societies include agricultural credit, non-agricultural credit, housing, dairy and livestock, irrigation, marketing societies. labour contract, industrial etc.

The Modi government has given a special emphasis on the development of the cooperative sector in the country, and the Cooperation Ministry was formed in the union government last year with that goal. Home minister Amit Shah currently is also the cooperation minister. The ministry’s motto is ‘Sahkar Thi Samruddhi’, which means prosperity with cooperation.

As per the press release by the government during its formation, the ‘Ministry of Co-operation’ was created for realizing the vision of ‘Sahkar se Samriddhi’ which essentially will focus on community-based developmental partnerships. The Ministry ‘will provide a separate administrative, legal and policy framework for strengthening the cooperative movement in the country’ and ‘streamline processes for ‘Ease of doing business’ for co-operatives.’

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Raju Das
Raju Das
Corporate Dropout, Freelance Translator

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