Analytics, tech, automation & digitisation aid Amul quadruple farmers' income

MUMBAI: The drive towards digital and cashless payments, which received a huge boost following demonetisation has brought about significant benefits to our farmers in rural Gujarat. Amul has actively helped its farmer-members to open bank accounts and have linked an additional 13 lakh farmers’ bank accounts to our system. Now, milk payments are cashless and directly transferred into their bank accounts.

Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF) vice-chairman Jethabhai Bharwad explained in detail: “Our digitalization drive has brought in complete transparency in payment to milk producer members. Farmer-members are aware of the exact amount due to them and the rationale behind the same. Payments going directly into their bank accounts also helps inculcate the savings habit in them. The need for an active bank account has brought large number of the Amul family farmer households directly into the formal banking network. Automated Milk Collection Systems installed at village dairy cooperative societies have now been linked through common online software applications. This helps to further enhance transparency among producer members using digital technology.”

The chairman Jethabhai Patel added: “The drive towards digital and cashless payments, which received a huge boost thanks to Government of India’s demonetization initiative, has brought about significant benefits to our farmers in rural Gujarat. We have actively helped our farmer-members to open bank accounts and have linked an additional 13 lakh farmers’ bank accounts to our system. Now, milk payments are cashless and directly transferred into their bank accounts.”

GCMMF, which markets the popular Amul brand of milk and dairy products, has successfully quadrupled the income of its dairy farmers in last seven years, demonstrating the efficacy of Amul model in exceeding the national goal of doubling farmer’s income in six years. During the last seven years, Amul’s milk procurement prices to its farmer-members more than doubled from Rs. 24.30 per litre for buffalo milk (Rs. 337 per kg fat) in 2009-10 to Rs. 49 per litre (Rs. 680 per kg fat) in 2016-17. Since the cooperative’s total milk procurement also doubled during this period, from 90.9 lakh litres per day to 176.5 lakh litres per day, this effectively increased the income of its dairy farmers, four-fold in the last seven years.

Turnover of GCMMF has registered quantum growth of 238% in last seven years, which implies an impressive cumulative average growth rate (CAGR) of 19% during this period. The mantra of rapid expansion had yielded rich dividends with the GCMMF’s sales turnover increasing 3.5 times, from Rs. 8,005 crore in 2009-10 to Rs. 27,043 crore in 2016-17. Results of the apex body of dairy cooperatives in Gujarat were declared on 15 June 2017.

GCMMF managing director R S Sodhi emphasised that Amul’s success has been driven by its ‘3E’mantra – Rapid expansion in milk procurement, rapid expansion in manufacturing facilities and rapid expansion in marketing & distribution network.

"This year, we leveraged heavily on our technological capabilities and data analytics to enhance communication with our channel partners and expand our distribution reach”. “Product innovation has always been part of our DNA and has inspired us to launch more than 50 new products in the market during the last three years," Sodhi added.

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