The story before:The positive role that dairying could play in providing income and employment opportunity was clear to policy-makers long time back and a set of measures were put in place to develop and protect the dairy industry. Immediately after India gained independence, the Milk Control Board was set up which controlled the supply and distribution chains.
This however led to emergence of a set of middlemen and the share of producers in the sales declined. With processing units set up in cities, it became difficult to procure and transport milk from the centres of production which were in the rural areas.
Over five decades ago, the life of an average farmer in Kheda District (formerly known as Kaira) was very much like that of his/her counterpart anywhere else in India. His/her income was derived almost entirely from seasonal crops. The income from milk buffaloes was undependable. Milk producers had to travel long distances to deliver milk to the only dairy, the Polson Dairy (Incorporated in 1900 by Mr. Pestonji Edulgi Polson, primarily as a Coffee manufacturing Company, Polson diversified into other business activities including diary, agriculture, pharmaceuticals, leather chemicals and Real Estate.) In Anand – often milk went sour, especially in the summer season, as producers had to physically carry milk in individual containers. Private traders and middlemen controlled the marketing and distribution system for the milk. These middlemen decided the prices and the off-take from the farmers by the season. As milk is perishable, farmers were compelled to sell it for whatever they were offered. Often, they had to sell cream and ghee at throw-away prices. In this situation, the private trader made a killing. Moreover, the government at that time had given monopoly rights to Polson Dairy (around that time Polson was the most well known butter brand in the country) to collect milk from Anand and supply to Mumbai city in turn (about 400 kilometers away). As a result, the yield of milk declined and imports of milk powder went up. India ranked nowhere amongst milk producing countries in the world in 1946.
Gradually, the realization dawned on the farmers with inspiration from then nationalist leaders Sardar Vallabhbhai Patel (who later became the first Home Minister of free India) and Morarji Desai (who later become the Prime Minister of India) and local farmer, freedom fighter and social worker Tribhovandas Patel, that the exploitation by the trader could be checked only if they marketed their milk themselves. Amul was the result of the realization that they could pool up their milk and work as a cooperative.