Amul and Mother Dairy on Wednesday increased milk prices by ₹2 per litre across major variants and pack sizes, with the revised rates set to come into effect from Thursday, May 14. The Gujarat Cooperative Milk Marketing Federation (GCMMF), which markets Amul products, said the price hike was necessitated by rising costs of animal feed, packaging and fuel. According to Amul, the increase translates to around 2.5% to 3.5% across categories. This is the first milk price revision by Amul since May 2025. The co-operative said milk production and operational expenses have been rising steadily, while higher transportation costs and increasing prices of cattle feed have put additional pressure on the dairy industry. Amul had last raised milk prices by ₹2 per litre on May 1, 2025, across Gujarat and several other states. Before that, prices of all major variants were increased by up to ₹2 per litre on June 4, 2024. Mother Dairy also announced a similar ₹2 per litre increase shortly after Amul’s decision on Wednesday. How Amul’s cooperative model works Amul operates through a three-tier cooperative structure that links farmers directly to the dairy business. Dairy Cooperative Society District Milk Union State Milk Federation At the village level, milk-producing farmers are members of dairy cooperative societies. These members elect representatives who manage the district milk unions. The district unions are responsible for processing milk and producing dairy products, while marketing and distribution are handled through GCMMF. The system is managed by professionals overseeing procurement, processing and supply chains. According to estimates, around 15 lakh people are directly employed through milk collection, processing and distribution in the Amul network. A model studied in business schools Amul’s cooperative framework is often cited as a successful business model and is taught as a case study in management institutes. The model ensures that ownership remains with farmers, allowing profits to flow directly to producers instead of private intermediaries. In the cooperative structure, milk producers form the base of the pyramid. According to the federation, out of every ₹1 earned, around 86 paise goes directly to farmer-members, while the remaining 14 paise is used for running the cooperative business. How millions of litres of milk are collected daily The milk collection process begins early each morning across Gujarat. The state has around 18,600 village-level milk cooperative societies and 18 district milk unions spread across 33 districts. More than 36 lakh farmers are linked to these societies. Collection activities start around 5 am, when farmers milk their cattle and transport the milk to local collection centres. By around 7 am, collection centres see long queues of farmers. At these centres, both the quantity and fat content of milk are measured through automated systems. Each farmer’s daily output is digitally recorded, and payments are calculated based on milk volume and fat percentage. Farmers receive payments directly into their bank accounts on fixed dates every month. Amul has also introduced a mobile app that allows farmers to track milk quantity, fat content and payment details. Support system for farmers The cooperative also provides several support services to improve milk productivity and farmer welfare. These include free training programmes on cattle care, animal nutrition and dairy management. Farmers are supplied cattle feed produced at dedicated plants, where fodder is prepared using protein, fat and mineral mixes. According to reports, some of the machinery used in these plants has been imported from Denmark. The cooperative also offers medical facilities and financial support. It operates specialised hospitals for farmers and provides subsidies for equipment purchases. For example, automatic milk extraction machines costing around ₹40,000 are made available at nearly half the price through subsidies.
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