ET Awards: RS Sodhi picked as Corporate Citizen

Many FMCG companies have been known to promise they will donate a portion of the proceeds to a worthy cause every time you buy their product. Often, it’s a marketing proposition that’s used to attract customers, build brands and drive corporate social responsibility.

For the Gujarat Co-operative Milk Marketing Federation (GCMMF), the owner of the Amul brand, the proposition is its raison d’être, built into its structure when it was created 65 years ago. "When customers buy Amul products, 80% of the revenues goes back to the dairy farmers," says GCMMF managing director RS Sodhi.

GCMMF has balanced the demands of consumers with those of farmers. By channeling the milk procured from village co-operatives, into a range of profitable, value-added products, GCMMF ensures that dairy farming continues to thrive in the hinterland. With sales of Rs 9,774 crore in FY11, GCMMF is now expanding its milk procurement operations beyond Gujarat to Rajasthan, Haryana, Punjab, Maharashtra and West Bengal.

"We want to give the dairy farmers of other states the benefits of the Amul brand. Around 10% of our milk now comes from outside Gujarat," says Sodhi.

The virtuous cycle that GCMMF has created has helped turn India into the largest milk producer in the world. Milk is now the country’s biggest agricultural product, with annual production valued at Rs two lakh crore, constituting 22% of agricultural GDP.
The biggest benefits of the Amul cooperative model have gone to the poorest marginal farmers, landless labourers and rural womenfolk, who bring the milk to village collection centres twice a day and receive cash in return. Like all entrepreneurs, farmers also consider opportunity cost of resources allocated to dairying and in case they identify more viable options for utilising these resources, they may move away from milk production.

At its headquarters in Anand, most of GCMMF’s senior executives have spent their entire career in the organisation. Sodhi, 53, who took charge as managing director earlier this year, is a graduate of the Institute of Rural Management, Anand, and has been with GCMMF for 30 years. "Our people are very dedicated," he says. "We have three million farmers as shareholders and they depend on our performance."