Operation Flood History: How India Became a Dairy Giant

In the 1940s, milk from Kaira (now Kheda) district in Gujarat went to Bombay through private contractors under the Bombay Milk Scheme. The main buyer was Polson, a private dairy in Anand with a supply contract that gave it an effective monopoly. Farmers had no say in the price, which was set by traders, and much of the value went to middlemen.

The farmers turned to Sardar Vallabhbhai Patel, who told them to form their own cooperative and sell directly to the Bombay scheme. He sent Morarji Desai to organise them. At a meeting in Chaklasi, farmers resolved to stop supplying Polson, and a milk strike followed. The Kaira District Co-operative Milk Producers’ Union was registered on 14 December 1946, with local leader Tribhuvandas Patel as its chairman. It began with two village societies and about 247 litres of milk a day.

The union is better known by its brand, Amul, adopted in 1955. The name is usually expanded as Anand Milk Union Limited and is also linked to the Sanskrit word amulya, “priceless”.

Two people who arrived later made the cooperative work technically. Verghese Kurien, an engineer who had been posted to the government creamery in Anand, joined the union in 1949 and became its general manager. Harichand Megha Dalaya developed a way to make skimmed milk powder and condensed milk from buffalo milk. Until then this had been done only with cow’s milk. It mattered because most of Gujarat’s milk came from buffaloes, and the cooperative now had a way to store the surplus from the flush season.

What became known as the Anand Pattern is a three-tier cooperative structure. The same people own every level: the milk producers.

The NDDB describes the key features as producer ownership, elected farmer leadership and professional management. That last element is easy to miss. The cooperatives hired trained managers, vets and engineers, so the dairy was owned by farmers but run as a modern business.

In October 1964 Prime Minister Lal Bahadur Shastri visited Anand to open Amul’s cattle-feed plant. He also spent a night in a village, talking to farmers about the cooperative. He then asked Kurien to reproduce the Anand model across India. The National Dairy Development Board was founded in Anand in 1965, with Kurien as its founding chairman. He held the post until 1998.

The NDDB began as a society. The NDDB Act, 1987 merged it with the Indian Dairy Corporation, the government body that had handled Operation Flood’s finances, with effect from 12 October 1987, and declared it an institution of national importance.

The problem Kurien faced was scale. Anand had worked in one district with one strong market in Bombay. India had hundreds of scattered milksheds, few chilling plants, poor roads and city dairies that depended on imported milk powder. The answer was Operation Flood.

Operation Flood was launched in 1970. The NDDB set three goals: produce more milk (a “flood of milk”), raise rural incomes, and supply city consumers at fair prices. The main tool was a national milk grid that treated village milksheds and city markets as one system instead of many isolated local markets.

The financing was the unusual part. The European Economic Community donated skimmed milk powder and butter oil through the World Food Programme. Instead of handing the powder out, Indian dairies recombined it into milk and sold it in the cities. The proceeds went into new dairy plants, chilling centres and cooperatives. Wikipedia puts Phase I’s cost at about Rs 116 crore.

The idea was that aid would pay for the capacity to replace aid. Europe had milk surpluses. The recombined milk kept city dairies supplied while the new rural cooperatives grew, so the cities would not undercut village milk with cheap imports.

Phase I linked 18 of India’s main milksheds with the four metros: Delhi, Bombay (Mumbai), Calcutta (Kolkata) and Madras (Chennai). NDDB dates it 1970 to 1980. In practice it was about building the pipeline from village to city.

Phase II expanded the programme sharply, with World Bank loans added to the EEC aid. The number of milksheds rose from 18 to 136, and 290 urban markets became outlets for cooperative milk. By the end of 1985, the NDDB says, there was a self-sustaining system of 43,000 village cooperatives covering 4.25 million milk producers.

Processing capacity grew too. The NDDB says domestic milk powder production rose from 22,000 tonnes before the project to 140,000 tonnes by 1989, and credits all of the increase to dairies set up under Operation Flood. Powder mattered because milk production is seasonal. Cows and buffaloes give much more in the winter flush than in the summer lean season. Drying the surplus let the system carry milk from one season to the next and reduced the need for imported powder.

The third phase was more about strengthening the network than extending it. According to the NDDB, it added about 30,000 new dairy cooperatives to the 42,000 formed by the end of Phase II. The number of milksheds peaked at 173 in 1988-89. Cooperatives expanded their procurement and marketing infrastructure and put more into services that raise output per animal: veterinary first aid, balanced cattle feed and artificial insemination.

Research got more attention. The NDDB lists a theileriosis vaccine against a tick-borne cattle disease, bypass-protein feed and urea-molasses mineral blocks among the phase’s innovations. The question changed from “how much milk can a farmer sell?” to “how can a farmer produce more milk from the same animal?”

Phase III also expanded Women’s Dairy Cooperative Societies, and women’s membership rose significantly. In rural India women do much of the daily work of feeding, cleaning and milking, but men had usually held the society memberships and received the payments. Women’s societies gave the women doing that work membership and a direct payment.

Phase III ended in 1996. In 26 years Operation Flood had built a cooperative infrastructure that kept running after the project’s money stopped.

The official series shows why Operation Flood was needed. Output grew only from 17.0 million tonnes in 1950-51 to 21.2 million in 1968-69, slower than the population, so per-person availability fell from 130 grams a day to 112. It bottomed out at 110 grams in 1973-74. From then on both lines rose.

From 23.2 million tonnes in 1973-74 to 247.87 million in 2024-25 is an increase of more than ten times. Operation Flood cannot claim all of it. Most of the growth came after 1996, driven by rising incomes, a bigger population, urbanisation, crossbred cattle, better feed and vet services, private dairies, later government schemes and the cooperatives the programme left behind. The NDDB itself describes Operation Flood as the foundation later programmes built on.

Operation Flood was controversial while it was running. The best-known critique is Shanti George‘s Operation Flood: An Appraisal of Current Indian Dairy Policy (Oxford University Press, 1985). George argued that the programme relied on a high-cost, import-heavy model and that cheaper indigenous alternatives would have suited India better. She warned that donated European dairy commodities could discourage local production if city dairies preferred cheap recombined milk to village milk. She also argued that the programme focused on procurement, processing and city distribution at the expense of raising production. Other critics worried that European-style high-input breeds did not fit India’s low-input smallholders, and that milk bought up for cities could reduce what rural families, especially children, drank themselves.

Kurien and the NDDB rejected these arguments. They said the aid was deliberately sold, not dumped, and the money built capacity that ended the need for aid, and that a steady cash income from milk was the best way to raise rural incomes. The debate continued for years in journals such as the Economic and Political Weekly.

A fair reading is that both sides were partly right. The output figures and the size of the cooperative network are not in dispute. How much of the gain reached the poorest producers, how much the aid shaped the result, and whether a slower, cheaper route would have worked as well are still debated.

The cooperative movement also produced one of Indian cinema’s best-known films. Shyam Benegal’s Manthan (“The Churning”, 1976), co-written with Vijay Tendulkar, dramatised the struggle to set up a milk cooperative in a Gujarat village against a local trader and caste divisions. It was paid for by about 500,000 dairy farmers of the Gujarat cooperatives, who contributed Rs 2 each towards a budget of about Rs 10 lakh. It is often called India’s first crowdfunded film.

Farmers reportedly travelled to cinemas in truckloads to watch “their” film. It won the National Film Award for Best Hindi Feature Film in 1977, and a restored version was screened in the Cannes Classics section in 2024.

1998, world number one. The NDDB says Operation Flood helped India overtake the United States as the world’s largest milk producer in 1998, the same year Kurien stepped down as NDDB chairman. India has kept the top spot since.

2019, the network. As of March 2019, the NDDB counted 1,90,500 village dairy cooperatives affiliated to 245 milk unions and marketing dairies and 22 federations and apex bodies, with 16.9 million farmer members procuring an average of 508 lakh kg of milk a day.

2024, White Revolution 2.0. On 19 September 2024, Union Cooperation Minister Amit Shah launched standard operating procedures for White Revolution 2.0. It aims to raise milk procurement by dairy cooperatives by 50% over five years, to about 1,000 lakh litres a day, by setting up cooperatives in villages that do not yet have one. It focuses on women farmers, local production, infrastructure and exports.

2025, the latest data. Basic Animal Husbandry Statistics 2025 put production at 247.87 million tonnes for 2024-25, with 485 grams per person per day. The top producing states are Uttar Pradesh (15.66%), Rajasthan (14.82%), Madhya Pradesh (9.12%), Gujarat (7.78%) and Maharashtra (6.71%). Amul alone is controlled by about 3.6 million milk producers.

The next problems are different. Yields per animal are still low by world standards. Cooperatives compete with private dairies. Feed and fodder costs keep rising, cattle contribute to methane emissions, and adulteration is a concern for consumers. Collection now uses electronic weighing, automated fat testing and direct bank payments, but the principle hasn’t changed: measure the milk, pay the producer, build the market, raise productivity.