Winning Bizness Desk
Mumbai.People witnessed another rise in household expenses after Amul and Mother Dairy increased milk prices by up to Rs 2 per litre. The revised rates will come into effect from Thursday, adding pressure on daily kitchen budgets already stretched by food and fuel inflation. Amul announced the hike first, and within half an hour Mother Dairy also revised its prices upward. Both companies said the decision was taken because of rising operational costs, including cattle feed, packaging material and transportation expenses.
Rising input costs force fresh revision
The Gujarat Cooperative Milk Marketing Federation, which markets Amul products, said the dairy industry has been facing constant pressure from rising production costs. Officials explained that cattle feed prices have increased sharply over the past few years, while fuel and logistics expenses have also gone up.
Key reasons behind the increase include:
- Higher cattle feed and nutrition costs
- Increase in fuel and transportation charges
- Rising packaging and operational expenses
- Growing pressure on dairy supply chains
Amul said the latest increase works out to nearly 2.5% to 3.5% across major milk variants and pack sizes. The company also clarified that a large part of the revenue eventually reaches dairy farmers linked with cooperative societies.
Previous hikes show continuing pressure
This is the first time Amul has increased milk prices since May 2025. Before this, prices were revised upward by Rs 2 per litre on May 1, 2025, across Gujarat and several other states. Earlier, another increase of up to Rs 2 per litre had taken place on June 4, 2024.
Mother Dairy had last revised its prices in April 2025. Industry experts say repeated revisions over the last two years reflect the stress faced by the dairy sector, especially due to inflation in animal care and transportation.
Important timeline of milk price hikes:
- June 2024 – Prices increased by Rs 2 per litre
- May 2025 – Amul raised rates again
- April 2025 – Mother Dairy revised prices
- May 2026 – Fresh Rs 2 hike announced
How Amul’s cooperative structure functions
Amul operates through a three-level cooperative system that has become a famous business model studied in management schools worldwide. The structure connects millions of dairy farmers directly to the market while ensuring regular income support.
The three levels are:
- Dairy Cooperative Societies
- District Milk Unions
- State Milk Federation
At the village level, farmers become members of dairy societies. These societies elect representatives who manage district milk unions. The unions process milk and milk products, while the state federation handles marketing and distribution across India.
Professionals are hired to manage supply chains, processing and logistics. The model generates direct and indirect employment for nearly 15 lakh people linked to milk collection, transportation and product distribution.
Morning collection network drives giant supply
Amul’s milk collection system begins before sunrise every day. Across Gujarat’s 33 districts, around 18,600 milk cooperative societies and 18 district unions are connected to more than 36 lakh farmers.
From nearly 5 am, farmers begin milking cattle and filling metal cans before reaching collection centres. By around 7 am, long queues form outside these centres where milk quantity and fat content are measured through automated systems.
The process includes:
- Computerised recording of milk quantity
- Fat-content based payment system
- Direct bank transfers to farmers
- Mobile app updates for payment details
Farmers are paid on fixed dates every month, and earnings depend largely on milk quality and volume supplied to societies.
Farmer welfare remains central to system
Amul’s cooperative structure is often praised because nearly 86 paise out of every rupee spent goes back to member farmers, while the remaining amount is used to run the cooperative business. District union chairpersons regularly hold meetings to discuss expansion plans, machinery purchases and bonus distribution.
The cooperative also provides free training programmes for cattle care and productivity improvement. Farmers receive guidance on feeding methods, animal health and dairy management practices. Special cattle-feed plants prepare nutrient-rich fodder using imported machinery, while subsidies are also offered for equipment like automatic milk extraction machines.
The dairy network additionally supports farmers through specialised healthcare services and financial assistance, making the cooperative model one of India’s strongest rural economic systems despite recurring market pressures.
