Amul is an acronym for Anand Milk Union Limited. It is managed by the Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF). It follows the co-operative model.

At the village level, there is a village dairy co-operative society. (VDCS). It serves as a milk collection centre. There is a procurement supervisor. He receives milk from the producers. The producers are mostly farmers and cattle rearing villagers. Every village co-operative society has a secretary and chairman. A producer can sell any quantity of milk to the society. Every collection centre has an automatic milk testing machine — it indicates weight, volume, fat and percentage of SNF or milk solids which are not fat. The centre offers the price per litre for given fat and SNF percentages. These parameters are displayed on the screen of the machine at the time of milk collection. The amount payable to the producer is known immediately. It is directly transferred to the milk producer’s bank account by the milk union. The milk thus collected at the centre is taken by a tanker to a chilling centre. A bigger tanker carries milk from the chilling plant to the dairy where it is processed.

The stages can vary in some districts. Milk tankers can visit VDCS twice a day. The milk is tested in a lab at the plants. After clearance, the milk is unloaded, processed and treated.

There are 16.6 million producers in India. There are 185903 VDCSs in India. There are district milk unions or DMUs. And at the apex are the state milk federations. Co-operative network covers 1.96 lac VDCS in India — with a cumulative membership of 17.26 million milk producers.

The DMUs provide VDCSs cattle feed, veterinary services, animal breeding services, rural health services, veterinary doctors to assist milk producers.

The DMUS make products for the Federation. In Gujarat it is under the AMUL brand. The Federation does the marketing distribution. Many states have dairy co-operatives, but none is as popular as Amul.

The surplus or profit made is shared at three levels (after all costs) — at the VDCS level, at the DMU level and at the Federation level. The surplus shared is in addition to the what the producers received for milk sold. The surplus is distributed at the end of the financial year.