The Quality Series Presents:

Dudhsagar Dairy Cooperative Uses Continuous Quality Improvement and Good Corporate Citizenship to Change Lives in India

Mohandas Gandhi Used Innovative Techniques to Help Gain Indian Independence

The 1930 Salt March was a turning point in India's struggle for independence
Business Initiative Directions has nominated the Dudhsagar Dairy in Gujarat State of western India for the Quality Crown Award in London later this year. Gujarat State is a major dairy producing region of India, and is well known for producing one of India’s most famous native sons -- Mohandas Gandhi.

According to Louis Fischer, “Gandhi’s greatness lay in doing what everyone could do but doesn’t.” Mohandas Gandhi was born in Gujarat state in 1869. His childhood upbringing included a strong inculcation in values such as pacifism, mutual tolerance, non-injury to living beings and vegetarianism. Gandhi was educated in London as a lawyer and moved to Natal, South Africa in 1893, where he spent the next 20+ years. He quickly became involved in the struggle against racial segregation, founding the Natal Indian Congress and participating in nonviolent resistance to the registration law for Indians in South Africa.

Making a Difference at Home

Upon his return to India in 1916, Gandhi continued to practice nonviolent civil disobedience, resisting the British colonial authorities, leading peaceful strikes and protests, and spreading a message of self reliance to India’s poor. In 1921 he became head of the Indian National Congress, and began agitating for complete political independence from Great Britain, using such techniques as a boycott of British goods and institutions and civil disobedience. He was jailed for 2 years as a result. By the early 1930’s, however, instead of arresting him the British began to negotiate, and made concessions on economic conditions, caste status, women’s rights, and autonomy. One of Gandhi’s most famous early protests, and one which graphically demonstrated the unjustness of British rule and the absurdity of some of its laws, was the Salt March of 1930. It was inspired by the Salt Act of 1882, which made it illegal for anyone to collect or produce salt except for authorized British nationals. Starting with a group of about 80, Gandhi characterized his 240 mile walk to the sea as a traditional spiritual march. Using the publicity as an opportunity to gather support, he arrived at the coast with more than 12,000 followers, who began to make salt in defiance of the law. The British did not have an adequate response. Allowing such a well organized protest to continue gave more and more political space to those who wanted independence. On the other hand, coming down hard on the protestors for the simple act of making salt seemed like an exaggerated response which would cost the good will of loyal Indians. Furthermore, salt was a commodity that everyone, even the most poor, used. Focus on the unfairness of the British monopoly on its production brought into sharp relief how repressive the law was. During the first years of WWII, Gandhi helped lead the “Quit India” movement to pressure the British to leave India. The movement’s leaders, including Gandhi, were arrested and spent most of the war in jail, and Gandhi’s wife died while imprisoned at the Aga Khan Palace in Pune. The British finally realized that India was no longer governable, and moved quickly to withdraw once the war was over. India gained its independence, but the British insisted on dividing the colony into Hindu and Muslim sections. Gandhi opposed this plan, and after the partition advocated for the payment of restitution to Pakistan for territory it lost in the division. Gandhi was assassinated in 1948 by Nathuram Godse, who was opposed to what he believed to be Gandhi’s naïve and dangerous rapprochement with Muslims. During his lifetime, Gandhi was nominated for the Nobel Peace Prize five times but he never won it. Unlike the other Nobel prizes, it is awarded for activities carried out during the prior year, and like the other prizes, posthumous nominations are not allowed. In an apparent tribute to Gandhi, however, for 1948 the Peace Prize was not awarded for lack of a “suitable living candidate.”

Other Changes in India

About the time that India was gaining its independence from Great Britain, milk producers began to fight for their own kind of independence. Milk producers, many of whom only had one or two cows, were not able to make a living because the bulk of the profits were going to middlemen. Individually, producers had no power to negotiate a better deal, but decided that there was strength in numbers, that if they banded together they could do better. And so, the first milk cooperative was born.

Cooperatives are groups of producers who work together on issues like marketing, distribution, storage, price supports, legislation, continuing education and other matters of mutual interest and benefit. The cooperative functions like a company where the producers are the owners or shareholders. Money that would normally be paid to wholesalers, distributors and other intermediaries goes instead to the producers. Since rural communities become more self sufficient, the social fabric is more robust and jobs are created in the local economy. Where milk cooperatives have been set up literacy has increased, the caste system has eroded, suicide rates of farmers have decreased dramatically, democratic principles have flourished, and religious tolerance has blossomed. According to the Dudhsagar Dairy, “there is no religious difference in purchase of milk.” The rise of the cooperative as a production model has led India from a net importer of milk to the largest milk producer in the world.

An additional benefit of the milk cooperative is consumer protection and safety. Because of the direct link between producer and consumer, quality issues are the direct responsibility of the dairyman, and the consumer also enjoys a cheaper price.

The Dudhsagar Dairy is the largest in India, and one of the oldest and most successful milk cooperatives in the country. According to the latest available statistics, more than 530,000 dairy producers composed of 1238 member societies make up the cooperative dedicated to the following principles:

- Voluntary And Open Membership - Democratic Member Control - Member Economic Participation - Autonomy And Independence - Education, Training And Information - Co-operation among Co-operatives - Concern For Community

Some of the notable activities that the Dudhsagar Dairy engages in are Milk Day Programs, Cleanliness Drives, Leadership Programs, Cooperative Development Programs, and Programs on Cooperative Principles and Practices.

The Dudhsagar Dairy provides infrastructure to farmers that they would not be able to afford themselves. Currently it produces 2,500,000 litres per day, operating five milk chilling centers, three cattle feed plants (including the largest in India), milk processing plants, and the third largest semen collection center in India. Additionally, the cooperative operates the Dudhsagar Research and Development Association and its Mansinhbhai Institute of Dairy and Food Science Technology.

Continuous Improvement, the Key to Consistent Quality

The Board of Directors at Dudhsagar Dairy has implemented plans and programmes designed to continuously improve quality. For instance, the Fertility Improvement and Productivity Enhancement Programme covers such areas as Pure Breeding to develop genetically superior animals with high milk productivity, Total Mixed Ration to provide scientifically developed feed to animals, and Calf Rearing to create good replacement stock.

On the production side, the cooperative and its umbrella organization have implemented the Infrastructure for Quality and Clean Milk Production, working with the National Centre for Disease Control and following strict government guidelines. This effort includes Clean Milk Production training programmes in villages as well as expansion of plants outside of Gujarat state in order to make quality milk more widely available.

In the area of Human Resources Development, the cooperative avails itself of the Internal Consultant Development system for developing leadership skills among member producers, and provides specially trained consultants who facilitate Vision Mission Strategy Workshops where they help producers prepare Mission Statements & Business Plans for next five years. For producers with identified talent and interest, the Progressive Milk Producers Programme trains participants in scientific animal husbandry practices and commercial dairy farming.

All of this dedication to quality improvement has shown up in the bottom line. Milk procurement prices have increased by 68% in the last four years as exports have risen, perceived quality has improved, and demand for high quality milk and dairy products from reputed brands has risen sharply.

Third party Certifications

The Cooperative has implemented a strict quality control and corporate governance system. As a result, it has been ISO 9001:2008 certified, ISO 14001:2004 certified, and became the first dairy cooperative in the country to receive FSSC-22000 certification. This last certification is supported by the European Food and Drink Association,the American Groceries Manufacturing Association, and the Global Food Safety Initiative. These are strong indicia of quality in the organization. Importers have also appreciated the quality of products from the cooperative and other milk producers in Gujarat state, which have seen impressive gains in volumes in recent years, allowing milk production in India to grow at a faster pace than the world average .

The BID Committee strongly considers good corporate citizenship as evidence of quality, since companies must make a conscious decision to dedicate extra resources to these activities and often do not expect a direct financial benefit in return. This shows confidence in the long term future of the enterprise, robust quality systems and a dedication to careful planning. In the case of the Dudhsagar Dairy, good corporate citizenship is expressed in a written policy dedicated to Sustainable Development, Social Empowerment, and Political Empowerment of its Membership.

Doing Well by Doing Good

Consistent with these general principles is the cooperative’s particular interest in the empowerment of women. India is a country where labor force participation by women is less than half that of men and, at the lower end of the income spectrum, the gender gap in pay approaches 50%. Most of rural milk producers are women, so the cooperative dairy model has benefitted women in India directly and significantly.

The cooperative dairy farmers receive about 80% of the retail price for milk, the best consumer to producer price ratio in India. Furthermore, the cooperative has the strength to raise prices when costs of production increase, as has happened recently. Women are also eligible to participate in the cooperative’s Leadership & Awareness Programs, and in the Mahila Pashupalan Talim Karyakram with technical collaboration and resources of Anand Agriculture University.

According to the World Bank, only 43% of Indian women had a bank account in 2014. Dudhsagar Dairy has decided to address this issue directly by opening bank accounts for its women members, many of whom had no prior banking experience at all.

The charitable arm of Dudhsagar Dairy provides milk products to the Gujarat government for children suffering from malnutrition. They have also participated in the Green Amul Green India Campaign by planting 370,000,000 saplings across Gujarat state with plans to expand the program to all the villages of India where they procure milk.

Because of its commitment to continuous quality improvement, dedication to good corporate citizenship, and contributions to the lives of ordinary Indians, Dudhsagar Dairy Cooperative has been selected to receive the BID Quality Crown Award for 2015 at the convention in London.


BID is a private and independent organization founded in 1984, whose primary activity is business communication orientated towards quality, excellence and innovation in management. A leader in the broadcasting of Quality Culture, BID recognizes those companies and organizations which lead the most important activities in the business world, and is considered the founding organization in the broadcasting of the Culture of Quality, Excellence and Innovation in 179 countries. The trophy symbolizes a pledge to the principles of Quality Culture. The QC100 Total Quality Management Model, together with the Quality Mix program, media coverage of the convention and its impact on the community and business sector, create an unmatched platform for continuous improvement within the organization and awareness of the achievements of the company at an international level. Awards are given only to those who are committed to improving their Quality Culture based on the principles of the QC100 Total Quality Management Model. Candidates are proposed by the leaders of previously awarded companies who they consider worthy of the award. Especially meritorious candidates may also be nominated. The International BID Quality Award Selection Committee then chooses the winning companies who will receive the award in New York, Paris, Geneva, Frankfurt, Madrid and London.