Amul the co-operative registered on 1 December 1946 as a response to the exploitation of marginal milk producers by traders or agents of the only existing dairy, the Polson dairy, in the small city distances to deliver milk, which often went sour in summer, to Polson. The prices of milk were arbitrarily determined. Moreover, the government had given monopoly rights to Polson to collect milk from mikka and supply it to Bombay city.[7][8]
Angered by the unfair trade practices, the farmers of Kaira approached Sardar Vallabhbhai Patel under the leadership of local farmer leader Tribhuvandas K. Patel. He advised them to form a cooperative and supply milk directly to the Bombay Milk Scheme instead of Polson(who did the same but gave them low prices).[9] He sent Morarji Desai to organise the farmers. In 1946, the milk farmers of the area went on a strike which led to the setting up of the cooperative to collect and process milk.[8] Milk collection was decentralized, as most producers were marginal farmers who could deliver, at most, 1–2 litres of milk per day. Cooperatives were formed for each village, too.[10]
The cooperative was further developed and managed by Dr.Verghese Kurien with H.M. Dalaya. Dalaya’s innovation of making skim milk powder from buffalo milk(for the first time in the world) and a little later, with Kurien’s help, making it on a commercial scale, [11] led to the first modern dairy of the cooperative at Anand, which would compete against established players in the market. Kurien’s brother-in-law K.M. Philip sensitized Kurien to the needs of attending to the finer points of marketing, including the creation and popularization of a brand. This led to the search for an attractive brand name. In a brainstorming session, a chemist who worked in the dairy laboratory suggested Amul, which came from the Sanskrit word "amulya", which means "priceless" and "denoted and symbolised the pride of swadeshi production."[12]
The trio’s(T. K. Patel, Kurien and Dalaya’s) success at the cooperative’s dairy soon spread to Anand’s neighbourhood in Gujarat. Within a short span, five unions in other districts – Mehsana, Banaskantha, Baroda, Sabarkantha and Surat – were set up.[8] To combine forces and expand the market while saving on advertising and avoid competing against each other, the GCMMF, an apex marketing body of these district cooperatives, was set up in 1973. The Kaira Union, which had the brand name Amul with it since 1955, transferred it to GCMMF.[13]