Phase III (1985-1996) enabled dairy cooperatives to expand and strengthen the infrastructure required to procure and market increasing volumes of milk. Veterinary first-aid health care services, feed and artificial insemination services for cooperative members were extended, along with intensified member education.
Operation Flood's Phase III consolidated India's dairy cooperative movement, adding 30,000 new dairy cooperatives to the 42,000 existing societies organised during Phase II. Milksheds peaked to 173 in 1988-89 with the numbers of women members and Women's Dairy Cooperative Societies increasing significantly.
Phase III placed increased emphasis to research and development in animal health and animal nutrition. Innovations like vaccines for Theileriosis, bypass protein feed and urea-molasses mineral blocks, all contributed to the enhanced productivity of milch animals.
From the beginning, Operation Flood was conceived and implemented as much more than a dairy programme. Rather, dairying was seen as an instrument of development, generating employment and regular incomes for millions of rural people. "Operation Flood can be viewed as a twenty-year experiment confirming the Rural Development Vision" (World Bank Report 1997c.)