Kurien’s producer-centric approach has rubbed off on private dairies as well; they have come a long way from the time of Polsons.

The passing away of Verghese Kurien presents an opportunity for reflection, not only on the exceptional contributions of the Father of India’s White Revolution, but also on the future of dairying in the country. Kurien helped nurture an entity, Amul, whose affiliate dairies collect and process over 10 million litres of milk daily from 3 million farmer-members of 16,000-odd village-level societies across Gujarat. These farmers are indirect shareholders of this ‘company’ that exists in order to maximise returns, not on the capital contributed by them (if at all), but on the raw material (milk) they supply. The fact that its farmers are able to capture roughly three-fourths of the price paid at the retail consumer end is testimony to the venture’s success. This has been made possible through a transparent system of paying farmers based on the fat/solids content in their milk; efficiencies in processing and supply chain management; and an advertising strategy relying not on expensive celebrity endorsement as much as exploiting the natural mindspace that milk products occupy among Indian consumers (there hasn’t been a better medium for it than the likeable Amul moppet). Amul, in a sense, represents the best of capitalistic and grassroots community empowerment values essential to a vibrant liberal democracy.

Unfortunately though, Kurien’s model of cooperative capitalism has not permeated beyond Gujarat and, to an extent, Karnataka. The fault for it lies both with the National Dairy Development Board – which he set up to replicate the Amul model across India – and the State governments that have viewed cooperatives largely as captive patronage-dispensing extension arms, rather than as businesses meant to deliver value to those for whom they ostensibly exist. That’s, indeed, what Amul or Fonterra – the world’s largest dairy company cooperatively owned by 11,000 milk producers in New Zealand – are. Today, cooperatives in India procure collectively some 11 million tonnes (mt) of milk, half of which comes from Gujarat and Karnataka. Elsewhere, organised private dairies have made huge inroads over the last 10-15 years, so much so that their combined procurement may have crossed 15 mt – more than the cooperatives.

That is not bad in itself, considering that private dairies have evolved since the days of Polson – a company, which symbolised exploitation of farmers and triggered the founding of Amul, way back in 1946. Many of these dairies have now eliminated middlemen in procurement and pay according to fat content. Some have even invested in artificial insemination, scientific breeding, animal nutrition, fodder development and other backend activities – which, too, Kurien may have approved, in spirit if not in form. Either way, the fact is that the cooperatives, barring those in Gujarat and Karnataka, are floundering, while the bulk of new processing capacities are being created in the private sector. The ultimate tribute for a public official is in seeing his initiatives being adopted by the private sector in the same field. Judged by that yardstick, many of Kurien’s innovations have become industry best practices and Indian dairy farmers are the lasting beneficiaries. Kurien may be no more, but he has left millions of them a happy lot.

(This article was published on September 10, 2012)
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