The man who empowered through milk

Harish Damodaran | Updated on September 09, 2012

Verghese Kurien — November 26, 1921-September 9, 2012

The rural producer was central to Verghese Kurien’s business model.

There was nobody more unsuitable to have earned the sobriquet ‘Milkman from Anand’.

Verghese Kurien — who passed away in the early hours of Sunday aged 90 — was a Syrian Christian from Kerala, who, before landing for the first time in Anand on an early May morning of 1949, knew it just as a place “somewhere near Bombay”.

That Anand was almost 500 km away from Mumbai was something he discovered only after reaching there as a 27-year-old, to work as superintendent of a run-down government creamery on a monthly salary of Rs 275.

Moreover, the man who endeared himself to Gujarat’s farmers and created a brand called ‘Amul’ for the milk they produced, never spoke Gujarati (though he once told me that he fully understood the language; not speaking it was a deliberate strategy he employed to know what others were saying without their realising it).

Also, as someone who was a self-proclaimed atheist, a meat-eater and not particularly averse to alcohol, there couldn’t have been anybody more removed from the puritan Vaishnav-Jain traditions of Gujarat.

Milky contrasts

And the biggest incongruity of them all was the fact that milk was never Kurien’s favourite food; he actually quite disliked it.

Nor did he choose dairying as a profession; it was dairying that chose him and made him the greatest CEO India has seen, and will possibly ever see.

Kurien was originally a mechanical engineer from Chennai’s Guindy College of Engineering, who in the early 1940s worked with Tata Steel or TISCO as it used to be.

He left the job only because TISCO was being headed by a maternal granduncle, John Mathai, who later also became India’s Finance Minister.

Being known as the grand-nephew of TISCO’s top boss was rather stifling for a young, independent-minded man.

So, when he got a government scholarship to study in the US, Kurien chucked the job. It did not matter that the scholarship was only to do a masters in dairy engineering and not his first choice of metallurgical engineering.

On returning from Michigan State University in 1948, Kurien had a Rs 1,000-per-month job offer from Union Carbide in Kolkata, which he could, however, not take up because of a two-year government employment bond that was part of the scholarship deal.

And the creamery in the boondocks of Gujarat’s Kheda/Charotar region was where Kurien got posted.

The Tribhuvandas effect

It was in Anand that Kurien encountered the man who changed his life: Tribhuvandas Kishibhai Patel.

The latter had, in late 1946, organised a cooperative for marketing the milk of farmers in Kheda district, who were being fleeced by the lone Polson Dairy promoted by a Parsi businessman, Pestonji Edulji Dalal.

It was a struggling cooperative without any proper processing facilities to prevent the milk from curdling by the time it reached Mumbai. Patel had, however, managed to lease a part of the government creamery, where Kurien was biding his time, for the cooperative’s use.

But it had completely worn-out machinery prone to frequent break-downs, which Kurien, in his spare time, would offer to fix.

During one of such interactions, Kurien suggested investment in a plate pasteuriser as the only practical long-term solution, although it might cost some Rs 60,000.

To his surprise, Patel offered to raise the money — provided Kurien would help in the initial installing and running of the equipment.

By then, Kurien had served his term and was all set to leave Anand. But Patel’s persuasive powers and demonstrable commitment to a cause were enough to get him to remain in Anand, which became his karmabhoomi. The rest, as they say, is history.

The Kheda cooperative, which was collecting 5,000-odd litres per day of milk from 430 farmers in end-1948, eventually became a pan-Gujarat organisation that now procures over 100 lakh litres daily from 30 lakh producers in 16,000 village-level societies.

Cooperative capitalism

What Patel and Kurien ended up creating was a unique entity, whose sole purpose was to procure, process and market the milk of Gujarat’s farmers with a view to maximise their share of the consumer rupee.

The unions affiliated to the Gujarat Cooperative Milk Marketing Federation today pay their farmers an average rate of Rs 470 for every kg of milk fat.

That, for full-cream milk containing 6 per cent fat, works out to Rs 29 a litre or three-fourths of what consumers in Ahmedabad or Delhi shell out.

Not a small achievement, made possible only because of Kurien’s vision that saw farmers not only owning processing facilities for their milk, but even having control over marketing. Central to this was selling under their own brand — in this case, Amul.

“Without a brand, you will just be a contract supplier doing all the hard work of collecting and processing the milk from lakhs of farmers. The cream is not there. It lies in marketing, which is where actual value realisation takes place. The benefits of it should accrue to the producers”.

This is how the legendary dairyman summed up his philosophy in an interview he gave me sometime in 2004.

Unfortunately, the above vision has been junked by the National Dairy Development Board (NDDB) that Kurien had originally set up to replicate the Anand model in other States.

The NDDB, in recent times, has converted its subsidiary, Mother Dairy, into a company sourcing much of its milk from private dairies and contractors, when not importing powder and butter.

Simultaneously, it has presided over the decline of dairy cooperatives in virtually all States, barring Gujarat and Karnataka that have remained faithful to Kurien’s philosophy, which has fundamentally been about empowering small rural producers.

“I am in the business of empowerment. Milk is just a tool in that”. He couldn’t have expressed it better.

Published on September 09, 2012

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