The Hutatma model

The farmers' cooperative in Sangli district, Maharashtra, which runs the Hutatma Kisan Ahir sugar factory, establishes a model for management.

in Walva

IT is Sunday afternoon. Most people are enjoying their siesta. But, inside the Hutatma Kisan Ahir sugar factory farmers from 15 villages have gathered to talk business. There is lively discussion. The weekly meeting of the sugar cooperative's Board of Directors is under way.

Sugarcane farmers themselves manage India's most efficient sugar factory, in Walva in Sangli district, Maharashtra. Who says you need an MBA to run a company successfully? You don't even have to pass high school.

The Hutatma Kisan Ahir Sugar Cooperative is different from other sugar cooperatives in Maharashtra. No politician has any say in its functioning. Farmers take all decisions collectively. The cooperative's founder, Naganath Nayakawadi, a freedom fighter and a social activist, guides its activities.

Each of the 15 villages, where the cooperative's members live, collectively select a director to represent them. Moreover, one Dalit, two women and a poor candidate also have to be appointed directors. All the members together take decisions on major issues such as the price of cane. The weekly board meetings have an open-door policy. Any member can attend and vote. "In all other sugar factories, the management takes decisions behind closed doors. Only here the system is transparent. Even you can walk in and question us," says Hindurao Patil, a small farmer and a former director of the cooperative.

The `Hutatma model' has reaped rich dividends. During the past 18 years, the factory has received several national awards for being the most technically efficient. Its recovery rate (amount of sugar recovered from the cane) is the highest in the country. The cooperative pays farmers the highest price for cane in the State. And payments are prompt.

The cooperative makes sure that even the poorest among the members benefit from its prosperity. Each village has a job quota. Members of the cooperative decide who should get jobs in the factory. During village meetings, people identify the poorest families for employment. More than one-third of the factory workers are Dalits. To employ those most in need of work, the factory announced a job scheme for the poorest. "Those who agree to work as cane cutters for two years are given permanent employment after that. Only the poorest are willing to cut cane. That is how we identified the most needy families," said Shahaji Bansode, a factory worker.

More than 100 people got jobs under this scheme. The workers are given free housing, a good bonus and a quarter of the surplus generated. Even migrant sugarcane cutters who work here during the six-month cane-crushing season get a share of 25 per cent of the surplus. These workers travel from the drought-prone Marathwada region in central Maharashtra to work in the sugarcane fields in the western part of the State. The Hutatma cooperative is the only one to have built houses for cane cutters and a school for their children. Workers also get free medical treatment.

Yet the cooperative has money to spare for rural development. Part of its surplus goes towards funding an educational trust, which runs balwadis (pre-primary schools), a high school, a college and a hostel for girls. Education and accommodation in the hostel are free. "It is run so that even the poorest get an opportunity to be educated," said a director. Many of the villages have paved roads thanks to the cooperative's investment in rural infrastructure. Cooperative dairies and banks have also come up in the area. The factory is also funding lift irrigation schemes for farmers.

The cooperative does not stop at only looking after its own functions. It also supports other social causes. After the Latur earthquake, it adopted 108 destitute children and educated them in its school. A part of the surplus is given every year to people displaced by the nearby Warna, Urmodi and Koyna dams.

Nayakawadi, popularly known as Annasaheb, has made sure that the cooperative retains its social conscience. "This factory is named after a comrade who was killed by the police during the Quit India Movement. Our work today is a continuation of the people's struggle for their rights. The movement started in 1942 when we ran a parallel government against the British Raj. Just one person cannot do anything. People have to work together," he says.

Women hold top positions in the present board of directors. Nayakawadi ensured that women were appointed chairperson and vice-chairperson. They are the daughters or wives of Anna's old friends. What power they actually have remains in doubt. Finally, whatever Nayakawadi says is law as he enjoys a lot of respect. "They are new, but they will learn," he says about the women chairpersons. "It is very important to set such examples for others. And, it also boosts women's self-esteem."

The cooperative has had a Dalit, Jain and even a Muslim chairperson. Each gets his or her turn. No one can hold a post for more than one five-year term. The board changes completely every five years.

The directors of the cooperative are mainly medium or large farmers. A few small farmers actually get chosen. "Poor people cannot spare the time to attend meetings. We are too busy working for our everyday survival. Maybe, if they gave directors a salary, it would be possible," said a marginal farmer. "But the directors we elect make sure that everyone benefits from the cooperative."

Have not political parties tried to gain control over this cooperative? "They know there is no scope for corruption here. So they leave us alone. They do not get involved. They loot their own factories," said Yashwant Babar, a former director of the Hutatma cooperative. "All of us support different political parties. But when we come for a meeting, we leave our politics outside the door. It should not interfere with issues of our livelihood," he said. Sound logic that has built a strong business.

The Hutatma model would baffle management gurus who believe that only men in suits are qualified to manage. The 8,000 members of the cooperative have crafted a brand of business that has prosperity, not profit, as the motive.