`The NDDB has no marketing capability'

Published : Mar 28, 2003 00:00 IST

Dr. Verghese Kurien, architect of the Indian dairy cooperative structure, has battled several odds on his way to success. At 82, the pace-setting "Milkman from Anand" continues to be combative when it comes to issues threatening the cooperative movement. Kurien has shown that in spite of the changing dynamics, the cooperative movement has a bright future. He is strongly critical of Dr. Amrita Patel, once his protege and currently the Chairman of the National Dairy Development Board (NDDB), over the NDDB's plans to begin joint ventures with State cooperatives. In this wide-ranging interview to Anupama Katakam, Kurien shares some of his thoughts on the cooperative sector, the government's open market policies and the bureaucracy.

What do you think is the present status of the cooperative movement?

Unfortunately, cooperatives are looked down upon, whereas in actual fact cooperatives are more straightforward, more honest, than the private sector.

Cooperative dairying will always be a roaring success, only you have to assume that it is truly a cooperative. The chairman and the board have to be elected from amongst those who produce the milk. You have to assume they have the freedom to appoint their professionals, including their managing director. Given these fundamentals it cannot fail. If an IAS (Indian Administrative Service) officer is appointed managing director, then it is a totally different story. It is not a cooperative in the first place.

Given the current inclination towards privatisation, where do you think it is heading?

To the stars! (laughs). You see in dairying you are dealing with milk, which is highly perishable, which needs to be marketed twice a day every day of the year; which cannot be held back by the producer or the farmer who is seeking a better price. The farmers' ability to bargain for a higher price does not exist. No one in dairying collects milk from small and marginal farmers and landless labourers, who are the producers of milk. They have an agent in the village to collect the milk. Now, while you can argue in many cases - not in all cases - that the declared price is a reasonable price. You cannot argue that the milk contractor offers the right price to the farmers, who have no bargaining power, who have no holding capacity. That is why dairying is tailor-made for cooperative endeavour.

That is why dairying in most countries is entirely cooperative. Whether it is New Zealand, Poland or Norway. In the United States, 87 per cent of the dairy industry is cooperative.

We did not invent cooperative dairying. All that we did here was we tried it out in India under Indian conditions and we found it works.

What hinders the other State cooperatives from becoming other Anands?

Where you say cooperatives have failed, they have not failed. In most cases where you say they have failed, they have never had a chance. It is politicised. It is not run for economic reasons. Managing directors are IAS officers. The government appoints them. That won't do. That is not a cooperative.

Could you say why you are opposing the NDDB's plans to enter into joint ventures with State-level federations?

You know what the NDDB is? The NDDB is government. And the government appoints the Chairman of the NDDB. Are you suggesting that I call the government to rescue the cooperatives when what they require is rescue them from the government?

Mind you, I am not talking about the personalities involved.

Yet the Dairy Board says that it requires help, particularly in marketing products?

May I know what the dairy board has marketed? As far as I know they have not marketed anything. It is Gujarat's federation that has the marketing capability. Just because the NDDB has appointed some ex-Hindustan Lever fellow and pays him Rs.3 lakhs a month, it does not mean it can perform. If any cooperative wants our help, we are prepared to extend it.

If they don't have the marketing capability, essentially what would be the NDDB's role?

The NDDB is a statutory corporation set up by an Act of Parliament.

In fact the government even made the mistake of asking me to draft the National Dairy Development Board Act of 1987. You know how and why this Act was passed? Because of Lal Bahadur Shastri - our Prime Minister. He was hardly 4 feet 11 inches tall. But he was a very very big man. He was coming to Anand in response to our invitation to declare open our cattle feed component-manufacturing unit. The Prime Minister sent word thanking us for the invitation but said he would prefer spending the night in a village as the guest of a small farmer. We arranged it. He spent the night and saw whatever he wanted to. When he was to leave, he said, "Kurien I have to talk to you". "Yes, Prime Minister!" "You know I have heard about Amul. What a glorious success it is! I have also heard of Bombay, Calcutta, Delhi and Madras milk schemes. All disasters. They don't satisfy those who they supply milk to. They don't satisfy those who collect milk. Complete corruption. Incompetence. Then I was told of Anand. I came here to see and discover what is the secret of Amul's success is. Therefore, I stayed in the village. To study it from the grassroots. I looked at the soil. Not as good as the Indo-Gangetic plain. I looked at your temperature. Cool in winter, warm in summer, as it is in most of the country. Nothing special there. I looked for any vast availability of fodder and feeds. I thought I would see green countrysides with contented cows grazing. The whole place is brown. Rainfall - 30 inches - average of most of the country. I looked at the buffaloes. These buffaloes don't look as good as those I remember in my village in Uttar Pradesh. Yes, I said these give less milk, they are soortis. Lastly I looked at the farmers. Good people, as farmers usually are. But not as hardworking as the Punjabi farmer. Everything I looked at, which has a bearing on milk production - you have nothing special. The issue arises - what is the secret of its success. I spent a whole night in a village to discover and I have discovered none. Is there any secret? If there is a secret, would you please explain to me what it is?"

I said, "the secret is very simple. This is a dairy owned by farmers. Their elected board manages it. The government has no say in the matter. And they have appointed me their manager. And I lose my job if I don't satisfy my board. This is, therefore, a dairy where they are sensitive to the needs of farmers. The manager is their employee and not on deputation from the government. If I want to keep my job I have to satisfy the board - which I seek to do. If a dairy is so structured, it cannot fail."

He said, "if there are no special conditions to create this, then this is what India needs. So, Kurien, from tomorrow onwards you don't work just for Anand. You work for India. I will create a National Dairy Development Board, you please accept the chairmanship."

I said I would, but there would be conditions - the NDDB should be headquartered in Anand. "I am not coming to Delhi. It is polluted in many ways."

Today I think there are 175 Anands in 22 States of India. Together there is a membership of 10 million farmers. India's milk production, which was stagnating at 22 million tonnes per annum, is 86 million tonnes today - a four-fold increase. But unlike in the case of other agricultural commodities, though the production has quadrupled, the price has not gone down. This is achieved by better marketing. Marketing is everything. I said I would first create 17 Anands with one million farmers as members around Bombay (Mumbai), Delhi, Calcutta (Kolkata) and Madras (Chennai). It is my view that I should not do anything small. Because when you do something small and it fails, you sweep it under the carpet and forget about it. Ten million farmers, you cannot sweep them under the carpet. If something is wrong with it, you have to put it right. If it has not succeeded, why hasn't it? Then you have to create conditions to make it succeed. That's my philosophy. I don't commit small mistakes, I commit huge, terrible mistakes!

As a spokesperson for the cooperative movement, how do you think the government's policies on liberalisation have evolved?

Liberalisation, globalisation - these are fancy words. Which only means that we are required to open up our vast market. To be invaded and exploited by other countries, even as they close their own markets to us. I have no time for the World Trade Organisation. Who cares about what the advanced countries say. Some fellow in Delhi may bother. I will do what I want here. It is my country.

Should we not abolish the IAS? How long can we depend on them to frame the policy of the country. Greedy people, always looking at what post to grab. No sooner did they hear that Amrita Patel and I have a quarrel than they wanted to become Chairman of the NDDB. If they can catch hold of Patel and start joint ventures, they have succeeded in some ways.

There was an understanding that Amul would not market in Mother Dairy's area? By launching Amul ice cream, did the Gujarat Cooperative Milk Marketing Federation (GCMMF) break that agreement?

That is all in the past.

Amul is a huge success story. In spite of the entry of multinationals and private players, you still have a huge share of the market. Could you tell us a little about the brand?

It is the best product and offers the best quality at the cheapest price.

Look at our marketing. On the trade name Amul, we spend Rs.25 crores on advertising alone. The total salary at the GCMMF, of its 40 officers, is 0.5 per cent of sales. We are ready to take on anyone at any time. That is the kind of people we are.

How would you explain all this? How a cooperative has taken on the multinationals. They want to know how to fix this guy. If I have a meeting I can collect 50,000 people. They said why don't you stand for elections. I said I can't quit the cooperative movement.

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