It is indeed great news when an Indian corporation achieves a billion dollar turnover, but the same news gets bigger and in itself becomes a reason for celebration if it is Gujarat Cooperative Milk Marketing Federation (GCMMF: an apex body of 13 milk co-operatives), more popularly known as Amul – The Taste of India. Yes! The federation has crossed the coveted billion dollar mark in the current financial year, 2006-07. What makes this achievement special is that unlike any other corporation where the benefits of this kind of achievement accrue to its promoters and shareholders, in the case of GCMMF, it accrues to the most neglected and the majority stakeholder of our economy, i.e., the Indian farmer! Of course, there is more than one reason why the success of GCMMF is both unique and critical, particularly in the Indian environment. In a country where farmers have been the most neglected stakeholders, GCMMF has shown how, with the right intent and vision, a farmer cooperative can function like any other professionally run corporation, compete in this fiercely competitive FMCG market, keep operational costs low, and yet succeed and set up an example, which is completely unheard of. The federation’s success also goes on to show how – in a country where ageless apathy of the Indian farmer is a reality and none, including the government, has bothered to make them partners of growth and success – an organization solely run by farmers can not only sustain but also succeed and plan to achieve more, making life more meaningful for the staggering 26 lakh farmers associated with it. At a point in time where farmer suicides across the nation is a regular feature, and adding to their apathy is the current spree of land grabbing, GCMMF’s achievement indicates that in this market economy too, it is possible to build a humane organisation and take development to the last level of the social hierarchy. Truly, GCMMF – a co-operative revolution that was envisaged by Sardar Vallabh Bhai Patel in 1946 – has come a long way. With humble beginnings with two cooperatives and 250 litres of milk procurement per day, it has grown to 13 cooperatives and an average of an incredible 6.75 million kilograms of milk procurement per day. In fact, the entire credit of making India the largest producer of milk (from a milk deficit nation, if one remembers) goes to this organisation and its iconoclastic leader, Varghese Kurien (also known as the father of this white revolution), who gave birth to the brand Amul. India, as such, has one of the largest livestock in the world with 16% of the world’s cattle, 57% of buffaloes, 17% of goats and 5% of sheep. But what is close to miraculous is the federation’s brilliant success in converting this livestock advantage and translating the same to thousands of farming households in Gujarat. And by doing so, they have been able to productively engage the rural poor and thus create an impact in their overall socio-economic condition. The impact of the federation has been such that studies have proved that the general standard of living and quality of life of associated farmers are remarkably better when compared to other regions in the country. Among other things, another notable aspect of GCMMF is their success in one of the most ‘relinquished’ sectors of our economy, namely agriculture. At a period where the capital formation in agriculture has been constantly shrinking, what with investments from both government and corporations not forthcoming, and even global markets, particularly the developed ones, leaving no stone unturned to protect their farmers, the federation has successfully shown that it (aka, agriculture) is not only prudent business, but a hugely profitable one for that matter. Almost a decade back in one of my books, ‘Planning India’, I had proved why it makes economic sense to invest in agriculture and allied industries particularly in the Indian environment. The argument went – and holds more strongly now – that not only do we have a rural advantage (as a majority of our population is based in rural hinterlands, ergo, providing productive engagement becomes easier), but also that agriculture and allied industries have a relatively much lower incremental-capital-output ratio as compared to other industries, whereby returns could be generated even with relatively smaller dosage of investments, provided products are of quality and marketed well. But thanks to our government, we have completely failed in nurturing this advantage. Forget nurturing the agri-advantage, what has been most unfortunate is the kind of pathetic market environment that has been created, whereby half a litre of sweetened water in a pet bottle sells for Rs.20, but for a litre of milk, consumers nonchalantly bargain even to pay even Rs. 18. All that apart, what Amul has done is something that is completely irreplaceable and irrevocable, and that is that it has won the trust of consumers. In a country where this factor is grossly deficient, Amul has given us the same in abundance. And that is why when Amul achieves, it is not just an organisation’s achievement, or even the achievement of those 26 lac associated farmers, but truly, a national achievement! The taste of India? Oh yes...
- 01 July 2007 |
- Dr. Arindam on Indian Economy