SATURDAY, APRIL 20, 2024
Eugenio Viassa Monteiro
I had the opportunity to study and frequently refer to the Federation of Cooperatives for the Milk Marketing, in Anand, with the outstanding AMUL brand. It was the outcome of the commitment of Dr V Kurien, who shaped and cemented a model much replicated in India, of providing the farmer with the best remuneration for his work.
In a very poor region, such as all of India in the 1950s, he laid the foundations for the movement, creating a series of village cooperatives, which together formed the Union of Cooperatives; these, in turn, composed the Federation of Unions.
Kurien studied Mechanical Engineering in the US on a Scholarship. In return, he had to render service where indicated. It fell to him to go to Anand to a milk cooperative entity that had just been created. What does engineering has to do with milk? Nothing! But Kurien will have intuited that this job would give him possibilities to help many thousands/millions, perhaps, of poor farmers. That's what he did, staying there and working with all enthusiasm and creativity, for over 50 years!
The structure on three levels – local cooperative, Union of cooperatives, Federation of Unions- designed to serve well the members of each village and allow for a harmonious growth of the whole. The members deliver the milk in the morning and afternoon to the cooperative; the value is paid immediately, according to the volume and density of fats (buffalo milk, for example, is fatter and, therefore, better paid).
For a farmer, receiving on delivery is a relief: right there, in the cooperative, he can buy products for family consumption and for livestock. The amount paid is around 70-80% of the market price of milk; an intermediary would pay about 60% of what the cooperative pays. And the price was never reduced, for any reason.
All milk is received, even when there is excess production, such as during the rainy season, as there is more pasture and cattle produce about 2.5 times more milk than in the dry season.
These cooperative policies encourage an associate to raise more cows/buffaloes, using loans, which the cooperative itself facilitates. And someone "outside" is attracted to join as well.
Several Cooperatives in a certain area form a Union where, according to the production, a milk processing Centre can be located, sometimes shared by more than one Union. At the Centre, part of fat is removed and it follows a line of elaboration of derivatives: butter, cheese, ghee, ice cream, baby-foods, items of chocolate, mozzarella, paneer, Srikhand, etc.
After that, the milk is pasteurised and packaged. All packaged material is then sent back to cooperatives and to a large number of AMUL product sales outlets, supplied by the Centre. Unions coordinate to balance the production and consumption of milk and dairy products in their respective areas.
All research in the veterinary field depends on it: on the feeding of cattle, the improvement of species for milk, artificial insemination, etc. The Amul Research and Development Association-ARDA was created for this purpose. There is a Bulletin issued regularly to members, with ideas for improving their incomes and other more family and social aspects such as children's schooling, the milk market and the organisation's growth.
The Federation created and runs the Indian Rural Management Anand-IRMA, designed by Kurien to play an important role in the training of leaders for rural institutions, especially for agri-business entities.
Many of the problems of Cooperatives or Unions are discussed at the proper places, with the participation of members. This is a great means of information and training for members; and it is also a way to identify future leaders for the different levels of the organisation.
In addition to ideas, the values of those who put them into practice count a lot: their integrity, their spirit of service, so that the work of farmers is valued and is well paid, helping them to improve and grow in the cultural and human aspects. Hence Kurien was called upon by Rulers to intervene in many matters, and did very well in them.
Kurien had the privilege of being visited by several top Rulers of India, namely the Prime Minister Lal Bahadur Shastri, on October 31, 1964. After visiting Anand and talking informally to the members of the Cooperative he had a long conversation with Dr V Kurien. I reproduce some parts of the encounter:
“In the second and third five-year plans, we built many milk cooperatives, all owned and run by the government. And all, an undisguised disaster, with losses. I heard that AMUL and its products are a success in the country, with a high annual growth rate. I want to know why this one is a success when the others all failed,” Shastri commented to V Kurien.
Shastri, impressed, asked him to replicate the model in other states, which Kurien enthusiastically did in several of them. Kurien set out to make Shastri's request a reality, and in three more states in India Cooperative organisations of the Anand type were started.
In 1997 the production of milk marketed, by cooperatives or otherwise, excluding self-consumption, placed India in first place in the world ranking, having grown at 6.4% per year in the last 5 years, when the world average was 2%. Despite the 1st place in global production, productivity per animal in India is at 1,806 kg/year, with the world average being 2,310 kg.
It is easy to understand that the Federation of Cooperatives of Anand currently has 3.6 million members; it reported a turnover of Rs 33,150 crore ($4.60 bn) in the financial year 2019 and in financial year 2021 sales were Rs 39,200 ($5.28 bn), despite COVID.
For the Cooperative to focus on giving advantages to members, with the sale of its product, it is important to find very competent managers, committed to the corporate purpose, through product and/or market innovations, which help to create wealth, as did V Kurien.
[The author teaches at AESE-Business School (Portugal) & at the I I M Rohtak (India)]
