It was only a couple of days ago that an audio book on Verghese Kurien was released in Mumbai and business leaders paid rich tributes for the work of the milkman of India. A statement by N.R. Narayana Murthy, co-founder of Infosys Ltd, asking the government of India to confer the Bharat Ratna, its highest civilian award, before time ran out, was somewhat prophetic as it indeed ran out of time.
It is a sad contradiction that in the year declared as the United Nations year of cooperatives, we have lost one of the most significant votaries of the cooperative form of business. Kurien showed the world that a business owned and controlled by a farmer could be run as professionally as any transnational corporation and Shashi Rajagopalan strived to make the legal environment for cooperatives better by tirelessly working for legal reform in state after state.
Kurien was a reluctant entrant to the small town of Anand, his ultimate home. He came with multiple handicaps: a non-vegetarian, bachelor and a Christian in an orthodox town. He was to serve a government bond in return of a scholarship. The bond became bonding. He stayed back and made it his life’s mission to put the cause of the dairy farmers at the centre of his life.
Kurien was never known for compromises. While he blended into the economic life of milk producers, he led a personal life on his own terms, including the way he dressed, the way he spoke (never in Gujarati) and the way he dealt with people. He was one of the several outsiders that Gujarat welcomed with open arms, but was always special. The district of Kheda and the dairy farmers of Gujarat owe their prosperity to Kurien. No wonder that these men’s photographs adorn many a farmer’s modest mantelpiece and walls.
A testimony for Kurien are in some numbers. A study that we did a couple of years ago showed cooperative dairies on an average delivered more than 70% of the consumer rupee to the milk producer. The cooperatives dictated the market structure. The competitors matched this benchmark at least on the upfront price. Dairying has the best return that a primary producer can get from the value chain in any agricultural commodity.
How did this happen? By putting the entire value chain from farm gate to food plate into farmer-owned structures. Today cooperatives own a significant chunk of the organized milk markets. If they do not commit harakiri as they did in Chittoor district of Andhra Pradesh, where private players killed a vibrant cooperative, they could be a thorn in the flesh for the private players.
They have a network of milk procurement points through village-level cooperatives that is so difficult to build, and usually difficult to break. No wonder the managing director of Amul recently said his competition does not come from the multinational brands that have deep pockets but from unorganized players, local and regional brands who can potentially control the procurement rather than the marketing end of the value chain.
Kurien built insular systems around cooperatives that made it difficult to penetrate and break. He ensured the cooperatives always had the technical edge. Setting up Kaira Can Co. Ltd in the early days to ensure backward integration in managing the critical supply chain; using technologies developed by public undertakings such as Central Food Technological Research Institute for producing cheese from buffalo milk; developing indigenous technology for drying milk into powder or making condensed milk; tie up with Tetra Pak for setting up a packaging company for selling long shelf life milk; use of commodity aid to develop markets for milk and milk products to be occupied by local milk producers under the operation flood programme; all these basically had the interests of the dairy farmer as central. That has held the cooperative structure in good stead.
Today, Gujarat procures the most hygienic milk—directly stored in bulk milk coolers at the procurement point; moving in insulated tankers to be processed in fully automated state-of-the-art plants with least human intervention.
While cooperative ideology was important for Kurien, it had to be filled in with solid business principles. And these business principles were backed by all that is fair in business—obstruction to private businesses using the power of lobbying and seeking extended protection through the milk and milk products order when the entire country was dismantling the licence regime and swearing by liberalization; using the press to lash out at his detractors, he did it all. Using tactic for tactic and paying back in the same penny that was used by competition, or his detractors.
Kurien was a blend of ideology, practical business sense, integrity, professionalism, purpose and a symbol of wanting to lead a good personal life without the need for undue enrichment. He was a fine Syrian Christian who lived on his terms; accepted by orthodox Gujaratis by the sheer power of his conviction and what he stood for and what he delivered.
If somebody had a straight spine and showed what it meant to stand up and still not lose the position and the moral authority, it was him. An inspiration for generations. A true Bharat Ratna. Just as well that he was not decorated by the government. These governments did not deserve the honour of conferring this title on him.
MS Sriram is a visiting faculty member at the Indian Institute of Management Bangalore.