When Dr Verghese Kurien, who presided over the Indian cooperative movement for half a century, resigned in protest on Tuesday, there were many who wondered about the fate of India's milk cooperative unions. Will they be subsumed by the dairy operations of multinationals like Nestle and Britannia? Or will the National Dairy Development Board do even better?
Kurien is the man who brought the wonder of large-scale organisation to India's dairy sector. Whether it was the Polson Dairy in Kaira, Gujarat, back in 1949, or even NDDB today, Kurien has been an important part of India's White Revolution. At first, it was about meeting India's large-scale demand for milk, a perishable. Later, this "Operation Flood" was about processing that milk into value-added products under Amul.
Born in 1921, Kurien attended Loyola College, Chennai, and then did engineering at Madras University before going to Michigan State University for his Master's degree. On his return, he was posted as a dairy engineer at the government creamery, Anand, in May 1949.
Around the same time, the infant cooperative dairy, Kaira District Cooperative Milk Producers' Union Ltd, later rechristened Amul, was fighting a battle with the privately owned Polson Dairy. Kurien, fed up with being at the government creamery, volunteered to help Tribhuvandas Patel, the chairman of the union, to set up a processing plant. Patel was assigned by Sardar Patel the task of "making the Kaira farmers happy and organise them into a cooperative unit".
Kurien since has engineered India's White Revolution, built Amul into a top brand in India, while also setting up NDDB to replicate the Amul experience across India, now the largest milk producer in the world. And along the way, he set up the Indian Rural Management Institute.
The man's enormous contribution to the dairy sector has won him dozens of prestigious awards: Magsaysay, Padmashri, Padmabhushan, Padma Vibhushan, Wateler Peace Prize, World Food Prize Award and many others.
Lately, though, he has been an embattled man, with his one-time protégé and current NDDB chairperson Amrita Patel (whom he groomed for almost 30 years as his successor) taking what he saw as power away from the farmer by having NDDB exert greater control over the state milk cooperative federations - expected to operate under the Mother Dairy brand and reap the benefits of scale.
Under the terms of the joint venture agreements struck between NDDB and the milk unions, the latter would have to cede much autonomy to the former in return for the benefits of centralised business and brand management.
"I strongly object to the fact that Mother Dairy, which is not a cooperative brand, but one owned by the government, will use the JV to tap the existing cooperative retail chain to push itself," he had argued, "There is an inherent contradiction that the government-owned NDDB, through its subsidiaries, is getting into fresh business activities at a time when the Centre is considering further divestment in all existing areas including those in the dairy sector such as the Delhi Milk Scheme."
Things were coming to a head, it was obvious, but though the 84-year-old doyen of the cooperative movement was seen by many analysts as being out of touch with current-day market dynamics, nobody thought he would be eased out so shabbily (under threat of a no-confidence motion at a board meeting). Quite clearly, Mother Dairy will now be under the pressure of public scrutiny to outperform expectations.Do you want to discuss stock tips? Do you know a hot one? Join the Stock Market Investments Discussion Group
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