“FAO recognition of traditional farming should keep GM away”

The traditional agricultural system of Koraput (Odisha) has been recognized by the FAO as a Globally Important Agricultural Heritage Site (GIAHS) at the recently concluded 99th Science Congress. This recognition is for outstanding contribution to promoting food security, biodiversity, indigenous knowledge and cultural diversity for sustainable and equitable development. Living Farms is a non profit working in the Koraput region of Odisha with the tribal communities practicing the traditional form of agriculture. Debjeet Sarangi of Living Farms spoke the to The Environment Health Bulletin and explains what this recognition means for the region.

Debjeet Sarangi What does this recognition by the FAO mean for agriculture in the Koraput region ?

The recognition of this traditional form of agriculture as a Globally Important Agricultural Heritage Site (GIAHS) is quite significant for the local communities, their traditional knowledge and agriculture systems. To begin the UN body has recognized the intrinsic value of the tribal agriculture system which is the custodian of thousands of traditional rice varieties, rich millets based mixed farming, sacred groves and agricultural ecosystems. We hope that our policy makers, institutional researchers, and research bodies also recognize this. We expect them to take strong policy decisions to conserve this heritage and ensure that the tribal communities of the region continue to live with dignity.

We also expect from the state and central government that Genetically Modified (GM) seeds and /crops will not be introduced here. The GM crops will contaminate the local agriculture system especially the local rice biodiversity and marginalize and weaken the local farming population. This recognition should also ensure that the chemical intensive mono cropping trend driven by the second Green Revolution program is not imposed or implemented here. It is also important that the land under agriculture in this region is conserved and not diverted for any other purpose.

Is this traditional system restricted to Koraput alone?

The Jeypore tract (undivided old Koraput district), is conceived by rice researchers as a centre of genetic diversity and secondary center of origin of rice. This traditional form of agriculture is not just practiced in Koraput. Its practiced in all the tribal districts of Southern Odisha. Koraput  has the highest population growth in the state. The district is primarily a tribal district; more than 70% of the total population belongs to one of the district’s 52 tribal groups. Some of the numerically large tribes in the district are Khond, Bhatada, Paroja, Bhumia and the Bondas.

What do the tribals largely rely on?

They practice millets based  mixed farming system consisting varieties of millets, sorghums, varieties of pulses, legumes, oil seeds, roots and tubers and vegetables. They have been conserving thousands of traditional varieties of rice. Apart from the cultivated sources a lot of their food, nutrition and livelihood come from commons- forests and waterbodies. So, there is an urgent need to conserve the commons in this region as well as to ensure that local tribal communities continues to  have access to their commons. (For instance if people upstream use pesticides it flows through the river and those living downstream are going to be affected)

How is this tribal agriculture and food system of Koraput different from the conventional agriculture or even the chemical free agriculture?

The tribal agriculture and food system consists of cultivated and uncultivated ecosystems. Apart from the agro-climatic situation their cultural practices and food habits, play a very important role in shaping up this system. Many festivals and rituals revolve around their agriculture and food system. They  view  cultivation as more than just a means of their food and  livelihood, they view it as a way of life.

The topographic diversity of the Koraput region has resulted in a wide diversity in ecosystems under which rice is cultivated: upland (unbunded as well as bunded), medium land (irrigated and rain fed) or low land condition. Within each ecosystem, innumerable rice varieties are grown depending on the local preferences for morphological characters (such as plant height, pigmentation of plant parts, grain shape and size, presence of awns) or cultural practices such as broadcasting, transplanting, food preparations (such as cooked rice, popped rice, puffed rice), palatability (aromatic or non-aromatic).

The official net sown area is around 25% of the total area of the region and is concentrated in plateaus and the wide river valleys. In the hilly areas however, permanently cultivated fields can be as low as 10% of the landscape. 33% of the cultivated area is irrigated; paddy occupies around fifty percent of the cultivated lands. Upland paddy and ragi (finger millet) are cultivated on around one third of the cultivated area.

Using their indigenous knowledge they take the viability test for seeds before sowing, maintain the soil fertility and conserve the landraces of rice and other crops. This knowledge has been transmitted from generation to generation among the family members.

How do the tribals preserve their plant genetic resources?

The “Sacred Grove” is an effective method of preserving plant genetic resources. It is a biological heritage as well as social mechanism by which a forest patch is protected. The concept of “sacred grove” is found deep rooted in the minds of different communities in Koraput region. Even today some forest patches are left to local deities as a traditional custom. Studies carried out by the Botanical survey of India and National Bureau of Plant Genetic Resources reveal that there is a rich assemblage of species useful for food.

Rice is the predominant crop in the Jeypore area –both in terms of land as well as in terms of production. More than 40% of the land is under paddy cultivation. The other crops grown are maize, finger millet (Eleusine coracana), green gram (Vigna radiata), black gram (Vigna mungo), mustard (Brassica juncea), sesame (Sesamum orientale), groundnut (Arachis hypogea) etc. The tribal people in the hills grow minor millets, littlemillet (Panicum miliaceum), foxtail millet (Staria italica), niger (Guizotia abyssinica), pigeon pea (Cajanus cajan) and horse gram (Dolichos biflorus).

Are these traditional forms of agriculture in any kind of a risk from the much talked about second green revolution ?

The second green revolution has been promoting subsidized  hybrid rice, hybrid maize, hybrid sunflower along with synthetic chemical fertilizers and pesticides. A region of mixed farming, local resource based agriculture is witnessing replacement of mixed farms of food crops by mostly mono cash crops. Traditional maize was never grown as a mono crop in this region. It used to be a part of a mixed farming. Are we not making the farms and farmers more vulnerable especially in this era of climate crisis ? What will happen to farmers of this region once the subsidy is withdrawn? Who will be held responsible if these tribal farmers are pushed out of their farms due to increased cost of production followed by indebtedness as a consequence of the second green revolution. We sincerely hope that the government revisits its decision on the present format and structure of the second green revolution program and re-design it to support local resource based farmer led ecological agriculture  in Koraput region as well as in rest of the Odisha.

How is this recognition going to affect the tribals ?  This agriculture system was awarded in the past on two different occasions – the Equator Initiative Partnership Award in 2002 and the plant genome saviour community award in 2006- How did they help in promoting the agriculture system and the state of tribals in the region?

We do not know whether the news of this recognition and its significance has reached to the local tribals. We hope that the cash associated with the previous  two different awards – the Equator Initiative Partnership Award in 2002 and the plant genome saviour community award in 2006 and the present one have reached the local communities. It is their community based institutions which have been the bed rock of their traditional knowledge and farming system and they should decide how the prize money should be utilized.

‘Food Security Bill is somewhat defective’ : Dr. MS Swaminathan

Jan 6, 2012, 04.40AM IST

Q: Is food security just a concept or is achievable? 

A: Of course it is attainable. There are three main issues. First is availability of food in the market. For which farmers have to produce more. Second is access to food, whether one has the money to buy it. That’s what the (food security) Bill aims to achieve. Third is absorption of food in the body, which is a function of clean drinking water. Drinking water is the most important component. That is why Rajiv Gandhi Water Mission, Total Sanitation Mission and National Rural Health Mission should be brought together under the food security Act. Otherwise, the child may eat a lot but, what we call leaky pot, yet not absorb the food.
Q: What should be the approach to ensure food for all?

A: One is the conception to cremation lifecycle approach. That is why there are different programmes such as the school meal programme, programmes for pregnant women and so on to feed right from conception stage to death. We have to enlarge the food basket through the public distribution system. Not only wheat and rice but nutria-millets such as jowar, ragi, bajra, madua should be included in the PDS. In China, out of over 500 million tones food grains, 140 million tones are nutria-cereals and millets. It is 50 to 60 million ton in our country. Secondly, women must be declared head of households for entitlement under the PDS and food security Act. They should be considered in-charge of food security in the family. That is important because women can ensure nutrition from newborns to the eldest in the family.
Q: How can cereals and millet production increase?

A: Procurement is the greatest stimulation for production. The more the government will procure, the famers will produce more. Farmers will increase production if the consumption capacity in the country increases. We should look at grains other than rice and wheat which are nutritious to have a big range. The crop holiday in Andhra Pradesh should be a wakeup call when farmers stopped production because there was no demand.
Q: Are you happy with Food Security Bill?

A: The Bill is somewhat defective in some respects. It calls for selective PDS. I personally believe there should be universal PDS as is in Tamil Nadu and Kerala. The country should follow the principle of exclusion as against inclusion. Categorization of below poverty line (BPL), above poverty line (APL) and targeted PDS are controversial issues and there is large amount of corruption in such classification. One has to pay money to be a BPL. Why to get into those? There should be transparent criteria to exclude people. For example income tax payers, those who own a car and so on can be excluded from food security provisions. The proposed food security Act is the largest social protection against hunger anywhere in the world. Its success will depend upon how far we are able to reach all those who need food. In the current approach, lots of street children and the destitute will be left out.
Q: So what should be done?

A: I am pressing for the principal of exclusion. Besides putting a number of transparent criteria for excluding those from food security, selfexclusion should be the guiding principle. Tell people that those who do not need food should not ask for it. Even if you include a man who should be excluded doesn’t matter. But never should a deserving man be excluded. Freedom from hunger is freedom from corruption. The Bill must be based on a culture of honesty. Don’t develop a bill on a negative basis that people are always dishonest. The Bill has been referred to the select committee. I am sure it will take evidence from a large number of people and have a transparent criteria.
Q: Why are you a votary of traditional technology?

A: I am for combination of traditional and modern technologies, what is called eco technology. We must combine the good ecological principles of the past with the latest technology. Take for example Koraput, which was recognized as globally important agriculture heritage system. The conservation of biodiversity by tribals is commendable and is very important. Traditional wisdom is very relevant. Don’t destroy the good habits, rather build on previous knowledge. Don’t discard something because it is old or don’t worship something because it is new.We must ensure that technology is economically, environmentally and socially sustainable.
Q: How come you got so much interested in Koraput?

A: I started my career in Central Rice Research Institute at CRRI Cuttack in 1954. Soon after my post-doctoral research at the University of Wisconsin, I had joined CRRI. I had visited Koraput many times then. The tribals protecting biodiversity should be encouraged more. This will help stop genetic erosion.
Q:What is the biggest challenge for food security?

A: Conservation of natural resources, mainly land and water, is the biggest challenge. Land is going out of agriculture. Real estate has become so expensive. This is becoming more important in the context of climate change.
Q: Are we prepared for climate change?

A: The world is not prepared so far. People need to be aware of the impact of climate change, which is real. Thousands of people living close to the sea coast will become climate refugees. The world must take anticipatory action to check the impact of high temperature, floods, and other fallouts of climate change. Diversification of food grains is also very important in context of climate change because one or the other of these can be produced in adverse climate conditions, which we don’t know as yet. The business as usual approach people must change.
Q: Do you foresee a workable solution to climate change?

A: Well, the solution has to be both technical and political. We need a synergy between science and public policy. Everybody starting from the grassroots level to the world leaders must be climate-change literate. Our foundation (MSSRF Foundation) has started a programme called ‘Every child is a scientist’. Not that everyone will grow to become a scientist. But everyone must have a questioning mind and understand what is biology, climate and so on.

Source: http://timesofindia.indiatimes.com/city/bhubaneswar/Food-Security-Bill-is-somewhat-defective/articleshow/11383154.cms

Let farmers decide the price’: Mani Chinnaswamy, Apache Cotton

Author(s): Jyotika Sood
Issue: Jan 15, 2012
Mani Chinnaswamy’s contract farming model has prompted IIM graduates to study his Appachi formula. After all, it gives farmers the right to bargain the price of their produce with the buyer. Talking to Jyotika Sood, the entrepreneur shares the hurdles in the implementation of the formula and its potential to change farmers’ lives


Mani ChinnaswamyMani ChinnaswamyWhat makes your formula a novel contract farming model?

Appachi formula differs from conventional contract farming models, especially on the price front. We do not create uncertainty by fixing the price of the produce in advance. Our contract allows farmers to sell their commodity at the prevailing market rate. Though we have the first right to negotiate, farmers are free to auction off the produce in case of a disagreement. We motivate them to form self-help groups to enhance their bargaining power.

Our pricing mechanism usually does not disappoint them as it takes into account the labour put in by the farmer and his family. My company, Appachi Cotton, deals only in cotton because it is a family business, but alongside we encourage our farmers to grow millets, legumes and vegetables, which helps them meet their daily needs and expenses.

Another component of the formula is to ensure that farmers never go short of money and material throughout the cultivation period. The contract assures them easy availability of credit from banks, quality seeds, doorstep delivery of unadulterated fertilisers and pesticides at discounted rates, expert advice and field supervision.

We hear you have stopped facilitating farm credits.

I developed the formula with a vision that everyone who is part of the contract will fulfil their responsibilities. If a farmer takes a loan, he must repay it. It worked well for 10 years. But in 2006, during the assembly elections in Tamil Nadu, some political parties promised waiving off agricultural loans in their manifesto. This led to wilful default by farmers and a bitter end to the idea. To fill the void we started looking for ways to reduce cultivation cost. This made us switch from conventional to organic cotton in 2009. Farmers are always under fear and defensive, applying fertilisers and pesticides indiscriminately, thus increasing cultivation cost. They would sanitise the entire field at the sight of a single insect. There was a need to teach them when to pick up their pesticide guns.

Is organic cotton more profitable than the conventional cotton?

In agriculture, profit can be increased either by increasing the yield or by reducing the cultivation cost. Chemicals and technologies like Bt are pushing up the yield, but they are also increasing the cost of cultivation.

Farmers are organic by default. Through Appachi, we remove middlemen, passing the benefits directly to farmers. An increasing number of farmers are switching from conventional to organic cotton lately. Since the yield reduces during the conversion period, we offer them financial support to keep up their interest in organic cotton. We help them get organic certification.

What are the challenges before organic cotton?

No doubt Bt cotton poses the threat of contamination to organic cotton, but the biggest challenge is seed. All our seed banks have run out of traditional cotton varieties. Hardly any company or agriculture university is coming forward with seeds suitable for organic farming. The government and universities are promoting Bt crops, while people want safe organic crops.

What are the other endeavours of your company?

We have an integrated model for organic cotton farmers and weavers. At present, we have 165 farmers and 50 weavers. We make products like sarees and dress material under the brand name, Ethicus. We put our craftsperson’s name and picture on every piece he creates and mention the time it took to weave the fabric.

Q&A: Vandana Shiva ‘Retail FDI is not about investment, but market grab’

Q&A: Vandana Shiva
‘Retail FDI is not about investment, but market grab’
Sreelatha Menon / November 27, 2011, 0:40 IST

The Cabinet’s decision to allow up to 51 per cent FDI in multi-brand retail was taken without consulting the states, activist Vandana Shiva tells Sreelatha Menon.

Three years ago, you had campaigned against FDI in retail. But, with the Cabinet’s decision to open the sector to foreign chains, it has been made a reality. Do you accept it now? You have been silent on the issue.
It is still wrong, and many times over so. First, the model of FDI in multi-brand retail has completely failed. The failure has been established in the West. Why else do you have the Occupy Wall Street protests? Also, the decision was taken by the government on the third day of the Opposition demanding action on price rise and the economic crisis. The government seems to be saying, “We don’t care about Parliamentary democracy”. As far as I am concerned, I am writing to the states to improve the understanding on implications of the Cabinet’s decision. The media has been silent, too. In fact, it has been celebrating it, as if it was a big achievement.

One of the reasons in its favour is it would cut wastage and create a cold chain.

In the last one year, I wrote foreword to many books; most were on the wastage in the giant retail model. There is 50 per cent wastage. That India records 40 per cent wastage of food is a lie. It is another matter that the Prime Minister is allowing grains to rot by not picking them up.

How can there be wastage in big retail?
About 50 per cent of the wastage is at the farm level. If you order bread from a bakery, the baker has to stock it all day, and throw what is not sold.

But isn’t it supposed to help farmers, since 30 per cent of the procurement is local?
That is another lie. They call small retail ideological. But it is a reality in this country. The entry of Walmart and the likes started only after India inked the knowledge agreement on agriculture with the US.

As for farmers, if Monsanto’s entry led to a quarter million suicides, Walmart would pave the way for more. The model thrives on making everyone reduce margins, till none exist at lower levels. People reduce their margins till they go out of business. Besides, the criterion for 30 per cent local procurement qualifies businesses below $100 million. That is not small-scale in India!

Also, their model is to use five companies for two years, and then abandon these for new ones.

What would be the implications on labour? Won’t it create jobs?
Why is Walmart importing 80 per cent of what it sells in the US from China? Walmart can’t exist where there are labour rights. They had to leave Germany. As for jobs, the difference between India and the US is we have surplus labour. However, the irony is displaced farmers would not find jobs in these shops. They get educated kids. The poor migrants here can then resort to crime.

What about cold chains and backend infrastructure, which would come with retail FDI?
Does our country lack backend infrastructure? It is decentralised and distributed across the country. If there is a functional village haat or a local mandi that is backend infrastructure, they want to centralise these.

Walmart, for instance, entered India on cash-and-carry five years ago. What backend infrastructure have they created so far? If they couldn’t in five years, what can any of these companies do now?

But hasn’t China benefited from FDI in retail?
Yes, their domestic retail has doubled. But the truth is there was not a shop there. You are comparing a country with zero retail with India, which has a 400 million strong retail force.

The Cabinet decision is not about investment, but market grab. It is the Macaulay effect: You feel inferior and thus, succumb to anything that comes from outside, even if it is worthless.

Why do you call it market grab?
The whole unemployment crisis in the West is due to the model of centralised procurement by a few big players. If the big retailer is to import all medicines from China, our pharmacists would shut shop. Our electronics shops would shut shop. People would go to the big retailer to get cheaper stuff. In the 80s, the difference between retail and wholesale prices was six per cent, which rose to 50 per cent six years ago. With FDI in retail, 98 per cent would go to retail and just two per cent to farmers.

But no state or party has objected so far.
This is because states have not been consulted. It is so undemocratic. And, the Opposition has been tricked when it was not prepared for it. It shows the government refuses to learn a lesson from what happened to Europe and the US. It is an insult to the nation.

Have you been supporting the Anna movement?
I have known Anna since 1984, and his work in Ralegan Siddhi is great. In April, I told him the challenge is to join the energy of existing movements. It is focused on one law. It should be a set of parallel movements, with each member taking up a cause. Maybe, (Arvind) Kejriwal can take up Lok Pal and someone else can take up another issue. Public support can be channelised to many issues to create a nationwide movement for change on many fronts.

Critics have said the Rashtriya Swayamsevak Sangh (RSS) has been driving the movement. Do you agree?
No, that is not true. The RSS has not been able to keep up with issues and is out of touch. If it wanted to do something, it would do it on its own. It is a coming together of many people from different movements. I was called for their first meeting in January, but wasn’t able to make it. And, there were people from across the spectrum — from Ramdev to activists.

Would you join them?
No. I don’t jump into any bandwagon.

The native seed man

and Share
12 November 2011

Veteran activist and farmer Vijay Jardhari is on a mission to preserve India’s native seeds in the hills of Uttarakhand. In times of fast waning traditional agricultural practices, his efforts aim to restore the nutritional value of food grains and reduce food insecurity.

OneWorld: The Beej Bachao Aandolan aims to make farmers self-sufficient through traditional agricultural practices. What made you start this campaign in Uttarakhand?

Vijay Jardhari: The real source of inspiration is the Chipko Movement with which I was associated. Chipko movement had a slogan “kya hain jungle ke upkar? Mitti, paani aur bayar, jinda rahne ke aadhar” (What are favours of forest upon us? Soil, water and air that help us live).


Vijay-jardhari-BBA.jpgVijay Jardhari, one of the founders of the Beej Bachao Andolan/ Photo credit: The Hindu 

The Chipko struggle continued until the beginning of 1980 and I was there during the decade of 70s. When the movement became successful, I returned to my village to farm with my parents. By that time, new seeds and chemical fertilizers of the Green Revolution were available.

New seeds were provided with a kit containing fertilizers and other chemicals. We too used them and had a bumper crop in the first year. We decided to use the same seeds next year without the chemicals and fertilizer. But production went down; we used the same seed again but yield declined.

We then sat and discussed it with our elders. They said that we were witnessing this problem for many years. Since we started using new seeds, our own native seeds have disappeared. This opened our eyes and then we decided to look for old seeds.

I went to the mountains, the fields where today’s growth, development and agriculture officials have not reached, where diversity existed. We started bringing back old seeds, cultivated them in our fields, and then shared them with other farmers.

At the same time, it was being told that soybean cultivation is full of money, so leave traditional farming and start growing soybean. Initially people started cultivating it but it was also a big mess. We asked people to not grow soybean but they didn’t listen. Things went well in the first year of cultivation but problems started surfacing the next year.

We then discussed it with the women of the village; they said that it was not good for us, it doesn’t produce fodder. Another argument was that it was difficult to sell soybean in the market as everybody had started cultivating it. As far as traditional crops are concerned you can get grains as well as fodder.

This brought people’s attention back to traditional farming; they understood the cost incurred is very less – you have seeds of your own, manure from your home and even the pesticides. But in modern agricultural practices you get everything for free initially but later you find yourself dependent on the market.

We had the same experience with chemical fertilizers. It is similar to alcohol addiction; chemical fertilizers are making our land addicted.

OW: What is the 12 grain technique that you use? Can this be easily adopted by farmers?

VJ: The 12 grain technique (Barahnaja in Hindi) is a part of our life style, agricultural system and culture. It is full of food of high nutritional value and finger millet is central to it. Finger millet is rich in calcium, iron and iodine.

It is cultivated with other crops, at some places with six crops or twelve or even with more than that. These crops depend on each other. For example, many crops depend on Amaranthus for its growth and share a symbiotic relationship. Pulses, vegetables and oilseed crops are also there, for example, beans, black lentil,naurangi, gahat and bhatt.

In 12 grain technique you have enough for yourself and for your land. It increases soil fertility even if a crop takes in little higher dose of nutrition from soil. Pulses increase soil fertility and also support other crops. It is similar to the hand holding support that we provide to a child to walk. When there are 12-14 types of crops in a family, they feel food secure at least for six months. This 12 grain technique is philosophy of our life, culture and a medium for livelihood.

It is also very effective in fighting climate change because these crops can withstand heat and survive in dry conditions. In 2009, which is considered to be the year of severe drought in the mountains of Uttarakhand, there was no difference in yields of finger millet, Amaranthus and goda.

Also, if we see the damage of crops done by wild animals… a farmer cultivates six crops and one or two get ruined, then the rest of crops would be good. This is a complete crop rotation. Suppose Amaranthus was harvested in October and November and fields become empty; now the next crop wouldn’t be finger millet, it would be jhangora.

OW: You insist on collection of native seeds. How does the seed bank help farmers in the state and those outside?

VJ: Seed bank is a new term but every farmer in Uttarakhand has his own seed bank. Every farmer identifies and sorts vigorous seeds for the bank. Farmers have their own technique of sorting and identifying seeds; if you are sorting the seeds of paddy and finger millet, the process is known as ‘Rotyana’. Every crop has a different method of harvesting. But when it comes to seeds, every seed is identified, properly dried and then stored.

We have tried cultivating seeds which have got extinct or are on the verge of extinction. For example, we have grown 20 different verities of beans.  Now, when someone in nearby village requires these seeds we provide them through women groups or SHGs. We also have a tradition of exchanging seeds with neighbouring villages.

We have replicated ourselves in many states to provide native seeds. Recently we provided native seeds of finger millet to Jagori Grameen in Himachal Pradesh. We also provided Amaranthus seeds to Orissa and they have reported good yields. Many states themselves have come forward and asked us for the seeds.

OW: How will indigenous seeds and traditional farming techniques strengthen food security and preserve the environment?

VJ: We have so many misbelieves here, for example, we would not be able to feed our growing population if we adopt traditional agriculture. But we believe that some of the old varieties of seeds may have lost vigour with passage of time but they are more vigorous than the modern hybrid seeds.

You need to put a lot of input into hybrid seeds and they are very prone to diseases. But native seeds do not require high inputs. You need manure and bio-fertilizers, and if we put a small sincere effort in cultivating them, no one can stop them from a high produce.

We have cultivated a native paddy – thappacheeni, and produced 72 quintals of rice in a hectare; it also provided fodder of around 90 quintals per hectare.

Second, our state produces a good amount of finger millet and jhangora which is equal to our national standards. Government or agriculture scientists try to sell the seeds and fertilizers of MNCs. They insist on using chemical fertilizers – urea and DAP in finger millet and jhangora. However, these crops do not need it. This will ruin ukhad crop too, if used.

We firmly believe that traditional agriculture can feed people and is critical for food security but needs attention. You are subsidizing chemical fertilizers, modern agriculture practices but the same amount or even less than that needs to be spent on traditional agriculture. Organic farming and native seeds should be promoted because these are the seeds of future.

We have a variety of paddy, kankuri and gorakhpuri which can withstand drought and grow in only 90 days. You see how these native seeds are capable of tolerating tough climate and producing good yield; however the hybrid seeds are not.

OW: What are the future plans of Beej Bachao Aandolan?

VJ: The farmer is our only hope. We believe that if people start using traditional seeds, adopt traditional agriculture practices, this will definitely ensure food security, nutrition and freedom from diseases. Climate change is a continuous process; we cannot stop it because whether it is India or any other country, no one is going to reduce carbon emissions. So traditional seeds are the future and our hope is associated with them.

The agriculture policy is not in favour of Indian farmers. It favours multinationals manufacturing seeds, chemical fertilizers and weedicides. MNCs first send weeds and later on sell weedicide.

Farmers must be consulted while making agriculture policy. This will not only help the farmers but also the consumers. Farmer suicide is prominent in those areas where they have left the traditional and mixed agriculture. You will not find a single case of farmer suicide in areas where people are still doing mixed farming. Agriculture is cost dependent and modern agriculture is pushing these farmers towards darkness.

Second, farmers need to be given a respectable place in society. The new generation and education do not respect the farmer; it is important in order to involve younger generations in agriculture.

There’s the need to increase the income of a farmer.  It becomes very difficult for farmers to ensure livelihoods as there isn’t any surety of crops. The farmer’s life is very tragic. What will a farmer do if there is a drought, hailstorm or heavy rain? Wild animals damage our crop. That is why we have given a slogan “Kheti par kiski maar, jungli jaanwar, mausam aur sarkar” (Who damages our crop? Wild animals, weather and the government).

If rains start occurring on time, seasons start changing on time and if wild animals stop damaging our crops, then nothing special needs to be done for the farmer. If farmers have to prosper, then agricultural policies must be in accordance to them.

The ‘Beej Bachao Andolan’ [BBA], begun in the late 1980s, led by farmer and social activist Vijay Jardhari. The Andolan started in the village Jardhargaon of district Tehri, ttaranchal, famous for its unique movement to save the traditional seeds of the hills. The ‘Beej Bachao Andolan’ [Save the Seed Movement or BBA] is not only a crusade to conserve traditional seeds but also to promote agriculture and local tradition.

The Degree Of Noncompliance Hurts Us. Regulation Doesn’t-Cargill


“The Degree Of Noncompliance Hurts Us. Regulation Doesn’t”
Siraj A Chaudhury, Chairman of Cargill India, speaks with Dr Amit Kapoor, Honorary Chairman, Institute for Competitiveness, about the food supply chain industry and its dynamics. Excerpts:
Give us an idea of your industry. 

Cargill is a privately held business, headquartered in Minneapolis, with over 130,000 employees in 63 countries and consolidated revenue of $119.5 billion in FY2011. We have 75 businesses organised around four major segments—agriculture, food, finance and industries. In India, we have 11 of those businesses, the biggest being Cargill Foods, which is largely about edible oils. We have a grain and oilseed business that is engaged in sourcing and managing the supply chain for food. We also have a flavours and an animal nutrition business where we create animal feed for poultry, dairy and fish. Apart from this, we also trade sugar, cotton and some industrial commodities such as iron ore, steel and coal.

Which is the business that gives you your profitability?

Our biggest business in India is the foods business. Edible oils gives us 60% of our Indian revenues.

What are the challenges that you face in other businesses?

Our size in other businesses is a matter of choice. We felt the biggest opportunity was in this space [foods] and made greater inroads here. The food business has had more Cargill asset creation, investment and capital infusion, while some other businesses are more about managing the trade flows and the supply chain.

Does the government closely monitor this industry?

It’s a very closely watched industry. We are always under the scanner but I don’t think anyone is holding us back. It has to be closely watched because we’re dealing with agriculture and food in a country that has a huge population with low income levels. Given that 60% of the population here lives off agriculture, there’s a need to protect the interests of this population that consists of small farmers.

Could that be the rationale for minimum support price in the country?

Minimum support price has many roles to play. It is used more as a tool for producing certain crops. So if we want more wheat, the minimum support price for wheat rises. The government, though aware of the diversity of the country in terms of the soil and climatic conditions and also the ability to produce many crops, has started to give precedence to the theory of competitive advantage. So, if we’re good at producing wheat then we should concentrate on this food crop and if we’re less efficient at producing pulses and edible oils then importing them is better. Minimum support price helps to maintain that balance. And that is why it is needed and should be encouraged. The government should do more.

How severe is the lack of infrastructure?

It is one thing to produce and quite another to deliver. The problem is not the means but the schemes to market the products. India this year has produced its highest quantity of crops. The supply of commodities is managed but it is the distribution of these commodities that calls for better management.

There are about 5,000 towns and cities and over 650,000 villages in the country. How challenging is this complexity?


“We are trying to be different by spanning all three stages of evolution—value conscious, customer intimacy and innovation.”

It is a big challenge. Consumer food products reach a million retail stores across geographies through varied infrastructure conditions. It is comparatively more difficult in India where you don’t have well spread large format or organised retail. And it is the producer’s responsibility to reach the goods to consumers. 

In a more developed environment, or where you have a more evolved retail network, it is still about selling to the big five or six retailers who then carry the product to the stores and the regions that they operate in, through their distribution centres. So there is an inherent inefficiency because every company that distributes something has its own distribution network.

When each company is going to or is creating its own distribution channel do you think that could be an emerging model?

Yes, there are companies that have taken up the role of the distributors. So, when you have chains of food restaurants coming up they’re building the supply chain to support their venture.

It’s about moving certain products from one place to other places. I think that is the rationale for encouraging organised retail because it will help bring a lot of individual distribution centres to a more collective model.

A large part of the population is poor and this leads us to the bottom of the pyramid scenario. How do you look at this section of the population?

Obviously a large part of the population is poor. But over the last few years, I think the income of the people at the bottom of the pyramid has also been gradually increasing. So the whole group is moving up.

The other thing is that the higher price for crops has increased the earnings for farmers. There’s been an increase in rural income that is creating a need for more and better goods and increasing the challenge of distribution for some of the large food companies. So, though the cost of distribution goes up when going to these rural areas, it’s a segment that cannot be ignored.

Cargill has 75 business units globally. In India you have 11 businesses. How do you look at competition?

The top two to three major players in the edible oil space should be our competition. I however, have a slightly different view on this. I don’t look at it from a single country or market perspective but rather from the position of different regions. So we have different competitors in different regions.

There is variation and also the local factor at play. For instance, if something is produced locally it will get consumed there because there’s a historical connect. I also believe that when you’re in a growing market and are building a new concept there’s enough space for everyone to grow. Right now we are concentrating on differentiating ourselves from other companies in this space.

There is a level of noncompliance of regulatory practice ideas in the country. Is that a problem for you?

The degree of noncompliance hurts us. Regulation doesn’t. Today edible oil imports are duty-free. It makes no difference to me if there was a 50% duty either because everyone would be paying 50%. The consumer would suffer. In the ten years that we’ve been building up this business, noncompliance has significantly reduced. In certain markets we have a disadvantage relative to some of our competition, but that does not deter us from doing anything we want to do.

How do you carve a niche for yourself?

There’s a lot of strategy in our segment that is focused on operational excellence. We are in a geography where the customer is very value-conscious so the industry and its segments have focused on bringing maximum value to the customer. But as the economy is evolving, the customer is becoming choosy. So the next stage of evolution is in customer intimacy that comes with understanding customer needs.

A lot of companies in the personal care industry and even the IT sector have moved to the customer intimacy phase. As an economy, the innovation stage is next where you start planning for the future rather than just what the consumer needs today. So I think where we’re trying to be different is in trying to span all the three segments.

How do you think Cargill is going to grow in the future?

Cargill is established in India. Food is going to be available but the price of food is going to have a huge impact on the profitability of products that are created. Cargill’s ability to manage the backend of the supply chain, the risk on price movement and to process and convert basic food into food products is very well placed in India because we do that in the rest of the world. If I look at the whole chain from origination to the table, I think we’re equipped to take advantage of the growth in India.

Cargill was in the packaged food business earlier but exited. What compelled you to do that?

We were in the packaged atta [wheat flour] business in the early part of the last decade. But at that time industry profitability and readiness wasn’t really there. The business was a little ahead of its time. It was certainly not erroneous. And I would not rule out getting into that business again.

What are the unique activities that you’ve picked up?

Flour and edible oils are basic products that need a certain amount of differentiation because in reality the consumer thinks that there is no such differentiation. Nevertheless, we do have the power to pass on a lot of goodness that we have. We’re one of the first in the industry to fortify our oils because we recognised that oil is almost a 99% household penetration item, which means everyone in the country consumes oil.

Have you made a choice of not entering certain sectors?

Firstly, we screened our markets by differentiating a local market from a national one and by identifying the markets where we have an edge. This aids us in determining not just our potential market but also in allocating resources efficiently. Secondly, we believe that reach is measured not by capacity but by access.

Building access involves getting someone else to buy your idea. If you look at most of our industries they have over-capacity because it’s easy to build an asset. Market access, on the other hand, is intangible and not something that you can build once and believe that it is there. So it’s something that keeps you on the edge everyday.

You said the industry suffers from over-capacity. Does that have a repercussion on the performance within industry?

I think a lot of it has to do with the state tax incentives. A large part of the industry, particularly refined oils, was created in clusters. You can look at four or five ports that have most of the capacity because most of the oil consumed in the country is imported. That is why more ports in the country should have refineries.

Secondly, if you look at India today, a large part of investment bets on the future. Everyone knows that we are a bustling population with escalating consumption needs. So if you can build an asset and look at it from a real estate dimension, it’s not bad business at all!

How would you define strategy?

Strategy for us is about operational excellence, which, in turn, is about having the right set of people and skill sets along with efficiency.

And what about leadership?

For me, leadership is about people. It’s about finding the right people and letting them do their job. The other thing is about emotional intelligence—understanding other people’s perspective and motivational forces and then getting them to do things that drive them.

4Cs Model


  • 10-12 business units in India. Biggest business is Cargill Foods, focusing on edible oil.
  • Industry under the watch of the government.
  • Lack of distribution infrastructure.


  • Domestic. Largely urban but the growing income of the rural population has brought this segment within the company’s ambit.
  • Value-conscious customer.
  • Customers more expressive of preferences.


  • Focused on bringing value to the customer. Operationally efficient organisation.
  • Calculated selection of market sectors. Has chosen those segments where it can be a leading player.
  • Concentration on differentiated product for the consumer.


  • National and regional.
  • Both segmented and unsegmented competition.
  • As the packaged food product is a relatively new concept, there is enough space for all competitors to grow.

Looking Ahead


  • Value creation through differentiation.
  • Customer intimacy and logistics.


  • Brand building.
  • Operational excellence.


  • Regions where there is competitive advantage.


  • Nature of regulations.

Source: Interviewer’s analysis

‘NREGA reforms must address the supply-side problems’

Q&A: K S Gopal, Central Employment Guarantee Council
Sreelatha Menon / New Delhi September 23, 2011, 0:25 IST


K S GopalK S Gopal, former member of Central Employment Guarantee Council and now with Tata Institute of Social Sciences, Mumbai, tells Sreelatha Menon why Jairam Ramesh’s NREGA 2.0 may not be effective. Edited excerpts:

The rural development ministry feels the National Rural Employment Guarantee Act (NREGA) would reach more people if there was a way of capturing and registering demands for work. 
The rural development ministry’s diagnosis is wrong. It is not a demand problem but a supply problem. It is not that the NREGA worker’s demands for work are not being registered. It is that work is not being provided. Merely issuing fiats from Delhi won’t help. Presume for a moment that we are registering every demand. And the demand letter goes to the district collector. Would the collector be liable? Even if he opens work on demand, what if he has no money to pay? Will the ministry be liable? If the official in the panchayat or collectorate decides to acknowledge every demand and create work for the applicant, he may say there is work on the top of a mountain or some inaccessible place, where no one can go. Or he may just open work for a day and his duty would be done. Is that enough? The law doesn’t say you have to provide work to an applicant for 20 days at a stretch. But it should be a few days at a stretch or what money would he earn? So the truth is that it is a problem of supply.


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Water as a limited resource – Rajendra Singh

The rivers of Alwar that has seen life after death, thanks to the committment and foresight of Rajendra Singh and his team Tarun Bharath Sangh, who were instrumental in mobilising communities to rejuvenate their own water resources.

Anil Agarwal always maintained that the entire nation could be made drought free through community rainwater harvesting. What is your opinion?

His vision has become a reality in Rajasthan. In these 17 years we have made certain dry regions including Alwar, Jaipur, Savai Maadhopur, Karoli drought-free. Nature has maintained a balance between population density and rainfall in our country. Population density is low in Rajasthan and so is the level of rainfall. When we study the ‘rain chart’ since 100 years, we can find that the rainfall is balanced unevenly in Rajasthan. Five to six years of meager rainfall will follow two successive rainy seasons. When the cycle repeats like this, it becomes very useful if the rainwater is stored through proper ways.

It is very essential that we realize water as a limited resource. Though there is a balance between the rainfall and density of population, there is no balance in usage of water. Everybody wants more water. If we use water like a poor man’s ghee, then no village or person will face the scarcity of water in India.

Is it possible for other villages in India to replicate your success in making Rajasthan drought-free?

Definitely. Not only in India, it is possible throughout Asia.

Your Jal-jameen-jungle (water-soil – forest) conservation campaign enhanced the confidence of the villagers in Rajasthan. Throughout the process, you limited yourself to inspire people and encouraged them to work for the cause. What is the idea behind this?

Our community is creative. It has the latent capacity to bring a social change. We woke up this sleeping knowledge bank and encouraged them to work. Tarun Bharath Sangh helped the villagers to rejuvenate their style of functioning. In Gopalpura, the first village, it took three years for us to get results. We could achieve the same in 45 villages in the next one year. It was made possible due to the active participation of the villagers. The formula for success was made known to those who are interested. The success stories of these villages influenced neighbouring villages to join hands and work towards another success.

This cannot be achieved through speeches. The society should feel the necessity for such a work. The methodology should be decided only after understanding the community’s notion about soil and water. Unless and until we live with them, we don’t understand their relationship with water resources and soil. It is very important to utilise the indigenous knowledge in any work. Tarun Bharath Sangh never used any outside help for water and forest conservation. A work becomes sustainable and replicable only when local knowledge is applied.

To grasp the customs and practices of Alwar you became a fellow villager and lived with them. There is a large gap between becoming one of them and showing so. Isn’t it?

Our society is sensitive and also responsive. It observes your each step towards them. If you are trustworthy and reliable then they extend fullest support to you and move ahead with utmost commitment to their work.

When you started your mission you didn’t had the aim or dream of rejuvenating the rivers. Had you ever thought of such a possibility?

Here I remember an incident. In 1993, when I was talking with Dhannaa Gujjar, a fellow villager, he said, “Bhai Rajinder, you are working for the cause of water. It fills mother earth’s stomach. The day her stomach is full, water flows out into the rivers. She is very kind and never keeps water to herself. Whatever you provide her she gives back. This fills even our stomach and helps sustain our farming.” The scientists who came subsequently and studied the process of river rejuvenation for three years also gave the same opinion!

You have contributed a wonderful skill to the nation. Now, at this juncture, it is natural for you to wish to move back to your family. If it happens so, what will be the future of those villages?

Years of slavery and negative forces in the society have made our society like handicapped. The villages struggle from lack of confidence. In this situation if someone becomes one of them and boosts their morale, society wakes up and works with a new hope. I became a sort of crutches for them. Crutches are needed till the community regains its strength and starts working independently. Now we have enough young enthusiasts who will sustain the new zeal.

When we see the West, those countries have fully exploited their natural resources by converting them to luxury items. This way, their natural resources are exhausted. It is not the case in our country. It is time for us to make use of our insights and our natural resources properly. This century is going to be ours.

From a man who has learnt to treat the diseases of a body, you have grown to the extent of treating the sickness of the country. How do you feel when you look back?

If I had continued to be an Ayurvedic doctor, I would have cured a few persons with the medicine. But now I am repairing the souls of people. I’m trying to broaden the minds and hearts of people around me. This will help the society to progress with confidence and responsibility. My second job has started giving good results.

Ban sought on GM paddy research -Vadde


A senior farmers’ leader and former Agriculture Minister of Andhra Pradesh, Mr Vadde Sobhanadreeswara Rao, has asked the ICAR (Indian Council of Agricultural Research) to ban research on genetically modified (GM) paddy.

GM in paddy might impact business prospects for Indian rice in global markets. Voicing concern that GM paddy traits could contaminate natural varieties, he sought a ban on research in GM paddy as imposed in basmati areas in the North.

“Basmati farmers in the North were successful in stopping GM trials in paddy in basmati area. Any contamination of basmati could diminish demand in global markets. There is a huge demand for rice grown in the South too. The farmers here might lose this advantage if natural varieties are contaminated,” he warned.

He was addressing the ‘Innovative Rice Farmers’ meet at Directorate of Rice Research (DRR) here on Tuesday.

Dr Swapan K Datta and Dr K D Kokate, Deputy Director-Generals of ICAR (Indian Council of Agricultural Research), felicitated 26 farmers, including women, from across the country for their innovations that promised to reduce drudgery for farmers and increase productivity.

Addressing the gathering, Dr Datta felt that innovations were also needed in policy making, factoring in the needs of farmers.

Dr Kokate, DDG (Extension) expressed concern over crop holiday in Andhra Pradesh.

On one hand the country registered record farm output, on the other farmers in the State had decided not to grow kharif crop.

“Farmers need to get remunerative prices. We have to discuss and find solutions to their problems,” he said.

We need to get into mission mode on promoting cooperatives in right spirit: Interview with Shashi Rajagopalan


We need to get into mission mode on promoting co-operatives in right spirit: Shashi Rajagopalan

With the growing recognition that much more needs to be done to encourage the emergence of self-reliant farmer organisations, reviving India’sco-operatives is back on the agenda. Shashi Rajagopalan, till recently on the board of the RBI, gained hands-on experience in promoting credit cooperatives and farmers’ agri-processing units during a two-decade stint working on the creation of co-operatives. In this interview, Rajagopalan illustrates why India needs co-operatives and discusses how they should be revived. The interview is also a fascinating look into a newly independent India’s early attempts to extending finance to all.

Dr KC Chakrabarty was talking about the need to revive co-ops as a way to pushfinancial inclusion. At that time, he said that while he knows how to push banks into rural areas, he is not so conversant on how to revive the coops…
First, we need to realise that some businesses are so badly off they need to be folded up. Does every cooperative have to be revived? No, if there are such gone cases, please let them go. Across the country, across 6 lakh villages, you have about 100,000 primary agricultural credit cooperatives (PACs), and you have Co-op Central Banks and you have State Co-op Banks.

Now, these PACs were started in 1904 to be pure thrift and credit co-ops. They were supposed to save regularly and lend to members from their own savings. Over a period of time, they became very strong financial institutions. Which is what happened the world over. In Europe, in North America, in Canada, in Germany, France, you have the most wonderful rural and urban credit unions. All based primarily on member savings and lending to members. These co-ops continue to flourish. In some areas, they have become like banks in more recent years. They were allowed to take the savings of the public at large. They participate in clearning house, their debit cards are accepted, and so on. So, even though, they are very much member-driven organisations, they have linked up with the larger financial system.

Given that in economically advanced countries, there is a need for such organisations, it is obvious that in India, there is even more reason why we need such institutions. After all, if you are talking about a place where everyone is literate, has access to banks, and yet chooses to have an institution of their own, there must be something to it.

And there must also be that play in the marketplace. All other businesses in the system are capital-controlled, capital-sensitive and capital-rewarding. All other businesses are formed on the basis that the person who puts in the capital is a risk-taker and must be rewarded. Here, you say, there is another way of conducting business where those who have common needs come together and fulfill those needs through a joint enterprise. In these businesses, while the members put in capital, capital must not be rewarded. It is a necessary part of the business but it is not the reason why the business succeeded. The business succeeded because the members came together and serviced yourself through that enterprise. Therefore, any returns from the business will go to each member in proportion with the business they did with that enterprise.

Plus, unlike the other form of business, where you have one share one vote, here you have one person one vote, saying that, be it a small farmer or a 20 acre farmer, the stakes are equal. So the concept of stake is understood differently. And co-ops are very clear that they are not the only form of business — they respect the fact that there are also capital owned businesses. But believe that unless user-owned businesses are also given the same space in the marketplace, capital owned businesses will be irresponsible. That is the basic theory. If the market is to behave, there must be enough user-owned institutions in the marketplace using different paradigms and therefore forcing the market to think differently.

Now, what has happened in India is that till the 1960s, there were these PACs. Even if there were just 20,000 or 30,000 of them, they were vibrant. They were only member-dependent, thrift-dependent. A Co-op Central bank was set up in Vishakapatnam district. Its leaders went village to village in an open cart saying, ‘Look, we want to set up aCooperative Central Bank, will you put in some money in as share capital?’ And there are stories of women coming out with their jewels, ten rupees, twenty rupees. People would come forward and give that and that is how many of these banks were set up across the country.

What was their scale? Village level? Tehsil level?
The co-ops were all village level. In the good old days, one village, one cooperative. And then, over time, they began to federate and become one co-op for 3/4 villages. And then, at district levels, banks began to be created saying let us federate…

Tell me about viability…
Co-ops will be viable because the members run them, through part-time services of members, through full-time services of members, and members get paid for the services they do. So, you only pay from what you earn. And you only pay local costs. There is no cost of capital (apart from servicing the capital through interest). The difference between a SHG and this is that a SHG is not a body corporate. If you are not a body corporate, you are liable jointly and individually.

When you are liable severally, you cannot own property, you cannot get into contracts, you cannot get into court cases against defaulters, etc, etc. In the case of bodies corporate, you can. I think this SHG movement has done a lot for rural women. I think she has become visible socially, politically, economically. However, I also think there is a conspiracy deliberately to say that for women, we will give groups, unregistered groups, so that, just as they cannot hold property individually, jointly also they cannot hold property, or enter into contracts, whereas the men can. And I am absolutely convinced that this is a subconscious conspiracy, which is probably not even understood by most people.

Back to the mid-60s, a committee came up saying these co-ops are a great idea and we should have government share capital participation in them. And that government should promote more and more such co-ops. And right across the country, state co-op laws were changed to say that, first, the government can become a member of a co-op by putting in some share capital. Now, the ownership was always at a state level or the district. It was almost never at the primary co-op level. However, controls were brought in for the entire structure. Second, it said that, henceforth, co-ops cannot appoint their own staff. They had to write to the registrar and the registrar would approve. Third, audit used to be a free service available to any co-op that wanted it.

Now it become a compulsory drill whereby they could not appoint their own auditors any more. Instead, the registrar would appoint an auditor from the goverbnment’s staff and the co-op would have to pay for him. So, a, I lost the right to appoint my own auditor. And b, I had pay for the audit. Also, it was no longer necessary for the auditor to finish the audit before the end of the year. Plus, the auditor did not report to the society. He reported to the registrar. As a result, all the audits began to go years behind schedule.

Then, elections used to be conducted by each co-op on whichever day they chose. Some had a three year term. Others had a two year term. Some had nine members on the board. Others had ten members on the board. Some had chairmen by a direct election on the board. Others chose the chairman through an indirect election. Each co-op had its own thing. Now, suddenly, you had the government saying it will conduct all elections for all co-ops, and all would have a three year term, and all would have 12 members on the board, etc, etc.

The reason why political parties bought into the report so well is that this was one way to scuttle local leadership. And also patronage. The primary thing here is that these are farmer votebanks and come from contiguous areas. Also, in the name of promoting co-ops, parties could have access to treasury funds of an institution that is outside the state’s control. Given that the conduct of elections, and the right to supersede a committee, was in the politicians’ hands, and given that the auditor was accountable to them and not the general body, they could play havoc with the funds.

Now, people who did not get their MLA tickets or defeated MLAs, all could all be accommodated in the co-ops. Similarly, if you wanted to misuse some of the funds of that co-operative, audit was in your hands. It was a great source of financing.

The impact on members? Mr Mahalingam of Shakti Sugars. He was a great co-operatives man and he walked out in disgust leaving all that he had built over decades to set up Shakti Sugars. Because he could not fight on a daily basis on this political front. Like him, across India, you had the most wonderful entrepreneurs who chose to use their skills for the larger community rather than for themselves. But we made things so difficult for them that they could not get on with the business of servicing members. There were enquiries against them all the time. There were inspections against them all the time. And they said, this is just too much. They walked out. And when they walked out, members began saying why am I saving so much money in this co-op for? I do not get to decide who is going to head it.

So from vibrant thrift and credit co-ops, they all became over a period of time, multipurpose channels of subsidised credit and members began to see themselves are beenficiaries of state largesse. And whatever came their way, they took it. And over a period of time, they withdrew their deposits from the coop.

What about elite capture? Did Co-operatives run the risk of the local elite running them as a fiefdom?
Well, these were local institutions. Even if there was mismanagement, the co-op would fold up, but the person running it would have to live in the same area. Many years later, when I worked for the revival of PACs, I discovered that no amount of member education and other things helped. What helped was increasing the percentage of members’ financial stake. Once their stake is significant, the members almost always chose the right person. Otherwise, they would choose the person who spoke the best, etc. Most of the presidents were fairly non-charismatic in terms of their ability to speak, to project themselves. But most of them were also strict disciplinarians. And they were not these charming flamboyant personalities at all. Whereas, in these times, where you have largely external funding coming in, you need brokers, you need people who know how to liaise. There is a huge difference between these two. Your question was on how to revive PACs.

We have to make them thrift-oriented where every member must save x rupees every month instead of waiting for banks to refinance or forNabard to step in. That may continue but that cannot be a longterm plan. The longterm plan has to be your own funding. When you have thrift in an organisation, not only do you have a stronger co-op, but wealth retention also takes place at the local level. The profits of that enterprise stay at the local level. Your own savings stay with you. They get invested locally. Plus the profits from the entire enterprise also stay locally — the profits of any third party leave the area.

And the fact that a large number of people have access to credit on a regular basis means there is purchasing power in the hands of a large number of people at the large, contiguous area year after year. You automatically have a large, domestic, service sector emerging which is sustainable because it is not falsely supported from outside. And almost everywhere we see, we see liquor, some entertainment, flour mill, tea shops, workshops, mason, and transport coming in first into the village. And wherever you have good co-ops, sooner or later, you see the housing going up in the area.

And that is a story by itself. It has not been reported anywhere so far. But, my goodness, look what we can do. Instead of going on crying that agriculture cannot support so many people.

The question is why people would put money into the PACs today? What about the comparative rates of returns? And how do they know their deposits are safe?
Yes. So the laws have to change. In the mid-80s, even with these bad laws, we did a campaign — i was the chief executive of a federation of 100 PACs from 17 districts in AP and we found that thrift is the way to do it. The first thing we had to do is ensure accounts are audited. Now, we could not get blessed auditors to have undated accounts because they wanted bribes. So what we did is we simultaneously got CAs to audit the accounts. Now, these were not accepted by the department and so, statutorily, we could not announce dividends but what we could do was offer interest on thrift.

So, the first time, we had annual reports prepared and presented to all the members. The accounts were fully read. There was time for the members to raise questions and so on. And then, the resolutions were proposed. We did all that. But every three years, we had to fight with the government to get our elections conducted. In 1984, 1987, we went to court. Apart from PACs, meanwhile, in AP, thrift coops began to come up. First unregistered, which were 100% member-financed. When the Taskforce on Farmer Indebtedness (its report was released last year) was going around, we saw their average age is about 10 years.

On savings of Rs 25-40 a month, the men’s thrift co-ops, had an average loan outstanding of Rs 5,000. The very fact is that the thrift and credit co-ops have shown that from day one they are profitable, that within 10-20 years, they are giving Rs 10,000-20,000 loans to tenant farmers and marginal farmers and oral lessees. Others won’t even be willing to lend to them.

It tells you that you can reach these levels in ten years. What are we waiting for? How much longer before we get into a mission mode on promoting co-ops in the right spirit?

So why the reluctance to revive them? Do state governments think Co-ops are an idea that failed?
No. Every state government knows co-ops are something that must be contained. There is no state govt which feels they failed. A prime case is that of AP where out of 13-14 district milk co-ops, nine moved into the new liberal co-operative law. And there was such opposition to their move! The government had employee unions go to court. But, once they shifted, within 2-3 years, profits doubled, members got better prices, and such umbrage the state government showed. The co-op minister and the animal husbandry minister brought in an ordinance saying dairy co-ops will not be under the new law. One of the complaints against the new law is that no one files returns. But the new law says, if they do not file returns, you can write to then and cancel their registration. If they are not functioning, cancel their registration. On the political side, there is a fear of new rivals emerging from the co-operatives.

You had told me earlier that the union government has drafted a Constitutional amendment for cooperatives confirming that they are part of governance and not businesses. And that, since cooperatives are in the State list, the only way to get states to enact good cooperative laws is to have a Constitutional amendment. This is something you oppose strenuously. Why?
This is an absurd idea. 14/15 years ago, I thought we needed a constitutional amendment. But, this amednment says that “The preparation of electoral rolls for and the conduct of elections shall vest in such an authority as may be provided by the legislature of the state, provided that the legislature might also lay down the procedures for the conduct of such elections.” Would you do that for companies? The audacity that, when it comes to farmers, that I will continue to control them through this process.