May 13, 1986

Maharaja Sayajirao University of Baroda

The Maharaja Sayajirao University of Baroda

Thirty-fifth Convocation Address



National Dairy Development Board

May 13, 1986


Distinguished Chancellor, Mr Vice Chancellor, Members of the Faculty of the Maharaja Sayajirao University of Baroda, new graduates of the University, ladies and gentlemen,

When I was honoured by the request to deliver this Convocation Address, my surprise and pleasure was, I must admit, mixed with some considerable apprehension. To speak before such a distinguished audience causes me no little trepidation. However, I am increasingly worried about the lack of concern at the widening gulf between our urban and rural populations, between those who work in factories and those who work in our fields, between agriculture and industry, between our cities and our villages. I thought I should make known to you, particularly the new graduates, something of the hopes and aspirations of our rural populations in the hope that you will develop some understanding and sympathy and may even wish to playa part in bridging this gap. The degrees you have newly acquired certifies you as one of our nation’s educated elite; how you use what you have learned, and how you build upon it, and for whose benefit you use it is of far greater importance.

Those in this audience who recall the early days of independence will well remember that the eradication of poverty in our rural areas was our nation’s foremost goal. Even today, after 40 years of freedom, eradication of poverty remains our goal yet to be achieved. Poverty persists. While progress has been made at the fringes of the problem, today nearly half of our rural population remains poor. And because they are poor, they lack the resources, the education, the energy and the will to escape from poverty. There are of course poor in our cities but mostly they are the overflow from our villages, looking for jobs that often do not exist.

Why, we must ask, has the problem of poverty proved so intractable? Its elimination has been the first national priority for nearly forty years. Poverty and the problems associated with it have been studied and analysed by our finest economists, sociologists and social scientists. Our best scientific talent has been deployed to develop the technologies that will liberate our rural poor. Our plans, and the resources that flow from them, have focussed on amelioration of rural poverty. Yet the problem remains.

I would draw your attention to a rather striking paradox. Considerable and justifiable pride is taken in the great strides made by our agricultural sector in the last two decades. As recently as the mid-1960s many were convinced that, as a nation, we could not feed ourselves. Last year we produced a staggering 150 million tonnes of food grains; this year we shall equal or exceed that record, continuing on a path of progress that has few parallels. Yet, while production leaps, poverty persists. The rural poor — those who produce the cereals, the oilseeds, the cotton, jute, pulses and spices — show little gain from their efforts. Is it not curious that in a year of record production, farmer income has not increased dramatically? Is it not equally puzzling that consumer prices have increased, increases that tax that other class of underprivileged, the urban poor?

There is an unfortunate explanation for this paradox: exploitation. It is the traders and the middlemen who have been the major beneficiaries of our green revolution. Let us, however, give them their due. They have created marvels of vertical and horizontal integration to finance, procure, process and market a major portion of our nation’s agricultural production. Consider, if you will, only the logistics of moving cereals, vegetables, fruit, and oilseeds to Baroda not only from the far reaches of Gujarat but from every corner of India. One can only admire such a system. And, one would admire it more were it not for the fact that in the absence of control and competition, it exploits not only both producer and consumer, but operates with margins that allow for substantial inefficiencies and waste.

No doubt some of you have asked yourself the question I will now pose: how can such a situation persist in a democratic society? Is not one of democracy’s merits its capacity to redress such problems of exploitation? The answer, whether fortunately or unfortunately, is not a simple yes. Democratic decision-making must weave its way through a web of conflicting demands. Decisions in a democracy must, of the nature of the system, respond to pressures rather than simply resolve issues on their merits. It is an unfortunate fact that on issues that affect them, our rural poor exert little or no pressure. Weighed down by the problems of day-to-day life, even of survival, they are no match for the pressures of the urban elite, the traders and the middlemen.

Let me digress for a moment to tell you something of my own experience for it offers both an illustration and, perhaps the outline of a solution.

It was just at the dawn of our Independence that I found myself — much against my will I might say — posted to the little town of Anand in Kaira District. It was here that I got mixed up with some rather remarkable people who were grappling with this very problem of exploitation. Kaira District produces milk, far more milk during the flush season than can be consumed there, or in the surrounding areas. And so, the milk was purchased by traders and a private dairy who would send it to Bombay. The profit, needless to say, went to the dairy — not to the farmers. Shri Tribhuvandas K Patel and his colleagues believed that through cooperation the farmers of Kaira District could strengthen their position. As you know, they were proved right. But, it was not without a struggle and not without learning that our efforts could not succeed unless we became involved not only in trading, but in supporting production, in processing, and in the marketing of dairy products. We also learned that the rural poor could command a major enterprise and, in so doing, earn a far greater share of the consumer’s rupee. But to do so, the farmer’s power had to be linked with the expertise of professional management, management that would represent their interests effectively, persistently and with integrity.

The success of our efforts in Kaira District soon led neighbouring areas of Gujarat to seek our help in organising their dairy farmers into cooperatives. As the successes began to multiply, the then Prime Minister, Shri Lal Bahadur Shastri, decided that the same approach should be the basis of national dairy development policy and, at his instance, the National Dairy Development Board was established. This led to Operation Flood.

What is Operation Flood? It is not simply a dairy development programme. It is the organisation of farmers, giving them a platform to articulate their needs, to demand a better place under the Indian sun. The basis of Operation Flood is giving power to the farmers by combining their energies and resources with the talent and commitment of professional management. It is therefore appropriate that some have dubbed Operation Flood the “White Revolution”, for it is a revolution — not only in production, but in creating a constituency of farmers who, served by professional managers, can exert pressures in their own interests, thereby participating effectively in our democratic process. It is no accident that the incomes of dairy farmers have increased. They are organised and they have a voice. We can also take some pride in the fact that because their organisations are managed professionally, and because they are efficient, price increases to the consumer have been moderate.

This revolution has not taken place without opposition. It has been opposed by some politicians, by many bureaucrats, by middlemen merchants and traders. It has been opposed by advanced dairying countries and by multinational food companies. Yet this coalition of vested interests, who don’t want the poor to emerge, who feel threatened when the poor gain access to the stage of democratic decision-making, has failed. They have failed because of the very fact that the farmers are organised. And they have failed because the salvation of India is that in high places, in all spheres, there are people of good intentions, of good will and of ability. Such people have not only welcomed the poor to the arena of democratic decision-making, but have actively supported and encouraged this process.

The Government of India, beginning with Pandit Jawaharlal Nehru, has encouraged what we call the Anand Pattern of cooperative development. As I mentioned, it was Shri Lal Bahadur Shastri who was instrumental in creating the National Dairy Development Board so that the Anand Pattern could be extended to every part of the country. It was Shrimati Indira Gandhi whose encouragement and support was vital to Operation Flood and, more recently, to creating an alternative structure for vegetable and fruit marketing on the Anand Pattern. And it was Shri Morarji Desai who saw the Anand Pattern as the way to replicate the success of Operation Flood with oilseeds and edible oil.

Whether with milk, with vegetable and fruit, or with oil, organisation of farmers into cooperative enterprises is the first step towards releasing our rural population from the bonds of poverty. By their command over procurement, processing and marketing, the farmers ensure that their share of the consumer’s rupee increases, providing them with a remunerative and reliable return on their investment. Increased and stable income creates the conditions for further investment in production and productivity, an effort supported by the cooperatives which provide the services and inputs the farmers require. When the cooperatives achieve an influential share of the market — as they have in milk and dairy products — this forces the trade to conform, to compete with fair prices to the farmer and to the consumer. Most important, the cooperative enterprise, linking farmers locally, regionally and nationally, empowers the rural poor, giving them a strong voice in our democratic process.

It has probably occurred to you that if cooperatives are a solution to rural poverty, why does poverty persist? After all, today in India we claim to have one of the world’s largest cooperative movements — more than one hundred and fifty thousand cooperative organisations exist in our rural areas.

To understand why cooperatives have not succeeded in reducing poverty we must understand bit of history. Cooperation has existed in our country from time immemorial. But the cooperative movement organised by the British, and ruled by a Registrar, was alien to our culture and our genius. With Independence, cooperatives, along with Panchayats and village schools, were seen as one of the three pillars of development. But, while political power had been transferred, the approach to cooperation remained the same. We forgot the words of Gandhiji who said: “Cooperation, which is rooted in the soil, always succeeds”. What we promoted were cooperatives rooted in the infertile soil of Government Departments of Cooperation, created simply as an extension of the bureaucrat, a soil in which they might exist, but where they would never flourish. We ignored the lessons of cooperative pioneers such as Tribhuvandas Patel who built cooperatives from the bottom up, empowering the farmer, not the bureaucrat.

He and other pioneers of the Indian cooperative movement, men of great vision, saw that cooperatives could transform our rural areas, empowering our farmers and allowing them to direct their own destinies. They were convinced that cooperatives would strengthen democracy at the grassroots as our rural people learned to wisely use the power of one man with one vote. They believed that economic justice would be advanced by the lessons of cooperation where rich and poor, Hindu and Muslim, Brahmin and Harijan unite for the common good.

Increasingly these dreams have been dashed against the rocks of politics, bureaucracy and disregard for the fundamental principles of cooperation. Cooperation, a people’s movement, has been officialised, bureaucratised, politicised and neutralised. It is not necessarily wrong for a political leader to serve as a cooperative leader; what is wrong is when such leaders put political interests above the principles and purposes of cooperation. Only if cooperative leaders behave with decency, honesty and integrity can cooperation succeed as a powerful instrument of constructive change in our villages. As Mahatma Gandhi once said, “The cooperative movement will be a blessing to India only to the extent that it is a moral movement.”

Yet, in spite of all these difficulties, Operation Flood has now in its fold some 40 lakh milk producers families, who have organised themselves into 40,000 village milk producer cooperatives, federated into 150 district cooperative unions like Amul, owning their own milk processing and marketing facilities in one third of the districts of India. Between them they collect some 100 lakh litres of milk a day. ,They obtain as payment for their milk Rs. 1000 crores a year and the farmers have had their incomes doubled. India has completely stopped for the last 10 years all commercial imports of milk products. The only import of dairy commodities hereafter will be some 15,000 tonnes of milk powder and 5,000 tonnes of butter oil for the next 5 years and that too as a gift delivered free in India. No wonder some 86 countries of Asia, Africa and Latin America wish to have their own Operation Flood.

Are the benefits of such a project limited only to building up our own dairy industry and becoming self-reliant in regard to milk and milk products and doubling the income of vast numbers of our farmers? It can mean much more. True development is development of man and not of cows and the only way we can develop man is by giving him responsibility. In developing India, therefore, we cannot ignore the 73% of our population who live in the villages. We must find ways and means to give them responsibility to manage their own affairs. The human machine is a wonderful machine. The more you load it the bigger it becomes. This is true of farmers also. Operation Flood is a project which gives the farmers responsibility to procure, process and market the milk they produce. It gives them the responsibility of managing the large complex business through their own elected representatives, and by employing professionals. The biggest asset of India is its people. If we can mobilise the vast energy of our people by combining it with professional management to give direction and thrust, what can India not achieve?

In industry, in spite of the criticisms we may make of many aspects of India and of the many drawbacks of Indian life, the fact remains that India is today the tenth or the fifteenth largest industrial power in the world. How did this become possible? Forty years ago when we became independent, we could not manufacture a safety pin and today there is nothing that we do not manufacture. It became possible because people like Tata, Birla and our own Ambalal Sarabhai and Kasturbhai Lalbhai combined their business acumen, their money and their patriotism with professional management and made India what it is today industrially. What can India not achieve if we learn to combine the vast power of our rural population — 600 million Indians — with professional management and create institutional structures that give them the responsibility to manage their own affairs? Will they also not grow? I am one of those who believe that the good people of India are the farmers. They live close to nature. They till our lands, they work in our fields to produce the food and fibre we need. They only want to live and let live. All the bad people from the villages, all the ambitious ones, have already gone to Bombay and Ahmedabad in search of money and to our capital cities in search of power. Only the good ones are now left in our villages and if India is to prosper we should involve these good people in the processes of development, place in their hands the instruments of development and underpin the democratic structure at Delhi with the democratic institutions right down to the village level. These are some of the larger implications of Operation Flood.

May I express the hope that distinguished universities such as this and the students that graduate from them take a more active and sympathetic interest in the efforts of our farmers to better their lot.

Gandhiji talked about rural development as a service to the poorest. I hope you too, in your own Hay, serve the cause of Gandhiji’s Antyodaya — “The last, the least, the lowest and the lost.”

I wish you well.