Vallabhbhai Patel Memorial Lecture on Cooperative Marketing

Patel’s Vision of the Indian Cooperative Movement

Vallabhbhai Patel Memorial Lecture
on Cooperative Marketing

Vallabhbhai Patel’s
Vision of the Indian Cooperative Movement




National Dairy Development Board

New Delhi
August 30, 1991

Distinguished Chief Guest, Chairman of NAFED, invited guests, ladies and gentlemen,

I am delighted and honoured to have been invited to deliver the first Vallabhbhai Patel Memorial Lecture on Co-operative Marketing. In instituting this annual lecture series, the National Agricultural Co-operative Marketing Federation of India has not only taken a major step in promoting thinking and discussion on issues facing our co-operative sector, but has also ensured that the ideals of Vallabhbhai shall, for ever, remain with us. In inviting me to deliver the first lecture in this series, you have done me great honour for which I remain beholden to you.

Vallabhbhai was a good friend of mine. He was a remarkable man. Some people who had known him found him abrasive to the point of rudeness. However, many like me, who shared his ideals and his commitment to the farmers of Gujarat got to see the gentle side of his personality. This gentleness and our shared commitment to co-operatives forged a strong bond of friendship between us – which continued even as he became a minister. So mature as our relationship that even after he became a minister, Vallabhbhai never hesitated in himself coming down to Anand whenever he wanted to meet me.

Vallabhbhai paid a price for his abrasive style and no-nonsense approach to work. His political career was stunted in no small measure, by- these traits of his personality. But Vallabhbhai was not the type who would want to build a political career by wheeling and dealing. He was a man of principles. He had an ideology and a vision of society through which he saw the world around him. Until the day he was brutally assassinated. Vallabhbhai fought for this ideology and strove to create institutes – like the well-known Lodhika Co-operative – that strove to establish his ideals.

Co-operatives and grassroots democracy on the ground occupied a large part of the canvas of Vallabhbhai’s world view. It was to these that he devoted the bulk of his working life. A qualified lawyer himself, Vallabhbhai could have easily built himself a lucrative legal practice if he had so wished. But he decided, instead, to study co-operation under the guidance of Vajubhai Shah, a veteran of Gujarat’s co-operative movement. When he completed his studies, Vajubhai advised him, “What will you do as a lawyer? Instead, study the laws of co-operation and provide the advantage of your knowledge to farmers and to the public at large. Give a boost to co-operative activities”. This, then became the mission of Vallabhbhai’s life. As someone who has been closely involved in Gujarat’s co-operative movement. I can very confidently say that Vallabhbhai fulfilled this mission more than any man can do in a single lifetime. Gujarat has produced co-operative leaders of the stature of Shri Vaikunthlal Mehta. Vallabhbhai Patel certainly belonged to that class of leaders who put the interests of the society above their own.

India has the largest co-operative movement in the world. Over 10 crore farmers are members of one co-operative or another. If we consider the fact that creating institutional structures responsive to people is the most powerful vehicle for transforming traditional societies, this vast network of co-operatives could have become the foundation for building a strong and modern rural India. Unfortunately, we have all but missed this bus. Other than in a handful of sectors such as in dairying, oilseeds and sugar, our co-operatives have not been able to perform the role that our great leaders like Pandit Jawaharlal Nehru expected of them. Instead, our co-operative movement has remained a weakling, perpetually dependent on donors from the government and unable to rid itself of the shackles of bureaucratic control and political meddling.

Our founding fathers had dreamt of an India convulsing with strong, democratic and member-controlled co-operatives. But during the last four decades, these dreams have often been dashed on the shoals of politics, bureaucracy and disregard of the fundamental principles of co-operation. What should have been a people’s movement has been officialised, bureaucratized and thus politicized, neutralised. There is nothing wrong if a political person serves as a co-operative leader even as Vallabhbhai did; but it is certainly wrong when political purposes are advanced at the expense of the principles and purpose of co-operation as Vallabhbhai never did. There is nothing wrong in a government officer serving in a co-operative; what is wrong is when there is no accountability to the members or when the members’ desire for assuming responsibility is blocked. Men become responsible only when responsibility is given, not when it is withheld.

The main culprit for this degeneration of our co-operative movement is our archaic Co-operative Societies’ Act legislated 85 years ago by an alien government, whose aim was not to serve, but to rule. Long ago, some kindly Englishmen wanted some money lent. So they formed credit co-operatives. But lest the “natives” elope with the co-operatives money, the British enacted a co-operative law that gave enormous power to the Registrar of Co-operatives, who had to be an Englishman since the Act specified that he should be a member of the ICS.

At the dawn of Independence, we slowly realised that being the co-operative movement of independent India made no difference to our co-operatives. The Co-operative Act remained unchanged – in letter as well as in spirit. The ‘gora’ sahib was replaced by the ‘brown’ sahib, who – enjoying the powers to even supersede elected boards of co-operatives – began playing God to them. Worse still, the unscrupulous politician, whom the ‘gora’ sahib condemned as a native, now came into his own. With the control that he enjoyed over the pliable ‘brown’ sahib, our archaic co- operative law proved to be God-send for him: it enabled him to play boss to God – a very pleasurable occupation indeed!

Naturally, all this has not helped the cause of building a healthy co-operative movement. When all that a co-operative had to do was to lend a few hundred rupees, it probably did not matter much. But this is not the case today. There are co- operatives in India – such as, for example, the Gujarat Co-operative Milk Marketing Federation, of which I am the elected Chairman, which has 1.5 million members and an annual turnover of Rs.700 crores. And yet, the present law empowers a Deputy Registrar, who is often little more than a petty bureaucrat – to play havoc with such a business simply because it belongs to a co-operative. Indeed, any more large co-operative businesses would have come up and placed our farmers in command of a modernising agricultural economy but for the tyranny of our bureaucracy and the oppressive legal environment within which our co-operatives have had to function. Imagine what would have happened to Mr. Tata if the Registrar of Companies of Bihar had the same powers as the Registrar of Co-operatives. He would have simply superseded the TISCO Board long ago and appointed his Assistant Registrar of Companies as TISCO’s Managing Director! Worse still, some minister would have just ordered his registrar to supersede the Boards of all the companies in his state and replaced them by his cronies.

How can we expect our co-operative movement to flower in such an environment? This has to be stopped. We must, in our new co-operative law, redefine the powers and responsibilities of the Registrar. The government must reduce its profile. If it cannot provide support and guidance, the least it can do is to get off the back of the co-operative movement. Co-operatives must be given the freedom to manage their own affairs. The new law must protect co-operatives from narrow political interests. It must recognise the roles, responsibilities and accountability of the professionals to the membership of the co-operative, for a co-operative that fails as an enterprise will also fail as a vehicle of service to its members. Our new law must not just allow, but must require, our co-operatives to freely elect their own leaders. A co-operative with an appointed Chairman and Board is no co-operative at all. What we need is a model Co-operative Act that embodies each co-operative principle and which enables our co-operatives to flourish. We need a co-operative law based not on alien values; we need a co-operative law that reflects our unique national genius.

It has been a matter of relief that in recent years there has been some thinking on the reform of our co-operative law. The Ardhanareeshwaran Committee Report has given expression to the concerns of those like me who have spent their lives working as employees of farmers. An even more recent committee, headed by Chaudhary Brahmaprakash has gone so far as to recommend that no IAS officer should be appointed as a Registrar of Co-operatives, whose job ought to involve little more than registering co-operatives. It has also recommended that no share holding should be taken out by the government. I was delighted to read the report which I thought was a major step in the direction of liberating our co-operative movement from the clutches of the bureaucracy and restoring it to its membership.

However, I was disappointed that Chaudhary Sahib undid the entire work of his Committee and killed the soul of its report in the covering letter with which he forwarded the report to the Deputy Chairman of the Planning Commission. That letter recommended that the government should create a new ministry of co-operation. What will this new ministry do except to get into the hair of the co-operatives? In order to strengthen and revitalise our co-operative movement, what we need is less government, not more. What would help our co-operatives is the abolition of the existing department of co-operation and not the creation of a new ministry. This, in my opinion, would be a retrograde step and antiethical to the very spirit of the model Co-operative Act.

In my 40 years in the service of our milk producers, I have had opportunities to visit many countries and to study their dairy industry. On the basis of this, I have come to the conclusion that the co-operative movement can flourish only if the profile of the government is reduced. In India, we have a Department of Co-operation in the Ministry of Agriculture, but numerous private dairies are set up in our cities. In contrast, in New Zealand, there is no Ministry of Co-operation, there is no Department of Co-operation, and yet all the dairies without exception are owned by co-operatives of milk producers. This proliferation of ministries and departments does not seem to me to auger well for the development of our country. Thirty five years ago, we had only one ministry dealing with food, agriculture, irrigation, rural development, co-operation, community development and so on. Over the years, there has been increasing tendency to create new ministries or departments – mainly, in my view, to accommodate senior bureaucrats desiring posting in Delhi. Recently a new department of Animal Husbandry and Dairying has been created within the Ministry of Agriculture. I would not be surprised if in the near future we hear of a separate department for cows, one more for buffaloes, and so on. If multiplying ministries could have fostered development, India should have been the richest nation in the world by now. Fortunately there is a financial crunch now. I hope our new Finance Minister will abolish some departments and ministries.

Thus, when we look back at the historical evolution of our co-operative movement, many of us get dejected. Rather than inspiring and enthusing us, the state of our co-operatives often breeds despondence and helplessness. If its past has been so disappointing, can the future of our co-operatives be bright?

I, for one, believe that yes, it can. I hold that co-operation, like democracy, is a value to be cherished. All we do to further the cause of co-operation, as of democracy, is an act of faith. If our experience with our co-operative movement has so far been unsavoury, our experience with democracy has not been very happy either. In the name of democracy we have given birth to a soft state which is held in ransom by organised labour which has usurped larger and larger portion of the nation’s economic cake for contributing less and less to enlarging the size of this cake. We have created a Frankenstein of a fattening bureaucracy which has, under the veneer of parliamentary democracy, arrogated to itself the authority that no bureaucracy should ever have. Service to people is the long forgotten ideal of the bureaucracy. Our ‘brown sahibs’, like their predecessors, the ‘gora sahibs’, believe not in service but in ruling over our people.

Is this the democracy that we bargained for when we got Independence from colonial rule? Did we want a political apparatus where Parliamentary and Assembly elections are routinely won by distributing ‘daru’ and largesses and where booth capturing is the standard operating procedure for getting a seat in Parliament? Did we bid for a democracy which is merely a guise for this politics of patronage?

And yet, this is what we have got. But does it mean that we should give up democracy? Someone has aptly said that the answer to all the problems of democracy is more democracy. In the same vein, the answer to all the problems of our co-operatives is more co-operation. Indeed, more co-operation could, in the long run, be a major answer to the problems of our democracy as well. Because it is through co-operatives that good, strong and committed leadership can emerge.

The most crucial element in fostering both a strong co-operative movement as well as a strong democracy is honest leadership committed to democratic ideals. Regrettably, the only system through which people’s leadership could so far emerge in our country has been the political system and the parliamentary system. But this, clearly is a very unsatisfactory situation since only those in search of power and affluence – and not those pursuing lofty ideals and noble causes – get attracted to this route. Money and power attract only the dredges of society; whereas. it is the nobility of causes and the spirit of service that bring out the best in man.

In my opinion, therefore, the ideal route for good leadership to emerge – not only for our co-operatives, but also for our democracy – would be to encourage a plurality of democratic institutions to undertake procurement, processing and marketing of rural produce. Our democracy will not sink into our lives and our collective psyche until our democratic institutions in Delhi and our State capitals are underpinned by numerous democratic institutions reaching down to our villages. A strong, member-controlled co-operative movement freed from the bureaucratic stranglehold can provide an edifice on which we can re-build our democracy.

It is for such a vision of our society that Vallabhbhai lived and died. If he had been alive today, he would have been a great force in realising this vision. It is a pity not only for our co-operatives but also for our democracy that a man like Vallabhbhai was assassinated in the prime of his life, something which has been happening too often in our country in recent times. This is a warning to those, like Vallabhbhal, who stand for social change and strive to
eliminate repression in society. We Indians must learn our lesson from such violent acts.

Strangely, in retrospect, when I look back, I wonder if there could be a more fitting end for a man like Vallabhbhai. When he heard about the assassination of Gandhiji, George Bernard Shaw said that it is dangerous to be good. Vallabhbhai was a good man and fought, until he died, for noble causes. Is, then, there a more fitting end for a man like him?

Thank you.