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The AMUL model: How to save Indian farmers from suicide

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Prakash Bebington
Prakash Bebington is a PhD scholar, independent blogger and passionate humanist who espouses the cause of life, liberty and duty. Having worked closely with students as a Professor of Management & Engineering, he has a sense of obligation to these future citizens. He owes his allegiance to no political party, but only to the great nation of India and her future leaders.

Please…
no loan waivers,
no suicide compensations,
no tax exemptions,
no free electricity,
no unlimited water,
no politically expedient blah-blah-blah…

There are 6.25 lakh villages in India with about 12 crore farmers (cultivators) and 15 crore agricultural labourers. Over two-thirds of the farmers are marginal, having less than one hectare of land under cultivation. These farmers and their labourers are the most vulnerable population for suicides.

The situation of Indian farmer today is quite similar to that of the dairy farmer in British India. In the early 1940s, Gujarat’s dairy farmers were forced to sell to the monopolistic British company, Polson Dairy, who arbitrarily fixed low prices and paid them badly- very much like today’s wholesale agents and traders. Then, Sardar Vallabhbhai Patel directed Morarji Desai to organize the dairy producers into village milk cooperatives. These cooperatives were further developed by Dr. Verghese Kurien.

In 1946, the Anand Milk Union Limited (AMUL) was formed. Amul directly purchased milk every day from dairy farmers, quality tested, stored and sold the milk and milk products across India. Today, Amul is a Rs.38,000-crore company with 750 employees supplied by 36 lakh dairy farmers and selling to over 60 countries across the world. No dairy farmer commits suicide as they get a fair price for their produce directly from the consumer, without any bleeding by greedy middle-men.

Now, why can’t AMUL’s success story in dairy be replicated in other farm products like cereals, pulses, vegetables, fruits, fisheries, etc.? Certainly, Yes! But, how? The answer is the “Three-Tier Amul Model”. This is a cooperative structure which comprises:

  • A dairy cooperative society at the village level affiliated to…
  • A milk union at the district level which in turn is federated into…
  • A milk federation at the state level

Milk collection is done daily at the village dairy society, milk procurement and processing at the district milk union, and finally milk products marketing at the state milk federation. The structure was evolved in Gujarat and thereafter replicated all over the country under the “Operation Flood” program during the Lal Bahadur Shastri era.

To replicate the Amul Model in agricultural products and save our farmers from extinction, India urgently needs an “Operation Secure Farmer” in which a national company- say Bharat Farm Cooperatives Federation Limited (BFCFL) is incorporated via public-private partnership. BFCFL’s first and foremost order of business is to establish farm cooperative societies at village level across all 6.25 lakh villages in India. This requires the village Panchayats to sign memoranda of understanding (MoUs) with the company. Specifications of price and quality should be clearly spelt out in these MOUs.

  • At every harvesting season, BFCFL’s trucks should visit the villages and measure, quality-check, and collect the produce directly from farmers. Within 7 days, the farmers should be paid via direct funds transfer into their Jan Dhan accounts.
  • Next, the collected produce should be brought to the warehouses of farm unions set up at the district level. These warehouses at the 640-odd districts across India should be well designed and built to prevent wastage/ loss due to rot, pests, and pilferage. The warehouses should also function as “food factories” by processing the incoming produce by cleaning and packaging them into salable packages—say, under the brand name “Aahaar”. Fumigation, radiation, refrigeration, vacuum/ nitrogen packing, etc. should be done in these factories. Warehouse performance should be strictly monitored on wastage and pilferage (“dump and shrink”) parameters.
  • Finally, these factories should be technologically linked to state-level marketing offices which would facilitate distribution to the customers at markets in towns and cities across the state. Retail traders (not large wholesalers) and end consumers could place orders online or via telephone or directly to the sales agents from BFCFL and the nicely pre-packaged, preserved products would be delivered directly by the company from its nearest factory/ warehouse. In order to avoid black-marketing (and consequent generation of black money), customers should be informed to purchase agricultural products only from BFCFL, i.e., Aahaar.

Besides eliminating the scourge of seasonal price rise, BFCFL would completely eradicate farmer suicides. However, vested political interests, middle-men cartels, and black-money hoarders would try to sabotage BFCFL during the initial months. So, the Government of India could initiate this monolithic project nation-wide by partnering with large private companies (such as the Tata, Birla, Reliance groups or even Amazon Pantry). Dynamic youngsters could start at the district level and expand to state level and beyond over time, like the indomitable Dr. Varghese Kurien.

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Prakash Bebington
Prakash Bebington is a PhD scholar, independent blogger and passionate humanist who espouses the cause of life, liberty and duty. Having worked closely with students as a Professor of Management & Engineering, he has a sense of obligation to these future citizens. He owes his allegiance to no political party, but only to the great nation of India and her future leaders.

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