India’s Dairy King Leaves Behind ‘a Butter Place’
India mourned the demise on Sept. 9 of Dr. Verghese Kurien, whose pioneering work at the intersection of dairy-farming technology, the cooperative sector, and branding and marketing created one of the nation's greatest business success stories. Kurien, who died at 90, was a revolutionary in the dairy sector, and the brand that he created, Amul, today enjoys more name recognition and goodwill than almost any other.
Kurien was also the brain behind Operation Flood, a massive undertaking that began in 1970 and lasted almost three decades, designed to develop a countrywide milk grid that would solve milk scarcity problems -- a reality of the mid-20th century that is unknown to most young Indians today -- and make the nation the largest milk producer in the world. Through his work and vision, dairying became "India’s largest self-sustainable rural employment program."
Somewhat like the economist Muhammad Yunus in Bangladesh, who devised a microfinance model to encourage the entrepreneurial talents of the poor, Kurien helped generate long-term wealth. He linked the small Indian farmer, with one or two cows or buffaloes, to a huge network of milk collection that worked on a cooperative model and returned to the producer much of the sale price of the milk.
Most of Kurien's early work was done in Gujarat, a western state with a long history of mass involvement with the cooperative sector. The dairy brand Amul, now more than 50 years old and with annual revenue of about $2 billion, is the brand name of Gujarat Co-Operative Milk Marketing Federation (GCMMF) -- or, as Kurien was proud of saying, "the brand name of 2 million farmers, members of 10,000 village dairy cooperative societies throughout Gujarat." Describing the strengths of Kurien's model of dairy farming, the economist MS Sriram wrote:
A testimony for Kurien can be found in some numbers. The co-operative dairies on an average delivered more than 70% of the consumer rupee to the farmer. ... Dairying has the best return that a primary producer can get from the value chain in any agricultural commodity. This happened by incorporating the value chain from farm-gate to food-plate into farmer owned structures. Today co-operatives own a significant chunk of the organized milk markets. ... They have a network of milk procurement points through village level co-operatives that is so difficult to build, and usually difficult to break. No wonder the managing director of Amul recently said that his competition does not come from multinational brands that have deep pockets but from unorganized companies, local and regional brands.
Kurien's work in villages, with small-scale producers, and in branding is now the subject of hundreds of case studies in business schools. Among the many successful institutions that he set up is the Institute of Rural Management (IRMA) in Anand, Gujarat, which aims to produce "rural managers" to professionalize the development of India's rural sector. Reflecting on Kurien's legacy, the economist Yoginder Alagh wrote in the Indian Express:
A third of rural income comes from dairying, and Kurien produced the only viable model for it. Thirty years ago he realised that dairying isn’t just about machines, technology and co-operatives. It is also about human capital. Dairying, at least the way he envisioned it, required the best managers, too.
And in 2007, the year after Kurien retired from GCMMF, the magazine Business Today said:
Had Verghese Kurien been a private equity investor, he would have retired as one of the richest men in India. Operation Flood, a movement he launched in 1970 as Chairman of National Dairy Development Board to boost milk production in the country, cost a mere Rs 1,772 crore [$350 million] in investment over its three phases (1970-1996). The net return into the rural economy has been estimated at a whopping Rs 24,000 crore per annum over a period of 10 years, or a total of Rs 2.4 trillion in all [$43.5 billion]. In the process, it helped create a network of milk cooperatives that comprised 22 federations and apex milk unions and 9.3 million dairy farmers in 22 states, reaching out to four metros, more than 100 Class 1 cities, and other major towns and urban areas across the country.
Among the many surprising journeys on which Kurien took the dairy farmers of Gujarat was one into film production, with "Manthan" ("The Churning"). The film -- to my mind one of the great Indian productions because of its unusual theme, its mixture of idealism and realism and its origins -- featured a story set around the cooperative dairy movement. It was meant to communicate a sense of the movement's pleasures, struggles and potential for creating lasting change through a form that would reach a wider audience than the standard documentary. It was made by the legendary Indian director Shyam Benegal, and what was most unusual about it was that it was funded entirely by the dairy farmers of Gujarat. Benegal recalled:
[Kurien told him] “You and I may like these documentaries but it’s highly unlikely that we’ll show it to people. We need a feature film to get the word out. I’ll need money to make a feature film.” He wanted to know what budget I’d be comfortable with, I said about Rs 10 lakh [$18,000]. He asked farmers who came to Anand centres to give Rs 2 [3 cents] each and thus made them all producers of the film. In the publicity material, we had every farmer’s name. Manthan had half-a-million producers. It was Dr Kurien’s genius and his faith in farmers that made Manthan possible. Once Manthan was ready we met with a very unenthusiastic response from distributors. Dr Kurien invited our half-a-million producers with their families to the first screening of Manthan. Hordes of farmers came in trucks to see the film that they helped produce in a cinema hall. It created the right buzz and distributors got the faith to release the film.
Kurien was to present his own version of these experiences in an autobiography called "I Too Had a Dream." It was to include the strange story of how, as a young man in his twenties, he arrived in Gujarat with an assignment in a government creamery even though his technical training was in metallurgy. In an essay for the Indian magazine Seminar in 2001, Kurien wrote about the Amul brand and the cooperative movement:
The brand name Amul, from the Sanskrit "amoolya", meaning priceless, was suggested by a quality control expert in Anand. The first products with the Amul brand name were launched in 1955. Since then, they have been in use in millions of homes in all parts of India, and beyond. Today Amul is a symbol of many things: Of high quality products sold at reasonable prices, of availability, of service.
There is something more, though, that makes the Amul brand special and that something is the reason for our commitment to quality and value for money. Amul is the brand name of 2 million farmers, members of 10,000 village dairy cooperative societies throughout Gujarat. This is the heart of Amul, it is what gives strength to Amul, and it is what is so special about the Amul saga.
The relationship with Amul is one that Indian people renew whenever they buy the company's butter, milk, ice-cream or other dairy products. But it is also kept up through the brand's signature advertising campaign, a tongue-in-cheek series of tableaux on current Indian affairs linking back in some way (usually through a pun) to Amul butter, that is now one of the world's oldest advertising campaigns. This week, a picture in the spirit of the Amul ad campaigns did the rounds on Twitter, thanking Kurien "for leaving India a butter place."
(Chandrahas Choudhury, a novelist, is the New Delhi correspondent for World View. Follow him on Twitter. The opinions expressed are his own.)
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