Kerala comrades take a leaf from Deng's primer on market

CPI-(M)-led cooperatives do not let ideology come in the way of job survival as the party diversifies vigorously.

For Deng Xiaoping, the creator of China’s market economy, it hardly mattered whether the cat was black or white as long as it caught mice. Heeding the advice is one of Kerala’s (and the country’s) largest industrial cooperatives, one run by the Communist Party of India (Marxist).

In 1967, a lot of privately-owned beedi production units in and around the Kannur area of Kerala closed for various reasons, leaving about 12,000 workers jobless. There was a CPM government; party seniors mobilised a rupee each from 3,000 workers, got a share capital loan from the government and the result was the Kerala Dinesh Beedi Workers Central Co-operative Society. There are 18 primary societies spread across different districts working under it, whose members elect a central governing body, based in Kannur. The board has always had a CPM-led majority. In the early 1980s, it was the largest workers’ co-operative society in India, with 80,000 members.

“Demand started to decline from the second half of the 90s due to strict anti-tobacco laws and the tyranny of MNCs (multinational corporations) due to globalisation,” said K Prabhakaran, secretary. “We realised we’d not be able to sustain through only beedi sales. So, we started diversification.”

It began with a foray into food processing in 1997, by launching coconut milk and curry powder and then pickles. An umbrella assembling unit began in 2000 and a software development centre in 2001 — it provides e-banking solutions for co-operative banks. The state government had sanctioned Rs 4 crore in 2006 for a Rs 7 crore diversification project, including the setting up of three apparel units, two at Kannur and one at Kasargodu. It now has a presence in beedi rolling, food processing, umbrella assembling, garment making, information technology and also an auditorium for commercial purposes. The latest is the introduction of fast moving consumer goods (FMCG) such as soap, detergents, dish washers and lotions.

Needed, given the steep decline of the market for beedis. “While our turnover from beedis alone was above Rs 160 crore in 2000-2001 (4,750 million sticks sold), it had declined to Rs 36 crore in 2010-11 (only 1,060 million sticks). This happened even after regular price rise,” said Prabhakaran.

The triumph of pragmatism over ideology has a sound basis. “In 2010-11, our overall turnover was Rs 45 crore and it (the co-op) was not running in a loss,” he notes. It provides 12,000 direct and 100,000 indirect jobs through the functional units. “The party should try to follow these steps in beedi belts like Murshidabad in West Bengal, as these give better wages for the working class,” advises Prabhakaran.

Adds CPM central committee member and former finance minister of the state, Thomas Isaac: “The beedi industry is dead. So, diversification, including that to the FMCG sector, is the only way out. The party is supporting the society’s move and is intervening at different levels for its development.” Deng would have approved.