Dinesh Beedi Firm At Crossroads

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When the Kerala Dinesh Beedi Co-operative Society, Kannur, was set up in 1969, it created industrial history. It was the first time in India that the capital for a business was raised by its workers, with its 12,000 employees contributing a rupee each to the society.

The novel idea was promoted by the then communist government in Kerala to keep out exploitative capitalists. The state government itself chipped in with the rest, to raise the total capital of Rs 20 lakh.

The rest, as they say, is history. Dinesh beedis became the largest selling brand in mainly rural India where beedis are the poor mans cigarette. Storming the Indian tobacco market in the mid-seventies, Dinesh Beedis profits surged from Rs 50,000 in 1969 to Rs 44 crore by 1994-95. Annual production increased a whopping 70 times and reached 6.85 billion beedis per year during the period.

In an industry notorious for employing children, the Dinesh Beedi Co-operative became an exception. It became the first unit not to use little hands and also offered its employees access to bonus, gratuity, medical aid, paid leave up to 81 days and death allowance besides a handsome salary.Some of the founder members of the society have become directors of Indias largest industrial co-operative society.

But those days are now past. Steadily declining profits coupled with an increasingly shrinking market have landed this legendary co-operative at a cross-roads.The net profit had slumped to Rs 27.7 crore in 1995-96.

There are many reasons for this  widespread recession in the tobacco industry due to anti-smoking campaigns, the new manufacture tax policy of the central government, proliferation of fake Dinesh beedis and growing preference for cigarettes.

But the biggest reason was the recent tax cuts given to small-scale beedi firms and mini-cigarette manufacturers, which has helped cigar makers. Dinesh Beedis dependence for raw materials on other states has prompted the society to charge a high price for its product.

Moving with the times, the society is now exploring the possibility of diversifying into food and fruit processing, poultry farming and other agricultural activities. Plans are also being finalised to launch processed coconut milk with the help of the Regional Research Laboratory , Thiruvananthapuram.

But a major hurdle to this is the reluctance of its 42,000 employees, many of them from among the original work force, to shift from their traditional beedi-making skills.

Experts say the society must diversify to survive. If attention is not shifted to other areas soon, no doubt the Dinesh Beedi

Co-operative will face doom, warns Dr Thomas Isaac, State Planning Board member and noted economist.

Such an abrupt end to this dream firm should be avoided at all costs. For it is not a mere co-operative but a symbol of the collective spirit of a generation, he added. (IANS)