IRMA: Relevance @ 40

Unlike crop cultivation, most farmers now see dairying as an enterprise, says the author

Verghese Kurien, India’s milkman nonpareil, made me an offer in May 1979 that I could not refuse.  He was the chairman of the National Dairy Development Board (NDDB) at Anand then.  He wanted me to help him set up the new Institute of Rural Management, Anand (IRMA), the first of its kind anywhere in the world. When I went to Anand a month later, I discovered that there were no documents or reports regarding the yet-to-be registered institute, save the routine draft Memorandum and Articles of Association.  It existed in the thoughts, often disjointed, of Dr Kurien and Kamla Chowdhry, my old senior colleague at Indian Institute of Management, Ahmedabad (IIMA) and then a Ford Foundation advisor to Dr Kurien on the new project.  

Dr Kurien told me right off that he would handle funding and aesthetics of the new campus; everything else — recruitment and induction of faculty and staff, curriculum design, student intake — was entirely my responsibility with a promise of non-interference, which he scrupulously kept. He assured me that money would never be a problem and NDDB would provide all the back-stopping. He asked me how soon would the institute start functioning. Heady with excitement, I said in one year (which was patently foolhardy in retrospect). Somehow, 363 days thereafter, we managed to get Tribhuvandas Patel, the grand old founder chairman of Anand Milk Producers’ Union (AMUL) to welcome the first group of 52 students to a makeshift IRMA campus.  The IRMA Society was registered with the state charities’ commissioner on December 14, 1979. That was IRMA’s formal foundation-day.

But this column is not a nostalgia trip down the memory lane.  It is about a question that became vexing for all of us then: What is this beast “rural management” and why does it need a new institution?  Partly because of the physical proximity, but mainly because many of us early pioneers of IRMA had IIMA umbilical cords either as teachers or students there, an impression existed that IRMA was a sort of a poor ‘country’ cousin to the already formidable IIMA. That riled us no end. This institutional existential question as to who or what we were led to long, passionate but inconclusive debates. Even as late as five years ago, the renowned water management expert Tushaar Shah, who was part of the doctoral programme at IIMA and an early member of IRMA faculty (later to be its director), and I engaged in this discussion.

Since then, much of our collective attention has been focussed on rural distress. Producers of grains, pulses, oilseeds and even vegetables have had legitimate complaints about unremunerative prices. Inadequate market support coupled with ineffective minimum support prices have aggravated their grievances. For the most part, however, dairy farmers (barring cowherds in parts of Maharashtra) have not shown signs of economic strain. The milk economy in value terms is now as large as the other two commodity systems, grains and horticulture. So, dairy production being a minor or secondary occupation cannot explain the relatively sanguine situation of its practitioners.

Unlike crop cultivation, most farmers now see dairying as an enterprise, and not a subsistence or default occupation.  Milk, no matter how small a quantity, is produced for markets. The market power asymmetry is effectively countered by producers’ organisations, which are large enough to enjoy economies of scale through the use of technology.  And like all mature enterprises, their concern has moved from remunerative prices to their stability, value-addition and surplus generation for all stakeholders.  Administrative interventions such as support prices or monopoly procurement are not required, since farmers’ organisations can powerfully lobby to protect their collective interests. A case in point is the Gujarat Co-operative Milk Marketing Federation’s staunch opposition to India’s participation in the Regional Comprehensive Economic Partnership that would have enabled New Zealand to dump its surplus dairy products in India.

I had asked Dr Kurien, who had previously started an institute of technology and another one of co-operative management and served on the board of governors of IIMA, what he meant by rural management.  His response was a rambling monologue on the early days of Amul and its many experiments. Forty years on, I can now interpret this as the essence of rural management being the transformation of commodity production to enterprise.  Farmers as practitioners of enterprise can use market actions and mechanisms to secure their legitimate ends and benefit without seeking external interventions.

We have seen much advice on how to deal with rural distress, which in effect has meant further tying down the producers to government apron-strings, rather than freeing them.  Rural management interpreted thus has the potential of being a truly liberating influence on the one unreformed sector of the Indian economy. It may not be possible all at once or to cover all activities, but transforming farmers into enterprise owners could well be the order of the day.

The Vice President, M Venkaiah Naidu, will lead the observance of four decades of IRMA later this week.  Rural management would be close to his heart, as he had been a thinking minister for rural development in the Atal Bihari Vajpayee governments.  Here is hoping he advocates it with all the formidable persuasion at his command.

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The writer is the founder-director of IRMA