The Hindu Business Line : `There's space for more than Amul' — Kurien `worried' about Patel's successor

DR. V. Kurien, Chairman of the Institute of Rural Management, Anand (IRMA) as also the Gujarat Co-operative Milk Marketing Federation (GCMMF), allayed fears that he was batting only for the Amul brand as he said that there was space for more than one brand from the co-operative stable.

However, setting up joint ventures (JVs) between the National Dairy Development Board (NDDB) through its subsidiary and the various State Co-operative Milk Marketing Federations (SCMMFs) was not the way to achieve this goal, he said.

"I do not believe that one brand - Amul - for the entire country would be a correct policy, given that it would then control too much of the market share. There should be three or even four brands. The GCMMF would be happy to lend the SCMMFs any other marketing support," said Dr Kurien in response to a question from the media whether it was not better for Amul to infuse the required marketing savvy into the local co-operative brands by bringing it under the former's umbrella. Dr Kurien's statement came even as controversy surrounding the proposed signing of JV agreements by the NDDB subsidiary and a handful of SCMMFs was sought to be kept alive at a two-day national workshop that ended here on Friday.

Dr Kurien sought to play down the difference of opinion he had with Dr Amrita Patel, Chairman, NDDB, saying that it was like any other friction within a household. He hoped to meet Dr Patel "quite soon" and resolve all outstanding issues, he said.

"I am more worried about who would succeed Dr Patel as she is slated to retire in another 10 months. We may need to sit together to ensure that someone who does not have faith in co-operatives nor is committed to the concept does not succeed her," Dr Kurien said, adding that after the workshop, further JVs may not materialise.

Earlier, Dr Kurien made a scathing attack against the setting up of any more JVs by the NDDB subsidiary - Mother Dairy Foods Ltd (MDFL) - along the lines of the one it has already forged with the Kerala Co-operative Milk Marketing Federation (KCMMF) in December last. The NDDB's claim that it was having majority shareholding only in the marketing function was misleading as the SCMMF's only function was marketing, he said.

Dr Kurien exhorted the NDDB to allow the SCMMFs to retain majority equity in the proposed JVs, if it was of vital importance to pursue this path. But the road map should be clear in so much as to ensure that the NDDB withdrew from the equity structure after a certain time frame once the requisite marketing skills were acquired by the SCMMFs. The approach should be to facilitate the viable operation of these entities rather than the NDDB delving into the business of ownership of the co-operative business, he said. How could the NDDB divert the funds it has generated for helping the co-operatives towards investing in new companies, he asked.

The two-day workshop on `Designing co-operative companies/JVs in the emerging environment' also brought to light some of the issues that were thrown up by the JV agreement that NDDB had signed with KCMMF. It included the potential conflict that could arise as the new management would be more concerned with maximising profits, per se, rather than ensuring good returns to the farmer. The other issue pertained to how the MDFL, a government undertaking's (NDDB) subsidiary, by taking majority stake in the JV, proposed to liberate the co-operative brands from the clutches of the Government.

Meanwhile, there were notable absentees at the workshop as some of the major SCMMFs such as Punjab (Verka), Uttar Pradesh (Parag), and Kerala (Milma) opted out. Among the SCMMFs present were Andhra Pradesh (Vijaya), Tamil Nadu (Aavin), Gujarat (Amul), Karnataka (Nandini) as also Orissa and Uttaranchal.

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