What is the rationale behind the recent strategy of JVs, like the one with Milma?Every state has got its own brand for its product — Punjab has Verka, Haryana has Vita, Kerala has Milma. The profits of the JV signed last month between Mother Dairy Foods Limited and Milma will go back to the people after the deduction of expenses. The JVs function exactly as if they are marketing federation. Shareholding ratios are 51 per cent for Mother Dairy and 49 per cent for the cooperative state federation. This, our critics feel, takes away the power of the cooperatives. (That may be) True, under normal circumstances. However, the compelling reason to enter into JVs is that we want the cooperatives to come out of the state government’s clutches. We can only have the freedom to run the JVs professionally if we remove it from the control of the government. Remember, this is not something we apprehend but (something) we have experienced.Dr Kurien would perhaps argue that in the guise of ridding it of state government control, you are actually proposing taking it out of the control of the farmers’ unions?If we look at the equity of any state cooperative federation today in any state outside Gujarat, it varies from 55 to 98 per cent state government equity. Is that what a cooperative is supposed to be? We are merely trying to free cooperatives from government control. In fact, to use Dr Kurien’s words ‘‘NDDB was set up as a government body to rescue dairying from the government.’’ In 1965, when Dr Kurien said this, Amul was the only true cooperative. In every other state, dairying was under the control of the government. Former Prime Minister Lal Bahadur Shastri was aware that in every state, except Gujarat, the cooperatives were totally under state control. He spent a night in a village in Gujarat to understand how cooperatives operated there without government control: Farmer power combined with professionally run employee cooperatives. Alas, where is farmer power today under power of the government?Is freedom from government control enough for cooperatives to run smoothly? Suppose JVs do not work, how do you ensure they run efficiently in an autonomous set-up?If we want cooperatives to stand on their feet, it is absolutely essential they become economically independent. Economic independence will only come about if cooperatives can independently market their products. We believe that in the future, when the JVs are strong and able to perform, they will appoint efficient marketing teams. There is, however, a provision that once the JVs become strong, the federations can disengage themselves with all infrastructure, entire staff and brand. They can simply pull out. If, 10 years hence, the cooperative becomes a producers’ company under the Companies Act, than MDFL will simply pull out of the joint arrangement. The marketing company has not been produced for the sake of profit alone, it has to provide expertise in marketing.Will this set a trend for a JV with a private company, say even a MNC?No way. The NDDB does not have mandate to do so.Does the NDDB have the mandate to sign JVs in the first place? After all, it is registered under the Societies Act, not the Companies Act?But the MDFL, an NDDB subsidiary, is registered under the Companies Act.Why didn’t you consult Kurien on the issue of JVs? I have met Dr Kurien twice a week ever since I took over. I have even discussed the strategy of JVs with him.
