A Temple Under Construction

        It's just another day for most of us out there in the cities. But I am in Utnoor, a small town by 8 AM. Although a part of my native district - Adilabad - I never had a closer look into this town or the surrounding villages, except while traveling to Vijayawada or Warangal. As a passive observer, I join a gathering of about 20 visitors from various states, who are working with farmers and agricultural labour and are keen to learn what is going on in this part of the country and take back the learnings to their own set of people for a better tomorrow. Almost all of them have done a significant amount of work in their own regions. We are led by Professor Trilochan Sastry, who founded the NGO, Centre for Collective Development (CCD) to bring a change in the way small and marginal farmers go about their business. CCD works with more than 15000 farmers in three districts - Adilabad (Telangana), Ananthapur and Chittoor (Andhra Pradesh). The Adilabad district office is in Utnoor and is run be a young manager, Vijay Kumar and his team of 15 field executives and 4 office staff. They have been able to mobilize 120 farmer cooperatives with about 8000 farmers. These cooperatives come together to form a district level federation, Praja Mitra Raitu Mutually Aided Cooperative Federation. (More details on it are here) 

        We first move to a small village, Phullara, which just has 50 households and the cooperative there was established about and year back. As we reach there, the members of the cooperative including its President are awaiting us. They welcome us with a traditional and warm "Ram Ram" holding our hands. As we settle down, Professor conveys to them why we are gathered today and suggests them to tell what they have been doing at the cooperative and what are the challenges they face in growing their crops. The village head, (who is the go to guy in case of issues between people in the village) and the cooperative President take over the discussion. There are 21 members in the cooperative as of now. They grow cotton, red gram (usually as an inter-crop) and soya bean. They say they realize better price by selling through the federation than through the local trader who gives lower price and also cuts the weight citing quality reasons. They also have started saving 50 rupees a month within their cooperative. This money is very low to be useful but it is just a starting point. They have bought an electronic weighing machine worth 10000 and plan to buy a moisture content measuring machine.

        At this point, we, the visitors start asking where do they get the credit from and at what interest rate. They say that they get it from Sahukaar (local money lender). They say, somewhat casually, that they have to repay 1500 for every 1000 they take over a period of 6 months. As I hear that, my mind goes numb. 50% interest rate over 6 months. Effective Annual Rate of 125%. Some of the visitors ask, "What about the banks providing loans at 7% interest rate?". They say that the bank officials usually take time to process the loans and the money does not reach them at the right time. They need to buy seeds by mid-june and they usually do not get bank loans by then. They also accept the fact that some of them sometimes default on the loans and hence do not become eligible for the next year, till the govt decides to waive off. The visitors ask them, "Why can't you take loans from banks and repay the Sahukaar loan in a month or so?". They say, the Sahukaar only takes back the loan at the end of six months and that's one of his main "terms and conditions".

        We ask them about the crop yield, whether they cultivate in one season or two seasons, and how much they earn. They say that as they depend only on rain water, they grow only during Kharif season. Their typical yield for cotton is about 3.5 quintals per acre. There are farmers with a minimum of 1 to a maximum of 8 acres landholding with an average of 4 acre holding. 5 out of the 50 households are landless and work as agricultural labour. The professor suggests Vijay to check govt schemes about allotting land to them and help them with the process. The President tells that he typically takes a loan of about 30000 for his 4 acre land, uses the money for farm as well as household expenses, earns about 50000-55000 which he uses to repay the Sahukaar and again repeat the same cycle next year while using whatever small amount left with him for rest of the year. This is sufficient, although barely, because there are only two people in the house as his daughter is married off, he says.

        The Professor comes up with a question. He says, "I noticed a temple under construction outside the village. Who is paying for it and what is the cost of its construction?". The President promptly replies that it is costing them 6 lakhs and they all (along with 50 more households from an adjacent village) are contributing 1000-1500 per year for the last 3-4 years. The professor says, "It is good that you decided to construct the temple and have come together collectively for the same. Now, it is time that you come together collectively for your own benefit and start raising the corpus fund of our cooperative to reach at least 6 lakhs in 3-4 years because god will also be interested to help you only if you start helping yourselves. And as we can see clearly from other older cooperatives, this is quite possible and achievable for you." He asks them, "will you do it or not?". For which, they give an emphatic yes, although after a little explanation about how they can save money by avoiding loans from the Sahukaar and borrowing from their own cooperative.

        Professor opens his next card: A 500 gram packet of Adai Dosa (Pesarattu) Mix ( a south indian breakfast product) that is priced at 120 Rupees (along with a couple of other products). He shows it to them and asks them how much can the manufacturer earn if he sells a Kg. They say, 240 rupees. He tells them that it is made out of a combination of red gram, green gram, black gram and rice and all the ingredients except rice are grown right here. He asks them, what is the average price that they receive for these pulses. They say that it is about 50 rupees per kg. He then asks, should we do it ourselves. They say, definitely. He tells them, "We are already manufacturing these value added products and selling them in Hyderabad and Bangalore and if you supply good quality Pulses and Millets that you grow, I will ensure that these are turned into value added products like this and sell them in different cities under a single brand. The profits from the share of supply you provide us will be given to your cooperative. But I have two conditions to be accepted by you. Condition No. 1 is that you need to ensure quality. Condition No. 2, you need to keep this money within the cooperative and must use it to build the corpus". For which their response is yes.

        After the meet, we move to the dal mill (5 tonne per day capacity) that they have set up in 2009. There we meet the Board of Directors of the district federation. The 12 member board is elected from among the 120 presidents of the cooperatives that form the federation. Again we ask them similar questions and also some questions regarding the functioning of the federation. Couple of the board members are from cooperatives that are more than 8 years old and they have set up good corpus of about 10 lakhs and more than 75% of their farmer members take loans from the cooperative and avoid sahukaars. Although still they take the loans at 2% per month, they benefit because, eventually the cooperatives are owned by them and the benefits of cooperatives are passed on to them. My understanding is that the members do not get the interest for the savings in the corpus as of now but this will be done once the transactions and the structure are streamlined. One of the visitors asks them, "Are there any cases of default by the members?". They say, "Not one till date. Although there are cases where people do give some trouble in repaying in time, it gets resolved by a little peer pressure as we pursue them regularly till they repay. They also realize that if they default, they will never be able to get the loans nor be part of the cooperative again".

        When the board is asked about their vision for the future and how they are planning to go about it, they are little bit vague on their short term plans but they say that they want all the farmers to be "Sahukaar mukt" or "Become free from money lenders". They also realize that the benefits will improve only when more farmers join them and they say that they plan to actively reach out to new villages along with field executives of CCD to demonstrate how they have benefited and encourage the new villages to form cooperatives for their own benefit. At this point, the professor adds, "The whole point is that they be the drivers of change and CCD just support wherever needed. And when it comes to handling financial transactions, CCD will no where be in the picture except in assisting them with getting Working capital funds at on-cost basis". Here again the professor shows them the packaged products and demonstrates the same idea about value added products. He is clear in emphasizing that this can be done at best with about 20% of the produce they supply in the long run, but nevertheless, it is a good deal as it brings more money to their corpus and also connects the consumer directly to them. The whole idea is to make them realize the need to look beyond just farming just the way that they have set up the dal mill. He also makes it clear to the board that they should keep all these activities apolitical and anyone who wishes to be a part of any political association in future can not be a member of the board or the president of any of the cooperatives. He can be a member of the cooperative though. He advises Vijay to formalize these into the bye laws of the cooperatives as well as the federation.

       After the exercise, and having interacted with the Professor earlier, my thoughts were converging on the idea of Amul Model for agri-commodities, especially non-perishable food crops. Post Lunch, the professor has a review with the CCD team while we interact among ourselves. Later, he sits with the visitors and asks them whether they think that they should try this out in their respective regions and if yes, how do they plan to go about. Professor clearly describes his inspiration about the cooperative model from the likes Dr. Varghese Kurien, Rama Reddy and Late Mrs Shashi Rajagopalan and also his vision about building the Amul model for agri-commodities and asks them to be a part of it if they believe it to be the way to go forward. He states, "Iske liye Hum ko Bharat aur India ko jodna hain" (which loosely translates to "We need to connect the rural and urban India to succeed in this vision"). Everyone says yes and suggest different points based on their regional background and ask various questions. One of the key points being, how to register the cooperative as different states have different policies with some states repealing the cooperatives act altogether. Professor suggests that Multi-state Cooperative Act of the central govt. is the best alternative if they have to collaborate and work towards a single Brand, aptly named, "FarmVeda".

        As I return home, I feel happy to be a student of his and hope to be a part of this slow but steady change in whatever way possible through our startup, KrishiYog