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We then tried to sell the dairy. Dr V. Kurien had suggested that through National Dairy Development Board’s (NDDB) support, it might be possible for the Uttar Pradesh Government to acquire the Etah dairy. Kurien never liked HLL or any private sector incursion into the dairy industry, which he felt was to be an exclusive preserve of the cooperatives, preferably his own NDDB set-up. He saw himself as the milk czar of India He was pleased that HLL had failed in its Dairy Operation and was now seeking his help to find a solution!
Our disillusionment with Etah was so great that we were willing to give it away. Who better to act as a facilitator than Kurien. Accordingly, I approached him. He was very helpful and suggested that l met the relevant officials. He even sent a team from Amul to evaluate the project for recommendation to the Uttar Pradesh Government. Finally, I went to Lucknow to meet the Government Secretary concerned and explained the rationale for the State government to take over the dairy. We were offering it free to the government. After having listened to me, the wise civil servant told me very politely, ‘Mr Thomas, if HLL, as an efficient company, cannot make profits in Blah dairy after twelve years, do you think the UP Government will ever make it pay? It will not. And when it continues to make even bigger losses, some mischievous person can say that an official like me, who has to recommend the acceptance of this gift from HLL, had to be bribed by the company to take on this liability. Under these circumstances, do you think any civil servant like me can afford to accept your gift?’ I had to agree with his analysis and left Lucknow a wiser man.
Our last escape route from Etah was closed-other than outright closure, which I had rejected. By the middle of 1976, every part of the business was profitable, except Etah. So I began to look upon it as a challenge rather than a problem. If Kurien could operate dairies profitably, why should we not be able to? He had many advantages in subsidized imports, guaranteed markets, capital subsidies and gifts from abroad and, most importantly, a monopoly procurement facility. We had none of this. Still, we had to make it competitive. That was the challenge. We had just written off a huge loss on the export of baby food to South-East Asia. That added spice to my quest for a solution.
As a first step, I decided to spend a few days in Etah with Bipin Shah, who was now placed in charge of vanaspati and dairy. I talked to the managers and the supervisors, seeking their views. Then I decided to take nine of the milk collection centre-in-charges (supervisors) and pose them a challenge. These were youngsters from the villages of Uttar Pradesh who belonged to the right castes and had diplomas in agriculture. I knew some of them because they had worked on the pea cultivation project with me in Ghaziabad in the early 1960s. So they understood me well, despite the distance in hierarchy between us. This personal rapport was very important in what happened subsequently.
My conversations and the total immersion in Etah affairs produced one clear idea in my mind, viz., the basic problem in Etah was not milk production or animal husbandry, it was agricultural productivity. Men and animals were competing for the output from the land. As long as that was inadequate, they could not feed the animals properly. So we had to find a way to improve the agricultural productivity. Improved animal husbandry would follow automatically.
Excerpted from Page 218-219 of ‘To Challenge and To Change’ by T. Thomas