Of Florida oranges and North East Pineapples

Perhaps Jaipur Literature Festival is not the most obvious choice for those like me preoccupied with linking small farmers with markets. Yet a panel discussion between author and MIT fellow Abhijit Banerjee, Amy Chua (of ‘World On Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability’ fame ), Arun Meira (Planning Commission member) and Tarun Das (CII’s Ex Boss), turned out to be as revealing as Abhijit’s brilliant book “Poor Economics”.

We (my wife, son and the humble self) reached Diggi House, Jaipur in time to catch Jehangir Pocha (Business World’s ex editor) moderating the above mentioned “Poor Economic” discussion.

Jehangir recalled a recent incident when one fine day an acquaintance drops to his office with a pineapple in hand. She checked with Jehangir if he is aware that North East India produces fine quality of Pineapples. Jehangir was not aware of this and his impromptu cross check with the packed house (more than 2000 folks) revealed that majority did not know this fact either.

Jehangir thereafter turns towards Abhijit and directs his question:

A Florida orange grower in US has access to system and processes that help him turn a cheap raw orange into a 500 times value added ‘Minute Maid’ kind of orange juice while a small poor North East pineapple grower with excellent pineapples does have access to similar type of value addition mechanism and processing capabilities. Where are the gaps he ask?

For Abhijit, Florida and North East situation are not similar. Very large orange orchard ownerships support the kind of economies of scale, standardization, quality, food safety and hygiene demanded by packaged juice industry while in case of NE pineapple growers this may not be possible unless an institutional framework like ‘Amul’ get created and established for facilitating and supporting “Cooperatives” of small pineapple growers in NE.

It was my now my turn to go on an ego trip. Solution offered by Abhijit was precisely similar to the panacea I had offered a month back during a presentation on North East where I’d spoken on Strengthening Input Delivery mechanisms in North East India. Here’s the link to the presentation. http://is.gd/xWv93Y. I had advocated ‘Producer Companies’ instead of ‘Cooperatives’, an essential but minor point of difference. Also for want of a visible accelerator, I had also suggested that large input companies, product marketing companies, NGOs, Financial institutions act as catalyst of change, a harbinger of new institutional framework.

Back to Delhi next day after listening to Oprah Winfrey’s tidbits on India and Indians, I again reminisced about the connects and disconnects between oranges, pineapples, Coca Cola (read Minute Maid ) and Amul.
Two clear-cut disconnects emerged. One from my crude understanding of economics, while another one, also from my equally crude understanding of cultures and history.

Where is the catalyst for the formation of an ‘Amul’ for pineapples in North East?

Amul had Polson. The exploitative trade practices followed by the cartel led by him triggered off the cooperative movement.  Angered by unfair and manipulative practices followed by the trade, the farmers of the Kheda district in Gujarat approached the great Indian patriot Sardar Vallabhbhai Patel for a solution.  He advised them to get rid of middlemen and form their own co-operative, which would have procurement, processing and marketing under their control.  Polson, and for that matter SVP also, are missing in present day North East.
Some cultures, like Gujarat, and times (pre independence) are culturally and historically more conducive to formation of cooperatives like Amul.

I don’t have any access to an authoritative study to authenticate this claim but my work related travels have thrown enough anecdotal evidences that cooperatives are not everyone’s cup of tea. Pooling resources and shared incomes are aliens to certain individualistic cultures like mine (Punjabi). Perhaps these two disconnects can be better understood and addressed in future by thinkers and authors like Abhijit B and Amy C.