The Hutatma Model

Corruption, mismanagement, political fiefdoms – these are the words usually associated with sugar co-operatives in Maharashtra. Here’s one that’s different.

Dionne Bunsha
In Walva, Maharashtra.

It’s Sunday afternoon. Most people are enjoying their siesta. But, inside the Hutatma Kisan Ahir sugar factory, farmers from 15 villages have travelled here to talk business. There’s lively discussion and debate. The weekly meeting of the sugar co-operative’s Board of Directors is underway. Sugarcane farmers themselves manage India’s most efficient sugar factory in Walva, Sangli district. Who says you need a fancy MBA to run a successful company? You don’t even have to pass high school.

The Hutatma Kisan Ahir Sugar co-operative is different from other sugar co-operatives in Maharashtra. No politician controls its functioning. Farmers take all the decisions collectively. The co-operative’s founder, Naganath Nayakawadi, a freedom fighter and social activist, guides the co-operative’s progress.

Each of the 15 villages, where the co-operative’s members live, collectively selects a director to represent them. Moreover, one Dalit, two women and one poor candidate also have to be appointed directors. All members decide together on major issues like cane prices, purchases etc. Weekly board meetings have an open door policy. Any member can attend and vote. “In all other sugar factories, the management takes decisions behind closed doors. Only here, the system is transparent. Even you can walk in and question us,” says Hindurao Patil, a small farmer and former director of the co-operative.

The ‘Hutatma model’ has reaped rich dividends. For the past 18 years, the factory has received national awards for being the most technically efficient mill. Its recovery rate (amount of sugar recovered from the cane) is the highest in India. The co-operative pays farmers the highest price for cane in Maharashtra. And, payments are prompt.
The weekly meeting of the Board of Directors of the Hutatma Kisar Ahir Sugar Cooperative at the factoryPhoto: Dionne Bunsha
The co-operative makes sure that its prosperity trickles down to the poorest. Each village has a job quota. Members decide who should get factory jobs. At village meetings, people identify the poorest families for employment. More than one-third of factory workers are Dalits. To employ those most in need of work, the factory announced a job scheme for the poorest. “Those who agree to work as cane cutters for two years are given permanent employment after that. Only the poorest are willing to cut cane. That’s how we identified the most needy families,” said Shahaji Bansode, a factory worker. More than 100 people got jobs under this scheme. Factory workers are given free housing, a large bonus and quarter of the surplus generated.

Even migrant sugarcane cutters, who work here during the six-month cane-crushing season, get a 25% share of the surplus. These workers travel from the drought-prone Marathwada region in central Maharashtra to work in sugar fields in the western part of the state. The Hutatma co-operative is the only one to have built houses for cane cutters and a school for their children. Labourers also get free medical treatment.

Yet, the co-operative has money to spare for rural development. Part of its surplus goes towards funding an educational trust, which runs balwadis (pre-primary schools), a high school, a college and a girls hostel. The education and hostel is free. “It’s run so that even the poorest get the opportunity to be educated,” said a director. Many villages have paved roads thanks to the co-operative’s investment in rural infrastructure. Co-operative dairies and banks have also sprouted in the area. The factory is also funding lift irrigation schemes for farmers in the area.

The co-operative doesn’t stop at only looking after its own. It also supports social causes. After the Latur earthquake, the co-operative adopted 108 destitute children and educated them in its school. A part of the surplus is given every year to those displaced by the nearby Warna, Urmodi and Koyna dams. Nayakawadi, popularly known as ‘Annasaheb’, has made sure that the co-operative retains its social conscience. “This factory is named after one of our comrades who was killed by the police in the Quit India movement. Our work today is a continuation of people’s struggle for their rights. The movement started in 1942 when we ran a parallel government against the British Raj. One person can’t do anything. People have to work together,” he says.
Naganath Nayakawadi, the freedom fighter who founded the sugar cooperativePhoto: Dionne Bunsha
Women hold top posts in the present Board of Directors. Nayakawadi ensured that women were appointed chairperson and vice-chairperson. They are daughters and wives of Anna’s old friends. What power they actually have remains under doubt. Finally, whatever Nayakawadi advises is law. He enjoys enormous respect, and lords over a socialist fiefdom of sorts. “They are new, but they will learn,” he says about the women chairpersons. “It is very important to set such examples for others. And, it also boosts women’s self-esteem.” In the past, the co-operative has had a Dalit, Jain and even Muslim chairperson. Each gets their turn. No one can hold a post for more than one five-year term. The board changes completely every five years.

Directors are mainly medium or large farmers. Few small farmers actually get chosen. “Poor people can’t spare the time to go for meetings. We are too busy just working for our survival everyday. Maybe if they gave directors a salary, it would be possible,” said a marginal farmer. “But the directors we elect make sure that everyone benefits from the co-operative.”

Haven’t political parties tried to gain control over this co-operative? “They know there is no scope for corruption here. So they leave us alone. They don’t get involved. They loot their own factories,” said Yashwant Babar, a former director of the Hutatma co-op. “All of us support different political parties. But when we come for a meeting, we leave our politics outside the door. It should not interfere with issues of our livelihood.” Sound logic that has built a strong business.

The Hutatma model may baffle management gurus who believe that only men in suits are qualified to manage corporations. The co-operative’s 8,000 members have crafted a different brand of business. They know what’s best for them. Their final aim is prosperity, not profit.

Frontline, September 13 – 26, 2003 Also available here

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