NEW DELHI, 29, 2024 – Dr Udai Shankar Awasthi is the Managing Director of the Indian Farmers Fertiliser Cooperative Limited (IFFCO), the largest fertiliser producer and marketer in India, and the biggest cooperative in the world by turnover on GDP per capita. IFFCO is hosting the ICA Global Conference, along with the ICA’s 18 members in India. Ahead of the event, we hear his thoughts on cooperatives, IFFCO’s work and his hopes for #ICANewDelhi2024
When and how were you introduced to cooperatives/ cooperative movement?
Dr US Awasthi: I joined the prestigious Banaras Hindu University [BHU] to study Chemical Engineering in 1962. At the time, India was facing a severe food crisis. I had come from a rural background and knew the plight of farmers and the crisis in agriculture. Hence, I resolved to work to enhance agricultural production, but at the time, I did not know the best medium to serve them. In 1974 I became aware of an emerging farmers’ organisation, Indian Farmers Fertiliser Cooperative, which had been founded in 1967.
How and when did you join IFFCO?
Dr US Awasthi: As a Chemical Engineer, in 1975, I was working with a private sector fertilizer company and had a few opportunities to meet the Managing Director and Marketing Director of IFFCO during seminars and conferences. I immediately realised that this could be my dream destination. I was offered a project manager’s job. Although I was working for a well-known business and IFFCO was just in a budding stage, the idea of serving Indian farmers and doing something substantial for them fascinated me! I accepted and joined IFFCO on 15 November 1976. Later, I went on to serve government enterprises in the fertilizer industry at the behest of the Government, and rejoined IFFCO as a Managing Director in 1993.
IFFCO’s production capacity rose 292% under your leadership, and net worth 688%. What was the key to this success and what challenges did you face?
Dr US Awasthi: There are many factors which contribute towards the success of an organisation. However, the key to IFFCO’s success is the trust of its member cooperatives combined with efficient professional management and cordial relations between board and management.
The challenges were many! When I took over as a Managing Director of IFFCO the political environment had shifted from a protected economy to liberalisation, and even previously flourishing businesses were struggling to survive. Alongside this, there had been a quick succession of changes in IFFCO’s top management. There was a lack of enthusiasm among the employees. It was a time of uncertainty and turmoil in IFFCO and as a result, the organisation had stopped growing.
The first challenge was to achieve an amicable balance and relations between management and board. This involved focusing on manpower, planning, cost optimisation, establishing cordial relations with the employee unions, and launching well-defined systems and procedures. This enabled the cooperative to envisage and enact long-term plans for expansion, diversify into different sectors and enter into joint ventures, which also had its own share of challenges.
A later challenge was the 2002 amendment in India’s Multi-State Cooperative Societies Act, which envisaged the autonomy of cooperatives and had provisions for the repatriation of equity held by the Government. But our cooperative societies contributed overwhelmingly and, by June 2004, complete equity got repatriated.
Has the Cooperative Identity given IFFCO a competitive advantage?
Dr US Awasthi: Certainly. The Cooperative Identity has helped IFFCO tremendously to connect with people in rural India. More than two thirds of India’s population, or 833 million people, reside in rural areas, and nearly 65% are engaged in agriculture and allied activities directly. As an agriculture cooperative, many of IFFCO’s member organisations are from rural India, and we have made a concerted effort to market fertiliser products through this cooperative network of about 36,000 societies. Because of this, IFFCO has better reach and popularity among farmers, and has strong brand loyalty.
How does IFFCO ensure that the prosperity created through cooperation reaches members at every level of the organisation?
Dr US Awasthi: IFFCO is a unique model as its cooperative member-owners are also its consumers and marketing partners, and it tries to protect the interests of all of its different members.
For its member-owners, IFFCO has paid a maximum permissible dividend of 20% on their investments for the last 23 years, and its balance sheet has provision to pay the dividend at 20% for next 25 years. IFFCO has entered into joint ventures, undertaken expansion of existing fertiliser units and diversified its business activities to achieve sustained growth and better economic returns to members. The members, through the Representative General Body, participate in the governance of IFFCO.
For its marketing partners members, IFFCO markets through the cooperative network only, ensures the timely supply of quality fertilisers, provides transportation subsidies, gives preference to cooperative warehouses and also provides financial support to weaker member cooperatives.
For its consumer members, IFFCO educates farmers on innovative farming techniques, including the “balanced fertilisation programme”, and provides other education opportunities through various field programmes. It ensures the timely availability of fertilisers in the remotest areas, and provides community development support. It also makes the products as environmentally friendly and cost effective as possible, for example through the recently launched “Save the Soil campaign”. In collaboration with its subsidiary insurance company, IFFCO has launched a unique insurance policy “Sankat Haran Bima Yojana” which provides accidental insurance cover to the farmers buying a bag of IFFCO’s fertilisers or a bottle of Nano Fertilisers, with the insurance premium borne by IFFCO. To facilitate the spraying of Nano Urea Plus and Nano DAP liquid fertilisers, IFFCO is procuring 2,000 drones to help farmers use advanced technology in agriculture. Besides this, it has engaged drone service providers to help in spraying of Nano Fertilisers in cost-effective manner.
Agriculture can play an important role in lowering CO2 emissions. How is IFFCO working to address the sector’s environmental impact?
Dr US Awasthi: IFFCO has been a world leader in developing Nano Urea, Nano DAP, Nano Zinc, Nano Copper and many other nano products. This indigenous technology helps reduce chemical fertiliser doses and increase yield with a lower carbon footprint.
IFFCO Nano fertilisers are zero-residue products and their use efficiency is more than 90% – meaning that CO2 and NO2 emissions caused by chemical fertilisers are greatly reduced. The production process of these nano fertilisers is much more eco-friendly compared with chemical fertilisers, and these products also increase microbial activities in soil as well as photosynthesis.
Women are not yet fully represented in agriculture, particularly in leadership roles. What actions has IFFCO taken to address this?
Dr US Awasthi: Initiatives include making sure women have equal chances for leadership roles as board members, committee leaders, and office bearers. From 2018, IFFCO has reserved 5% of seats on its Representative General Body for women, and also reserves one board seat for a woman Director.
The cooperative runs regular capacity-building workshops and seminars which focus on skills like sustainable farming, financial management, and entrepreneurship to prepare women for leadership. Through its subsidiary IFFCO eBAZAR, it provides an attractive franchise model scheme to partner with rural entrepreneurs. Almost 33% of the total franchisee business are held by women entrepreneurs.
IFFCO has trained 300 women as certified drone pilots under the Namo Drone Didi scheme, with drones distributed by Prime Minister Shri Narendra Modi, showcasing innovation and empowerment.
Through another subsidiary, IFFDC, IFFCO supports self-help groups (SHGs) and skill development programs to empower women and marginalised communities, encouraging economic independence and social cohesion. It arranges training programmes to improve women’s skills in areas such as beekeeping, tailoring, embroidery, adult education, fruit and vegetable preservation and computer literacy.
How would you like India’s first ever ICA Global Conference to be remembered and what are you most looking forward to?
Dr US Awasthi: It is a historic moment for IFFCO as well as for the Indian cooperative movement. I would like the Conference to be unique, inclusive and fruitful. It should be a platform for meaningful collaborations, and a reaffirmation of cooperative principles. It will also celebrate India’s cooperative leadership, and the contributions of Indian cooperatives, including IFFCO. It will also ignite the torch of cooperative spirit worldwide to accomplish the Sustainable Development Goals and launch the UN International Year of Cooperatives 2025.
Personally, I am looking forward to networking opportunities, cultural exchanges and seeing the coming together of cultural diversity, knowledge sharing and learning. I wish this conference to be memorable in the years to come, for many reasons, especially for its carbon-neutral efforts.
The Indian government formed the Ministry of Cooperation in 2022 – the 75th year of India’s independence – under the inspiring leadership of Hon’ble Prime Minister Mr. Narendra Modi. This Ministry is guided by the dynamic leadership of Mr. Amit Shah who has envisaged many vast programmes for cooperatives. I hope this conference will build on this, and be remembered for the contributions made by Bharat [India] to the global cooperative movement. I look forward to meeting global cooperators in New Delhi in November.
Source: ICA
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