A pillion-ride to Dr Reddy’s fair trade

The small town of Araku Valley in Andhra Pradesh’s Visakhapatnam district, which straddles the state highway connecting Orissa and Andhra Pradesh, experienced its first-ever traffic jam in August 2008. Its sole claim to fame until then was that it was a picturesque locale for the occasional song-and-dance routines of Telugu films.

That day the first annual general meeting of the tribal coffee-growers’ cooperative was held in Araku. More than 3,000 of the 8,000 members showed up for it, as against the expected 700. That was a tribute to the organising abilities of Naandi, the voluntary organisation founded and sustained by K. Anji Reddy, who passed away on March 15, at the age of 72.
Naandi (which means “the beginning” in Sanskrit), a voluntary agency established by Reddy in 1998, was active in the Araku region. This remote, hilly tri-junction of Andhra Pradesh, Chhattisgarh and Orissa, is mainly populated by tribals. They eked out a living by cultivating barren hill slopes, but that seldom provided enough food to last the year. Its remoteness meant that there was virtually no other occupation possible. The grinding poverty of the area had endured for centuries. Successive administrations had done little to alleviate it. Development programmes, half-hearted at best, suffered from grave mismanagement. Consequently, the Naxal movement had gained ascendancy.
Naandi’s original mission in Araku was to address the problem of safe drinking water. Even though it rained seven months of the year, there was an acute shortage of potable water from February to July every year. The Naandi team realised that people would continue to be destitute even if the water problem were to be resolved. Any meaningful development of the area had to be predicated upon generating additional income.
Naandi decided to resuscitate an earlier coffee cultivation project of the government, now nearly abandoned. It brought in technical support, tied up marketing strategies and organised the growers. By 2005, farmers received Rs 90/kg of cured coffee beans instead of the earlier Rs 20/kg. Naandi also helped the Araku coffee growers obtain the coveted international Fairtrade certification, which signified that the product was grown organically, under non-exploitative human conditions. That opened up the premium European market and meant bonuses.
I went to Araku Valley shortly after the massive first annual general meeting to assess it for the Fairtrade organisation. Farmer euphoria was palpable, and not just on account of higher income. They took pride in being owners of their cooperative which had set up a new pulping and curing centre with funding from the Dutch and Naandi. Their elected office-bearers were keen to learn English to negotiate directly with the buyers. People who used to scrounge for leaves and roots to eat in off-seasons now possessed small gold ornaments. The local population demanded teachers be present in schools. The villages, though hard to access, were spotlessly clean and women proudly showed local storage tanks that provided them water. In short, empowerment!
In what must be a unique occurrence, both the government and the local Naxal leadership acknowledged the success of the approach. They treated the project with the respect it had earned, by not interfering with it. I travelled in the Araku area as a pillion rider on the motorcycle of a young Naandi staffer. We were stopped by an armed police picket and an armed roaming patrol of Naxalites, all on the same day. I emerged not merely unscathed when they found our Naandi connection, but was escorted some distance with great courtesy by the groups otherwise implacably hostile to each other. Such was the groundswell of goodwill created by the developmental activities of Naandi.
The Naandi Foundation continues to catch the fancy of the people. Its membership is 11,000 and it now also covers horticulture. Service to the tribals is a testimony to Reddy’s healing touch.
But Naandi continues to accord priority to safe water supply, its original mission. This is among the severest problem India faces. Just as Naandi used a mix of social engineering and marketing to deal with Araku’s problem of livelihood, it employs social engineering to deliver technology-based solutions for the water situation. Naandi’s recourse to technology is also evident in its large, modern, semi-automated kitchens that churn out massive numbers of mid-day meals and supply them hot to designated schools in five states. It now serves over 1.2 million meals every day.
What made Reddy, an innovative technocrat par excellence, who did much to place India in a leadership position in the extremely competitive and quality-conscious global pharmaceutical industry, spend so much of his energy and own resources on such activities? It was his realisation that even as India gained through international recognition, its masses continued to face untold miseries for want of action in areas such as access to safe water, education and nourishment for children, and, above all, adequate income. Dependence on government was not enough; at any rate, it produced little result. Good citizens with the means had to demonstrate their commitment through action.
Thus was born Naandi, well before the government contemplated making it mandatory for corporates to commit resources for social responsibility. Reddy’s pioneering efforts invite comparison with those of Bill Gates and Warren Buffet worldwide, not in the scale of operations, but in breadth of vision and depth of commitment.
Many numbers are associated with Reddy’s enterprise — the turnover of Reddy’s Laboratory is now over Rs 10,000 crore with a net profit of about Rs 1,500 crore. The firm, which started in 1984 with a capital outlay of Rs 25 lakh, is now listed on the New York Stock Exchange as well. Its current market capitalisation is around Rs 30,000 crore. I have no doubt, though, which statistic would have been closest to Reddy’s heart. It would have to be the Rs 10 per child per month Naandi programme to provide quality healthcare to schoolchildren.

The writer taught at IIM Ahmedabad and helped set up the Institute of Rural Management, Anand. He writes on economic and policy issues.