You are on page 1of 50

Chapter 6

BEEDI COOPERATIVES: THE SAGA OF SUCCESS

Introduction

Cooperatives form a major segment of

the beedi industry in

Kerala and they provide employment to more than 30000 workers. This
is

in

sharp

contrast

cooperatives
industry

form

and

to

only

the

the
a

all-India

marginal

situation

segment

cooperative

industrial

of

where,

both

sector

beedi

the
ln

beedi
Indial.

Therefore, unlike coir and handloom cooperatives, the data on beedi


cooperatives are not available in the 17 industry classifications
of industrial cooperatives in the published data. A
of the cooperatives in the beedi industry is beyond

mac~o-analysis
ou~

reach.

Our study of beedi cooperatives in Kerala for:us or: the twenty


two primary cooperatives and one central cooperative operating in
the

northern

districts,

districts

commonly

of

known

Cannanore,
as

Kerala

Kasargod
Dinesh

and

Calj_cut
(KDB)

Beedi

Cooperatives. A few other beedi cooperatives function in the other


districts.

But

they

hardly

account

for

five

percent

of

the

cooperative output and employment. Being rather recent entrants to


the industry,

they

also stand apart

from KDB

coopera~ives

which

have completed twenty five years of working. Hence, our study of


beedi cooperatives is exclusively focused on the KDB cooperatives.

Further, it may also be mentioned here that the beedi industry


today is

increasingly getting localised in Northern Kerala.

The

share of beedi employment in the Travancore-Cochin region declined

from more than 50 percent in 1951 to around 27 percent in 1981 2 .


The beedi employment increased by 312 percent in Kerala during the
period 1951-81.

But growth was

localised in the Malabar region

where beedi employment increased 603 percent as compared to only 88


percent

in

Travancore-Cochin

area.

The

highest

growth

was

registered in Cannanore district where beedi employment increased


by a factor of 18.

As mentioned in chapter 3 unlike other traditional industries


in Kerala

the

beedi

industry has continued to

expand both

its

workforce and production during the decades since the sixties. In


short,

the industry cannot be considered to be in the throes of

crisis

as

the other

traditional industries.

distinguishing feature of

the

beedi industry is

buoyant market for its product.

Further,

materials are being produced in Kerala,


has

tended

supplies

to

have

expanding

aggravate

The most

sharply

been

adequate

to

industry.

Finally,

the

in
meet

its

important
relatively

though none of its raw


(the raw material crisis

the

recent

the

industry

period),

requirements
also

does

their
of

not

the
face

competition from mechanised production systems. Cigarette produced


with machinery in large scale factories caters to a very different
market segment of tobacco users.

At

the

same

time,

the

beedi

industry

shares

the

generic

features of other traditional industries: handicraft technology,


low productivity and low wages.

Attempts to improve the living

conditions through unionisa tion are rendered ineffective by the


employers, who take recourse to domestic unit based production,
sub

contracting arrangements

or
234

more

importantly shifting

the

production

to

non

regions 3.

uniOIJised

The

extremely

low

fixed

capital investment required for the beedi industry makes shifting


of industry a highly successful tool of the employers to confront
trade

union

challenges.

Traditional

forms

of

unionisation

and

worker responses are largely rendered helpless in beedi industry.


Therefore, right from the inception of the trade union movement,
cooperative

expansion

was

demand

from

below

to

meet

the

manipulations of the employers.

In section 1 of the chapter we discuss in detail the formation


of the Kerala Dinesh Beedi cooperatives in Northern Kerala. In this
connection

we

shall

also

industrial structure,
and the growth of

be

discussing

the

evolution

of

the

trends in standard of living of the workers

the

trade union movement

in Northern Kerala.

Section 2 is devoted to a discussion of the growth and performance


of the beedi cooperatives.
contributing

to

the

In section 3 we

efficiency

of

examine the

production

of

the

factors
primary

cooperatives. The overall functioning of the beedi cooperatives is


also crucially dependent on the efficient handling of the
and marketing functions and
Central

Cooperative.

This

purchas~

financial management handled by the


is

discussed

in

section

4.

Here

we

highlight the working of the central cooperative and the financial


structure

of

the

cooperatives,

which

ensuring cooperative performance.


summed up.

235

were

crucial

The conclusions

factors

are also

in
then

Section 1

Formation of Kerala Dinesh Beedi Cooperative

It

will

not

be

an

exaggeration . to

state

that

the

beedi

cooperatives are as old as the trade union movement in the industry


(the Sree Narayana Beedi Thozhilai Union) 4. Formation of the first
union in 1934 was

partly a reflection of the social awakening of

the 'thiyya' caste from whom the majority of the beedi workers in
the region were drawn. It was also a response to the deterioration
of the working conditions in the beedi industry.
export

demand

from

Burma

and

Ceylon

and

then

Initially,

later

the

the

rapid

expansion of domestic demand had facilitated

the growth of

the

beedi

of

and

industry

Tellicherry 5.

in

The

and

around

available

the

evidence

towns

indicates

first three decades of the century labour was

Cannanore
that

during

the

scarce and wages

relatively high and advances had to be paid to ensure the supply of


workers 6.

During the

industrial expansion in

the post first

Har

period the scale of production in most of the units also increased


so that many of them came to employ more than a hundred workers in
work

sheds 7 .

With

the

onset

of

depression

and

increase

in

unemployment labour supply became plentiful. The advanced system


ceased and wages came to be arbitrarily reduced. Various forms of
arbitrary deductions from wages also became the norm causing much
resentment among the workers.

Soon after the formation of

the first trade union of beedi

workers in Tellicherry there took place a spontaneous strike at


Charka beedi factory, a prominent firm of the period. Reduction in
236

wages was the provocation 8

The strike soon fizzled out. The trade

union found itself helpless against the pressure tactics of


employer. Suggestions carne up from various quarters that

the

a worker

cooperative was the only lasting solution to the high handedness of


the employers. Thus, hardly within a month of its formation

the

fledgling trade union was forced to sponsor a worker cooperative


named

'Thozhilali

Beedi

Works'

to

rehabilitate

the

retrenched

workers 9. Appeals were made in the press requesting support for the
new venture. This pioneering cooperative enterprise did not survive
very long.

The

available

information

showed

Cannanore and Tellicherry regions


during the latter half of the

that

the

wages

in

deteriorated so much so

the
that

'thirties the wage rates in these

towns were significantly lower than those paid by the beedi firms
at

Mangalore,

district 10 .

lying

Many

80

beedi

kilometers

rollers

north,

migrated

to

in

South

Kanara

Mangalore

seeking

employment. Similarly, some Mangalore based beedi firms also began


to set up work sheds in and around the towns of Tellicherry and
Cannanore to take advantage of the lower wages.

The first of the

firms

of

was

established

in

1934

and

this

shift

the

industry

accelerated from the early forties and continued to the sixties 11 .

Largely under the pressure of the

trade union movement

the

Madras government extended the Factories Act to the beedi industry


in 1937. The beedi employers responded
beedi work

sheds

employing less

into

than

by bifurcating the large

smaller establishments or branches,

twenty workers,

so

that they

would

each

remain

outside the purview of the Factories Act 12 . The workers resisted

237

the move and presented a charter of demands to the beedi employers.


The result was a long drawn out industry wide strike, which lasted
more than a month. Although the strike was total in Cannanore and
Tellicherry regions,
areas

like

political

the production went on unhindered in other

Mangalore.
conscience

The
and

beedi

workers,

.militancy,

despite

were

forced

their
to

high

reach

settlement largely on terms set by the beedi employers. The branch


system of production became the dominant organisational feature of
the beedi industry from that period.

Although the strike of 1937

fai.led it proved

to be a

very

important nodal point in the radicalisation of beP.di workers. Beedi


workers were deeply involved
strongly influenced by the

in

the

national movement and were

radical elements organised under

the

Congress Socialist Party. The role played by the Congress Socialist


Party leaders in organising the strike drew the workers even closer
to the militant movements.

One point that should be mentioned in

this context is the long standing tradition of political education


among the beedi workers as part of the work routine. It was normal
that at

any work center workers would

take

turns to read aloud

political tracts while the others rolled the beedis. In fact one of
the demands of the 1931 strike was for the above right of learning
while working 13 .

The beedi

workers

became

well

known for

their

political knowledge and social commitment. From among their ranks


came many a prominent radical leader of Northern Kerala 14 .

The period of

the Second World War was

one of

comparative

industrial peace although the real wages failed to keep up with war
time inflation. It was due to the conscious policy pursued by the

238

communists, who by and large controlled the trade unions, not to


hinder the war efforts. However, with the cessation of the War the
beedi

trade

unions

launched

major

offensive

demanding

wage

increase and payment of bonus. Unlike in 1937 the trade unions in


the Malabar and South Kanara districts decided to coordinate their
strike action and the entire

indu~try came to a standsti11 15 . After

one

government

and

half

months

the

was

forced

to

refer

the

dispute t6 compulsory adjudication and the strike was withdrawn.


The

arbitration

award

was

favourable

to

the

workers 16

But

it

proved to be a mirage. For, by the time the award came, along with
the Communist Party the communist trade unions, including the beedi
trade union, were outlawed. The employers refused to implement the
adjudication

award.

Instead

they

set

out

to

reorganise

the

production on the basis of indirect production system. The former


branches of large firms were put under the charge of contractors
with no formal association with the firm. Thus, the workers ceased
to have any formal legal connection with the owners of beedi firms.

The lifting of the ban in 1951,

enabled the rejuvenation of

trade union activities in the fifties. During this period the trade
unions successf11lly countered the attempts of the beedi employers
to further decentralise beedi production to the household of the
workers.

But they were unable to enhance

the low wages in the

Malabar beedi industry. The Tripartite Committee Report for Beedi


and Cigar Industry (1958)

noted that beedi wages in Malabar were

around 25 percent lower than

that of other regions

in Kerala 17

These low wages enabled the continued shift of the industry from
South Kanara to North Malabar and by the sixties
239

the Mangalore

based firms emerged as the largest beedi employers in Malabar. The


Mangalore

Ganesh

Beedi

alone

employed

around

10000

workers

in

Cannanore district in that period.

Apart from the efforts to improve the wages the trade union
efforts during the

fifties

concentrated in

two directions.

The

first was the demand for comprehensive legislation especially for


the beedi

industry

that would

provide

protection even

for

the

workers employed indirectly under contractors. The union organised


a

'jatha'

to Madras in support of

this demand and succeeded in

forcing the then Madras government to enact the Minimum Wages Act
in 1948 18 But the implementation of the new Act resulted in the
migration of the beedi industry from Madras and the government had
to beat a
demands

hasty

for

retreat.

national

Therefore,

the unions

legislation for

began

the beedi

to

raise

industry that

would cover all the states and provide no scope for evasion.

The

second

direction

reorganisation of

the

of

trade

industry on

union
a

mobilisation

cooperative basis.

was

for

At

the

height of the 1937 strike one of the mediators, exasperated at the


intrangience of the beedi employers, had publicly appealed to the
trade unions

to organise workers'

bargaining power 19 . By 1946,


become

the

cooperatives

official
were

to improve

their

promotion of worker cooperatives had

policy
an

cooperatives

of

important

the

trade

element

unions.
of

the

Worker's
postwar

revitalisation programme for the industry drawn up by the workers


and placed for endorsement of the candidates contesting in the 1946
legislative elections 20

240

It took more than a decade for the above demand for workers
cooperatives to materialise. The communist government that carne to
power

in

the

newly

formed

state

of

Kerala

in

1957

favourably

responded to the demand of the workers. A scheme to set up 14 beedi


cooperatives in the important beedi manufacturing centers of the
state was drawn up following the recommendations of the Tripartite
Cornrni t tee

for

the

Beedi and Cigar Indus try

( 19 58) 21 Of the

14

cooperatives at least three were based in Cannanore district in the


towns of Cannanorer

Tellicherry and Neeleswararn. There is hardly

any information regarding the


cooperatives.

But

working and performance of

the available

information indicates

these

that

the

experience was not very encouraging 22 . The cooperatives had very


inadequate resources and they were too small to compete with the
large beedi producersr who dominated the market. The marketing of
beedis

was

attempted

done
to

by

improve

the

beedi

workers

the working

themselves.

condition

of

the

Though
workers

they
and

provide some token payments as non wage benefits to their workers


they were unable

to register any significant achievements;;).

The

dismissal of the left government in 1959 also resulted in reduction


of government commitment to the beedi cooperatives, especially in
terms of financial support, and they gradually wound up one after
the other. Despite these inadequacies some cooperatives, like those
in

Cannanore

and

Neeleswaramr

continued

to

survive

up

to

the

seventies.

The sixties saw the introduction of new regulatory measures


in the industry.

The Kerala Beedi

and Cigar Industrial

Premises

(Regulations of Conditions of Work) Act was enacted in 1961 24 .


new regulations further

The

emboldened the workers and a series of

241

strikes broke out demanding

increased wages and better working

conditions. The result was that by the mid sixties the wages in
Cannanore became marginally higher than those at South Kanara2 5 .

This was an important turning point for the beedi industry of


the region. The low wage rationale behind the shift of the beedi
industry from Mangalore to North Malabnr was completely eroded. The
beedi employers saw the decentralisation of production to worker
households as the sole means to escape the government regulations
and

to cornibat

the

increasing

strength of

the

trade unions

and

prevent further increases in labour costs. They intensified their


attempts to decentralise production to
This

was

fiercely

employers reduced

resisted

by

the

the worker's households.

trade

unions.

Some

beedi

production of beedis in Cannanore and some large

local firms like Sadhoo Beedi even stnrted a reverse sh1ft of the
industry to Mangalore where they organised decentralised production
units in 1963 26 .

To

make

matters

worse

for

the

beedi

employers

other

progressive laws to protect the workers were legislated in the mid


sixties. In 1966 the state government enacted the Beedi and Cigar
Workers Minimum Wages Act while the central government enacted the
Beedi

and Cigar Workers

(Conditions of

Acts sought to further regulate


provide

improved

wages

and

Employment)

Act""1

These

the working of the industry and

better

working

conditions

to

the

workers. The beedi employers were thus threatened with a further


escalation in wage and other production costs.

242

The

three large Mangalore

based beedi

firms,

who

employed

around 12000 workers in and around Cannanore and Tellicherry towns,


were

the

first

to

respond

to

the

increasing

wages

and

new

regulations. The immediate provocation was the Kerala Government


notification detailing its intention

to implement

the Beedi

and

(Condition of Employment) Act in August 1968 28 . The

Cigar Workers

large Mangalore based firms threatened stoppage of work and shift


of production to Mangalore. The trade unions responded by forming
joint action councils and initiating campaigns to mobilise public
opinion

in

inducted

their

in

the

implementing

favour.

Prominent

negotiations

their

threat.

to

public

prevent

However,

personalities

the

the

bAedi

beedi

were

firms

firms

from

stopped

production in the middle of October 1968 and 12000 workers

lost

employment.

Negotiations were

started at various levels

to resolve

the

problems. During the prolonged talks the state government agreed to


stay the implementation of the Beedi and Cigar Workers (Conditions
of Employment)

Act 29 .

But the beedi

firms demanded

the right

to

decentralise production to worker household as a precondition to


restart production.

The

trade unions split

into two gronps over

this issue. The dominant communist un1ons and thA socialists were
unwilling
efforts

to

to

concede

the

decentralise

intermediaries with the


This

led

to violent

demand 30 .

production

'T'he

beedi

to worker

firms

initiated

household

through

help of the other smaller trade unions.

clashes

and

agi ta tions 31 .

Though the

beedi

firms were marginally successful in their efforts the large section


of the workers resisted the move and continued their agitation. The
failure of the talks with the beedi employers directed the workers

243

to

agitate

tor

government

intervention.

The

state

responded by deciding to start a cooperative of

government

the unemployed

beedi workers, two months after the closure of the beedi firms. The
rules and regulations of the cooperative and the location, number
and size of the primary cooperatives were ~ecided at the meeting of
the trade unions
beedi

and government representatives.

cooperatives

were

registered

in

January

Twenty primary
1969

with

government as the chief promoter and the five major beedi


unions

as

registered

co-promoters 32

the
in

the

following

The

central

month.

The

the
trade

cooperative

cooperatives

was

started

production in March 1969 with around 3000 workers.

Section 2

The Growth and Performance of Kerala Dinesh Beedi Cooperatives

The

spectacular

growth

and

successful

performance

of

the

Kerala Dinesh Beedi cooperatives are emphatically brought out by


the growth of its

membership

work force

and turnover and more

importantly by the increase in emoluments paid to its work force.

The

cooperative

successfully

achieved

the

objective

of

rehabilitating the 13000 workers forced out of employment following


the closure of the three private sector beedi firms within

five

years/ i.e., by 1973-74. Between 1974 and 1984 it more than doubled
its

employment

employment of

from
35000

12000

to

27000

workers was

workers.

achieved

Though

in 1991

the

peak

we find

that

growth of employment has decelerated in the last decade. It is seen


in table 2 that in value terms the total sales of the cooperative

244

have increased from around 11 lakhs in 1969 to 5879 lakhs in 1992.


However, in real terms the turnover has also tended to stagnate in
recent years 33 We

shall examine the

factors

responsible for

it

later. But it should not detract one from the remarkable success of
the

cooperative

in

achieving

on

of its

primary

objective:

protection of employment.
Table 1
Growth of the Beedi Cooperatives (Amount in Rs Lakhs)
Year

Primary Cooperatives

Central Cooperative

Membership Employment Workers


income

Sales

( 1)

( 3)

( 2)

1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
h979
h980
h981
11982
1983
1984
1985
1 1986
h987
11988
1989
1990
1991
[1992

I
I
I

13000
N.a.
N.a.
N.a.
N.a.
N.a.
N.a.
N.a.
N.a.
N.a.
N.a.
N.a.
N.a.
N.a.
N.a.
N.a.
N.a.
47768
46623
48510
49077
50727
50051
49120

I
I
I
I
I
I

I
I
I

3000
5000
7000
8000
10000
12000
14000
1n5oo
18000
18000
19246
19036
2?.330
22065
28569
27148
30590
32633
30658
3.3518
.32670
33771
350.35
33372

( 4)

I
I

I
I

N.a.
N.a.
N.a.
N.a.
N.a.
N .a.
234
252
362
400
420
480
652
762
948
1031
1384
1598
1799
20n4
1671
2499
2756
3270

I
I
I
I
I
I

Net
Profit

(5)

( 6)

11
52
108
141
169
245
388
492
649
761
80.1
9.1 l
1254
1415
1719
2015
2342
2873
3420
3617
2808
4.566
5318
5878

.50
.30
.98
.-11
.-18
.92
.-38
.34
.-27
.80
.66
.88
.93
1.14
.27
1. 01
3.15
7.08
33.88
31.51
26.11
38.92
32.17
36.42

I
I

I
I

Source: Kerala Dinesh Beedi Workers Central Cooperative Society,


Annual Reports, (Various Years)
It is also seen from table 1 that the total emoluments paid to
the production workers has increased from Rs.234 lakhs in 1975 to
Rs.3270

lakhs

in

1992.

The

salaries

management and administrative staff


245

in

and

allowances

the primary and

paid

to

central

cooperatives have .tended to increase only proportionately to the


wages of workers 34 The trend in per capita wages and earnings are
presented in Table 2

Table 2
Growth of Workers Income

..

Year

Per capita annual earnings (Rs.)


Wage

(2)

(1)
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992

1550
1363
1677
1766
1678
1896
2131
2483
2407
2718
3239
3463
4061
4245
3315
5081
5366
6652

Other
benefits
(3)

57
90
201
271
311
388
497
607
- 563
685
791
852
1008
1053
857
1267
1399
1747

Bonus

Total

Percapita
real
earnings
(Rs)

Share of
non wage
benefits
%

(4)

(5)

(6)

(7)

64

.1671
1525
2011
2220
2181
2520
2919
3452
3320
3797
4523
4897
5868
6158
5115
7400
7866
9799

1006
947
1281
1354
1246
1254
1275
1426
1253
1266
1454
1436
1573
1532
1224
1697
1576
1775

7
11
17
20
23
25
27
28
28
28
28
29
31
31
35
31
32
32

72

133
183
192
236
291
362
350
394
493
582
799
859
943
1051
1102
1399

Source: Same as table 1


The per capita annual wages per worker increased from Rs.1550
to Rs.6652 between 1975 and 1992.

At the same time, the per capita

annual non wage benefits tended to increAse at n fAster

rnte so

that its share in the total earnings tended to rise over time from
7 percent in 1975 to 32 percent in 1992. The total emoluments to
the worker increased from Rs 1671 to Rs 9799 during the period.
Even when measured in real terms the total income earned by the
workers shows substantial improvement by 75 percent between 1975
and 1992.

246

The

cooperative

pays

periodically determined for the


even

the

minimum

wages

statutorily

the

are

industry.

not

paid

In

to

determined

wages

the privRte sector

the

workers

in

the

unorganised sector. As for the non wage benefits, the cooperative


is ahead of the organised private sector beedi firms. It has taken
ini tia ti ves

to

implement the

various we 1 fare schemes envisaged

under the Beedi and Cigar Workers

(Conditions of Employment)

Act

and also devised various non statutory benefit schemes of its own
like the pension to beedi workers. As a result there exists a wide
gulf

between

the

earnings

of

beedi

roller

in

the

private

unorganised sector and the cooperative sector (see table 3).

As

indicated

existing in

the

above

out

of

thR

twelve

cooperative sector today,

non

nlne

existent in the privat.e nnorg;:mised sector.

WRC]P.
are

bRnefi ts

totally non

The other three non

wage benefits viz. bonus, gratuity and provident fund are paid by
only a few of the beedi firms in the unorganised sector. A larc:Je
segment of the workers in the private unorganised sector employP.d
by Mangalore based beedi firms' refuse to pay even the prescribed
minimum

wages

in

the

state

and

only

pay

the

minimum

wages
H

applicable in Karnataka that are lower than that of Kerala"".

It

has been calculated that the actual labour costs of producing 1000
beedis in the cooperative sector increases to more than Rs.60 when
all other non wage monetary bRnefi ts including 81

days

of paid

holidays are accounted for 36 .

Besides the higher wagR and non wage benefits the cooperRtives
have also focussed on improving the working condition in the workcenters. Over the years the cooperative has continuously improved

247

the facili"ties

by constructing new ventilated and well-lighted

work sheds with back rest for the beedi rollers and with toilets
and other facilities. It is seen that over the years 139 new work
sheds have been constructed in the different primary cooperatives
for the

326 work centers

functioning

in 1993 37 The modern work

sheds of the cooperative is indeed a sharp contrast to the over


crowded ill ventilated attics or rooms in which beedi rolling is
usually carried on.
Table 3
Wage and Non Wage Benefits 1992-93 in the Cooperative and Private
Sectors
Cooperative
sector

Wage categories

( 1)

1 . Rolling for thousand beedis


(a) Basic wage
(b) Dearness allowances
2 . Sunday wage
3 . Holiday wage
4 . Casual leave wage

Rs.14
Rs.17

5 . Medical allowance
6 . Maternity benefit
7.
8.
9.
10.
11.
12.

Bonus
Gratuity
Provident Fund
Retirement benefit
Death benefit
Pension

( 2)

I
I

13. Thrift loan

Private
unorganised
sector
( 3)
Rs.14
Rs.17

Nil
All Sundays
Nil
1'1 day's
Nil
One day for
every 18
days worked
Rs.50
Nil
Rs.400 and
Nil
3 months
leave
16.5%
14%*
As per Act As per Act$
6.25%$
6.25%
Rs.3000
Nil
Rs.5000
Nil
Rs.150 per
Nil
month
Rs.600
Nil

Note: * Bonus rates in private unorganised sector range from


lumpsum of a few hundred rupees to 8 or 12 percent of annual
earnings; $ = Gratuity and provident fund are not paid to all the
workers. Usually only a small percentage of the workers are given
these benefits.
Source:Survey conducted in 1992-93

248

The emoluments paid to the Kerala Dinesh Beedi workers have


become the bench mark by which the wages in the beedi industry are
negotiated.

The

trade

unions paint

to

the higher

wages of

the

cooperative worker as the indicator of the industry's ability to


pay higher wages. The wages in the private sector though lower than
in the cooperative tend to be revised in proportion to the wage
.
.
1ncreases
1n
t he

coopera t.1ve sec t or 38 .

Some welfare schemes

like

the pension scheme had its influence on the other segments of the
cooperative sector.

The higher wages paid to the workers have not been at the cost
of

the

financial

history,

expect

viability
for

four

of

the

years

cooperative.
the

Central

Throughout
cooperative

its
had

registered profits (see table 1). In the initial years the profits
were kept at the minimal level due to the high incidence of taxes.
The cooperative was more keen to return as much surplus generated
to the workers and build up assets, especially in the form of new
work sheds,

Hence,

the

to provide better amenities


maximum

amount

cooperative was paid back

of
to

the

and conditions of work.

trade

profit

of

the

Central

the primary cnopera ti ves as price

enhancement for beedis prod11ced so that net income and profits of


the Central cooperative and taxes pni.d by

it

were t.he

least..

change in the tax Jaws, which allowed for tax exemption to interest
income earned by cooperative institutions from cooperative credit
sector, enabled the Central cooperative to declare higher profits
and increase the funds accruing to the reserve and building funds.
This

accounts

for

the

sudden

spurt

cooperative in the later years.

249

in

profits

of

the

Central

Now we shall turn to explain the factors that have contributed


to the success of the Kerala Dinesh Beedi Cooperative. Other things
remaining the same, the profits of the cooperative depend upon the
efficiency at which the raw materials
beedis.

We

shall

first

examine

the

are converted to finished

factors

that

influence

the

productivity of the cooperative.

Section 3

Efficiency in Production at the Primary Cooperatives

It is the primary cooperative that undertakes the prnduction


of beedis. Two more primary cooperatives were

for~ed

after 1969 so

that there are 22 primary cooperatives in the fold of Kerala Dinesh


Beedi

Central

Cooperative.

Each

of

the

primary

cooperatives

confines its activities and membership to beedi rollers' resident


within a definite non overlapping geographical area. Each primary
cooperative

1s

managed

by

an

elected

board

of

directors

and

administrative staff employed by the cooperative. The actual beedi


rolling

is

carried

out

in

work-centers

distributed

at

various

vantage points within the operational area of the cooperative. The


headquarters
packaging

serves

center.

as

an

The

administrative

main

features

of

and

distribution

the

primary

and

beedi

cooperatives are summarised in Table 4.

The primary beedi

cooperatives significantly vary from one

other in terms of membership as well as scale of operation.

The

Chala primary was the largest with 3885 members and Cannanore City
primary with 605

member~

the smallest
250

i~

1992. The output of the

primary

cooperatives

also

varied

significantly.

The

Pinarayi

primary cooperative that produced 71 crore beedis was almost eight


times as large as the smallest Cannanore City primary cooperative
that produced around 9 crore beedis.

The composition of output

between different beedi brands also tended to vary from primary to


primary. For example, the share of Medium beedis, one of the most
popular brands, in the primary cooperatives varied from zero to 100
percent of the production.

Table 4
Profile of Priaary Cooperatives (1991-92)

I Naae

Total number of
I Percentage share of Total beedi Share of Per worker outEut
Work Heabersliorkers Lab. I Kale
Ad;. output medium
Per annua Per davl
.(
sheds
worker worker staff llakhsl beedis(%)

I of
I priaary
I

(11

Tellichery 16
Kadirur
22
Dhanadaa 16
29
IPinarayi
Chala
29
10
IThottada
Valianur I 23
lcannanoreTown 4
Canna'noreCi ly 5
IKaHad
I 9
lchalad
I 6
Chirakkal
11
Azhikode
11
IPayvanur
15
Che;uvtur
21
Nelesaram
16
1Hosdurg
I 17
Kotachery
15
1
I Kasargod
20
INaniesaram 13
Bad;gara I 9
Bediadeka I 10

(3)

(21

2204
2474
17 38
3472
3885
1355
I 3441
I 787
605
1464
1203
1278
2117
1981
3574
2998
2926
2198
5017
1665
1304
I 1434

i (4)

(6)

(51

.-

148o I
18 89 I
1s o5 I
Jo 45 I
28 49 I
905 I
2287 !
367

3
2 f
3 II
3 I
4 I
4

4 I

3431I

810 I

4oo
788
942
1452
2263
1656
2o18
1657
2246
1456
776
961

I
I
I

I
I
I
I
I
I

47
40
56
53
40
73
75
92
87
84
91
68
16

(7)

2l
2l

zl

2555
4224
7126
3335
7924
2351
5565

31

21

l
I

909
2010
1037
1997
2604
3263
5104
3541
3770
4355
4475
3222
1629
1842

I
I

ul
36

I8)

I
I
I

( 9)

I
I
I

52
56
57
42
44
0
45
22
24
31
15
32
18
67
49
47
62
59
100
100
0
100

(10)

240
223
221
234
243
259
24 3
252
265
248
259
253

276

224
225
213
215
227
199
221
210
191

I111

.I

846 I
, 87 1
780 I
824 I

m I

915 I
857 I
888 I
933
876
913
890
973
792
794
753
760
801
702
779
739
67 5

Rote: Lab. = Labelling; Ada. = Ad11inistrative


Source: From annual reports and other unpublished data provided by the Central and Primary cooperatives

251

Table 5
Profits as Percent of Primary Cooperative Sales(1982-83 to 1991-92)
Primary

1982-83

Tellichery
Kadirur
Dharmadam
Pinarayi
Chala
Thottada
Valianur
Cann.Town
Cann.City
Kakkad
Chalad
Chirrakal
Azhikode
Payyanur
Cheruvtur
Nelesaram
Hosdurg
Kotachery
Kasargod
Manjesaram
Badagara
Bediadeka
Total
Primary
Tellichery
Kadirur
Dharmadam
Pinarayi
Chala
Thottada
Valianur
Cann.Town
Cann.City
Kakkad
Chalad
Chirrakal
IAzhikode
IPayyanur
Cheruvtur
Nelesaram
Hosdurg
Kotachery
Kasargod
Manjesaram
Badagara
Bediadeka
Total
Note: Avg.

1983-84

-1
-1

5
5
6

-1
0

0
2
-0
0
-3
-2
0
-1
1

3
1
-3
4
-1
3

-2

2
-2
0
3
1
4
2

7
7
3

1
1

4.

1988-89

1989-90

-2
-2

1
1

-1

-1
-0
-1
-1
-3
-2

-3

6
5
4

5
5
5
2
4

7
5
2

2
3
5
2

2
2

1
4

I
I

7
8

9
7
7
8
4
9
6
6
6
7
6
4
6
1
5
7
6
5
7

1987-88

4
4
4

.:;2
2

2
-1

-0

3
3
0
2
2
4
4
2

4
2
2
2

-1
-1
3
1990-91
-5
-2
-3
-2
-2
-2
-5
-5
1

-1

1
-1

-2
-5

0
2

-5
-6

-2

-2
-1
-4
-16
-6
-19
-4
-3
-6
-2

-2
0

-2

-1
-2
2
-3

-1
-5
-1

-3
-5
-7
-5
-3

1
-6
-1
0

-1

Average; Source: Same as table 4


252

1986-87

4
2

5
9
6
7

1985-86

-0
-0
-0
3
-8
1
-8
3
-0
-1
3
-1
1
-0
1
-4
0

1984-85

1991-92

Avg

-1
-2
-1
-1
1

1
1
2

2
3

-0
0

-2
-1
1
-4
1
2
1
-2
-1
-2
0
-1
-5
-5
-4

-1

1
1
-1
2

-1
1
3
3
1
-0

1
0
0
0
-1

-1
1

Table 6
Profit Per Worker (1982-83 to 1991-92)
1983-84

Primary

82-83

Tellichery
Kadirur
Dharmadam
Pinarayi
Chala
Thottada
Valianur
Cann.Town
Cann.City
Kakkad
Chalad
Chirrakal
Azhikode
Payyanur
Cheruvtur
Nelesaram
Hosdurg
Kotachery
Kasargod
Manjesaram
Badagara
Bediadeka
Total

-45
-40
73
8
105
-8
18
-254
-136
12
-48
42
-106
--119
-104
11
188
54
179
78
-84
65
27

337
324
385
385
464
323
269
98
-227
313
-117
257
434
482
470
210
383
283
533
350
489
182
350

Primary

11987-88

1988-89

Tellicher
Kadirur
Dharma dam
Pinarayi
Chala
Thottada
Valianur
Cann.Town
Cann.City
Kakkad
Chalad
Chirrakal
Azhikode
Payyanur
Cheruvtur
Nelesaram
Hosdurg
Kotachery
Kasargod
Manjesaram
Badagara
Bediadeka
Total

I
I
I
I
I

I
I
I

I
I
I

I
I

I
I
I
I
I
I
I
I
I

596
423
604
498
714
583
439
531
648
548
223
456
828
516
186
189
293
539
152
199
195
78
429

-140
-178
-61
-104
-11
-127
-117
-276
-228
-100
-197
-459
-216
-174
-68
-304
-312
-12
-319
-305
-235
-408
-123

1984-85
-41
1
49
76
-14
-23
-6
244
-660
91
-649
255
317
131
-19
-61
202
-68
51
-5
59
-228
13
1989-90
117
95
91
-293
152
271
-112
-45
88
-127
132
246
581
424
-54
-224
178
-321
132
94
-573
-200
34

1985-86
534
305
405
326
467
386
331
332
5
240
420
92
496
255
276
167
331
175
171
138
-54
-54
283
1990-91
-894
-292
-517
-283
-374
-342
-740
-820
100
-437
-908
-958
-346
52
-79
-771
-99
-207
-354
-682
-980
-570
-429

1986-87
898
764
844
878
1082
838
895
989
545
1034
785
722
757
749
633
417
634
77
496
653
541
396
720
1991-92 JAvg.
-209
-326
-146
-161
103
-80
108
-343
-318
102
-743
135
370
172
-370
-166
-266
4
-134
-913
-856
-616
-170

Note: Avg. = Average; Source:Same as table 4


In terms of profitability also the primary
253

115
108
173
133
269
182
108
46
-18
167
-110
79
312
273
87
-53
153
53
90
-39
-150
-136
113

cooperatives

revealed very substantial differences. Table 5 gives the trend in


profit rate for the various primary cooperatives. We find that some
cooperatives

have

done

relatively

better

in

terms

profit

generation. Primary cooperative like Chala, Azhikode, and Payyanur


have tended to consistently perform better than the others during
the

1980's.

Cannanore

On

City

the
and

other .hand,

the

cooperatives

Chalad

been

consistent

have

at

Bedideka,

laggards.

The

general picture does not radically change even if one considers the
profits per worker (see table 6). In the absence of relevant data
it is not possible to undertake a time series analysis of the trend
in profits.
factors

However,

that

we intend

determine

the

to undertake an analysis of
profi tabi li ty

of

the

the

primary

cooperatives using cross sectional data for the year 1991-92.

The raw materials are supplied by the central cooperative on


a

cost

plus

basis

to

the

primary cooperatives.

Similarly

the

beedis are purchased back at a uniform price determined by the


central cooperative. Therefore, the profitability of each primary
would depend upon the efficiency with which the given raw material
is converted into beedis. There are three elements that contribute
to the efficiency of conversion viz.
out turn and (c)

(a) leaf out turn (b) tobacco

labour out turn. We shall briefly explain these

factors.
(a) The leaf out turn refers to the number of wrappers cut from a
given quantity of raw tendu leaves. The data shows that there is a
wide disparity in the leaf out turn across the different primary
cooperatives. In 1992 it ranged from 2022 beedis from one kilogram
of leaf in Cannanore town primary to a maximum of 2396 in Payyanur
primary; a difference of around 20 percent. Assuming that uniform

254

quality of leaves is distributed to the primary cooperatives the


leaf out turn would depend on the skill and care of the worker in
cutting

the

maximum

number

of

wrappers

from

each

leaf.

The

importance of leaf out turn in the efficiency of conversion has


grown in importance due to the sharp increase in the leaf prices in
the last decade.
(b) The tobacco out turn, which also is dependent on worker skill,
is also of crucial importance in determining the efficiency

of

conversion. But the variation in the tobacco out turn is lower than
that of the leaves. In the case of medium beedis it ranges from a
minimum of 5466 beedis from one kilogram of tobacco in Azhikode to
a maximum of 5596 beedis in Pinarayi. The tobacco out
differs between the beedi brands.
essential

in maintaining the

turn also

'l'he optimum use of tobacco

product quality.

Too much

is

tobacco

clogs the smoke channel of the beedi and adversely effects product
quality while too little tobacco adversely effects the flavour of
the beedi.
(c) Labour out turn refers to the number of beedis that a worker
produces in a working day. Higher the output per worker per day,
the lower would be the average labour cost of producing a beedi.
This

peculiar

prevalent

in

situation
the

is

industry.

due

to

'l'he

the

wage

system
of

the

of

wagR

payment

worker

has

tr,w

components. The first is the basic wage which 1s a piece rate fixed
by

the

minimum

wage's

committee.

The

second,

1s

the

vnriable

dearness allowance periodically revised according to changes in the


cost of living index. The dearness allowance is a lump sum amount
for every working day.
beedis

per

Therefore,

Any worker,

working day,
there

is

is

who produces a minimum of 800

eligible

built-in
255

for

the

disincentive

lump

sum

within

amount.

the

wage

structure to roll only the

minimu~

number of

bee~is

on the part of

the workers. On the other hand, since the marginal labour costs of
beedis above the first 800 are significantly lower, a cooperative
that has relatively higher out turn, can reduce the average labour
costs and earn higher profits.

As can be seen from the table 4 the per capita beedi output
shows considerable variation over primary cooperatives. It ranges
from 276 thousand beedis in Azhikode primary to 191 thousand beedis
in Bediadeka primary. It is not possible to accurately arrive at
average output per worker per day in each cooperative since we do
not have data regarding average number of days that the rollers may
have

worked

differences

in
1.n

each
the

cooperative.

average

There

number

of

could

working

be

substantial

days

per

worker

between the various cooperatives. Assuming that in 1991-92 on an


average there were

284 number of working days we have worked out

average beedi rolled by a worker during a working day (seP. column


11 of table 4). It appears, on an average the labour productivity
is

above

allowance

the

minimum

threshold

for

eligibility

in many primary cooperatives.

But it

l.S

for

dearness

evident

that

there is substantial scope for improvement. An average worker can


roll with ease around 1000 beedis per day.

The number of beedis rolled per day would depend upon many
factors

the most

important being,

(a)

the

number

of hours

the

worker chooses to roll beedis, and (b) the skill and speed of the
worker in rolling beedis. It is a well-known fact that the speed of
beedi rolling peaks at around 40 years of age of the worker and
begins to rapidly decline as one crosses tifties. The reason is
256

that over time, due to constant aberration, the skin on the fingers
becomes smooth and the beedis tend to slip from the fingers while
rolling.

Therefore,

the age composition of

the workforce

is an

important factor in determining the speed and skill of rolling.


Similarly, the sex composition of the workers also affects output.
It has been often been remarked that the women wdrkers tend to come
late and

leave

early

at

the

work

centers due

to

the

domestic

hurdles including household chores. As against this, opinions are


also expressed that women tend

to handle the leaves and

tobacco

more carefully and that their leaf out turn is relatively higher
than that of males.

Apart from the above three skill-related elements there are


certain macro factors related to the organisational environment of
the cooperatives that may effect relative profitability. The first
would be the overhead charges of the cooperative and the scale of
production. Primary cooperatives with large scale production will
be better able to spread their overhead charges. But larger scale
may

bring

centers

in

are

certain disRconomies
too distant

of

scale

also.

If

the

transportation costs may increase.

work
The

proportion of beedis damaged in transport and storage is another


factor.

The

cooperatives.

rent

costs

Another

vary
cost

significantly
element

that

between

the

substantially

primary
varies

between the cooperatives is the maternity benefit allowances which


would vary depending on the age component of the female workforce.
Finally,

and perhaps most importantly,

is

the efficiency of

the

cooperative management and its ability to motivate the workers in


improving the productivity and quality.

257

Now we shall examine

the relative importance of

the above

factors, to the extent the data permits, in explaining the relative


profit level of the primary cooperatives for the year 1991-92. We
have taken profit and losses per worker as the indicator of

the

financial

the

performance

of

the

primary

cooperatives.

Since

annual reports of the prima-ry cooperatives did not have a uniform


format

for

presenting

the

data

nominal balance sheet profits

it

of

was

not useful

to

take

the primary cooperatives

the
that

included different expenditure components for individual needs (for


example

investment

on

buildings)

of

the

individual

primary

cooperatives. For finding a uniform comparable profit figure of the


different primary cooperatives we deducted from the beedi sales of
each

primary

the

expenditures

incurred

on

wage

and

non

wage

benefits (Sunday wages, holiday wages, casual leave wages, bonus,


maternity and medical allowance and provident
payments) to workers,

raw material costs

fund and gratuity

(raw material purchased

plus opening stock minus closing stock) , salaries to other staff


(i.e., all employees excluding beedi rollers and beedi rollers) and
rent to calculate our

total

estimated profits

that are

seen

in

table 7. We then found out the per worker profit by dividing the
estimated total profit with the number of production workers (beedi
roller and labelling workers) in each cooperative. It is seen that
profit

per

worker

varied

from

maximum

of

Rs

1786

1n

the

Tellichery primary to a loss of Rs 11596 in Badagara primary.

Taking

profit

per

worker

as

the

dependent

variable,

we

identified nine independent variables that were likely to influence


the

profitability.

The

independent

worker output of beedis (PWO),

variables

included

( 1)

(2) out turn from tobacco (TO),


258

per
(3)

out

turn

from

leaves

(LO)

salaries of employees (S)


( FP)

8)

total

workers

(4)

maternity

(6) rent (R)


(TW)

and

(M)

(5)

(7) female participation

( 9)

allowance

average

distance of

work

centers. The direct wages costs and material costs were left out as
their influence would be captured by per worker output and out turn
from raw materials. The costs were represented in per worker terms.
Table 7
Profit and Losses of Pimary Cooperatives (1991-92)
Primary
( 1)
Tellicherry
Kathirur
Dharmadham
Pinarayi
Chala
Thottada
Valliyanur
Cannan ore town
Cannanore city
Kakkad
Chalad
Chirrakal
Azhikode
Payyanur
Cheruvathur
Neeleswar
Hosdurg
Kottacherry
Kasargod
Manjeswaram
Badagara
Bediadeka

Profit per Rank


worker(Rs)

Total
profit

( 3)

( 2)

2726845
3240649
1813660
4450289
5155600
1558080
4068110
432041
355391
1416893
211667
919401
1691958
2499985
2807887
1628697
1946374
2463750
3109505
1182758
9462438
9195541

I
I
I

( 4)

1786
1678
1167
1424
1747
1652
1717
1116
998
1703
504
1125
1719
1685
1200
950
937
1452
1360
799
-11596
-9383

1
7
13
10
2
8
4
16
16
5
20
14
3
6
12
17
18
9
11
19
22
21

Source: Same as table 4


Table 8 shows'

the correlation coefficient among all these

variables. The profitability of the primary cooperative (i.e.

the

dependent variable) is seen to have a medium positive correlation


with per worker output (.60) and medium negative correlation with
female participation in the labour force

259

(.52).

Out turn of tobacco (.66) is strongly negatively correlated to


per worker output. But per worker output and leaf out turn have
only

medium

negative

correlation

( .61).

This

indicates

that

higher output level per worker leads more to the inefficient use of
tobacco

rather

than

of

leaves.

The

per

worker

output

is

also

strongly negatively related to womens participation in labour force


(.87).

But

it

has

only

medium

negative

correlation

with

maternity allowance (.54). This indicates that the decrease in per


worker output with increase in female participation is enhanced by
other factors rather than by just the maternity leave alone. The
increases in female participation which leads to both decrease in
per worker output and increased maternity costs is the possible
cause of the negative corrRlation between female participation and
profitability (.52). On the other hand, the positive relationship
between female participation and leaf and tobacco out turns
and . 55)

(. 65

shows that female participation increases the Rfficient

conversion of raw materials and hence reduces costs in this way. As


expected maternity costs
female

participation

is

( . 7 2)

strongly associated with extent


The

medium

association

of

between

maternity allowances and work center distances is spurious.

Regarding other organisational costs like salaries and rents


we find salary costs are strongly negatively associated with size
of work force

(. 70).

This

indicates that economies of scale do

operate in larger primary cooperatives.

But it is seen that

the

rent costs are not associated in any way with size of work force
(.04). The strong positive correlation between female participation
and distance of work centers distances (.69) is rather interesting.
260

This indicates that widely scattered work centers make it possible


for more women to join the cooperatives.

Table 8
Correlations Among Profitability variables
p
p

P\1'0

1.00
.60*
-.42
-.07
-.16
-.19
.01
-.52*
.04
.15

P\1'0
TO
LO
M

R
FP

TW

wen

1.00
-.66
-.61
-.54
.32
.17
-.87
-.38
-.56

LO

TO
1.00
.44
.39
.10
-.27
.65**
.19
.36

1.00
.53*
-.36
.02
.55*
.38
.46

1.00
-.52*
.08
.72**
.47
.53*

1.00
-.25
-.41
-.70

1.00
.11
.04
.20

-. 31)

T\1'

FP

\lCD

1.00
.46
1.00
.69** .42

1.00

Having thus identified the independent variable that is most


strongly correlated with the dependent variable we did a multiple
regression analysis. Table 9 shows the results of an ordinary least
square multiple regression of the above variables. The
tests indicate that of the eight
worker

output

fashion with

and
the

salaries

are

signifi~ance

independent variables only per


highly

dependent variable

~orn~ l i'l

at

t_ed

in

per~ en t

five

lin ear

levels

of

significance. The positive effect of leaf out turn is F!lso evident.


But the influence of

the variable

lS

s 1 igh tly

above 10 percent

levels of significance.

The regression results show that only per worker output has a
positive impact on profitability. The other variable,
have

in

contrast

s ta tis tically

negative

significant

at

effect.
5

Roth

percent.

The

the

salaries,

varjables

R2 shows

that

are
76

percent of the variations in profit are determined by the above


nine independent variables. Moreover, the calculated 'f' value is
significant at five percent levels.

261

Table 9
Estimated Equation of Profitability of Primary Cooperatives
Independent
variables

Coefficient

'T' Value

( 2)

( 3)

(1)
1.PWO
2.TO
3.LO
4. M
5.S
6.R
7.FP
8.TW
9.WCD
Constant

2.608*
1. 077
1.655**
-.325
-2.479*
-1.477
-.501
-.753
1.583**
-2.202*

.0221
.3862
1.5267
-1.7755
-3.4625
-11.9413
-4.2920
.0944
46.1388
-7566.7332

R2 =.76
F = 4.18
* 5 percent levels of significance
** 15 percent levels of significance

The influence of per worker output

22

and managerial costs on

efficiency of functioning of the primary coopP.rativP.s has prompted


the central cooperative to keep a close watch on the differentials
in these parameters across various primary cooperatives. 'I'hongh the
appointment of the managerial and other salaried employees and the
emoluments

paid

to

them

were

initially

done

by

the

primary

cooperatives at their discretion, over time the central cooperative


has ensured

that a

uniform norm is

followed by all

the primary

cooperatives in all such appointments. For instance, it has fixed


the ratio between production workers and clerical staff should be
in the ratio 250:1. It is also ensured that differences in uniform
emoluments paid to the employees of the primary cooperatives in the
early years of its working has been evened out. Table 10 show that
the share of salaries in production cost has remained stable during
the period 1982-83 to 1991-92. It is also seen that the disparities
in such costs across primary cooperatives have narrowed down during
the period.
262

Table 10
Improvement in Productivity (1982-83 to 1991-92)
Primary

Per worker Output Salary share %


1982-83

{1)
Tellichery
Kadirur
Dharmadam
Pinarayi
Chala
Thottada
Valianur
Cann.Town
Cann.City
Kakkad
Chalad
Chirrakal
Azhikode
Payyanur
Cheruvthur
Nelesaram
Hosdurg
Kotachery
Kasargod
Manjesaram
Badagara
Bediadeka
Total

( 2)
221443
218874
232261
217470
232929
249728
223370
263119
241637
216042
255968
244982
255074
180824
172219
171520
227526
177908
163965
182492
133373
127083
207577

1991-92
( 3)
240256
223611
221621
234043
243055
259830
243350
252065
265055
248770
259333
252723
276435
224790
225565
213824
215853
227568
199262
221328
210008
191770
229855

1982-83

1991-92

( 4)

( 5)

1.48
1. 23
1.15
1. 47
1. 31
1. 54
0.98
2.43
3.04
2.14
2.55
1. 98
1.19
1. 77
1. 54
1. 72
1. 57
1. 35
1. 39
2.16
2.20
2.21
1. 57

1. 40
1. 46
1. 59
1.26
1. 39
1. 43
0.62
2.70
2.01
2.23
2.70
2.13
1. 35
1. 81
1. 61
1. 90
1. 56
1. 39
2.03
2.37
1. 66
2.14
1. 54

Leaf out turn


1982-83
( 6)
1717
1784
1793
1753
1785
1694
1741
1727
1734
1737
1670
1677
1726
1865
1736
1785
1916
1749
1810
1576
1682
1612
1740

1991-92
{7)
.2063
2211
2100
2192
2144
2089
2129
2022
2148
2153
2056
2057
2087
2396
2302
2304
2160
2254
2262
2078
2188
2263
2166
Continued

263

Tobacco out turn

Primary

1991-92

1982-83

Tellichery
Kadirur
Dharmadam
Pinarayi
Chala
Thottada
Valianur
Cann.Town
Cann.City
Kakkad
Chalad
Chirrakal
Azhikode
Payyanur
Cheruvtur
Nelesaram
Hosdurg
Kotachery
Kasargod
Manjesaram
Badagara
Bediadeka
Total

Changes {1982-83/91-92)

ss

PWO %

( 8)

{9)

{11)

5763
5443
5477
5439
5500
5162
5833
5577
5686
5735
5211
5429
5535
5525
5475
5460
5525
5561
556'3
5427
5357
4983
5485

5481
5596
5594
5488
5502

8
2
-5
8
4
4
9
-4
10
15
1
3
8
24
31
25
-5
28
22
21
57
51
11

5496
5502
5530
5505
5519
5466
5517
5504
5490
5500
5504
5519
5495
5517
5512

LO %

{12)

TO %

{13)

-0.08
0.23
0.44
-0.21
0.08
-0.11
-0.35
0.27
-1.02
0.09
0.15
0.15
0.16
0.04
0.07
0.18
-0.01
0.05
0.64
0.22
-0.54
-0.08
-0.04

{14)

20
24
17
25
20
23
22
17
24
24
23
23
21
28
33
29
13
29
25
32
30
40
25

-5
3
2
1
0
-6
-1
-3
-4
6
1
-0
-0
0
-0
-1
-1
1
11
0

Note: PWO = Per worker output; SS = share of salary; LO= Leaf out
turn; TO = Tobacco out turn
Source:Same as table 4
However, the authority of the central cooperative in improving
the

production

difficult
workers
material

to

in

parameters

use

is

directives

individual

incentive

for

much

to

control

cooperatives
their

more

do

better

restricted
such

not

as

it

parameters.

receive

performance,

is

Since

any

special

the

central

cooperative has to motivate the primary cooperative functionaries


and

incorporate

trade

union

activists

in

all

such

efforts

to

improve productivity and quality. Right from the beginning of the


formation of the cooperatives the trade unions have been insistent
throughout on ensuring uniform labour standards within the entire
cooperative sector. Individual primary cooperatives do not have the
264

~e

right to award any special benefit to its workers whatever

their

financial situation. They are formulated at the Central cooperative


level

through a

process of

collective bargaining between

the

Central cooperative management and the trade unions.

Thus,

the

'

absence

of

material

incentives

to

improve

productivity in individual cooperatives ensured that the central


cooperative had to play a pivotal role in maintaining quality and
improving productivity. The maistries at the work centers, central
cooperative foremen stationed at the primary cooperative and the
foremen at the central cooperative are important functionaries who
enforce quality control. Additionally, various measures to improve
quality of output have been implemented in recent years following
increase in complaints from consumers. The first initiative in this
direction has
called

four

been

zonal

taken

in

198n

conferences

primary cooperatives

when

of

to discuss

the

central

rna is tries

and

cooperative

foremen

the quality probl e;;,s.

1986 to conduct surprise checks to

improve quality.

all

A speci a 1

~as

squad of directors and foremen of central cooperative

of

set up in

The

special

quality control squad was made a permanent set up in 1991-92.

Ensuring uniform out

turn

per worker

in different

primary

cooperatives is rendered difficult given the differences in age


composition of workers, their skills and gender composition in the
different

primary cooperatives

influence

on

per

worker

all

output.

of which

The

have

inbuil t-bias

significant
in

the

wage

structure against increasing per-worker output has also made such


interventions

very

futile.

Despite

this

per

worker

increased by 11 percent between 1982-83 and 1991-92.

265

output

has

Besides,

given

the

increasing

costs

of

ra.w materials

the

Central cooperative has been paying greater attention to increase


the productivity. The major focus has been in enhancing the number
of wrappers cut from a given quantity of tendu leaves. The prize
incentive scheme, under which cash awards are made to workers and
supervisors with the best out turn from leaves, was innovated by
the central cooperative in pursuit of this objective. The efforts
seem to have borne fruit as evident from the 25 percent increase in
leaf out turn during the period 1981-82 to 1991-92 (see table 10).
The

increase

in

leaf

out

turn

has

been registered

1n

all

the

primary cooperatives and the differential in leaf out turn across


the primary cooperatives has also been narrowed down with all of
them increasing out turn from one kilogram of leaves to above 2000
beedis. However,

no such improvement has been registered in out

turn from tobacco (see table 10); Though the out turn has tended to
stabilise

there have been

sharply contrasting trends with

some

primary cooperative showing improvement as compared to a decline in


the others.

Section 4

Efficiency

of

Purchase

and Marketing

Operations

and

Financial

Management

So far we have been discussing the factors determining the


efficiency of conversion of raw materials, tendu leafs and tobacco,
into

the final

product viz.

beedis.

Consequently,

our focus

of

attention has been largely the primary cooperative. Needless

to

say, the overall profitability of the cooperative system would also


266

be crucially dependent upon the efficiency of purchase and sale


operations and financial management. These are the primary tasks of
the Central cooperative. As already noted the Central cooperative
in the Kerala Dinesh Beedi is not a mere purchase and marketing
agency. It plays an active role in coordinating and monitoring the
production and setting the labour standards. Besides, it also plays
an

important

role

in

the

financial

management

of

the

entire

cooperative system. It must be admitted that according to bye-laws


the

primary

cooperatives

are

autonomous

units.

But

in

actual

practice the autonomy of the primary cooperatives has been severely


restricted. In almost every aspect of their activity they have to
abide by the decisions made

and guidelines drawn by the Central

cooperative. These traditions have been developed over time and


occasionally backed up by decisions of the general body of

the

Central cooperative and rarely by government orders too 39 . However,


the most

important factor

that has

facilitated the unchallenged

hegemony of the Central cooperative has been the extreme efficiency


with which

the purchase

management

have

been

and marketing operations

undertaken.

We

now

and

briefly

financial

discuss

the

purchase and marketing operations and the financial management of


the Central cooperative.

(i)

Raw

financial

material

purchases:

resources

of

the

In

the

early

cooperative

years

forced

it

the
to

limited
buy

raw

materials from the close-by markets of Calicut and Mangalore. The


prices were high and quality poor. As soon as the cooperative could
generate enough resources,

it began scourging raw materials from

producing areas at harvest time enabling a substantial reduction in


raw material costs of production 40 .
267

The beedi leaves are largely

purchased from Madhya Pradesh and Orissa while tobacco is purchased


from Gujarat and Karnataka.

fr~m

The cooperative takes great pains to avoid purchases

the

private trade as the beedi leaf trade is a very corrupt business.


Hence, it relies solely on-the Orissa Forest Corporation for its
leaf requirements. This prevents any corruption in the large leaf
purchases. The tobacco purchases are done by calling

quotatic~s

and

ter~s

and

samples and then negotiating favourable prices and other

conditions. The other materials which are scoured by the central


cooperative include labels and yarn. The labels are purchasei from
Sivakasi in Tamil Nadu the cheapest possible market for

l~bels,

while the yarn is procured from the local market.

Three
operations

remarkable
of

the

features

Central

that

characterise

cooperative

may

be

the

pu~chase

noted.

F:..~stly,

through bulk purchases it is able to gain substantial

advant~ge

in

prices and ensure uniform quality of raw materials.

Seconc:y,

it

has

evolved

fairly

foolproof

system

to avoid

corrupti:::1

nepotism despite annual raw material purchase operations

and

cur~ently

involving around Rs 25 crore, there has not been a single ir,stance


of corruption charge against the cooperative management 41 . T~:rdly,
adequate and timely supply of raw materials has been assured. By
staggering the delivery of purchases made in bulk the

coope~ative

has managed to reduce the warehousing costs and overcome

tra~sport

bottleneck's.

(ii) Marketing of beedis: The entire production of beedis pr::duced


by the primary cooperatives is marketed under a single bran= name
268

'Dinesh

The trade mark is owned by the Central cooperative. Given

the brand loyalty of the consumers this perhaps is the greatest


source

of

control

of

cooperative. Today,

the

primary

by

cooperatives

the

Central

the cooperative has gained wide spread brand

loyalty among the beedi smokers to command a substantial share of


the market within the state. This achievement was possible partly
due

to

the

political

good

will

that

the

workers

cooperative

enjoyed in the state and the innovative means of promotion employed


by the cooperative management.

The challenge initially faced by the central cooperative was


to market
twenty

the

five

entire output

lakh

beedis

of

3000 workers,

day,

from

the

totalling

first

day

around
of

its

operation 42 . The challenge was met by devising innovative marketing


techniques. The political sympathy generated by the struggles of
the beedi workers was used to popularise the cooperative s product.
1

The beedi cooperatives were identified as a rehabilitation package


of the left government and its survi va 1 taken up as a po 1 it ica 1
task by the left political forces. The beedi trade unions formed
squads to exhort retailers and consumers to buy the beedis produced
by the cooperative 43 .

In many cases the centr<'ll cooper8tive even

sponsored motorised campaigns by trade union activists to publicise


the

cooperative

product.

The

cooper<'ltive

was

thus

able

to

incorporate the trade union and political activists in its campaign


to popularise the cooperative product. These coordinated efforts of
the political parties, trade unions and the cooperative management
provided the initial impetus to generate sufficient publicity for
marketing a major portion of the output. The quality of the beedis
also helped in sustaining consumer interests in the product.

269

Apart

from

sympathisers

utilising

the

the

voluntary

cooperative

also

enthusiasm

developed

an

of

its

efficient

distribution network of marketing agents throughout the state. All


the agents, whose area of operations was demarcated, were directly
connected with the CentraL cooperative. Thus, a long hierar~hy of
intermediaries was carefully avoided.
trade

i tern

very

seldom

was

the

Beedi being a

product

given

on

fast-moving
credit.

The

cooperative was hesitant to amass a fleet of vehicles for transport


of raw materials and products which usually leads to misuse of such
facilities. Therefore,

it devised a scheme under which wholesale

distributors were given a

commission,

depPnding on quantity

of

beedi sold, to maintain their own sales vehicles.

The boldest promotional campaign of the cooperative which in


fact played a major role in facilitating a market breakthrough was
the matchbox gift scheme devised to sell of the beedi stock of Rs
20

lakhs

that

got

accumulated

within

the

first

six months

of

operation. A matchbox was gifted freely with each bundle of beedi


purchased 44 .

The cooperative has also made skillful use of the media

in

projecting its image. News reports regarding the cooperative have


tended to receive wide publicity partly due to the conscious effort
of the management.

The

efficient

marketing

of

the

beedis

by

the

Central

cooperative requires that the production of cooperative beedis by


the primary cooperatives be according to the off take of beedis in
270

the market.

This

cooperatives

be

requires
tuned

that

to

level

market

of

output

demand.

in the

The

most

primary

important

instrument to regulate the output of the primary cooperatives is


the

control

exercised

by

the

central

cooperative

over

the

recruitment of workers by the primary cooperatives. The primary


cooperatives

may

recruit

workers

only

according

to

the

quotas

sanctioned by the Central cooperative. The Central cooperative also


decides

the

composition

of

output,

i.e.,

the

different

beedi

brands, of each primary cooperative depending on the market demand


for the

particular brand.

control output levels.


would

be

faced

,.;i th

These

are the

normal

But occasionally the


the

problem

of

fine

methods

used

to

central cooperative
tuning

production

to

fluctuations in demand. In case of large excess stocks of unsold


beedis the Central cooperative directs the primary cooperatives to
restrict output of individual workers or to stop production for a
few days by persuading workers to take leave with wages 45 .

However, the marketing strategy seP.ms to be losing its drive.


In recent years there has been a marginal decrease in sales.

In

1990-91 the sale of Special beedis decreased by 14 crores and in


1991-92 the total sales decreased by 25 crore beedis and this was
wholly

due

crores 46 .

to

The

the

decrease

significant

in

decline

sale
in

of

Special

sales

beedis

between

by

1990-92

28
was

forewarned by the large stock of unsold beedis, which necessitated


stoppage of production in the primaries

in 1987-88 and 1991-92.

Despite these market signals, the cooperative limited its response


to the launching of a marketing campaign by which gift coupons of
different values were distributed randomly in beedi packets

for

retailers to reclaim by encashing its value 47 . The scheme was tried


271

first in Madras city and then for special beedis throughout

the

state in 1991-92.
Table 11

Marketing Costs of Central Cooperative


Marketing costs.as %of sales
Marketing costs (Rs.lakh) Total
marketiAdvt. ng costs Van.all. Sales
Advt.
Total I
(Rs.La- Van.all Sales
ccm:n.
costs
ccmn.
costs
costs
khs)

Year

Total
sales

(1)

(2)

1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992

(4)

(5)

(6)

2.98
3.05
3.43
3.88
4.53
4.51
0
5.18

0.54
3.17
6.09
7.35
8.39
10.83
14.86
18.47
23.95
23.94
23.62
24.13
30.44
33.42
39.04
43.29
48.57
60.38

0.2
2.33
2.03
2.17
2.33
2.58
1.%
3.03
2.72
3.13
3.02
0
3.94
3.33
4.47
4.92
0
5.37

0.74
5.5
8.87
10.21
11.21
14.58
18.7
23.83
29.75
29.99
29.62
27.18
37.81
40.63
48.04
52.72
48.57
70.93

n.a.

n.a.

(3)

n.a.

0
0
0.75
0.69
0.49
1.17
1.88
2.33
3.08

11
52
108
141
169
245
388
492
649
761
803
931
1254
1415
1719
2015
2342
2873
3420
3617
2808
4566
5318

2.9Z

5.57
4.46
5.59
6.02
5.64

75.93
60.36
96.06
109.97
118.38

n.a

I
I

n.a

5.5
8.21
9.18
8.12
9.25

(8)

(7)

87
73.03
110.83
124.11
133.27

(9)

(10)

n.a

n.a.

n.a.

n.a.

0.0
1.5
0.6
0.3
0.7
0.8
0.6
0.6
0.5
0.4
0.4
0.4
0.3
0.3
0.3
0.0
0.2

29.7
11.8
6.8
6.0
6.4
6.1
4.8
4.9
3.7
3.1
3.0
3.3
2.7
2.8
2.5
2.4
2.6

21.8
3.9
2.0
1.7
1.5
0.8
0.8
0.6
0.5
0.4
0.0
0.4
0.3
0.3
0.3
0.0
0.2

51.4
17.2
9.5
8.0
8.6
7.6
6.1
6.0
4.6
3.9
3.4
4.1
3.2
3.4
3.1
2.4
3.0

n.a.

n.a.

n.a.

n.a

0.2
0.1
0.2
0.1
0.1

2.2
1.7
3.4
2.4
2.2

0.2
0.2
0.3
0.2
0.2

2.5
2.0
3.9
2.1
2.5

I
I
I
1

Source: Annual Reports of KDBWCCS

The developments in the last decade indicate the need for more
aggressive

sales

immediately
indicates

strategy.

tackled.

that

the

An

This

is

assessment

percentage

share

lacuna

that
cost

needs

of

the

of

of

advertising

to

be

marketing
costs,

an

effective sales tool, in total sales has decelerated significantly


from twenty one percent in 1970 to a meagre 0.2 percent in 1992
(see table 11).

In fact,

even the total share of expenditure on


272

sales including that of advertisement,

sales

commission and van

allowances to agents, has declined from fifty one percent of sales


in 1970 to 2.5 percent of sales in 1992.

The other vital factor affecting the marketing effort is the


growth of duplicate or counterfeit beedis posing as the real Kerala
Dinesh beedis. There are three versions of this duplication. One is
those beedis which have a similar name as Dinesh Beedi. The second
category of duplication includes those brands which have similar
packaging and label as the cooperative beedis.

The third

~nd

most

dangerous and rampant duplication is actually counterfeit Dinesh


beedis made in the

priv~te

sector which are sold in every hook and

corner and in far flung regions like Palghat, Idukki, Kasargod and
Trivandrum. The

large profits

from

the lower wage

and non wage

costs paid by the counterfeiters and their evasion of the excise


duties

make manufacturing

of

counterfeit beedis

an

attractive

proposition. The estimates of counterfeit beedis range as high as


30 to 50 percent 48 .

Thus, the efficient operation of the procurement and marketing


network by the central cooperative has also contributed immensely
to the general performance of the beedi cooperatives. In fact, it
is this
exert

it

success of
influence

the central cooperative which enables it


on

every

aspect

of

cooperative

to

functioning

including in the sphere of production which is under the purview of


the primary cooperatives. Thus,

primary cooperatives are morally

coerced to accept the directives of the central cooperative despite


their autonomous legal standing. Another factor, which enables the
central

cooperative

to

assert

its
273

supremacy

over

the

primary

cooperative, is its financial structure. We-will now discuss this


aspect of KDB and then sum up the discussions.

(iii) Financial Self Reliance of the Beedi Cooperatives

The

unfavourable

circumstances

of

the

origin

of

KDB

necessitated that the cooperative be wholly dependent on external


finances to fund its operations. The penury of the workers that led
to the origin of the Kerala Dinesh Beedi Cooperative is highlighted
by the fact that the workers were unable to finance a bare sum of
Rs 20 for purchase of one share capital to register as a member of
the primary cooperative. The state government
Rs

19

to each

workers

to

purchase one

contribution was restricted to a

provided a loan of

share

single rupee 49

and

the

workers

In

the

initial

years the finances required by the central and primary cooperative


were

almost

wholly

provided

by

the

state

government

and

the

District Cooperative Bank. The state government provided funds to


the tune of around Rs.22 lakhs to the cooperatives of which Rs.13.5
lakhs were its contribution to

the share capital of the

central

cooperative, Rs.7 lakhs were for working capital loan and Rs.1.9
lakhs was loan given to individual workers

through the

primary

cooperatives, to purchase one share of the primary cooperatives. In


addition the government also stood guarantee to a loan of Rs.20
lakhs from the Cannanore District Central Cooperative Bank.

Over the years


discontinued

its

the

Dinesh Beedi cooperatives have

dependency

on

outside

finances.

totally

Even

the

proportion of government investment in share capital of the Central


cooperative has decreased from 93 percent to 63 percent over the
274

years.

The

last loan

taken

from

a bank

was

in

Outside

197 9.

finances have been fully replaced by internally generated funds.


The accumulated thrift deposits of workers,

collected by primary

cooperatives by deducting five percent from the workers wages, are


the main source of internal finance. Originally, the thrift deposit
scheme was initiated to recoup the
primary

cooperative

members

for

loan of Rs 19 given

of

one

share.

But

to

the

the

scheme

continued even after the loan was repaid. The central cooperative
being the custodian of funds the finances raised under the thrift
deposit scheme are transferred to the central cooperative as also
all

the

other

surplus

accumulated

funds

by

the

primary

cooperatives. These form the main sources of working capital to the


cooperatives. To control finances and monitor expenditure and costs
incurred

by

the

primary

cooperatives

the

central

cooperative

rations out the finances needed for working capital of the primary
cooperatives

and

also

to

meet

any

investment

needs

of

fixed

capital. This strategy of the central cooperative ensures strict


financial

discipline

in

r.1ll

the

beedi

cooperatives and

it

has

prevented wasteful expenditures and the misuse of funds.

This strategy of financial management has proved to be very


effective in managing the resources and accumulating capital. Over
the years the workers not only repaid the entire loan amount but
also raised value of the share capital of the primary cooperatives
toRs 72 lakhs. The share of the member cooperatives in the paid up
capital of the central cooperative has increased from 63 percent in
1969 to 93 percent in 1992 50 Besides,

the thrift fund collected

by the primary cooperatives nearly amounted toRs 650 lakhs. Thus,


the primary cooperatives generate sufficient surplus funds enabling
275

the cooperative to be self sufficient even for its working capital


needs. At the time of its formation even the Central cooperative
did not have its own land or building. But today apart from own
central cooperative headquarters and warehouses all

the primary

cooperatives have there own land and buildings. The majority

of

the work sheds are also owned by the cooperatives. The book value
of the land and buildings owned by the cooperative exceeds Rs 500
lakhs51.

The

accumulation

of

physical

assets

has

been

entirely

financed by the surpluses generated by the cooperative.

Conclusion

The

Kerala

Dinesh

Beedi

cooperatives

have

been

success

story. It has ensured steady expansion of employment and earnings


for its members without compromising on its financial viability. A
major part of the surplus has been successfully accumulated so that
the cooperatives have an impressive network of fixed assets in work
sheds and other buildings and is fully self reliant for its working
funds.

It has grown to be one of the largest beedi manufactllring

firms

in

-India.

The

most

outstanding

aspect

of

the

beedi

cooperatives was the nature of its origin. Unlike in the handloom


and coir industries, the beedi cooperatives were not set up as a
part of the cooperative expansion schemes in the Five Year Plans.
The

beedi

originated

cooperatives
at

the

were

self

initiative

of

defence

the

intervention was restricted to that of


forward

to

provide

the

needed

cooperatives

workers.

The

that

governroent

a facilitator which came

assistance

to

the

cooperative

venture. The initiatives from below ensured that the cooperative


organisation came identified with the struggle to protect workers

276

interests. This resulted in active mass participation both in its


formation and functioning. The high level of worker participation
contributed to the enhancement of efficiency and productivity. Our
discussions in section 3 showed how the primary cooperatives were
motivated to constantly improve

efficiency.

The workers

in

the

cooperative were enthused to increase productivity by recourse to


peer group pressure and persuasion rather than through fines and
deductions as is done in private sector units. The efficiency in
production was a major factor in the financial success of the KDB
cooperative.

The experience of

the KDB also indicates the importance of

shelter organisations in promoting better cooperative functioning.


The

efficient

central

cooperative

plAyed

an

important

rolP.

in

ensuring cooperative success. The constant monitoring of production


parameters by the centra 1 cooper at i. ve allowed
point deficiencies
cooperatives. The

in

working and

innovn~ive

pull

financial

up

it to quickly pin

the

laggard

primary

structure resulted jn the

centralisation of available funds with the central cooperative and


ensured

strict

cooperatives.

The

control

over

expenditure

centralisation of

the

in

the purchase

and

primary
marketing

operations by the central cooperative enables it to reap economies


of scale. The general performance of the cooperative was also aided
by the buoyancy of the beedi industry.

The surprising aspect is that though the legal structure of


the

KDB

cooperatives

is

cooperatives in the state,

similar
the

to

the

other

industrial

KDB has been able to innovate a

distinct style of functioning of its own. The incorporation of the

277

trade unions in the management structure and in


functioning

has

been

the

prime

factor,

the

wo~~-floor

enab::d

which

the

cooperatives to coordinate the functioning of the various ?rimary


cooperatives and overcome the usual time horizon

limitatic~s

adversely

the

effect

the _accum11lation

process

in

suc=:ssfull
~orkers

cooperatives. The role of trade union solidarity with the


in the cooperative was an important factor that

that

contributa~

to the

success of the initial marketing effort.

Despite

the

successful

performance

so

far

thE

beedi

cooperatives are facing severe competition from low-prices beedis


both from inside and outside
been

deceleration

in

the state.

the

demand

Further,

for

beedis

~~s

there

also

~ue

both

to

substitution of cigarettes and also due to increasing ave"3ion to


tobacco products due to

heightened health

awareness.

Tr~

beedi

market seems to be stagnating if not declining in recenr years.


Diversification of

the beedi cooperatives

into other

pr~~uction

sectors is necessary to meet the emerging situation. It ren3ins to


be

seen

how

effectively

will

KDB

challenges!

278

cooperatives

face

~~e

new

Notes and References


1.

Though total employment in the Indian beedi industry is


estimated t6 be between 16 to 50 lakhs, there are only a few
beedi cooperatives, scattered across the other major beedi
producing states, employing at most a couple of thousand
workers. For further details see Panikkar G K (1986).

2.

In 1951 there were 28834 beedi workers in the state of which


16268 were in Travancore Cochin and 12566 were in Malabar with
Cannanore accounting for 12566 workers. By 1961 the total
number of beedi workers in the state had increased to 64311
and that of the different regions mentioned above to 22369,
59033 and 40378 respect1vely. For details see Pyaralal
Raghavan (1986), p.47.
Table 1 Growth of Beedi Employment; 1961-81

IArea
I

1961

IPersons
I 64311
Kerala
Cannanore I 18501
I 8502
Calicut
Mallapuram
8171
Palghat
4781
Trichur
6339
Ernakulam
Idduki
Kottayam
3778
Alleppey
5125
Quilon
5593
Trivandrum
3521

I
I

Male

1981
jremale

\Persons IMnle

62959
17780
837.1

I
I
I
I

13h1
721
17.9

7930
4567
6318

241
214
21

3774
5121
5586
3510

1119000
I 71309
I 27on
5815
8555
11060
.1162
672
2223
4259
I 6509
3597

I
I

4
4
7
11

I
I
I

77760
39890
2560
5224
7830
3264
2813
658
2219
4185
6443
3547

jremale

I
I

412401
31419
1461
5911
725
7796 I
349
14
4
74
66
50

Source: Government of India, Census of India, 1961, Vol VII Kerala Part
II-B (i) General Econor.ic Tnbles, Table BI to B IV, Superintendent of
Census, Kerala, 1965 and Government of India, Census of India, 1981 Series
10 Kerala Part-III "A & B li)
General Economic Tables, Table B-17,
Director of Census Operation, Kerala
1

3.

Pyara lal RaghavA.n ( 19 8 6) . Chapters 2 & 3.

4.

See the Hathrubhumi dated 30.5.1934


19.11.1946.

5.

Kannan C (1984)

6.

Pyaralal Raghavan (op.cit.)

7.

ibid., p.22.

8.

See the Mathrubhumi dated 30.5.1934 and 28.6.1934.

9.

The Tellicherry Beedi Workers Union (1984), p.18.

28.6.1934, 19.12.1937 and

p.44.
1

279

p.?.3.

10.

Government of Madras (1947).

11.

See Mathrubhumi

12.

See Mathrubhumi dated 30.11.1937.

13.

Right from the very inception of the beedi trade union a night
school and library functioned at the union office premises.
For this and details of the strike demand see the Mathrubhumi
dated 7.9.1934, 3.9.1934, 23.5.1937, 25.8.1937 a~d 30.11.1937.

14.

The most prominent among them include the Late Azhikkoddan


Raghavan who was one of the front ranking communist party
leaders in the sixties, C Kannan the State President of the
CITU the largest trade union in Kerala.

15.

For
further
details
see
Mathrubhumi
dated
23.4.1946,
12.11.1946,
18.6.1946,
9.10.1946,
22.10.1946,
7.11.1946,
19.11.1946 and 24.11.1946.

16.

See Mathrubhumi dated 5.5.1952.

17.

Government of Kerala 11958), p.31.

18.

Tobacco Workers Union, CITU

19.

See Mathrubhumi dated 19.12.1937.

20.

Andalat (1978), p.439.

21.

Government of Kerala (1958), p.16.

22.

Subramaniam M (1965)

23.

Interview with Sri Kunhiraman,


worker director
Cannanore Beedi Workers Cooperative on 9.6.1993.

24.

Subramani~m

25.

Pyaralal Raghavan (op.cit.), p.58.

26.

Government of Mysore

27.

Pyaralal Raghavan lop.cit.), p.59.

28.

See Mathrubhumi dated 30.9.1968 and 30.10.1968.

29.

See Mathrubhumi dated 3.11.1968.

30.

See Mathrubhumi dated 21.10.1968, 17.11.1968 and 13.11.1968.

31.

See Mathrubhumi dated 11.12.1968, 17.12.1968/


24.12.1968/ 28.12.1968 and 11.1.1969.

32.

Kerala Dinesh Beedi


(undated) r p.1.

dated 4.11.1934.

~annanore

(1984)

p.28.

p.33.
of

the

M (op.cit.), p.32.

(1973), p.222.

Workers

280

Central

23.1/..1968/

Cooperative

Society

33.

See Kerala Dinesh Beedi Workers Central Cooperative Society,


Annual Report, 1991-92 and 1992-93

34.

In the period 1985-86 to 1991-92 the emoluments paid to


administrative staff
increased from
Rs.45.67
lakhs
to
Rs .111. 64 lakhs. This is proportionate to the increase in
emoluments paid to the production workers whose total
emoluments increased from Rs .1596 lakhs to Rs. 3270 lakhs
during the same period. For further details see Kerala Dinesh
Beedi Workers Central Cooperative Society, Annual Reoort,
1985-86 and 1991-92

35.

The information available for 1985 shows that while minimum


wage rate in Kerala was Rs 15 per 1000 beedis the Karnataka
minimum wage was only between Rs 8 to Rs 10. The differences
continue to persist even today. For details see Halayala
Manorama, dated 13.6.1985.

36.

Table 2
in 1993

Production Cost of Thousand Beedi's 1n Chala Primary

Component

Amount

Wage Cost
Holiday wages
Bonus
Provident fund, Gratuity,
Medical, Maternity etc
Managerial salaries etc
Excise duty
Raw material costs
Other costs
Total Production cost

Rs 29.51
Rs 8.43
Rs 6.10

Source: Calculated
Cooperative

from

I
data

Rs 6.08
Rs 1.11
Rs 4.90
Rs 19.12
Rs
.65
Rs 75.93
furnished

by

Chala

Primary

37.

Data furnished by the Secretary, Kerala Dinesh Beedi WorkArs


Central Cooperative Society.

38.

Pyaralal Raghavan (op.cit.), pp.92-93.

39.

See Kerala Dinesh Beedi Workers Central Cooperative Society,


Annual Reoort, 1987-88.

40.

Pyaralal Raghavan (op.cit.), p.104.

41.

Unlike the usual experiences in most cooperatives even


opposing unions does not accuse the management of
cooperative of any corrupt practices.

42.

The central cooperative had faced a unique challenge in the


history of the beedi industry right on the first day of the
inception of cooperative production. Though there are large
beedi firm~ which claims production of crores of beedis on a

281

the
the

single day, ~ither directly or indirectly through middLemen,


a historical investigation of the origin of all these beedi
firms, either big or small, will show that all of them started
marketing particular beedi brands in minuscule amounts by
starting off with one to five workers. All these firms were
enabled to grow only in the long run by recruiting new workers
as they improved their marketing network and created a ~arket
for their particular brand name.
43.

Interviews conducted-with Radhakrishnan, first secretary of


the Central cooperative on 10.6.1993, K P Sahadevan, present
secretary of the Cannanore Tobacco Workers Union on 9.5.1993
and Panniyan Bhara than and Pookodan Chandran, both :ormer
directors of the Central Cooperative on 9.6.1993 and 8.6.1993

44.

Panikkar G K (undated), p.10.

45.

See Kerala Dinesh Beedi Workers Central Cooperative Society,


Annual Report, 1990-91 and 1991-92.

46.

See Kerala Dinesh Beedi Workers Central Cooperative Sccjety,


Annual Reports, 1991-92 and 1992-93.

47.

See Kerala Dinesh Beedi Workers Central Cooperative Scciety,


Annual Report, 1991-92.

48.

Interview with Pavithran a worker director of Kerala :inPsh


Beedi Workers Central Cooperative Society, on 12.6.19?2.

49.

Panikkar G K (op.cit.l, p.S.

50.

See Kerala Dinesh Beedi Workers Central Cooperative Sc=iety,


Annual Report, 1968-69 and 1991-92.

51.

Details furnished by the Secretary,


Workers Central Cooperative Society.

282

Kerala

Dinesh

3eedi