A study conducted by IRMA


"Nothing, arguably, is as important today in the political economy of development as an adequate recognition of political, economic, and social participation and leadership of women" (AmartyaSen, 1999).

Women and public policy in India a retrospect

Women are vital and productive agents in Indian economy, however their role has mostly remained under curtains and their development top-down (Anand, 2002; Mazumdar and Guruswamy, 2006). The jargons used in the public policy research in the last decade of 20th centaury highlighting the hidden role of women in Indian economy are 'statistical purdah' (World Bank, 1991) or 'economic invisibility' (Devi, 1990). These manifest the selective under-documentation of their endeavor, in a society with strong traits of patriarchal norms (Mazumdar and Guruswamy, 2006).

It is unfair to say that thedevelopment of women was not on national policy agenda of India, but they didn't get things quite well for a long period of time like most of the other developing countries. The welfare approach of 1950s and 1960s emphasized on women development, but it saw them as passive recipients rather than active participants in the development process. The 1970s Women in Development (WID) approach recognized the limitation of welfare approach and developed a number of alternative approaches based on equity, poverty alleviation, efficiency and empowerment. But if got into complexities since its inception in the form of lack of standards against which success could be measured and political hostility from various development agencies (USAID, 1978). A tuned-down version of equity under WID was enacted in 1970s called anti-poverty approach. It focused on women's productive role through access to employment and income-generating resources in order to alleviate poverty and promote balanced economic growth. While it augmented the income of large number of women, it didn't led greater autonomy and in various cases burdened women with extended working hours. After all this experimentation the empowerment approach emerged in late 1990s with the aim of empowering women through greater self-reliance and internal strength (Anand, 2002). While recognizing the triple role of women, it aimed to raise women's consciousness to challenge their subordination. One of the means to achieve this was through bottom-up women's organizations. The Swarnajayanti Gram Swarozgar Yojana (SGSY) in 1999created a platform for nurturing these bottom-up women organization by their collectivization into Self Help Groups (SHGs) (Ibid, 2002). After running for more than a decade while the policy was brought substantial changes in the socio-economic status of women, it has remained to give collectivization and business sustainability to a large number of SHGs (Reddy and Reddy, 2012).

Challenges to economic development of women in Kerala

Unlike most of the other parts of India the situation of women in Kerala has been somewhat different. It is caught in an interesting paradox of social advancement and economic stagnation (Mazumdar and Guruswamy, 2006). It has carved out as a separate niche in development discourse due to impressive performance over the years in the demographic and social development front such as female literacy, matrilineal inheritance customs, decentralized governance, high levels of life expectancy, low infant mortality and cohesive social structure promoting effective interpersonal channels of communication (Mazumdar and Guruswamy, 2006; Suchitra, 2005; Bhatt and Rajan: 1990; Kannan: 1990; Kumar: 1994). These social outcomes became what is called as 'Kerala-Model' of development. However unlike most of the countries that experienced such trends, in Kerala this social development didn't show corresponding impacts on economic sphere of women (Suchitra, 2004). Their participation in the labor force remained consistently low and declining (Mazumdar and Guruswamy, 2006). The influences of family structure, family composition and family characteristics on young women employment are few endogenous restrictive factors (Ibid, 2006; Panda, 1996). The transitory forces that were set in motion with structural changes in Indian economy (NER of 1991) are major exogenous factors thathad profound implications for participation in economic activities (Mazumdar and Guruswamy, 2006). Changes in the cropping pattern and fall in international price of coconut, rubber, tea and coffeeremarkably displaced a large number of women workforce from agriculture mainly in rural areas (Ibid, 2006; Suchitra, 2004). All the northern Malabar districts witnessed higher fall in female work participation rate compared to southern districts (Mazumdar and Guruswamy, 2006). The manufacturing industries both households based and others have been largely stagnant. The tertiary sector with its only growth being service sector has not been able to absorb the entire redundant labor that lost jobs in the primary and secondary sector (Kumar (1994). One of the main issues with women in particular was mismatch between labor demand and supply due to technological obsolescence (Kannan: 1998).

Emergence of SHGs and economic empowerment of women in Kerala

While the micro-finance was a key strategy for poverty alleviation and women empowerment in Kerala from mid-eighties, adopted by various organizations (Anand, 2002). The 1990s saw a new era of micro-finance in the state with the forerunners role of NGOs such as Community Development Society – a model women groups in Alappuzha and setting up of Kudumbasree – the poverty eradication program of the State Government.1The enactment of SGSY in the beginning of 21st century with special emphasis on women gave this movement an institutional shape with the availability of large-scale administrative and financial support.

1Kudumbashree was conceived as a joint program of the Government of Kerala and NABARD implemented through Community Development Societies (CDSs) of poor women serving as the community wing of local governments. Kudumbashree is formally registered as the State Poverty Eradication Mission (SPEM), a society registered under the Travancore Kochi Literary, Scientific and Charitable Societies Act 1955. It has a governing body chaired by the State Minister of LSG. There is a state mission with a field officer in each district. This official structure supports and facilitates the activities of the community network across the state. Kudumbashree differs from conventional programmes in that it perceives poverty not just as the deprivation of money, but also as the deprivation of basic rights. The poor need to find a collective voice to help claim these rights.The grassroots of Kudumbashree are Neighbourhood Groups (NHG) that send representatives to the ward level Area Development Societies (ADS). The ADS sends its representatives to the Community Development Society (CDS), which completes the unique three-tier structure of Kudumbashree. Today, there are 2.58 lakhs NHGs, over 19,700 ADSs and 1072 CDSs in Kudumbashree. It is this network that brings women to the GramaSabhas and helps them bring the needs of the poor to the attention of the local governments. The Community Development Societies are also very active in Government programmes and play significant roles in development activities ranging from socio-economic surveys and enterprise development to community management and social audit. Though its efforts to engage women in civil society in development issues and opportunities, Kudumbashree in association with the local self government of Kerala is charting out new meaning and possibilities for local economic development and citizen centric governance.

By 2002 it was found that about 98 percent of the SHGs in Kerala were women groups and in the rest of 20 percent there are also some mixed groups of men and women (Anand, 2002). This movement was very strong in the Perambra block where 700 out of total 900 SHGs (covering over 12,000 BPL families) were women groups (Das et al., 2002).

While these SHGs changed the lives of many women in the state in the form of savings, availability of informal banking at the doorstep, and freedom from moneylenders, they didn't emerge as a panacea for all the ills of the rural community and economy (Ibid, 2002). The non-availability of incentives to group leaders resulted in lack of interest and gradual decline in the group efficiency. In addition there were widespread issues of lack of transparency, autocratic style of leadership and failure of group enterprises with the result being financial imbalances and difficulty in loan repayment. Moreover, none of the voluntary agencies were found making efforts to develop a second line ofleadership (Anand, 2002).

Emergence of SUBICSHA to address SHGs problems

It is in the backdrop of these problems that Perambra block panchayat initiated 'Good Coconut Program' in 2000 under the leadership of Mr. Kunnahmad to involve SHGs in value addition process of coconut products in order to strengthen their business, bring better income thereby lead to women empowerment. The program was successful but inadequate to reach the large number of SHGs and convert all the coconut raw material into products. Therefore a feasibility study was conducted with the support of IIM Kozhikode entitled – SUBICSHA to extend the coverage of programand explore the possibilities of additional business ventures (Das, et al., 2002). The proposal was accepted by the Ministry of Rural Development under special SGSY project with 14.6 crore budget in 2002 (Ibid, 2002). The implemented took place in 2003 with its extension to 700 SHGs. Again the business development process was successful, but due to large number of Home Based Production Centres (HBPCs) the business was fragmented and suffered from lack of standardization in production, packing and marketing. Transferring the federation of 700 SHGs into a larger business collective was decided as a step forward by BP and DRDA. Out of the four collectivization models viz. private company, trust, cooperative and producer company, the latter was found to be more appropriate model to address the problems of lack of standardization and business sustainability of these SHGs. This resulted in transformation of SUBICSHA project into SUBICSHA PC in 2005 with initial membership of 5000 women from 522 groups.

Since the PC has completed 10 years there is scarcity of evidence about its growth, functioning and empowerment impact on women. This paper is addressing this knowledge gap by using a case study approach with mixed methods instruments of data collection in order to capture all the relevant information and data from various stakeholders. The instruments used are interview schedule, in-depth interviews and Fuzzy Cognitive Mapping and the stakeholders interacted are chairman, BoD, Managers, CEO, accountant, other staff and members of the PC. In addition, a thorough review of organizational documents was also done. The rest of the paper explains the outcomes of the study through nine broader sections – overview, geo-economics and political ecosystem, institutional design, access to financial services, legal and regulatory framework, value chain process, challenges, impact of PC on its members, and conclusion.


The genesis of SUBICSHA PCare in the micro-credit and SHG movement which started in Kerala in 1980s and took an institutional shape with the enactment of SGSY in 1999, a predecessor of all the earlier self-employment programs in India. The first phase of pre-promotion process was between 2000 to 2002, when PerambraBP under the presidency of Mr. Kunnahmad started coconut value addition process to give sustainable business to women SHGs in the Block. 'Good Coconut Program' was started with one coconut drier having capacity of 1000 coconuts per day, with the involvement of one SHG group having membership of 10 women.Before the initiation of this program SHGs existed in the block but they were involved only in primary credit activities (Das, et al., 2002). After one year BP found it very provoking model and distributed Rs. 5000 as working capital to 50 women SHGs in the same business. Groups were taking copra and selling it directly in the market. While the business was going well and was profitable the BP realized that there are many other related products that were getting wasted such as shell and coconut water. To make holistic use of coconut produced in the block, the BP thought of launching a large-scale intervention. The idea was discussed with a team of two faculty members of IIM Kozhikode Prof. Mukunda Das and Dr. Saji Gopinath in 2002. The team suggested about conducting a baseline feasibility survey and presenting proposal before the government for funding. The study was conducted in 2002 and the proposal was prepared entitled 'Special Project for Sustainable Business Development of Innovative Coconut Based Micro-enterprises for Holistic Growth and Poverty Alleviation' (SUBICSHA). The aim of the project was to augment the livelihood of 7,000 families organized in 700 women SHGs in 68 wards of the seven gram panchayats of Perambra block within three years by developing 43 value added products from coconut (Das et al., 2002; Govin, 2015). The enterprises were also expected to help the coconut farmer of the areas with price increase in coconut by 60-70 percent (Das et al., 2002). The detailed project report was submitted to the Government of India in 2002. The project was approved in 2002 under the SGSY innovative projects with outlay of 14.26crore for 3 years (Ibid, 2015). For the establishment of 523 enterprises Rs 796 lakhs, creating a set of common production centers Rs. 301 lakhs, marketing and administrative infrastructure Rs. 170 lakhs, and training cost 159 lakhs. Rs. 605 lakhs were sought from SGSY special project, Rs. 201 matching grant from state government, Rs. 249 from local government support (block and gram panchayat) and the rest amount from Coconut Technology Mission, SGSY normal program, Coconut Board, Coir Board and NGOs (Das, et, al., 2002).

Before the implementation of the project the DRDA and BP organized awareness and mobilization camps and meetings during early 2003 within SHG groups, communities, local politicians and various related administrative department regarding the project and its implementation process. In addition the project was discussed in length withlocal banksthat were sought to provide credit of Rs. 681 lakh to SHGs (Das et al., 2002).

The project was formally inaugurated by the then Honorable Minister of Rural Development of Kerala Mr. C. F. Thomas on October 31st 2003. This was also the beginning of the second phase of pre-promotion process, which ended up in 2005. During this period various activities started talking place in parallel to each other. First, after the awareness generation 700 SHGs of the block joined the programwho were federated under one federation. While most of these SGHs were old, established by Kudumbashree, somewere newly formed under SUBICSHA. The number of business activities suggested in feasibility study were presented before groups. All the groups selected one business activity as per their choice.Second, the government transferred three existing Copra Dryer units in Perambra block panchayat (Cheruvannur, Nochad, and Kayanna) to SUBICSHA as a part of women development program. In addition, with the financial assistance from SUBICSHAconstruction of Virgin Coconut Oil Production Unitsstarted taking place in 5 of the 7 panchayats in Perambra Block.Third, the process oftechnical, soft skill, marketing, management and skill development trainings to SHG members also started. For the leadership development of SHGs,training of trainers (TOT) was done. A group of women from SHGs called 'Preraks' were trained to organize and mobilize SHGs. Another group of 10 womennamely 'Resource Counsellors' were trained to impart leadership, livelihood skill, management and technology trainings to members in various business ventures. The soft skill trainings were given for about 3 days to one week and the business and technology trainings were give for about 25 days. The institutions that were involved in giving soft skill and technology trainings to TOTs are CFTRI Mysore, NIT Calicut, CDB Cochin, NIRD Hyderabad, SIRD Kerala and CPCRI Kasaragod.

Fifth, all SHGs were graded and creditdisbursement started taking place to mature SHGs by the end of 2003. Out of the total project cost Rs. 200 lakh were allocated for grant to working capital of SHGs to start their micro-enterprises. Even though up to 50 percent assistance is available under the scheme guidelines, the project gave only 25 percent of the total cost of starting the enterprise (Das, et al., 2002). All SHGs also had their own nominal savings that in total amounted for Rs. 70 lakh when project was started (Ibid, 2002). Sixth, SHGs who received credit started their business units through HBPC model in which a group of 10-15 women were working together at one place. This was followed by SUBICSHA's first entry into the market. The marketing strategy was selling through same SHG members to local communities and local shops. The products that were prepared and sold by SHGs are coconut oil, virgin coconut oil, pickle and soap.

In mid 2004 when project was coming to an end, the DRDA, BP, and IIM Kozhikode team realized that the production is going well but there are problems of fragmentation, lack of standardization in raw material, production, quality, packaging and marketing and issues of lack of sustainability in groups business. In addition, the production capacity is limited especially at special occasions and it is difficult and very expensive to provide machinery at HBPC level. While the federation of SHGs was already in place from 2003, it was not able to overcome these challenges. Therefore theneed was felt to unify these production activities by establish a centralized platform forprocurement, processing, packing and marketing. While the feasibility study had suggested registration of a society to look after the post-project implementation process, it was found to be an inadequate institutional framework. Three other institutional designs were discussed in length - Trust, Cooperative and Company.According to the chairman the trust was found having technical problems with doing business, cooperative was found to be too political, and the company was constrained by share limit of 80 and shares could be sold to anyone outside the company. Considering the socio-economic condition and livelihoods needs of these SHGs forth institutional design - Producer Company was found to be more appropriate. Therefore the federation was registered asSUBICSHA Coconut Producer Company Ltd in April 2005 and was appointed by the government as an implementation arm of SUBICSHA with an agreement between the BP and SUBICSHA PC.This became the first PC of poor women in India, with initial authorized share capital of ten lakh from 10 SHGs, at equity share of Rs. 10. The main objective as per MoA of the PC is to carry on the business of producing, procuring, pooling, handing, packaging, manufacturing, marketing, purchasing, importing, exporting, developing and dealing in coconut, coconut based, coconut tree based goods, products and articles from members.

With the registration as a PC in 2005, the role of SUBICSHA also changed from pre-promotion to promotion and it started helping PC in its start-up. The BOD was nominated and a series of trainings and awareness camps were organized for SHGs about the PC, its functioning, benefits to members and the role of members in PC. After these workshops out of 700 SHGs, 522 joined PC as shareholders. The total strength of these SHGs was 6000 members.In order to give an institutional shape to procurement, processing, packing, branding and marketing, the PC realized that HBPC modelis unsystematic and unsustainability. Therefore a shift was made towardsCommon Production Center (CPC) model. This plan was little different from the plan suggested in the feasibility study. The initial plan in the feasibility study was to establish 500 odd HBPCs (micro-enterprises) and 7 CPCs for the use of these micro-enterprises for drying, packing and expelling oil. In addition establishing an administrative building, and a testing center (Das, et al., 2002).

The transition to this model was smooth because by this time two oil extraction units were completed one in Cheruvannur and the other in Nochad, and Virgin Coconut Oil units in other panchayats were also ready with the technical guidance from Coconut Pacific (an Australian company) and Rubber Co-operative Ltd (RUBCO). To supplement its working capital the PC mobilized Rs. 24 lakh as unsecured loan from those SHGs who has paid back their group loan to banks and had savings from group business activities. The rule for unsecured loan from member was that any group can take it back anytime in future with a fixed interest rate of 14 percent.

To run the production centers the PC hired experienced group members from SHGs, and gave them further trainings in procurement, processing, packing, labeling, marketing and sale of products at the CPCs. The PC started with the processing and value addition of coconut oil (cooking oil)and virgin coconut oil (hair oil). The procurement of raw material at this time was done from the shareholders of the PC using PC's vehicle.

The SUBICSHA project was supposed to finish by the end of 2005, but it was extended to two more years due to non-completion of targets. As a result PC's promotional support also got extended by two years. In the beginning of 2006 the PC received branding license and in the mid 2006 the PC entered into the market for the first time under the brand name of SUBICSHA. Since the CPCs were limited in number they were not able to employall shareholders, therefore, a lot of HBPCs continued to function in parallel to CPCs. While the productionprocess was decentralized (HBPC and CPCs), the packing, branding and marketing was centralized under the brand name of SUBICSHA. Initially the HBPCs were manufacturing soap, coir, pickle and shell-based products and the common production centers were producing coconut oil and virgin coconut oil.

The promotional support finished in 2008 with the winding of SUBICSHA project. There are confusions about the total amount of money spend on the projectwhile the governance and management reports of PC say 6.5 crores, a recent audit report of the project by Local Fund Audit Department says that 10.85 crore were spend on the project (Govind, 2015). By this time all the SHGs had paid their loan back to banksthrough their business activities and according to the SHG members all groups had savings ranging from about 50 thousand to 1 lakh. The number of CPCshad reached to 7 in seven panchayats.The PC was given the usage rights of assets created under the project, but their ownership continued to be in the hands of government through BP. By 2008 the total membership of the PC was 5000 BPL women from 522 SHGs. While the business of PC had reached to Rs. 94.3 thousand, it had not made any profit, in factexperienced a huge loss of Rs. 4.19 lakh(Figure, 4). According to the chairman reasons for overall loss up to this time were lot of experimentation with procurement, products manufacturing, price and marketing technology. In 2008 it got further affected due towithdrawal ofDRDA support. The PC had to pay for the installation machinery in one of its largest production center (10 ton copra processing capacity daily) in Perambra. This center was completed by DRDA fund in 2008 but had no operating machinery on which PC had to make its own investment.

Year 2009 was the first year of independent functioning of the PC. The PC needed more capital to invest in its operations and administration. However, instead of approaching to banks for loan, it took unsecured loan from more SHG groups with total amount reaching to 84 lakhs (Figure, 5).While the PC continued to be in loss compared to 2008 the loss was much lesser Rs. 19.5 thousand compared to 2008.By 2011 the PC commissioned all the production centers with machinery and started mass production of coconut related products. In addition it also got involved in the processing of fruit pickle, coriander powder, chutney, and chili powder. For packaging it also got a grant of Rs. 10 lakh and technical training from NABARD.This resulted in increase in business and more importantly the PC for the first time had net profit of Rs. 2.12 lakh(Figure, 4). After 2006 this was the second time that PC was awarded with Best Co-Operative SocietyAward by Ministry of Agriculture, Govt. of India. Up to this time the demand was less – about 3 tones coconut a day. This demand was met through procurement from members. With increased production there was more demand for raw material as a result the PC stopped sending its vehicle for procurement from members and started about 90 percent of its procurement as bulk purchase from local dealers. According to the chairman due to this increased demand the PC also became the biggest coconut procurement agency in the area.

After 2003, 2012 was the second and 2013 third time when Perambra Block Panchayat received Swaraj Trophy Award form the Government of Kerala. According to the chairman the main reasons for receiving this award wereachievements of SUBICSHA PC in the block.

Presently the PC is at the expansion stage. It has adopted first phase of expansion in 2014 by incorporating 66 new SHG shareholders. This has resulted in membership increase from 5000 to 6000 members. As of November 2015 it has 7CPCs, 200 HBPC, 200 marketing units, and a vehicles. Members from about 470 groups are involved in production activities and from about 52 groups are involved in marketing and sale. Its largest production center is in Perambra with daily processing capacity of 10 tons of copra. It has gained a huge reputation in the state and is well known as a manufacturer, trader and supplier of 30 premium quality assortment of Virgin Coconut Oil, Coconut Pickle, Natural Vinegar, Chutney Powder, Hair Care, Mango Pickle, Lemon Pickle, Turmeric Sandal Soap, Gooseberry Pickle, Garlic Pickle, Coconut jam, Coconut Splash and Skin Care Oil.

The PC is planning for its 2nd phase of expansion to fruits and spices under the name of SUBICSHA-II. In 2014 it has signed MoU with Spice Board to establish a spice production unit. The other plan is to establish a seasonal plant for mango and jackfruit processing. It is also aiming for annual turnover of Rs 25 crore.

Table - 1 Evolution of SUBICSHA PC
Year Activities/Initiatives
1980s Initiation of SHG movement in Kerala.
1998 Establishment of Kudumbashree community network (Present strength:2.58 lakhs NHGs (SHGs), over 19,700 ADSs and 1072 CDSs.).
2000 Enactment of Swarnajayanti Gram Swarozgar Yojana(SGSY).
Pre-promotion (Phase-I)
2000 Perambra Block Panchayat (BP) under the Presidency of Mr. M Muhammad Master started 'Good Coconut Program'.
2001 Realization of need to use all the coconut related raw material and transform it into marketable products through value addition.
2002 Constitution of need assessment and feasibility study team under the aegis of Indian Institute of Management (IIM) Kozhikode.
2002 Study conducted by IIM Kozhikode.
2002 Submission of detailed project report to Ministry of Rural Development Govt. of India.
2002 Project approved with outlay of 14.6 crore as a special status under SGSY.
Pre-promotion (Phase-II)
2003 Awareness programs to SHGs, political and administrative institutions regarding project.
2003 Mobilization of 700 SHGs mostly from Kudumbshree and some newly established.
2003 Each SHG selected one business activity from the list recommended in feasibility report.
2003 Oct 2003, inauguration of the project by the then Honorable Minister of Rural Development Mr. C.F. Thomas.
2003 Initiation of soft skill and technology trainings.
2003 First phase of grading of SHG groups.
2003 Disbursement of grant from SUBICSHA project for infrastructural development.
2003 Credit from banks to the mature SHGs to start and expand business ventures.
2003 SHGs started home-based production centers (HBPS).
2003 Entry of SUBICSHA SGSY units into the local market.
2003 Started process of setting up of Virgin Coconut Oil Production Units in 5 of the 7 Panchayats under Perambra Block.
2003 Transformation of three earlier established Copra Dryer units in Perambra Block Panchayat (Cheruvannur, Nochad, and Kayanna) to SUBICSHA as a part of women development program.
2003 Registration of SHG group members under group insurance scheme of the govt. of India.
2004 Completion of 2 oil production units atCheruvannur and Nochad.
2005 Completion of Virgin Coconut Oil units with technical guidance from Coconut Pacific, an Australian company and collaborative support from RUBCO.
2005 BP and DRDA decided to register SHGs federation as a PC.
Promotion and start-up of PC
2005 Registration of SUBICSHA PC.
2005 Nomination of first BOD and Chairman.
2005 Training programs to SHGs regarding PC, its functioning, risks and benefits.
2005 522 SHGs joined SUHICSHA PC with membership of 5000 women.
2005 6 Production centers were complete.
2005 Move from HBPC to CPCs.
2005 SHGs started paying their loan back to the banks.
2005 SUBICSHA PC started taking unsecured loan from SHG members.
2006 Establishment of a full-fledged laboratory with the support of CDB.
2006 Adoption of Sophisticated methods in production modernization of packaging systems with the help of Rs. 10 lakh financial assistance and training from NABARD.
2006 SUBICSHA PC entered into market with brand name of SUBICSHA.
2006 Establishment of marketing outlet in Kozhikode city and 3 small outlets in other parts.
2008 Winding of DRDA project.
2008 All SHGs paid their loan back to the banks.
Independent Functioning (Growth and Expansion)
2010 Election of Second BoD and chairman with no changes.
2010 Brought the installation machinery for its largest coconut production center in Perambra from its own money.
2011 Completion of commissioning of machines and equipment, and starting of mass production of coconut oil.
2011 SUBICSHA made its first profit of Rs. 2.12 lakh.
2014 Incorporation of 66 new SHGs, with total new membership being 7000 members under 470 groups.
2006 & 11 Received best Co-operative society awarded from the Ministry of Agriculture, Govt. of India, under the aegis of CDB for its excellent performance.
2003, 12 & 13 Perambra Block Panchayat received Swaraj Trophy award from the govt. of Keralawith main reason being SUBICSHA PC.


Perambrais one of the 12 block panchayats of Kozhikode district located in North Malabar region of Kerala State with an overall area of 275.02 sq. km. The block is hilly in nature and is spread across seven Gram Panchayats – Changaroth, Cheruvannur, Kayanna, Koothali, Chakkittapara, Nochad and Perambra.The total population of the block is 1.47 lakh, spread across 28260 households with around 70 percent BPL and 12 percent SC/ST (slightly above the Kerala Average of 11 percent) (Das et al., 2002).2 Before the establishment of the PC the large as well medium scale industries were virtually absent in this block and agriculture has been the predominant occupation. The coconut has been the main agricultural crop in the area, with rubber and pepper being cultivated in limited quantity. Out of the total area of 275 sq km about 95.33 sq km is planted with coconut, with average yield of 6083 kg/ ha being higher than Kerala average of of 5888 kg/ha (Ibid, 2001).

In the district as whole the coconut production is spread across127402 ha of land with an average annual production of more than 888 million tones (Table, 1).3Because of being the main agriculture crop majority of the district workforce is directly and indirectly deriving livelihood from it. The average factor size in the state of Kerala is 0.24 hec. compared to 1.33 ha of national average, which means that majority of the farmers in the state are marginal holders. Due to marginal factor size and unsatisfactory returns from cultivations due to recession in the primary sector and incidence of root wilt and miteand limited employment opportunities in the non-farm sector there has been a continuous rise in the livelihood crisis in the rural areas of the state (Anand and Maskara, nd; Das et al., 2002). As mentioned earlier also that the women in particular have been the most hit victims of these crises due to lack of skill and other sociocultural constraints.

The SUBICSHA PC is spread across all the seven panchayats of the Perambra block. Since coconut is the main crop in the area and coconut based products have higher demand in the local market, the PC is well fitted within the local economy and market demand, because its major thrust area is making holistic use of coconut and provision of premium quality assortmentthrough value addition. The estimates of the feasibility study were that out of 19.06 lakh yielding tress with an average yield of 50 nuts@1 tree per year the total coconut availability will be 9.533 crore. With 50 percent of domestic consumption the surplus of 58 million is available for enterprises, which as per the study was sufficient to generate sales revenue of Rs. 43.74 crore and surplus of Rs. 16.68 crore. And out of the total production 80 percent of the essentials such as oil and soap will be marketed through local demand and the rest by adjacent and out of state markets. As per the approximate estimates the PC is producing about 0.5013 million coconut on yearly basis and selling about 90 percent of its products in local and state markets (70% local, 20% state and 10% outside state).4According to the CEO the coconut and coconut products constitutes about 95 percent of SUBICSHA PC’s business.5 The rest of business is related to the fruit products such as pickle and coir mat.As far as the difference in the value proposition is concerned the establishment of PChas resulted in better price realization of coconut in the area which benefited both member and non-member farmers. When PC started procuring coconut in 2006 it gave about 10 to 20 percenthigher price to farmers compared to external market agents.It’s takeover and emergence as the largest procurement agency in the area in around 2011exerted pressure on external market, therefore resulted in overall increase and standardization of coconut price. Now the PC pays 10 percent premium on daily market price to the farmers who sell their produce to the PC. However, there is no difference in the value proposition to members and non-members in procurement business.

From the livelihood security point of view the PC is targeting the most vulnerable groups of society in the block i.e., women. Although the PC’s bylaws don’t restrict its membership on the basis of gender,in practice it is exclusively of women SHG members, with the exception of chairman. The chairman (Mr. Kunnahmad) is the founder of the PC that is why he is the only male shareholder in the PC. He started the initial collectivization experiment in 2000 when he was block president. He also played an important role in getting the need assessment study done, implementation of SUBICSHA project and its transformation into SUBICSHA PC. Being the block president from last 15 years, and active member in the block and PC, he has been continuously nominated as chairman during the last two elections. Similarly, when we look at the landownership, majority of these shareholders come from marginal holding HHs (having ownership between 10 to 15 cent= - 0.10to 0.15 acres). In addition, there is also heterogenic as far as caste and religion backgrounds are concerned at all stages of PC from membership to daily wage workers in production centers, regular office employees, directors, and chairman.

In brining these women together in one collective and taking them on the path of sustainable business, the local and state level organizational and political ecosystem has played an important role. First,the BP, which is a community organization as wella politically inclined institutional system took the initial step towards the formation of this PC in 2000 under the leadership of block president Mr. Kunhammad. Mr. Kunhammad a school teacher by profession is also one of the most influential politician leader in the block since last 20 years. He is affiliated with the Communist Party of India (CPI) and has won the last three-block president election. As mentioned earlier that because of being the founder of SUBICSHA and politically affluent he continues to be nominated as chairman of the PC. While his active role in SUBICSHA and SUBICSHA PC has helped many women to come out of poverty, it has also paid back to him very well as a political leader. He has not only won 5 awards since 2000 but also got huge popularity and electoral support in the area. There is a widespread understanding within the shareholders, directors, and employees of the PC that without Mr. Kunhammadestablishing and running SUBICSHA PC was a distant dream. Because of this understanding Mr. Kunhammad has become kind of ‘God father’ and won lot of trust and integrity from members. There is a strong public opinion and belief that the PC is the creation and vote bank of CPI. However,with the exception of a complaint from an opposition leader, we didn't find any severissues of political opposition to the PC at the local level.

Second, Kudumbashree which is a joint program of the Government of Kerala and NABARD implemented through Community Development Societies (CDSs) of poor women since 1998 has played an active role in the growth and sustenance of SUBICSHA. The SHGs that were taken under the good coconut program in 2000, and majority of the SHGs in SUBICSHA and SUBICSHA PC were mobilized, formed, and trained byKudumbashree. Presently Kudumbashree is the main marketing agency for the products of the PC. Third, DRDA has been the main pillar of SUBICSHA PC, which financed SUBICSHA under special SGSY project. Forth, the Coconut Development Board (CDB) has supported in the value addition process from the beginning through technological trainings and provision of product testing laboratory, which is located in the head office at Perambra. Forth, the local commercial, public, and semi-government banks credit support to SHGs from 2003 to 2008 has played an instrumental role in timely start of group business activities within SHGs, and their repayment of loans. Finally, the NABARD assisted with financial assistance of Rs. 10 lakh and skill development training in 2011 to set up product packaging service.

Table - 2 Major Agricultural Products
Products Area under cultivation (ha) Production (tones)
Rice 5085 7167
Pepper 12365 1765
Ginger 217 598(cured)
Cashewnut 3883 2177
Tapioca 3964 77016
Coconut 127402 888 million
Arecanut 10584 15584
Rubber 17591 23490
(Source: Agriculture Statistics 2002-2003)


Membership System

The basic eligibility for becoming a member is that an individual should be a primary producer.The membership will bevoluntarily and available to all eligible persons who can participate or avail of the facilities or services of the PC and are willing to accept the duties of membership. Once an individual will become a member of the PC she/he can be called active only if he/she does transaction for a value not less than Rs. 25 thousand.In practice with initial government assistanceand support from established institutions such as (SHGs) and women society (Kurambshree), SUBICSHA PC has been able to incorporate6000 women producers through 588 SHGs. This membership has increased from 5000 (522 SHGs) in 2005 to 6000 (588 SHGs) in 2014. As far as the economic characteristics of these members are concerned, as mentioned earlier that all of them are primary producers belonging to the marginal landholding households. The PC is also very heterogeneous and inclusive with regard to religion and caste background as its members represent all the three major religioins (Christian, Muslim, and Hindu) and castes (Nair,Vaniyan, Marav, Kurup and Nandiyar) of the area.

Comparing the membership size SUBICSHA PC with the categorization of Sukhpal (2011) and Naik (2015)it can be called as a large PC.However, when we look at the proportion of active members it is considerable small.There is no quantitative data source available regarding the value of business done by members on yearly basis, neither has PC taken any initiative since its inception to identify active and inactive members. However, according to the members and BoD during the start-up period most of the members were actively involved in the business through HBPCs and contributing to the PC either through their surplus produce (coconut), or products. Over the period of time the proportion of active members has decreased becausea lot of groups have left their business activities after repaying their loan to banks. The shift from the HBPCs to CPCs has contributed to this decline, because of this shift theHBPCs have received less attention resulting in many SHGs stopping their business activities. In procurement business with members as mentioned earlier the PC has stopped sending its own vehicle to procure coconut from members. This has further limited the quantum of members’transaction with the PC. Though the product output and demand of coconut procurement has increased tremendously, the proportion of procurement from members is less than 10 percent.7 The PC has started bulk procurement from local suppliers who bring produce directly to the PC. Because of being marginal farmers with limited surplus production most of the members are not able to do so. As mentioned earlier there is even no difference in the value proposition in procurement business with members and non-members. Therefore it becomes less motivating and less profitable when members have to pay transportation charge to reach produce to PC.

To inculcate cooperative principles and democratic control at member level the PC has provisioned that shares can be brought as individual producers or producer institutions. The value of a share will be Rs. 10 and therewill be no restrictions on the number of share an individual in a group and group in the PC can buy.In practice both the membership and share distribution is institutional in nature as all the women are represented by their SHGs in the PC.According to the chairman the number of shares of members in groups rang from 1 to 100, and the number of shares of groups in PC rang from 3 to 1000. Every shareholder in the group and every group leader in the PC have equal voting rights.However, interaction with the shareholders who work in the PC as employees and those who do not work in PC present two different pictures. The ones who are working in the production centers are well informed about the governance and business functioning andtheir stake in PC compared to the ones who are not working in PC in any capacity. There is acontinuous flow of communication from head office to production centers through regular meetings and notices which update members working at various level in PC about the ongoing governance and business decision making and enhance their trust in FPC leadership. Notwithstanding,for the members who do not work in the PC,the communication of decisions and progress of PC, according to the chairman, is confined to two days training program in a year about PC’s progress and AGM.

Further, the provisions of the PC also state that from the Net profit not more than 20 percent should be distributed as dividend, 20 percent as patronage bonus and 20 percent of surplus as bonus. In practice, over the nine years of business while the PC has reached to share capital of Rs. 4.03 lakh and net profit of 4.73 lakh(Figure, 2, 4), it has never distributed dividend, patronage bonus, or surplus to members. The main reason according to the chairman and CEO was priority on profitmaximization and its utilization in business expansion. The PC has planned to distribute the first installment of dividends in general meetings of financial year 2016-2017.

Governance System

The governance structure of the PC consists of 5 BoDand a chairman. Since thePCis a bottom-up initiative, when we look at the socioeconomic and demographic characteristicsof BoD, it appears that a lot of effort has been taken from the very beginning to strengthen local ownership inthe governance system. As mentioned earlier also that with the exception of chairman the entire governance system consists of women. All these women belong to the local area and are also shareholders of the PC.All come from marginal landholding holding families, have a bachelor or masters degreeand fall within the age group of 35-50 years.

The first board was nominated through a rigorous selection process. All have been promoted from SHG members to SHG leaders, thenPreraks, Resource Councilors, and finally nominated asDirectors. As per the MoA of the PC the BOD was supposed to be properly elected after 90 days of PC’s registration. However, with the exception of two members who were replaced because they got other private jobs in 2008, no changes have taken place in governance system since last 10 years. The PC records show that first proper election was held after five years during 2010 AGM in which same BoD was re-elected. TheBoD and chairman are elected through indirect voting processes. The SHG leader elected BoD in the AGM, and BoD elected chairman.

The roles and responsibilities of directors are not just confined to the governance system, they are also involved in the management of PC on full time basis. Out of five directors four are working as managers in the head office (manager of admin, marketing, beauty care, finance, or mix of two), and one is heading the largest production center in Perambra. As per the PC regulations, the board members are to be paid for every board meeting not more than Rs. 250 and travel allowances, but in practicedue to their fulltime involvement in the management of PC they are paid full salaries ranging from Rs. 8000 to Rs. 10000.

During the life cycle of about 15 years (since 2000 to 2015) BoD has received various on-job soft skill, management, and technology related trainings. Even though none of them has any professional qualification to run the governance or management of the PC, these on the job trainings and experience has enhanced their skill and knowledge to a considerable extent that they are able to run these systems. The interactions with most of the BoDs about their cycle of growth indicates that these women have progressed from nothing at one point of time, to something where they lead a PC on both the governance and management front.

As far as decision making within the BoDis concerned, the PC has a system of monthly,quarterly and yearly meetings in which chairman and BoD participateto review the progress and deal with the issues if any. Since the chairman is busy at BP office during the weekdays, the board meetings usually happen on any Saturday of the month. It is the responsibility of the managing director to call other directors for meeting. The decisions and discussion of the meetings are capturing in the minutes of the meetings that are maintained in Malayalam language, and if needed notice is also circulated to all the production centers.Personal observations and interaction with the BoD and management indicated that chairman and the managing director (a board member) are the most informed and active members in the PC.It is also found that even the smallest decisions are taken to the chairman or managing director for approval.

Since all the directors are involved in the management of the PC the decisions of the board meetings flow easily to management in head office and production centers. The employees in the management (from managers to daily wageworkers) represent about 450 SHG groups. Therefore the communication of board decisions to the other members of these groups flows easily, compared to the ones who have no member working in the PC.

Operating System

The structure of the management of SUBICSHA PC consists of managing director, CEO,managers, resource councilors, preraks, and daily wageworkers at the production centers(Figure, 1).Out of the total staff of 1260,43 are full time that includes 1 managing director, 1 CEO, 4 managers, 13 resource counselors, 1 E-marketing assistant, 1 accountant, and 22preraks.The PC doesn’t have HR system or written rules for appointment, salary, removal and performance appraisal. As far as the appointment process is concerned with the exception of E-marketing assistant none of these positionsare filled after advertisement, because,as expressed by the chairman, one of the main objectives of the PC is to create jobs for its own shareholders. As a result of thismajority of appointments so far are internal, selected by the chairman and BoD based on the skill and experience of members.

Looking at the social and educational characteristics of these employees, the managing director and four other managers have either undergraduate or masters’ degrees, but none of them have it in any professional subject.The CEO is a retired bank manager appointed two years ago. The Resource Councilors working in the PC are ones who were trained to be resource councilors during the SUBICSHA project. Most of them have undergraduate degree, but like manager none of them have it in any professional subject. The term Preraks also comes from the SUBICSHA project. Similar to resource councilors, most of them have undergraduate degrees, but not in any professional subject. E-marketing assistant appointment the only advertised and properly interviewed post so far also doesn’t have any professional degree or experience in E-marketing. She is MA Bed, with knowledge of computer and three languages – Malayalam, Hindi and English. The computer skill and knowledge of three languages have been the main reasons for her selection. With these skills and knowledge she could communicate with wide rang of customers within and outside the state. The Accountant is also selected from an SHG groups and has an undergraduate degree in commerce. The daily wageworkers are also SHG members with majority having some level of formal education.

The managing director is mainly responsible for administration, but she also plays an active role in other departments also such as accounting, marketing and management of production centers. The CEO is mainly assisting in the financial management of the PC.Three managers are broadly responsible for three departments – marketing, beauty care center and finance, but they do not have any written and clear-cut job description and all get involved in each other activities whenever needed. Only one manager has a clear-cut responsibility of heading the production center in Perambra. The accountant is third in the hierarchy, and the Resource Councilors are also third in the hierarchy. Some of the Resource Counselors are in charge of production centers and some are dealing with the marketing and sales of products. The Preraks who are forth in the hierarchy assist managers either in production centers or head office in documentation, communication and liaison regarding procurement, processing and marketing. Some of them also work as marketing and sales assistants in direct and agency marketing.The last in the hierarchy aredaily wageworkers that work in the processing, quality control, packing, and branding inCPCs.

As far as salary structure of the PC is concerned, the chairman, managing director, and CEO get Rs. 10000. The salary of managers varies from Rs. 8500-10000 depending on the level of seniority. Resource counselors get Rs. 8500, E-marketing assistant Rs. 7500and PreraksRs. 6000 to Rs. 8000. The daily wageworkers get Rs. 40 per liter of oil and on average make about Rs. 160 in one shift of four hours. The staffsalary structure may not look very promising, but for most of these employees this salary is about 70 to 100 percent net increase in what they were earning before joining the SUBICSHA. All the salary comes from the internal resources of the PC. The PC does not have any written rules and regulations for the festival bonus distribution,but every year at the time of Onam festivala bonus is given based on yearly attendance with maximum limit of Rs. 3000.

There is a set system of communication and decision making at various level of management. Monthly review meetings are held at production centers and head office for stock reports. First meetings take place at the production centers, which reviews the monthly progress on procurement, processing, marketing, and employees attendance and salary. These meetings are attended by one or two managers/directorsfromthe head office, in charge manager of production center and some daily wageworkers. These review reports are taken to the head office where in-charge managers from production centers meet the CEO, accountant and managers of head office to review the overall PC progress, and issues and take decisions.All the decisions of monthly meetings at the production center and head office are documented in minutes of the meeting. In addition to monthly meetings,instruction reports are prepared in every quarter of the year from all the production centers (HBPSs as well CPCs) with the involvement of three directors/managers from the head office.Since the governance, management, and some part of membership systems are closely connected, there is a continuous flow of communication across the ladder. However, similar to the difficulties of interaction between governance system and members who are not working in CPCs, the system of interaction between the management, and its decision and members who are not working in CPCs is relatively poor.

Design Features and Patronage Cohesiveness Model
SUBICSHA « Low patronage cohesiveness Design Feature High patronage cohesiveness » SUBICSHA
Very long 5 years Very long 5-7 years Term of board Short 1-3 years  
  Very large 25-40 members Size of the board Small 5-11 members Small 5 members
  CEO is not answerable to board in de juri or/and de facto terms Relationship between the board and the chief executive CEO is appointed by the board and holds office at the board’s desire CEO is appointed by the board and holds office at the board’s desire.
  Many nominal members with no business stake in the co-operative. Who has voting rights? Only users of the co-operative’s service or their representatives have voting rights. Only shareholders of the PC or their representatives have voting rights
One member one vote One member one vote Voting rights Votes in some proportion to the usage of the co-operative services, present and past.  
Indirect SHG group leaders elect the board. Very indirect Degree of discreteness and indirectness in the electoral process Very direct  
  Absent Panel contests Widely practiced  
  Yes, through reservation of board seats for women, SC/ST, etc Partitioning of the electorate into sectional interest groups No reservations of board seats. No reservations of board seats
  No Right to recall a non-performing board Yes Yes, but not practiced so far.
  Only cost and responsibility centers: vale-adding sub-systems removed from board control. Area of influence of the board Total, including all cost centers as well as profit centers, such as plant, marketing etc. Total
Table-3: Comparison of SUBICSHA with Tushaar Shah Model of design features and patronage cohesiveness (1996)


The PC uses yearly business plan (from April to March), which is reviewed on quarterly basis. The plan is prepared by BODs and chairman without any external expert advise. The current major sub-systems in the business of SUBISHA are procurement, production and marketing. The present stage of these sub-systems is an outcome of about 10 years of experimentation. The PC is continuously looking for innovations in its entire business process in order to achieve the optimal level of system development.

Rules and Strategies
Procurement rules and strategy

In case of procurementof coconutinitially the scale of business was small (6-8 ton coconut daily) and the rule was to procurefrom SHG units by sending PC vehicle. The profile margin for members was 10-20 percent higher than external market and they were also saving onthe transportation cost.This was also one of the mechanisms from operating system that members patronize services. However, with the scaling of business during 2010-2011 the demand for procurement increased to 1000-2000 ton coconut daily. The PC’s vehicle was not able to cope-up with the demand, therefore it started bulk purchasing from local agents. According to the CEO out of 6000 shareholders, the PC procures coconut only from about 1000 members, the rest is procured from agents. These agents purchase coconut from the farmers and bring it directly to the PC. This has resulted in reduction in procurement business with members as only 10 percent of the current coconut procurement comes from members.According to the chairman in Kerala the number of coconut trees per HH vary from 10-1000. Since majority of the shareholders are from marginal HHs and are also BPL they have only 10-15 coconut trees and don’t have bulk surplus production. Bringing the small surplus produce to PC on their own human and transportation cost leaves them with no or very marginal net value increase in selling price. Therefore, according to the chairmanonly about 30 percent of the members are able to sell their surplus coconut produce to the PC since the PC has stopped sending its vehicle for procurement.

Once an agent or a member brings coconut to the PC quality check, price is fixation and weighting is done. The purchase receipt is issued to the customers at weighting. When it comes to the payment the PC pays 10 percent extra margin to both local suppliers and members on the market price of coconut that is published in the daily newspapers on that day. The spot payment rule is followed in the procurement business, with payments being made eitherthrough cash or cheque.The PC has a policy of directly approaching to big business merchants for procurement of coconut in case there is scarcity due to high demand or poor quality of coconut from members and local agents. Over the period of time the PC has become the largest coconut-procuring agency in the areas. This has hadan impact on the external local market coconut rate. According to the chairman in Vadagara and Quilandi areas where from PC is procuring coconut the local merchants pay much higher and close to the daily-published price than the rest of Kerala. About 80 percent of the other raw material such mango, lemon, ginger, onion, chilly, cardamom, and coir is procured from the members, and the rest from the agents or wholesale market. The HBPCs that are still in businessdo procurement by themselves. If they need any procurement assistance from PC, the PC is always ready to provide.

Production rules and strategy

As far as the productionsystem is concerned the basic rule of the PC is to produce good quality products without adulteration in order to provide good services to consumers and develop trust among them. Because of this objective the quality checking is done at various level such as at the time of procurement of raw material; once procured selection of premium quality coconuts for virgin coconut oil and other for edible oil, soap and other products; checking moisture level during drying of copra, which is different for different products; refining of virgin coconut oil;proper packing of products in different sizes, bottles and packets; proper labeling and branding. In addition production centers are cleaned regularly.

The second set of rules in the production process, which is more important from the membership point of viewis for appointment of employees in production centers. As mentioned earlier that sustainable economic empowerment of women was the basic goal of SUBICSHA it continues to be the basic principle of SUBICSHA PC.In fact the governing body and senior management sees SUBICSHA PC more as a women employment and empowerment initiative rather than a hard-core business industry. To achieve this goal SUBICSHA PC has a rule of appointing its shareholders as employees in the production centers. According to the chairman and other senior management,increasing employment opportunities for its shareholders in the PCis its primary strategy to enhance members’transactionand participation in the PC. In nine years of business it has been able to employ about 1260 shareholders and its aim is to provide employment to all its 6000 shareholders through the expansion of production and production centers. The goodness of PC’s operating design compared to external entities in serving members purpose is mainly explained by this employment generation.

Third, the PC has a unique system giving basic on job training to shareholders once they join, and using their skill as daily workers. As far as coconut products are concerned while some are involved in procurement, quality checking and weighting, other take coconut out of shell, supervise dryers, oil expelling and purifying machines, product quality checking, weighting, branding and storing of products. In allthe production centers women work in two shifts. The early morning shift starts from 9am to 12pm and the afternoon shift starts from 12pm to 5pm. There is a lot of flexibility for women to change their shift as per their other engagement at home.

Marketing rules and strategies

The PC follows six different methods of marketing – line marketing (van to shops), agency marketing,SHG marketing, home shop system, melas, and E-marketing. Line Marketing is the main strategy that markets about 40 percent of the PC’s products. In this marketing the PC’s vantakes products on daily basis and sells them to shops in near by areas.The home shop system is the second marketing strategy, which has been initiated by Kurumbshree. In this strategy individual shareholder members take product and sell in their villages. It constitutes about 25 percent of PC’s marketing. Marketing through SHGs is the third strategy through which PC sells about 20 percent products. In this strategy some shareholding groups take products and sell them in their villages either from home or through their established shops in villages.The agency marketing is the forth-marketing strategy in which an agency (present main agency is Kurumbshree) takes the products and sells them to wholesale dealers. It markets about 10 percent of the PC’s products.Melas are the fifth form of marketing, which are occasionally organized by the central and state government. In these melas the PC advertises as well sells its products.

There is a fixed sales price at which PCsells to individuals, groups and marketing agency, and MRP at which products are sold to customers. The margin between the sale price and MRP goes to the marketing persons, groups or agency. As mentioned earlier the entire marketing and sales operation is run by marketing manager and marketing assistants at the head office and at production centers. All of these employees are also the shareholders of the PC. While there are no net estimates of earning of members from the sales, according to the chairman the members who are involved in the sales earn about Rs.3000 per month.

The PC has started E-marketing within and outside Keralain 2014 as sixth marketing strategy. It markets about 5 percent of FPC’s products, so far it has received moderate response with the biggest order being of Rs. 50000. According to the E-marketing assistant the products that have received good demand in E-marketing are virgin coconut oil, soap, pickles and other hair oils.According to the CEO even though the quality of PC’s products is very good, the E-marketing has not been able to do very well because it is competing with big and well-established E-marketing companies, who have skilled and experienced e-marketingprofessional, and plenty of financial resources to advertise their products by using celebrities.

As far as the customer base and bran promotion is concerned, over the period of time the customer base of the PC has increased considerably as evident through increased business (Figure, 3). Initially the PC was only involved in B2C marketing, but since 2011 it has got into B2B marketing also. The majority of the current consumers of the PC are households.Since the PC sells around 70 percent of products in local market and involves its shareholders in sales there is a continuous communication between the consumers and members of PC. Moreover, all the members involved in the marketing and sales are aware about the ingredients, which go in product making and its benefits. The PC doesn’t use any specific marketing metrics to measure its marketing performance, but it gets feedback and reports about its marketing performance through consumer behavior analysis (how consumers rate and value our products) assignments carried out by various management students who do their internship in PC, which usually ranges from 2 weeks to 1 month.

Since the start of its business in 2006 all the products are sold under the brand name of SUBICSHA. According to the CEO the only major step that PC is taking to protect its brand name is ‘no compromise on product quality’ in manufacturing, processing packing and marketing. The PC doesn’t have any specific strategy for brand promotion but there are two activities that take place occasionally and result in bran promotion of the PC. One is door-to-door campaigning and the other is newspaper reports about the PC or the awards it takes. These reports get circulated across the Kerala resulting in not only the promotion but also increase of trust among consumers about the PC’s products. In addition the website of the PC plays a very important role in promotion as well advertising of the PC’s products.There are no exact estimates of the amount of money spend on marketing or brand promotion, but according to the CEO approximately it constitutes about 5 percent of the sales which mainly includes drivers costs and transportation.

As far as the future marketing strategy of PC is concerned,according to the chairman and CEO in addition to the existing strategies with the state, it will give more focus on E-marketing and also widen its agency marketing connection to other parts of India and abroad. The aim is to achieve optimal markets for its increasing production and profit making. According to the chairman since the PC is very determined to provide good quality adulteration free products to consumers its production cost is higher than other companies. Initially it kept its product price equal to other companiesbut experienced a huge loss as explained in next section. Since 2011 it has re-thought its strategy and increased its product price compared to other companies. Because of its good quality products this price increase has had marginal negative impact on consumer choice behaviors. This strategy has been profitable for the PC but the quantum of profits is low because the difference between the product manufacturing cost and selling price is still small. The way out to boost profit is to increase the production and target markets outside the state and country.

Evolution of FPCs Business over the Years

By March 2015 the PC has completed 9 years of its business. In these years it has made a considerable progress in share capital, business and net profit. By the time of registration in 2005 the share capital of PC was Rs. 10 thousand and the target (authorized share capital) was set to be Rs. 10 lakh. In 10 years the business ofPC has made a considerable progress, as its current state of share capital is Rs. 4.03 lakh (Figure, 2).

The total business of the PC has grown from 1.08 crore in 2006 to 3.25 crore in 2014. With the exception of two years (2008 and 2010) the PC has been close to its business target. In 2013-2014 the target was 3.5 crore and the actual achievement was 2.93 crore. The target for 2014-2015 was set to be Rs. 5 crore and the achievement was Rs. 3.25 crore.During 2008 and 2010 the PC has experienced a slight decline in its business. According to the chairman and BoD, the 2008 decline was due to capital investmentin installation machinery in one of the production centers, because the promotional support ended during the same year so there was no other source to fund machinery. This affected the working capital resulting in low output production. In 2010 the PC was experimenting with new product pricing and to minimize the risk of loss it controlled its output production. With the exception of these two years the business of PC remained progressive.

While the sales have been very progressive over the years, theprofitof PC has remained very fluctuating. In the entire business period of 9 years it has been able to makeNet profit only in three years (Figure, 4).As mentioned earlier also that 2011 was the first year in PC’s history when it made a net profit of Rs. 2.12 lakh. This reached to 2.76 lakh in 2012, but experience a huge declined to Rs. – 6.33 lakh in 2013, then again an increase to 4.73 lakh. According to the chairman, CEO and other BoD one of the main reasons for this negative and fluctuating profit is lack of professional guidance in business development.Particularly in 2013 the main reason for huge loss was that PC was closely following the market price trend. With adulteration the other companies’ brought price down and PC did the same resulting in huge loss in profit. Since then PC has decided to keep its price standardized without giving enough attention to market trends. Second,all the operational expenses are born by PC from its own profit and working capital generated from loan from shareholders. The current working capital requirement is Rs. 5 crore, but the PC has the capacity of only 1 crore.

Notwithstanding the progress in share capital, sales and net profit, there are some aspects of business that are important for PC being a cooperative principle based business, but have not been touched in 9 years of business. This includes the distribution of dividends, patronage bonus and surplus. The rules for the distribution of these benefits are explained earlier in section 5.1. The practical condition is that except the festival bonus of maximum Rs. 3000, no other distributions have taken place. The interviews with the chairman and other staff members revealed that the yearly profit of PC has remained low, because of this reason it has not been able todistribute dividends or patronage bonus to members. With a considerable growth in net profit in 2014 and better-expected net profit in 2015 the PC is planning to distribute first dividends in AGM of 2016.


The easy availability and access to financial servicesfrom pre-promotion to the incubation, growth and expansion stage has played a very important role in bringing PC to the current stage of growth. First, during the pre-promotion phase (2003 to 2005) DRDA grant played an important role in strengthening the roots of PC. With DRDA financial assistance the SUBICSHA was able to focus on multiple aspects of organizational development at the same time such as infrastructure creation, credit-cum-subsidy to SHGs to start business and financial assistance for soft-skill and technological development. During the promotional stage DRDA assistance helped in the registration of PC and getting various license, trainings and orientation to BoD and SHG groups about the PC and it’s functioning. Ones DRDA financial support was over in 2008 the PC faced difficulty in moving ahead. Unlike other companies it was not able to leverage on its small equity capital. As a way out it took unsecured loan from SHG groups at the interest rate of 14 percent. This is the second form of financial service that PC has opted for. This experiment was already done in year 2006 and 2007 but the amount of loan was very small (24 and 46 thousand respectively). By 2008 since all groups has paid their loan back and had saved the subsidy component, which constituted 50 percent of total credit received, a collective decision was taken by the board and members that instead of approaching private banks for loan this money will be taken for the purpose of running PC’s operations (working capital, salaries and so on). Each SHGs has given loan as per their financial capability ranging from Rs. 10 thousand to Rs. 50 thousand. It has been unanimously decided that any group can take their money back any time with full interest rate of 14 percent up to that period. In 2008 the total unsecured loan amount reached to Rs. 84.4 thousand and in 2014 along with over time interest rate it has reached to Rs. 1.31 crore. This is also the only outstanding external money that PC has.

Third,the CDB has not given the direct financial assistance but has supported thePCin setting up a testing lab, which is located in the head office and capacity building of the BoD, resource counselors, and other staff.Forth, in 2011 the NABARD provided assistance of Rs. 10 lakh and technical trainings to strengthen the packaging services of the PC.

As a part of expansion of production centers to spices and fruits as mentioned earlier, the PC is planning to approach both the government and private banks for term loan and working capital, but so far it has neither prepared proposal nor has approached to any financial institution. Having a strong foundation and business base in the state, the chairman and CEO are very confident and optimistic about getting financial assistance form both the public as well private institutions.


All the operations of the PC comply with the legal and regulatory framework of Section 58A of the companies Act 1956. After registration under the Companies Act 1956, the PC has got nine licenses. Panchayat license for the establishment of PC in Perambra and installing machinery or repairing system.HACCP (Hazard Analysis Critical Control Point) licence to preventing microbiological, chemical and physical contamination along the food supply chain. Food safety and standards authority of India(FSSAI).Bar Code, Brand Name, Export Promotion Capital Goods Scheme (EPCG), VAT, Income Tax, Pollution Certificate.

The PC is paying all yearly fee such as panchayatfee, VAT,Income Tax, and other license fee. Excluding VAT and Income Tax, which is conditional in the quantum of business and yearly income, the otheryearly feewhichPC pays (for license and other services) is about 2 lakh.

According to the chairman and the CEO getting each of these license has been a time consuming process. The single window concept thatis provisioned in PC guidelines to smoothen their process of fulfilling legal and regulatory compliance is not in place. The chairman said, that the process of documentation in government departments (license, payment of fee and so on) has been more difficult for their PC compared to others, because it is affiliated with the government. Other PCs that are functioning independent of the government support pay bribes to administrators and get their documents done quickly. Because the PC is affiliated with the government and I (the chairman) am a public figure (block president), people have a keen eye on me and ourPC activities, therefore we cannot get involved into such activities. As a consequence, compared to other PCs we spend double amount of time in getting these things done.


Before the establishment of PC

According to the various producers before the establishment of the PC in 2005 the supply chain was pro agent, pro wholesaler and pro manufacturer, the producer was the most distant stakeholderdue to lack of knowledge about actual market price of coconut, and functioning of supply chain and non-existence of analternate supply chain system. The local merchants used to purchase coconut and copra from the producers on a very low price (about 20-25 percent lesser than market price) and sell it to wholesalers in the town and city markets. The whole sellers used to sell it to coconut manufacturing companies in and outside the state of Kerala. Most of the profit margin of commodity selling was concentrated at local merchants and wholesalers level.

After the establishment of PC
Institutional and organizational support in value chain

After the establishment of the PC in 2005 the value chain has undergone tremendous changes with most of the margins going to producers involved at different stages of value chain process such as commodity production, processing of product, and service.Since coconut is the main agricultural commodity and coconut based products are the main daily consumables in the area, from the initiation of the concept of collectivization in 2000 the emphasis has been given on establishing an alternate pro-producer value chain in this particular sector. The initial effort in this direction as mentioned earlier was taken by block panchayat in 2000 by establishing Good Coconut Program. This was further expounded by the study of IIM Kozhikode, which gave a comprehensive model of establishing pro-poor value chain after the assessment of local needs and challenges of producers and market. Their study sketched that initially producers should be collectivized, trained in soft skills and technology and given a business orientation, then transformed into business enterprises. This framework resulted in the initiation of SUBICSHA project and later on SUBICSHA PC. Both the SUBICSHA and SUBICSHA PC have played very important role in bringing the value chain to its current form. The SUBICSHA from its initiation in 2003 played two parallel roles to initiate and create a sustainable ground for pro-producer value chain. On one hand it gave soft skill and technology trainings, credit facility to women to start business ventures and encouraged them for getting into marketing of products from HBPCs. On the other, it invested on the infrastructural development (building office, production centers, and installing technology) to create centralized system where from these producers can operate their value chain. The transformation of SUBICSHA to SUBICHSA PC in 2005 brought these producers collectives into a complete business shape. SUBICSHA PC has been playing an important role in the growth, expansion, profitability, and sustenance of this pro-producer value chain. Building on from the work done under SUBICSHA project, the SUBICSHA PC centralized the coconut procurement system in order to get good quality coconut; started processing of products through centralized processing units with good machineries of weighting, extraction, and refining; centralized the product system under the brand name of SUBICSHA, and streamlined the marketing and sales service by using producers under the brand name of SUBICSHA.

Stages and actors in value chain process

The present value chain processof SUBICSHA PC consists of three stages: first,procurement of coconut commodity form the farmers who directly bring it to the CPCs. Second, primary and secondary processing at the production centers. Through processing coconut is transformed into 30 different beauty care products and food items. Third, marketing of products in local, state, and national markets by using various marketing strategiesas mentioned in section 6.1.3. The actors involved in the process are coconut-sellers – producers(non-shareholders and shareholders), PC members working in procurement and processing in CPCs, marketing and sales members – individual and group producers, marketing agencies, retailers and finally consumers – households, hotels, hospitals and other consuming agencies.

Primary activities related to product, operation and marketing

The primary activities related to the productin the value chain process of SUBICSHA PCinclude – inbound logistics (quality checking and purchasing of coconut; issuing receipts; registering of purchased stock; payment through cash/cheque to vendors and storage of stock in production centers), operations (grading of different type of coconut for different products; extraction of copra from coconut; drying of copra; extraction and refining of oil (other activities include making soap, chips, pickle and vinegar); packing in different sizes; and labeling with brand name of SUBICSHA) and services ( returning product back if the marketing agency or customer finds any difficulty with the product). The primary activities related to the marketing process of SUBICSHA PC include – outbound logistics (product transportation; storing – mainly in two warehouses in Perambra; stocking and inventory by respective production center managers and marketing assistants; marketing and sales – advertising through PC website, taking orders from different marketing and sales individuals and agencies such as SHG members, SHG groups, home shops, line marketing shopkeepers and E-marketing buyers; disbursement of orders by marketing assistants to different buyers; making inventory of orders received and disbursed, payment received and payment due, and availability of stock in warehouses).

Support activities to primary activities

The supporting activities to the primary activities in the value chain process are procurement (procurement of good quality of coconut from the farmers), technology (using weighting, oil press, oil extraction, oil refining, and packing machines and branding of products), human resource (from governance system to lowest level of daily wage workers all are involved in different process of value chain), and infrastructure.

Value addition process

Looking at the value addition in particularly, the strategy adopted by the organization to stay connected and competitive in the supply chain is to providefresh and good quality products without adulteration on an affordable price. To standby this strategy it follows two-stage value addition process – primary and secondary. Since the involvement of PC in the value chain starts from the procurement of raw material the value addition at the primary level is limited.8In case of main products such as edible coconut oil the primary value addition process includes: quality checking of coconut at the time of procurement, grading, extraction of copra from coconut, drying copra in sunshine, selecting good quality copra for oil and poor quality for soap. In case of virgin coconut oil the primary processing takes place in the form of procuring coconut, selecting good coconut, grading mature ones, cutting, checking inner side and grading again. The actors involved in this process are producers (both share-holders and non-shareholders), and PC. The transport works as a secondary actor in the process. The technologies used during the primary value addition process are weight-checking machines, copra expeller machine, moisture meters and copra dryers. This value addition process takes place at all the production centres of the PC that are spread across seven panchayats.

The secondary value addition processing takes place in the manufacturing of products. In case of edible oil, oil is expelled from the copra, tested, stored, bottled and weighted with 500g, 1 litre, and 15 litre bottles and pouches, packed and labelled with brand name SUBICSHA which also includes the content details of product. The virgin coconut involves more complex process such as special drying at 32 Celsius, power cylinder to extract oil, collection and storage in tanks for one week to purify, testing, bottling and weighting and the rest of the process is same as edible oil. Similar system of processing takes place in case of other products such as soap, pickle, chips and vinegar. Once the products are ready they are transported to two warehouses in Perambra for marketing. The technologies used at this stage are oil expeller machines, laboratory checking, and storage tanks of 5 to 10 thousand litres, weight machines, packing machines and vehicle to transport products to warehouses. All the actors at this stage of value addition are PC employees working in production centres, who are also the producers and shareholders of the PC. The focus of technology used in value addition process is on enhancing the value of products, the process and service come second and third in line after product.

As far as the incentives and effects of value addition on agents, producers, product, process, and market are concerned there are several visible positive outcomes. Starting from producer there are two types of producers involved in the value chain process – shareholding producers and non-shareholding producers. The non-shareholding producers have not made any investment in the PC, since the PC is the largest coconut-procuring agency they sell their produce to PC. The incentives in selling to PC are higher price (as mentioned earlier PC pays Rs. 10 extra on market price of the day in coconut procurement), and saving on transportation and human cost because as mentioned earlier that these local merchants used to sell their produce at distant town and city markets before the establishment of PC. These are also the main motivations for these merchants to stay in the business of the PC. All the shareholders producers have made two types of investment in the PC – buying of shares, and loan to PC. However, the incentives from the value addition or the PC as whole vary. Those shareholders who work in the PC at different levels in governance, management, production system, marketing and sales get salaries or commissions on marketing and sale, have easy access to value added products of PC, and are owners of value addition process and PC as whole. The other group of shareholders don’t work in the PC therefore they neither get any salary nor any commission, but get the value added products of PC, and have ownership in it. According to most of the producer shareholders the basic factor that is influencing their interest to stay in the business, is ownership of PC and an understanding that through value addition PC will do more business and will generate more profit of which they are a part.

As far as changes in product life cycle due to value addition is concerned, according to the chairman of the PC due to use of fresh and good quality raw material, better technology, proper handing, and quality control the freshness and shelf life of our PC’s products is longer compared to other products in the market be it edible oil, vinegar, virgin coconut oil, or pickle. The manufacturing of good quality products has influenced our brand as well as consumer behaviour. SUBICSHA has become a popular brand in Kozhikode and Cochin markets, and there is an increase in consumption over the period of time even through our price is little higher than other similar products in the markets. This shows that consumers have realized the usage and health benefits of using SUBICSHA compared to other products. This is also an indication that our value addition process is becoming more and more sustainable over the period of time because demand is increasing within as well outside the state.


First, observations from the field visit and interaction with some officials in the CDB who have been observing SUBICSHA since the beginning reveal that the governance system of the PC has reached to a level of stagnation as the boardis governing the PC from last 10 years. Therefore, the challenge for PC is to bring new faces into governance system that will bring new thinking and innovations into the system and also strengthen its co-operative principles.

The second challenge as expressed by most of the employees and board is lack of skilled and experienced professionals to expand business and achieve long-term sustenance in the globalized market competition. So far the local leadership is running the PC. Considering their skill and competence they have been able to handle their basic responsibilities effectively at their respective management position. However, there is capacity deficit in business planning, operationalization, and development as evident through small and fluctuating business and profit. As a consequence of this deficit the PC is missing on leveraging the available infrastructure to the fullest such as increasing output production, quality enhancement, and market beyond the local and state markets.In fast growing competition from number private companies and other FPCs this pace of growth can be too slow to compete in future. Therefore, since the PC is currently at the expansion stage it needs more qualified and experienced professionals to develop vision,long-term business plans and enhance companies internal and external capacity to execute them. It should at least have professional managers at main position such as finance, HR, production and quality assurance and marketing.

The third challenge that partly add as wellexplains the second one,is poor financial capability of the PC. Due to poor financial capability the PC is not able to pay good salaries to existing employees as mentioned earlier the highest salary in the PC is Rs. 10 thousand. This is also affecting the PC’s potential to heir professionally trained and experienced people, expand marketing through media advertising, and establish an HR system. Whatever money available in the PC is further constrained due to poor financial management.

The forth challenges which SUBICSH is facing in related membership (patronage cohesiveness, member centrality and member interaction). As mentioned earlier only about 10 percent of the procurement business is done with members’ producers, the number of HBPCs is declining as a lot of them have left the business after paying loan to the banks and the intake human power capacity in the CPCs is limited to absorb all the 6000 shareholders. All these factors have contributed to reduced transaction and interaction between members and PC. Showing member centrality through the distribution of dividends and patronage bonus has also not taken place in last 9 years of business.


Using sustainable livelihood framework (SLF), with FCM approach to examine the impact of PC on producers.

In-depth interviews and Focused Group Discussion were held with the PC member to have a retrospective understanding of the risk and vulnerabilities they were facing before joining the SUBICSHA and SUBICSHA PC. Following this Fuzzy Cognitive Mapping (FCM) a semi-quantitative approach was deployed to capturethe critical assets that have got enhanced and helped members to overcome asset sensitivities. These cognitive maps were done with groups of shareholders working as employees at various levels in PC. We combined the FCM approach with sustainable livelihood framework to have a comprehensive understand of how capital base of producers has changed, capital base has experienced the highest change, and what are the impact multipliers (relationships). The SLF proposed by Chambers and Conway (1992), Scoons (1998) and the Department of International Development (1999) looks at the five HH assets. Another asset – the organizational asset was incorporated rendering the sustainable livelihood framework more comprehensive (Singh and Nair, 2014).These cognitive maps were categorized under various assets (also called impact themes) of SLF. This was done to condense relevant small impacts into a few to showcase the main assets providing resilience against various livelihood risks and vulnerabilities faced by these women.

Results and discussions

As mentioned earlier that the majority of SUBICSHA PC shareholders are from BPL families having marginal or small landholding. With the exception of few all these women were working in subsidiary sector within the four walls of their house before becoming part of collective. The in-depth interviews revealed that they hadlimited knowledge about day-to-day happenings in society, poor livelihood skills, and exposure to outside economic activities. Working in subsidiary sector had left them choice less and financially dependent on others. Because of being confined to HH activities, their social interaction was also limited and they lacked in confidence to take decisions for themselves and their families.

Since 2000, initially the SGSY, than SUBICSHA and SUBICSHA PC tried to address one or a combination of these vulnerabilities through various direct and indirect initiatives that were mainly related to the managing collective, livelihood skill enhancement and business development. The cognitive mapping results show that these initiatives have had a great direct and indirect impact on six capitals of these members – personal, social, financial, physical, human,and organizational. No doubt the PC is only10 years old, the actual initiative of collectivization is about 13 years old because SUBICSHA started in 2003. Because of this long span of intervention all the direct impacts are of high intensity(value ranging form 0.7 to 1 point), whiles the indirect impacts are either medium (ranging from 4 to 6 points) or highof intensity(Figure, 6).

Of the five assets the personal and social have the highest level of centrality (back and forth relationships) in the system followed by physical, human and organizational (Figure, 6). The personal impacts are experienced in the form of increased self confidence, personally development, self independence, stress reduction, mental peace and happiness, establishment of a reciprocal emotional support system, increased decision making power and ability to lead. The social impacts are collective work opportunity, freedom to work outside home, enhanced social circles, social support and public participation, equality of opportunity and reduced class bias, altruistic attitude, social development, and women empowerment. The financial and economic changes have taken place in the form of access to financial services, increase in household income, increase in purchasing power, improved quality of life, better investment in family health and education of children, purchase of assets, savings and financial self-dependence. The physical impacts experienced are employment generation, health working environment and flexibility in work to accommodate house and job duties. The human assets accumulated areincreased awareness, knowledgeand skill. Finally the organizational impacts are felt in the form of institutional membership and ownership, support to establish business units, collective decision-makingand cooperation. All these impacts are classified in 19 broad categories and five themes for clarity of analysis.

When we look at the direct and indirect impacts the results show a complex system of relationship. The initial livelihoodopportunityby forming SHGs hasfacilitatedgroups’access to credit(Figure, 6). This has fed back by creating secure employmentopportunity with groups investing credit in setting-uphome-based business units(Figure, 6). The existence of PC on one hand, and collective work and access to credit on the other, have strengthened group’s organizational capital – institutional membership and ownership (Figure,6). The existence of PC has provided them space to become part of a large collective, the initial SHG level collective work made them eligible to take PC membership and with the capital generated through the utilization of credit in business they were able to pay share capitalfor membershipand give loans to PC for its working capital.

The institutional ownership/ownership, in turn, has strengthenedmembers’physical and personal capital – employment, livelihood skills, personality development and confidence (Figure,6). The other asset that has had impacts onlivelihood skills, and personality development and confidence is knowledge (Figure,6). As mentioned earlier that after the formation of PCcontinuous mobilization and awareness generation meetings and workshops, and exposure visits were organized to strengthen the knowledge base of members about the functioning, business, and benefits of establishing a PC. With the formation of PC a shift was made from home-based centers to common production centers. This also resulted in change of employment from a less secure home-based production center job tomore secure employment in PC. To perform these new roles either in procurement, production, packing, or marketing and sales,members receiveda lot of new on the job livelihood skill trainings. This initialasset gain in the form of institutional membership/ownershipand knowledge enhancement also had a natural impact on personality development and confidence of these members (Figure, 6).

While the organizational (institutional membership) and human (knowledge) assets have played an important role in livelihood skill and personality development, they key to the accumulation of both capitalsas expressed by most of groups are social assets– culture of collective work and collective support (working in a group, close social circles, and increased public participation). The primary impact factor to collective work and collective support capital formationper se,is another social asset – work freedom and equality (Figure, 6).9The groups revealed that the freedom at the HH level to become an SHG member, and equality irrespective of cast and economic status differences within the SHGs and PC were founding pillars to the initiation of collective work and collective support.

As the PC started mounting up, the social assets (collective work and collective support system) became strong. Members grew in human and personal assets(livelihood skills and personality development, and confidence). More importantly they have experienced avery conducive physical environment (health and flexible working environment). These assets started paying back byincreasing members’freedom to work and further strengthening their livelihoods (employment diversification) (Figure, 6). Most of the groups revealed that they are now allowed to work in other outside economic activates such as National Rural Employment Guarantee Act (NREGA), which was not the case earlier. Along with work freedom and equality this assets accumulation has also created a reciprocal emotional support systemand improving risk mitigation strategies of members (Figure, 6). Members have formed small trusted group mainly consisting of colleagues working together in a shift, with whom they sharetheir deepest feeling and help each other to cope and overcome emotional and psychological difficulties.

The final layer of impacts of most of the assets – employment, livelihood skills, personality development and confidence, collective work and collective support are increase in income and quality of life, social development and women empowerment and life and livelihood satisfaction(Figure,6). The lowest ladder of women in the production centers – daily wage workers revealed that for 1 liter of oil production they earn Rs. 40, on average they make 4 liters in a shift between 9am to 1pm or 1pm to 5pm, which makes their daily earning up to about Rs. 160, and monthly earning about Rs. 4800. Similarly the shareholders in the marketing of products earn on average Rs. 200 to 500 daily. This earning is about 70 to 100 percent Net increase in their monthly income, because as mentioned earlier most of these women were working in subsidiary sector and had either no or very marginal earnings before joining SUBICSHA.

This income enhancement, in turn, has improved the purchasing power of HHs, and led better investment in education of children and family health care(Figure, 6). Income and employment assets have also strengthened the financial reserves of members through savings or more savings and supported in building the HH asset base by investment in various assets. Moreover, the existence of PC and increased income have also led financial independence of these women as they are now financially less dependent on their family members (Figure, 6).The social development, and women empowerment and life satisfaction assets,in return, keep the spirit of institutional membership/ownership, collective work and collective support, personality development and confidence, and healthy and flexible working environment on a constant move (Figure, 6).

Overall the SUBICSHA and SUBICSHA PC haveplayed an important role in strengthening the six livelihood assets (personal, social, financial, physical, organizational, and human) of its members working at different levels in PC, thereby,helped them to overcomevarious forms of socioeconomic risks and vulnerabilities which they were facing before joining the collective.

Looking at the use of FCM in PC it shows a much complex system of relationships, with almost every asset having impact on other assets. This is unlike the climate change where this model is used most commonly.The system of relationship is more of cyclic rather than linear in nature. Initially a particular asset supports in the formulation or enhancement of other assets, which in return impacts the same asset either by enlarging or strengthening it. In this particular case study the relationships are much complex because the collective forming, norming, and performing has taken place at two levels – first with the formation of SHGs and starting group business, then its transformation into PC and starting of new centralized business model. By attribution of a particular capital outcome to different assets by different groups of same background and work environment, this FCM also shows the perception complexity of how humans behavior, which is rarely identifiable by applying any other approach.

An important learning for PCs from this study is that a conscious and consistent attention to strengthening the entire capital base of producers is very instrumental in taking the collectivization process towards sustainability and achieving sustainable impacts for producers. Notwithstanding this complex system of relation also gives a pervasive signal that any asset depletion may negatively influence the other assets and if consistent may eliminate the positive impacts all together.


SUBICSHA Coconuts Producer PC Limited (SUBICSHA PC) formed in response to the growing livelihood crisis of women, was born out of small women specific initiative of BPcalled ‘Good Coconut Program’ in 2000 to add value to the coconut products. This small initiative paved way towards a large project of DRDA namely SUBICSHA in 2003 which later in 2005 got transformed into a PC. The SUBICSHA that did pre-promotion as well promotion of SUBICSHA PC was initiated by the BP, prepared with the help of IIM Kozhikode, funded by the DRDA, and finally implemented by DRDA and the extended arm of the government BP. The project mobilized 700 women SHGs most of whom belonged to the Kudumbashree society, who were federated into one federation. As part of special project a total grant of Rs. 14.26crore was disbursed for infrastructure creation, trainings and credit-cum-subsidy to SHGs to start micro-enterprises. Credit was disbursed through various commercial banks with 50 percent subsidy from the government. Special leadership, skill development and business trainings were also given to the groups in about 14 coconut related business activities that were recommended by the base line study. A group of 10 Resource Counselors was chosen from SHGs and trained to train other SHG members in soft skills and business technology and another groups called Praraks were trained to mobilize the SHGs.All the groups started their small enterprises through HBPCs and also started marketing through groupmembers in 2003. The produced manufactured were mainly coconut oil, copra, soap, coir mat, and pickle.

While the production and marketing were going well and members were also earning, this model lacked sustainability, standardization and quality, as has been the case with SHGsbusiness across India. To overcome these issues establishing a centralize the system of procurement, processing, packing and branding was thought to be an optimal solution and out of three organizational setups viz cooperative, trust, company, and PC, the latter was found more poor womenproducer friendly business setup. With a healthily socio-political ecosystem such as support from local panchayat, Kudumbashree, DRDA, NABARD and CDB, the PC has been able to mobilize and motivate 548 SHGs from the federation of 700 to become shareholders of PC with membership of 6000 women. With its focus on coconut and coconut related products PC is well fitted with local economy and market needs as about 95 percent of its business comes from coconut related activities, and 90 percent of its products are consumed in local market. The membership of PC consists of the most disadvantaged group of the area – women, majority of whom come from marginal landholding families and were working in subsidiary sector before joining PC. Being a bottom-up initiative PC has been able to progress with local leadership in both the governance and operating system. The entire board with the exception of chairman and entire management with the exception of CEO consistof women shareholders who don’t have any professional degrees but have received various on the job trainings and experience. Though slow PC has been able to increase its quantum of business from Rs… in 2006 to Rs. 3.25 crorein 2014 and net profit with some serious downfalls in between to Rs. 4.73 lakh in 2014. This progressive business and profit is an outcome of new value chain that moved away from local merchants and wholesalers to producers controlledvalue chain. The PC procures coconut from the local farmers and local agents with an extra premium of Rs. 10 on daily market price and then processes it in about 30 products including a few fruit and spice related products under the brand name of SUBICSHA. The entire process of procuring, manufacturing, packing and marketing is controlled by shareholders of the PC. With overtime growth the PC has emerged as the biggest procuring agency in the area that has exerted pressure on local merchants to increase coconut price.

The emergence of new value chain has had a huge impact on the local coconut farmers and agents through better price realization and shareholders of PC through employment generation and institutional ownership. The FCM outcomes have shown that 1260 BPL women shareholders who work at different levels of PChave experienced highest increase in personal, followed by social, financial, human, physical and organizational assets after becoming part of PC. With regard to financial assets in particular, those employed in PC earn from Rs. 10000 (managers) to Rs. 2020(daily wage workers) monthly in PC, this earning is about 70 to 100 percent Net increase in their income.

While the PC has made a considerable growth in meeting the livelihood crisis and overcoming the impediments to women empowerment in the area, the outcomes also highlight several questions, which need to be attended for future growth, sustenance, and competitiveness in the market. The governance system is unchanged since the inception. The transaction of Rs. 25 thousands takes place with limited proportion of shareholders (about 1260 work in PC, 1000 sell their coconut to PC, rest are just the buyers of products). Since the inception of PC no dividends, patronage bonus, and/or surplus is distributed. While the current management is using its fullest capabilities, the PC slow business growth and fluctuating profit appears to be in need of services from professionally trained people who can develop vision, plan large scale business and operationalize it.Finally the poor capital base has limited PC potential to pay good salaries to the existing staff and take the professional services in business development.

The combination of these outcomes and associated challenges present a comprehensive set of learning for promoting a women PC, particularly transforming the existing small collective structures – SHGs in to large business collective which is on the agenda of India public policy at the moment.

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