SARDAR VEGETABLE CO-

OPERATIVE
Assessment of net value realisation

Presented by:
Anupama Tripathi (29010)
Ashutosh Shekhar (29013)
Avinash Dwarapu (29014)
Francis C. Verghese (29017)
Shashikant Patil (29030)
Suman Kumar Gope (29033)
 CURRENT SCENARIO
• India: Second largest producer of
vegetables(109 million MT).
• 1st position in the world production of
Peas.
• 2nd position in the world in
Cauliflower, Cabbage, Brinjal.
• 4th position in the world production of
tomato.
 STATE SCENARIO(2005-06)
• 6th largest producer of vegetables in
India.
• Total production of vegetables in
state: 6.3 million MT.
• Total cultivated area(vegetables):
0.38 mha.
Total Area Cultivated -
Gujarat
Area and Production of
Vegetables
ANAND VEGETABLE MARKET
• Total area cultivated(2005-06):
12930 hectares.

• Total production(2005-06):315870
MT.
 DYNAMICS OF VEGETABLE
MARKET
• Price Fluctuations
• Seasonality
• Perishability
• High Weather Dependence
• Bulkiness
 PRESENT VALUE CHAIN

6%

Farmer APMC Dealer

10%

Trader APMC
1%

Retailer CONSUME
R
10 %
 EXAMPLE
%age
Distribution of
(Rs) Price rise
Farmer's Take home Price (Rs) 98.00
Unloading Charge (Rs per unloading) 2.00 5.89
Farmers'sPrice (Rs) 100.00
APMC Dealer commission 6%(Rs) 6.00 17.67
Cost to the Trader (Rs) 106.00
APMC Commission 1%Rs 1.06 3.12
Loading Charge (Rs per Loading) 2.00 5.89
Final Cost to the Trader (Rs) 109.06
Trader Margin (10%) 10.91 32.11
Cost to the Retailer Rs 119.97
Retailer Margin 10% 12.00 35.32
Cost to the consumer Rs 131.96
Increase in cost 33.96
Percentage Increase in cost 34.66 100.00
 WHY CO-OPERATIVE??
• Bargaining power
• Economies of Scale
• Assistance to farmers
• Shielding small farmers from the
market price fluctuations
 FACTOR MARKET
CONDITIONS
• Concentrating on Nawali and
surrounding villages in the initial
stage.
• High volume of vegetable production
in small area.
• Better price realization in markets of
Surat and Ahmedabad.
• Farm input supply from Gujarat State
Seed Corporation, IFFCO and NDDB.
 PRODUCTION RISKS
• Seasonality
• Perishability
• Quality/ Grading
• Demand - Supply mismatch
• Improper Handling
• Input Supply Risk
- Fertilizer
- Seed
 MARKET RISKS
• Price Fluctuations
• Demand Fluctuations
• Transportation Costs
• Lack of Bargaining Power
• Rejection of Lot due to Lack of
Quality
 MARKET SEGMENT
• Institutional
• Domestic
• Grading of produce
– Premium Quality- High price market
– Medium Quality- Local market
– Low Quality- Local or Institutions.
 LOCATION OF CO-
OPERATIVE
• Village: Nawali (7 kms from Anand)
• Average Land Holding : 1.5 – 2 acres.
• Vegetables: Cabbage, Cauliflower,
Brinjal, Bottle gourd, Ridge gourd,
Lady’s finger.
• Climate: Sub tropical semi arid climate
• Soil: Sandy Loam
• Income generating Activities – Farming,
Dairy, Poultry
• Average Rainfall: 950 mm
 Seasonality
Month Tomato Brinjal Cauliflower Cabbage Gourd Okra

June            

July            

Aug            

Sep            

Oct            

Nov            

Dec            

Jan            

Feb            

Mar            

April            

May            
 INCENTIVE TO FARMERS
• Reduction in
- Costs
- Risks
• Increase in production
• Better value realization
• Timely availability of farm inputs
• Assistance in production process by
specialist
 ECONOMIC VIABILITY
• Scale of operation: 2% of Anand
vegetable production i.e. 6200 MT.
• Total fixed cost (annual): Rs
5,00,000.
• Expected additional margin: Rs 0.25/
kg.
• Contribution: Rs 15,50,000.
• Surplus: Rs 10,50,000.
• Number of members: 500.
• Additional benefit to members: Rs
 GROWTH AND
SUSTAINABILITY
• Economies of Scope
- Organic cultivation
- Cold Chain: Cold storage,
Refrigerated Vans
• Retailing through Hand Cart Hawkers
• Tie up with Retail Chains
(Institutional Buyers)
 CO-OPERATIVE RELATIONS
• Farmer segmentation – Large
Farmers (30%) and Small Farmers
(70%).
• Member participation at different
levels.
• Type C proposals:
1) Insurance for produce, 2) Reserves
contribution on daily basis.
• Type D proposals:
 OPERATIONS
• Pooling, Grading, Sorting, Bagging
etc.
• Distribution according to demand in
different markets of major cities such
as Ahmedabad, Baroda, Surat.
• Transportation
• Input Supply – Seeds, Fertilizers etc.
• Technical Assistance to the farmers
 BUSINESS MODEL
• Pooling System
• Payment based on patronage
(proportionate to produce
contributed)
• Contribution identified through
proportion in each grade lot.
• Payment: (Price realized –cost)- 5%
as reserve
 NET VALUE ADDITION
• DISTANCE/PLACE
• PRICE
• FORM
 PROBLEMS
• Horizon Problem: Expansion for cold
chain
• Portfolio Problem: Addressed by
keeping separate account for farmers
who are producing different
vegetables.
• Control Problem: Addressed by
training and educating directors.
• Influence Cost: Long term asset
creation like premises.
 CENTRALITY OF CO-
OPERATIVE
• Member Centrality: Members derive
30-40 per cent of their income from
vegetable production.
• Domain Centrality: Contribution to
the economy of the area and the
state.
• Patronage Centrality: Commands 2
per cent of vegetable production in
Annad, and nearly 90 percent of
production in the operational area.
 Sources of Information
• APMC Market, Samarkha.
• Secretary, APMC, Sardarganj.
• Farmers of Nawali, Jakharia,
Samarkha, Barod, Ajarpura, Asodhar.
• Ekta Vegetable Co, Samarkha.
• Mansa Ji Vegetable Co, Station Road,
Anand.
• Big Bazar, More.
 Literature and Web Link
• www.agmarknet.in
• www.agri.gujarat.gov.in
• www.indiastat.com
• www.aau.in
• www.nhb.gov.in
• Co-operative Marketing of Fruits and
Vegetables in India, Subrahmanyam
K. V.
• Indian Horticulture Database 2006,
NHB.
THANK YOU!