Boriavi Farmers Cooperative

BORIAVI FARMERS COOPERATIVE

Ashish Chandra Ashish Chaturvedi C A Farzana Najeeb C Sudhir Neeraj Yadav

Scheme of Presentation § Existing Scenario § Characteristics of Business § Proposed Business Model

Potato: Characteristics Seasonal Perishable Needs cold storage Losses due to storage, transport and disease § Highly fluctuating prices. § § § §

Production of potato in Gujarat in 2008

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Yield for Gujarat in 2008

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Market Influencing Factors § Variations in potato domestic acreage based on §

§ § §

yield and price realization Crop development based on weather progress in key growing regions particularly cold wave and heavy rains during tuber formation Comparative price with other vegetables in the domestic market Demand of potato from the major cities and food processing industries The potato price tends to firm up during the planting period and eases down during the harvesting period. 6

WHOLESALE PRICE IN MAJOR MARKETS

Source: www.agmarknet.nic.in

BACK

Price fluctuations in 2008

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WHOLESALE PRICE FLUCTUATIONS IN ANAND MANDI (JAN03-JAN08)

Source: www.agmarknet.nic.in

Price Trend

Why Boriavi § Yearly production of potato: 3.5 lakh

bags approx. § Easily accessible to market by roads § 60 cold storages within a radius of 10 kms § A well established and successfully running fertilizer cooperative

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PRODUCTION SYSTEM § 750-800 farmers in Boriavi § Around 50 large farmers § Growing season: November to mid March § Major varieties: Lokar , Pokhraj , Badshah § Yield: 2008 - 250 lakh kg , 2009 - 175.5 lakh kg § 40% of produce kept in cold storage

Cropping patterns in Boriavi

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Cost incurred on one bigha land

Source: Fertilizer Cooperative, Boriavi

Transport rates § § § § § § § § § § §

Nadiad Rs. 650 Anand Rs. 650 Ahmedabad Rs. 1500 Bhavnagar Rs. 2200 Rajkot Rs. 2200 Ankleshwar Rs. 3000 Anand Rs. 650 Vapi Rs. 5000 Surat Rs. 4000 Mumbai Rs. 11,000 Pune Rs. 14,000 16

Existing Value Chain Farmer (Feb/March) (Rs 80- Rs 100/20 kg) Commission Agents (10% to 12%) storage

Cold

Broker at APMC (10% to 15% commission) Sub broker (8% to 10%)

Loose/

Production Risk § Extremely high cost of essential inputs like seeds, fertilizer results in stunted production § Highly seasonal nature § Pathological losses: early and late blight disease, wart, sot rot, tuber moth, charcoal rot disease § Physiological losses: Caused by the effect of environmental conditions § Physical: loss due to reduction in weight during storage, transport, grading and sorting § Despite having huge production, there may be issue of quality

Market Risk § Demand fluctuation § Fall in price due to huge production during peak time. § High transport costs § Less price offered due to low grade quality.

Why Co-operative § Facilitating economies of scale in handling, shipment and processing member’s produce § For improving growers’ bargaining power with buyers § To provide assistance to farmers in terms of farm inputs § Reducing the price risk for the individual grower by spreading that risk over a large number of unit

When the Co-operative starts functioning

Farmer

Co-operative

Cold Storage

APMC

Retailer

End Consumer

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Net Value Addition possibilities § Adding Place utility (Boriavi to Anand Market) § Adding Time utility (Significant change in prices in a short span of time) § Adding form utility (Grading, packaging)

Business Structure § Provide Farm Inputs § Provide Real time Information (Price and weather forecast through internet) § Assistance by an agriculture graduate § Market the farmer’s produce

Supply inputs

Harvesting ( By Farmers)

Grading

Co-operatives

Storage

Payment (80%)

Procurement

Transportation

Cold Storage

Transportation

Patronage Refund

Recurring Payment

APMC

Retention by Co-

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Grading Process Grading is an important factor in the marketing process of potato. It will also be used to make payments to the farmers based on the grade of his produce. Criteria for grading§ Size of the tuber § Conformity to the variety § Tolerance limit (for under sized &over sized tubers) § Percentage of diseased and damaged tubers § Presence of dust & extraneous material

Method of grading§ The grading will be done by mechanical grader for accuracy and efficiency. § The output capacity of the grader is 2 tons/hr. § The grading efficiency is 85 %.

Market Chain (Backward Linkage) § Services providing to farmers § Fertilizer: existing fertilizer cooperative § Seeds § Pesticides: National level Cos. § Agril Equipments: Irrigation, Farm mechanization assets etc. § Credit facilities/insurance if possible

Economies of Scope § Aggregation at Society’ level (Pooling) § Associated activities like grading etc. § Transformation may require for expansion or value addition (cold storages, transportation etc.)

Centrality of Co-operative Society § Member’s Centrality- Potato is one of the major sources of income to the farmers (approx. 30% of annual income comes from potato) § Patronage Centrality-terms of exchange § Domain Centrality-contributes to state GDP (% of total businesses, industry, services, agriculture)

Literature and Web links http://agmarknet.nic.in http://www.indiastat.com http://www.mapsofindia.com http://www.aau.in Marketing of Fruits and Vegetables in India, Namboodari N.V. § Co-operative Marketing of Fruits and Vegetables in India, Subrahmanyam K.V. § § § § §

Thank You

Finances