chicory cooperative

“Chicory Cooperative”

Presented by:Alpesh Dalwadi-29003

Amit Anand-29005Kamal Pandey-29020

Rijo P-29026Rohan Jain-29029Vivek Kunj-29037

Adulterant/ additive in coffee Agro climatic conditions (Gujarat good, Kheda better) Inulin derived from chicory used in Ice-cream/Chewing

gum/ Pharmacy Stand alone beverage (negligible) Root like carrot

Chicory

Seeds : provided by Company (Brooke Bond / Pioneer Chicory Ind.). There is agreement between Farmer and Co. Free Seeds provides by Company and also price of purchase also fixed during agreement

Sowing : Sowing is done by farmer. It start from the Mid November. Total crop cycle is of 5 ½ to 6 months. Total irrigation required is 6-7 depending up on the weather

Harvesting : Harvesting is totally manual process. It is mainly done by Bharvad community near by town. They do this job free of cost. In turn they get leaves of plant for their cattle

Cutting : The chicory roots are then transported to Near by Chicory cutting factory where chicory first washed and then cuts in to very small peaces. (5mm cube)

Process flow

Sun Drying : Sun drying is carried out after cuts the chicory in to small peaces. Then it is ready for treading in the market or Co takes at their factory for further processing

Roasting : Roasting of chicory is done at factory level. This will improve the flavors of chicory

Grinding : Roasted chicory then grinded to convert in to powder form. Then this powder is treaded in the market. This powder is use to blend it with Coffee to made coffee cheaper

Process flow

Water13%

Fetrilizer25%

Seeds21%

Others16%

Labour25%

Cost of Production at Farm Level

Farmers On Agreement PersonalSeeds 0 1300Fetrilizer 1500 1500Water 800 800Labour 1500 1500Others 1000 1000Total / Bigha 4800 6100Total / Acres 12000 15250

Wet DryYeild / acre 8000 2286Rate Rs. / 20kg 45 220Total 18000 25143Earning/ Acre 6000 9893

Earning per acre at Farm level

Nov-Mar/Apr (140-155 days) Seed imported, broadcasted No pesticide Labour for weeding and harvesting Yield 2.5-3 ton dry roots/acre (25% WoW) Sundried, sliced, roasted, grounded to powder Processing in Gujarat & Blending in South India

CULTIVATION & PROCESSING

EXISTING MARKET CHANNEL

Farmer (29%)

Chicory Traders (40%)

Chicory Processors

(49%)

Wholesaler of chicory Powder

Coffee Manufacturing

Company

Coffee Retailer

Consumer

FACTOR MARKET CONDITION

High volume of chicory production in small area Better price realization if the product could be stored till

October Month Seeds provided by traders or chicory powder

manufacturers under agreement system

PRODUCTION / MARKET RISK

Price fluctuation Coffee production Seed germination problem due to occurrence of Rain

with in two-three day of sowing

WHY COOPERATIVE???

Increase in bargaining power of farmers Easy loan availability In long run economies of scale

COOPERATIVE MARKET CHANNEL

Farmers Cooperativ

e

Chicory Processors

Wholesaler Chicory Powder

Coffee Manufacturing

Company

Coffee Retailer

Consumer

LOCATION SELECTION

Narsanda

PROPOSED CO-OPERATIVE LOCATION

Narsanda Village Chicory Cooperative, Narsanda Establishing the Chicory Cutting plant and sun-drying

in Narsanda. Concentrated Chicory cultivation Approximate Production: approx. 6000 ton dry /annum.

BUSINESS MODEL

Pooling System Payment system : 70% Fixed Pay off. Rest 30%

refund along with Patronage Refund at the end of year. Patronage refund is based on proportionate contribution 15% of surplus will be kept as reserve

CO-OPERATIVE CENTRALITY

Member Centrality: Members derive 45-50 per cent of their income from chicory production

BREAK EVEN FOR CO-OPERATIVE

Fixed Costs Amount in Rs.Office rent 36,000Loan Intrest 784,218Electricity 1,000Godown Rent 90,000Employee wage per annum 200,000Others / Misc. 24,000Total 1,135,218

Labour cost 0.02Transport 0.05Gunny bag 0.20Machine operating cost 0.20Misc 0.03Total 0.50Contribution 2.1800Break-even point(Qty in kgs) 520742.20* Dry Chicory

Variable cost (In Rs. per Kg*)

PATRONAGE REFUND (RS. 0.43 / KG)ParticularsTotal cultivable area in Narsanda village (In Ha.) 2135Total area under chicory cultivation (In Ha.) 1068% of area under cultivation for Chicory 50.00Total prodution of Wet Chicory (@ 8000 Kg/Acre) 21,350,00010% less for washing of Mud 19,215,000Expected pooling from the farmers (80% of Chicory produced) in Kg. 15,372,000Average rate of wet chicory (In Rs./Kg) 2.25Assuming 70% of payment to the farmers (In Rs.) 24,210,900Payment yet to made to farmers (In Rs.) 10,376,100Revenue : Qty. after 1% handling loss (153720 Kgs wet Chicory) 15,218,280Weight of dry chicory (Moisture loss) 4,348,08065% sell during first two months for payment to Farmers @ Rs. 9/k`g 25,436,26835% sell during Sept/Oct. @ Rs. 12/k`g 18,261,936Total Revenue 43,698,204Expenses : Initial Investment for Machinary 2500000

Intrest @ 12% 300,000Working Capital 4,035,150

Interest on Working capital @ 12% (In Rs.) 484,218Other Expenses 488,000Total Expenses 1,272,218Surplus (Revenue - payment to formers- expenses) 7,838,986

Patronage refund (85% of Surplus Rs. Per Kg) (15% as a reserve) 0.43

INCENTIVE TO FARMERS

Better value realization Lower credit period as compare to present situation

(reduction from 30 days to 15 days)

NET VALUE ADDITION

Time

Form

PROBLEMS

Free rider : Capital contribution of new entrants in proportion to amount of product

Control Problem : Addressed by management training

Influence Cost : Long term asset creation like more cutting machine

FUTURE PLANS

Powder Manufacturing Unit : High return in processing.

Collection from other villages : To increase in control over market.

Credit : for Member Centrality

SOURCES OF INFORMATION

Secretary, Dairy cooperative, Narsanda

Farmers of Narsanda, Valasan, Vadtal

Pioneer Chicory Processing Plant,:

1.Lambhval

2. Ravipura

LITERATURE AND WEB LINK

Chicory in India, A.Puspharaj Agriculture market linkages, Vaswani; Talati www.postharvest.com.au www.experiencefestival.com/chicory_-_symbolism_and_popular_references

www.en.wikipedia.org/wiki/Chicory www.google.com

Thank you