04/12/231

BACK TO SQUARE ONE

CONTENTS

2

Case over view

Salient Features of Procurement System

SWOT analysis

Collection of data

CASE FACTS…

3

Tilam Sangh :- Rajasthan OGF (Jaipur)1980Four DivisionsEight oilseeds processing plantsCDS:-conducted extension activities (1984)By 2003:- set up 926 cooperative societies and

1.54 lakh grower membersProduction was less than the demandSmall production capacityPUSH was needed

4

Govt. started promoting cooperativesEarlier farmers used to take to tradersNCDC provided the fund and Tilam Sangh

organised the procurement systemIt took 5 year seed multiplication programAt village level – OSCSRegular meetings and targets were fixedAccountability for quality and weightMISAdequate infrastructure

5

Procurement from members onlyPoor quality was rejectedPayment was market drivenDeferred payment (10days)80% capacity utilisation (Jhunjhunu)No adequate storage facilityProduction and storage had marketing

implicationsFarmers were happy but some concerns were

there

Salient features

6

OBJECTIVESTo give appropriate price for oilseeds to the

grower members.

Purchase produce at OSCS head quarters and make timely payments.

Tilam Sangh Procurement System

7

Primary Co-op societies :- 926

No. of members:- 1.54 lakhs

Eight processing plantsTilam Sangh

OSCS

FARMERS

(members)

Processing plants

Components of Procurement system

8

Quality

Quantity

Time

Cost

Procurement system

Quantity

Year Oilseed procured Value (Rs. in cr.)

1998 16952 6.80

1999 26024 11.45

2000 35660 20.29

2001 62713 56.24

2002 82002 63.28

9

• 380% increase from 1998 to 2002

• Under CDS, area under cultivation and production was increased

10

Significant gap between amount available and amount procured by Sangh

At project level meeting the estimation of expected production and procurement target was fixed

Past data were take into considerationMonthly targets were also fixed

Quality

04/12/2311

OSCS was responsible for ensuring the quality and weight

Quality control counter at the processing unit- 250 gram samples collected from the farmer.

Grading is done on the basis of presence of foreign matters shriveled or spotted grains moisture content.

In case the of non compliance of the prescribed standards the materials was not purchased.

Standard reduction of Rs 7 and Rs 15 was done for grade I and grade II respectively below the FAQ.

For any discrepancy, amount was deducted from the society’s commission

AGMARK (Jhunjhunu plant)

Cost

04/12/2312

Determining the Price:- average price of highest bid of 8 to 10 auctions of more than 5 quintals of oilseeds per lot of that day in the mandi. (FAQ price)

Rates were valid for 1 day of procurement operations.

In case of wide fluctuations on a particular day rates were discussed with headquarters before announcing.

MIS played important role

Time

04/12/2313

Seasonality Kharif – Groundnut and Soybean Rabi – Mustard Storage facility is a problem

Perishability

SWOT analysis…

04/12/2314

STRENGTHS

• Happy farmers

• Adherence to quality

• Accountability

• Ensured supply

• Support from world bank

WEAKNESS

04/12/2315

Less capacity utilizationInadequate storage facilityDeferred paymentLimited procurement

OPPORTUNITIES

04/12/2316

Gap between total production and actual procurement

Total no. of farmers – total no. of members = total no. of non-members

No. of villages leftInter- cropping of mustard and soybean

THREATS

04/12/2317

Other private playersTradersUncertainity in sustainabilityEnvironment

Collection of data

04/12/23Group 218

Total area under cultivation Cropping pattern and marketing behavior of farmers Productivity Qty. purchased by competitors and margin difference Qty. available Nature of existing business undertaken by traders Perception about Sangh Procurement system Insect Pest Incidence Storage Capacity and storage Loss Realistic Capacity for each plant to whom produce is supplied Transit Loss Seasonality and perishability of the crops Demand of the crops

04/12/2319

Type of Data Nature of Data Utility in Procurement Strategy

Possible Sources

Total cultivable area available

Quantitative Potential area for procurement

Block Office

Cropping Pattern Qualitative What crops are available for procurement

Block Office /Agriculture office/ Sarpanch/Panchayat

Productivity Quantitative Potential area Block office or survey

THANK YOU!!!