Fpo Business Plan Final

Template for Development of Business
Plan by Farmer Producer Organisation
Central Sector Scheme for promotion

of 10,000 FPOs
Prepared by: National Project

management Agency
Table of Contents
List of Tables ................................................................................................................ 5
List of Abbreviations...................................................................................................... 6
Background .................................................................................................................. 7
Farmer Producer Organizations (FPO) ...................................................................... 7
Broad Services and Activities to be undertaken by FPOs: ......................................... 7
Implementing Agencies: ............................................................................................ 8
Development of Business Plan .................................................................................. 8
Executive Summary: ................................................................................................... 10
Chapter 1: Introduction................................................................................................ 11
Farmer Producer Organization (FPO) at a Glance ................................................... 11
About Producer Company: ...................................................................................... 13
Block Index Map ...................................................................................................... 13
SWOT Analysis for the proposed business of the FPO ............................................ 14
Business Activity – I (Input Shop) ............................................................................ 15
Sale of inputs .......................................................................................................... 15
Business Summary – Seed Facilitation ................................................................ 15
Critical Assumptions: ........................................................................................... 16
Business Summary – Fertilizer Facilitation ........................................................... 17
Business Summary – Pesticides/ Insecticide ....................................................... 18
Business Activity – II (Aggregation and Sale of Produce) ........................................ 18
Operational Plan .................................................................................................. 18
Sale of produce ....................................................................................................... 20
Marketing Strategy............................................................................................... 20
FPC can provide the marketing support to its members in two ways........................ 20
Business Summary – Aggregation and Sales of Produce (Trading) ..................... 21
Business Summary – Aggregation and Sales of Produce on behalf of members: 22
Business Activity – III (Primary and secondary processing of surplus produce) ..... 23
Need of the proposed business activity ................................................................ 23
Operational Plan .................................................................................................. 23
Service charges ................................................................................................... 24
Business Summary - Cleaning and Grading Unit ..................................................... 24
Farmer Producer Organization Business Plan Page | 2

General Profile of FPO ......................................................................................... 25
FPC village wise detail ......................................................................................... 26
Crop wise area, production, and productivity of Block (Based on Baseline and
DPR).................................................................................................................... 26
Crop wise Area, production, and productivity of shareholders: ............................. 27
Personal Information about BoDs: ....................................................................... 27
Main Objective of the Producer Company:............................................................... 27
Business Intervention Proposed by Producer Company: ......................................... 27
Value chain in the block for agriculture produce ................................................... 27
Chapter 2: Business Idea and Business Opportunity – Value Chain ........................ 28
Analysis – Scope in the area – Key Commodities / Activities: .................................. 28
Value Chain Analysis: .......................................................................................... 28
Value Chain in Practice ........................................................................................ 29
Value Chains of Interest ....................................................................................... 29
Mapping the Value Chain ..................................................................................... 30
Chapter 3: Market Plan & Risk Analysis ...................................................................... 31
Market Plan and Risk Analysis: ............................................................................... 31
Assessment of Market Opportunities.................................................................... 31
Designing the Strategies for Marketing ................................................................ 32
Post Sales Service that an FPO can offer ............................................................ 33
Customer Communication.................................................................................... 33
Risk Management ................................................................................................ 33
Harvesting Schedule.................................................................................................... 34
Plan for Purchase of Inputs and sale of Outputs: ................................................. 35
Chapter4: Organizational and Management Plan ........................................................ 37
Human Resource Plan ............................................................................................ 37
Role and Responsibility of Staff ........................................................................... 37
Supervisor ............................................................................................................... 37
Role of Responsibility Governing Board (BODs + Promoters) .............................. 38
Organogram ............................................................................................................ 38
Chapter 5: Financial Plan ............................................................................................ 39
Variable Costs: ........................................................................................................ 39
Fixed Costs: ............................................................................................................ 39
Other Costs: ............................................................................................................ 40
Capital Investment................................................................................................... 43
Work Shed ........................................................................................................... 43
Variable Cost ....................................................................................................... 46
Depreciation estimates: ....................................................................................... 47
Income estimates: ................................................................................................... 48
Cleaning and Grading .......................................................................................... 48
Cleaning and Grading Income Estimates ............................................................. 48
Trading ................................................................................................................ 48
Working Capital Requirement .............................................................................. 50
Profit and Loss Statement .................................................................................... 50
Cash Flow Statement .......................................................................................... 51
Balance Sheet ..................................................................................................... 52
Sensitivity Analysis .............................................................................................. 52
Key Financial Indicators: ...................................................................................... 54
Chapter 6: Expected Impact of the proposed project ................................................... 55
Chapter 7: Annexure ................................................................................................... 56
Sources referred .................................................................................................. 56

List of Tables
FPO at a glance
SWOT Analysis
General Profile of FPC
PC village wise detail
Crop wise area, production, and productivity of block

Crop wise Area, production, and productivity of shareholders
BoD Profile
Gaps identified and interventions proposed

Administration expenses
Institution expenses
Fixed electricity expenses
Advertisement expenses
Manpower Expenses
Agri-produce purchase quantity in quintals
Agri-produce procurement expenses
Agri. Input quantity
Input purchase cost estimates
Variable electricity cost estimates

Direct manpower expenses
Depreciation employing the Straight-Line Method

Members’ and Non-Members’ Cleaned and Graded Quantity in Quintals
Cleaning and Grading Income Estimates
Agri-produce trade quantity in quintals

Agri-produce trade estimates
Agri-input trade quantity
Agri-input trade estimates
Assessment of working capital

List of Abbreviations
FPCL Farmer Producer Company Limited
BOD Board of Directors

CFC Common Facility Centre
FPO Farmer Producer Organization
FCSC Farmer Common Service Centre

Ha Hectare
HHs House Holds
Kg Kilogram
KVK Krishi Vigyan Kendra
IA Implementing Agency 10,000 FPOs Formation and Promotion Project
MRP Minimum Retail Price

MSP Minimum Support Price
PPP Private Player Parties
SWC State Warehousing Corporation

SFAC Small Farmer Agribusiness Consortium
PA Producer Association
PC Producer Company
PG Producer Group
Sq. Ft Square Feet

Qt Quintal
MTG Multitask Group

Background
Department of Agriculture, Cooperation and Farmers’ Welfare, Ministry of Agriculture &
Farmers’ Welfare, Government of India has launched a Central Sector Scheme for
formation and promotion of 10,000 Farmer Producer Organizations (FPOs) with following
objectives:
 To provide holistic and broad-based supportive ecosystem to form new 10,000

FPOs to facilitate development of vibrant and sustainable income-oriented
farming and for overall socio-economic development and wellbeing of agrarian
communities.
 To enhance productivity through efficient, cost-effective and sustainable resource

use and realize higher returns through better liquidity and market linkages for
their produce and become sustainable through collective action.
 To provide handholding and support to new FPOs up to 5 years from the year of
creation in all aspects of management of FPO, inputs, production, processing
and value addition, market linkages, credit linkages and use of technology etc.
 To provide effective capacity building to FPOs to develop agriculture

entrepreneurship skills to become economically viable and self-sustaining
beyond the period of support from government.
Farmer Producer Organizations (FPO):

FPO is a generic name, which means and includes farmer- producers’ organization
incorporated/ registered either under Part IXA of Companies Act or under Co-operative
Societies Act of the concerned States and formed for the purpose of leveraging
collectives through economies of scale in production and marketing of agricultural and
allied sector. However, FPOs registered under Cooperative Societies Act of the State
(including Mutually Aided or Self-reliant Cooperative Societies Act by whatever name it
is called) for the purpose of this Scheme, is to be insulated from all kinds of interference
including in election process and day to day management through suitable provisioning
in their Memorandum of Association and Bye-laws with a view to encourage healthy
growth and development of FPO.
Broad Services and Activities to be undertaken by FPOs:

The FPOs may provide and undertake following relevant major services and activities
for their development as may be necessary: -
 Supply quality production inputs like seed, fertilizer, pesticides and such other
inputs at reasonably lower wholesale rates.
 Make available need-based production and post-production machinery and
equipment like cultivator, tiller, sprinkler set, combine harvester and such other
machinery and equipment on custom hiring basis for members to reduce the per
unit production cost.

 Make available value addition like cleaning, assaying, sorting, grading, packing
and also farm level processing facilities at user charge basis on reasonably
cheaper rate. Storage and transportation facilities may also be made available.
 Undertake higher income generating activities like seed production, bee keeping,
mushroom cultivation etc.
 Undertake aggregation of smaller lots of farmer-members’ produce; add value to
make them more marketable.
 Facilitate market information about the produce for judicious decision in
production and marketing.
 Facilitate logistics services such as storage, transportation, loading/un-loading
etc. on shared cost basis.
 Market the aggregated produce with better negotiation strength to the buyers and
in the marketing, channels offering better and remunerative prices.
Implementing Agencies:
In order to form and promote FPOs in uniform and effective manner so as to achieve the
target of formation of 10,000 new FPOs in 5 years and to make the FPOs economically
sustainable, nine Implementing Agencies, namely, Small Farmer Agribusiness
Consortium(SFAC),National Bank for Agriculture and Rural Development(NABARD),
National Agricultural Cooperative Marketing Federation of India Ltd (NAFED), National
Cooperative Development Corporation (NCDC),Watershed Development Department
(WDD), Small Farmer Agribusiness Consortium – Haryana (SFAC-HR),Small Farmer
Agribusiness Consortium – Tamil Nadu (SFAC-TN), Ministry of Rural Development
(MoRD), North Eastern Regional Agricultural Marketing Corporation Limited
(NERAMAC)shall be responsible to form and promote FPOs.
Development of Business Plan:

Since the BoDs of FPOs are farmers, preparation of bankable business plan is a
challenge for them. Many a time the business plans are prepared by external consultants
without much involvement of Board of Directors or even CEO of FPO and as a result the
business plans are not translated into doable businesses for the FPOs.
A Good Business Plan acts as a compass to the FPO – showing the right direction
needed from time to time. Several FPOs prepare business plans for the sake of
preparation and it remains a statement of intention rather than a tool for direction.
However, a good Business Plan (BP) is the engine that drives the FPO to the destination
it has envisioned.
A good business plan helps the CEO to put their efforts in proper perspective and directs
the plan of activities for the next five years. While preparing a business plan, the CEO
should have the information of all the farmer members with respect to their area under
crops, the yield and income levels, the status of value addition of the crops and the pain
points in cropping, as well as past harvest stages. This helps designing a bottom up
micro plan starting from the last mile producer.
FPO as a business model is an emerging trend in the agri-business markets in the
country. A good business plan for an FPO should handle the financial affairs and

simultaneously address the concerns regarding the burden of agriculture in terms of input
logistics, quality parameters, technology and satisfactory returns to the efforts and
investments in FPOs.
This tool kit / template is an attempt to create the clear guidelines for development
of Business plan by the FPOs formed under the central sector scheme addressing
all the important aspects of a good business plan.

Executive Summary:
Executive Summary
Collectivization of producers, especially small and marginal

farmers, into producer organizations has emerged as one of the most effective
pathways to address the many challenges of agriculture but most importantly,
improved access to investments, technology and inputs and markets. Department
of Agriculture and Cooperation, Ministry of Agriculture, Govt. of India identified
farmer producer organization registered under the special provisions of the
Companies Act, 1956 as the most appropriate institutional form around which to
mobilize farmers and build their capacity to collectively leverage their production
and marketing strength.
The Coodu Trust, CBBO, Dindigul district, for TNSFAC for
forming FPOs, formed Kurinji Malai Farmer Producer Company Limited at
Mannavanur cluster.
District and Block Details
Dindigul district is located between 10005” and 10009”

North Latitude and 77030” and 78020” east Longitude sprawling over an area of
6266.64 square kilometers. . Dindigul District is bounded by Erode, Tirupur, Karur
and Trichy districts on the North, by Sivagangai and Trichy District on the East, by
Madurai District on the South and by Theni and Coimbatore Districts and Kerala
State on the West. It is spread over on area of 6266.64 Sq. Km. Dindigul District
comprises 3 Revenue Divisions, 10 Taluks, 14 Panchayat Unions, one
Corporation, 3 Municipalities and 23 Town Panchayat. According to the 2011
census, The total population is 21,59,775 with an average MSL is (+) 280 M. The
plains experience the tropical climate and Semi-arid condition and hill area
experience sub-tropical climate. The mean annual rainfall is 836mm. The district is
bestowed with black and red soils supporting variety agricultural crops like Cholam
(6162.445 Ha), Maize (3494.845 Ha), cotton (1298.51 Ha), Groundnut (606 Ha),
Green gram (47.08 Ha), Black gram (131.8 Ha) and also horticultural crops like
Tomato (491 Ha), Brinjal (95.4 Ha), Mango (318.5 Ha), Banana (102.2 Ha). The
net sown area of the district is 215462 ha.

Kodaikanal block is one of the Eight blocks of Dindigul district.
It is in the Western Ghats Hill Ranges with two distinct geographical zones, The
Upper Palani Hills and The Lower Palani hills. The block is a Rainfall assured Zone
receiving the shower throughout the year and the maximum rainfall received is
during the NE Monsoon period. The block enjoys both Sub-Tropical and
Temperate climates. More Horticultural crops-Vegetables, Spices, Plantation and
Floricultural crops are grown here. Known for its unique Hill Garlic cultivation it is
awarded the GI tag. Cut flowers and spices are export-oriented crops that attract
the corporates to have lands here. The block has a population of 115250 with a
gross cropped area of 15780.415ha.
Mannavanur cluster is located at a distance of 38 Km from the block headquarters

supporting the 20957 population. The cluster is having a Net sown area of 32228.9
Ha. The cultivation of Potato, carrot, Hill Garlic, Green Peas are taken-up in the
cluster
Chapter 1: Introduction:
Farmer Producer Organization (FPO) at a Glance:
S. No. Details
Particulars
1 Name of the FPO Kurinji Malai Farmer Producer Company Limited
2 Legal status Active
3 Registration act
Companies Act 2013
4 Registration number and date 14738 and 22/10/2021

5 Place of registration 4-3-68, Kovil Veetu Theru, Mannavanur, Dindigul,
Tamil Nadu, India, 624103
6 Address of registration 4-3-68, Kovil Veetu Theru, Mannavanur, Dindigul,

7 Contact details
4-3-68, Kovil Veetu Theru, Mannavanur, Dindigul,
 Address
 Phone/Fax 8870151502
 Email kurinjimalaifpc@gmail.com
 Website -
8 Board of Directors
 No of directors
10
 Women directors
1
9 Name of the CEO & Contact Mr. R.Martin
Number 7373682162
10 Number of employees on payroll 02
11 Share capital (Rs. lakh) as on
01/02/2023
Rs.2.0 Lakhs
 Authorized Paid up
12 Number of shareholders
 Farmer members
100
 Institutional members
-
 SHGs
-
 JLGs
-
 Farmer clubs
-
 Non shareholder farmers
100
Total
13 Bank account
 Bank and branch ICICI Bank Kodaikanal
 Account number 080305006366
 IFSC ICIC0000803

14 Funding agency
TNSFAC – Equity Grant Sanctioned Rs 1.0 Lakhs
 Name
20.07.2022
 Sanction date
15 Area of operation
 Districts
Dindigul
 Blocks Kodaikanal
 Panchayats Mannavanur,
Poondi,Mannavanur,Kumbur
 Villages
.
 Markets Vadugapattu Garlic Market,

Madurai Maatuthavani Vegetable Market
16 Sectors in which the FPO is  Block wise Agri-Horti
working
17 Key commodities and core 1.Garlic
Activities 2.Potato
3.Carrot
4.Green Peas
The company take up the following activities:

To purchase agricultural output such as Garlic,
Carrot, Potato and Green Peas from its farming
community and sell the same in bulk quantities so that
it can get good prices.
18 Proposed commodity(s) and 1. Garlic and Oil extraction & Cooking Powder
value chain
Trading of Garlic
Activities
19 Licenses obtained
Yet to be apply
 Fertilizer
Yet to be apply
 Pesticide/Insecticide
Yet to be apply
 Seed
Yet to be apply
 FSSAI
20 Infrastructure available with FPO  Administration Office

21 Business turnover achieved Rs.13.5 Lakhs
22 Profit -
23 Major risks faced 1.Mobilisation of farmers
2.Share Money Collection
3.Lack of farmers unity
24 Good practices promoted by the 1.Vadugapatti and Oddanchatram market is an
FPO good source for FPO
25 Major markets and distances 1.Vadugapatti Market – 140Km
2.Madurai Market– 152 Kms
3. Oddanchatram Market – 123 Kms
26 Major banks and distances 1.Punjab Narional Bank – 1kms
2.ICICI Bank – 32 Kms
3.Canara Bank – 14Kms
4. Indian Bank- 32 Kms

About Producer Company:
KURINJI MALAI FARMER PRODUCER COMPANY LIMITED

(a Farmer Producer Organization) was registered on 22.10.2021 under the
Companies Act 2013 and has its registered office at4-3-68, Kovil Veetu Theru,
Mannavanur, Dindigul, Tamil Nadu, India, 624103. The company has 100
shareholders. The major focus has been in promotion of small and marginal
farmers into FIG’s and FPG’s. The Kurinji Malai Farmer Producer Company
Limited has a strong back up of committed promoters and directors who are
however not very skillful in terms of marketing and financial aspects of business
management but have expertise in agriculture production and understand
collective marketing concepts. It has applied for Rs. 2 lakhs for Equity grant from
the Implementing Agency assisted by the 10,000 FPO Formation and Promotion of
Central Sector Scheme and implemented by the Govt. of India. FPOs can get up to
Rs. 18 lakh / FPO as Management Support. This Company will have its main
revenue generating business activities in terms of aggregation and marketing of
produce.
The Producer Company formed in Kodaikanal,Mannavanur. This

FPO has been established in Mannavanur village of Dindigul. The major crops
identified for leveraging in this block are Garlic, Potato,Green Peas,Carrot etc.
Details about the crop portfolio in this block is detailed out in this plan. This section
also highlights the number of villages located in this block within the block. These 4
villages form the Watershed for business for the FCSC that is proposed to be
established. There are around 5466 HHs with cultivable land of 6083 Ha in the
area.
Block Index Map:
This Business Plan has been developed by generating

related business ideas in consultation with the members of the Producer Company.
Accordingly, the Profile of FPO, Crop/Commodity Portfolio details, Marketing
Strategy, Operational Plan and Financial Plan including Income Expenditure
Statement, Cash Flows, Chart, etc. have been developed and incorporated. This
Business Plan has been prepared taking into consideration existing membership of

Kurinji Malai Farmer Producer Company from Mannavanur Gram Panchayats and
Kookal and Poondi. The average land holding is 0.86 Acres per producer. Also,
taking into consideration assumptions of proposed produce productivity (4.5T/Ac),
seed rate (0.300T/Acres), average sale price (Rs 270/Kg), minimum support price of
the commodity (Rs 30000/Quintal), average Mandi price of the commodity
(Rs.25000/Quintal), quantity and number of times of fertilizer application and
average price of the fertilizer, percentage of marketable surplus of the produce and
percentage of allocation of land for different commodities in Kharif and Rabi
season.
The major commodities identified for undertaking target business activity with
Kurinji Malai Framer Producer Company Limited is Garlic with allocation of land 100
% and 50 % of the cultivated area respectively in Kharif season, whereas in Rabi
season the proportion is 60% and 40% of the cultivated area respectively for
cultivating Garlic,Potato,Green Peas and Carrot..
This Business Plan has been prepared in consultation with representatives of
Kurinji Malai Framer Producer Company in coordination with other stakeholders of
the 10,000 Central Sector Scheme Project. This Plan has been developed for a
period of 5 years.
SWOT Analysis for the proposed business of the FPO:
Strength Weakness
 The block is endowed with a  High-level slopes used for the
Temperate and Subtropical climate, cultivation with terracing
offering an opportunity for the  Distance from the main marketing
cultivation of different horticultural centre for different villages is more.
crops. Farm to mainland transport itself
 It is an assured rainfall zone for involves high drudgery
successful crop cultivation.  Unawareness on new cultivation
 Rich soil with good humus technologies of crops.
encourages multi-tier farming.  Irrational use of pesticides and
applying Compost fertilizer in Carrot,
Potato and Garlic.
 Traditional family farming is followed
by many farmers
Opportunity Threats

 Export opportunities for the temperate  Wild animals damage of crops.
crops especially fruits is more.
 Non-availability of proper marketing
 Value addition is the key opportunity channel.
available for the enhancement of the
livelihood of farmers.
 Continuous rain fall may affect
 Availability of natural and organic yielding capacity
products
 Not being suitable for mechanization
 Government schemes to complement on hills
the role of FPO
 Administrative controls
 Limited government control

Business Activity – I (Input Shop):
The Businesses the FPO can undertake shall be classified into three main
categories
• Trading – “buying and then selling” businesses such as procurement and sale of
inputs, commodities, value added products etc.
• Production – Primary / secondary processing of the goods of their farmer members
• Services – Providing services such as dissemination of latest pre and post-harvest
practices and technology, doorstep delivery of inputs, crop health monitoring,
advisories on Integrated Pest Management (IPM) and Good Agriculture Practices
(GAP) and marketing of produce on behalf of farmer members
 Need of the proposed business activity

 Operational Plan
a) Advertisement of activities
 Input Promotion
 Output Promotion
b) Collection of indents
c) Vendor selection
d) Pricing and payments
e) Delivery of inputs to farmers
f) Pert Chart depicting the activities along with timeline for supply of inputs
Sale of inputs:
Business Summary – Seed Facilitation:
S. No Particular Y1 Y2 Y3 Y4 Y5
1 No. of Members 100 140 200 200 200
2 No. of Active Members 100 140 200 200 200
3 No. of Non-Members 0 10 25 35 35
4 Seed Quantity Required

(in KG)
Garlic
11880 12118 12360 12607 12859
Potato
4437 4526 4616 4709 4803
Green Peas
197 201 205 209 213
Carrot 1 1 1 1 1
Sub Total
16515 16845 17182 17526 17876

5 Seed Value (in Rs.)
Garlic
3267000 3392928 3522586 3656074 3793492
Potato
226287 235338 244662 254263 264151
Green Peas
44325 46216 47550 49129 50538
Carrot
22500 23001 23513.04 24036 24571
Sub Total (Rs.)
3560112 3697484 3838311 3983502 4132752
6 Seed Revenue (in Rs.)
Garlic
297000 363528 370799 378215 385779
Potato
22185 27154 32314 37669 43225
Green Peas
4928 5024 5739 6272 7037
Carrot
2500 2550 2601 2653 2706
Sub Total (Rs.)
326613 398256 411452 424808 438747
Business Summary – Fertilizer Facilitation:

1 No. of Members 100 140 200 200 200
4 Fertilizer Quantity Required
(in KG)
Urea-45KG 4942 5041 5142 5244 5349
DAP-50KG 6589 6721 6855 6992 7132
SUPER POSPHOTE -50KG 4942 5041 5142 5244 5349
POTAS-50KG 4942 5041 5142 5244 5349

Sub Total (Rs) 21415 21843 22280 22726 23180
5 Fertilizer Value (in Rs.)
Urea-45KG 32947 40327 46275 52445 64193

DAP-50KG 177903 188182 198801 209769 221097
POTAS-50KG 138376 146184 154250 162579 171180
Sub Total (Rs.)
398646 430142 461025 492971 531361
6 Fertilizer Revenue (in Rs.)
Urea-45KG 10982 15123 20567 26222 26747
DAP-50KG 13178 20162 27421 34961 42793
POTAS-50KG 9884 15123 20566 26222 32096

Sub Total (Rs.)
43928 65530 89121 113629 133732
Critical Assumptions:
 The Area under these producers are based on the average area (0.68 Acres) per
producer in the FPC.
 The member growth is the estimate based on the discussions with the BoD of the
FPC
 Fertilizer dose per acre is based on expert opinion
 Rate for the fertilizer is based on the current market rate and is subject to change
over a period of time
 Discount offered by the fertilizer supplier is based on the difference in the rate at
the distributor level and the retailer & subject to change over a period of time
 Member growth is 5% every year against total household of the block
 First year 0% of non-members against members and 2nd year onwards
1% increase in non-members.
 2 to 5 % inflation is considered for cost and revenue every year

Business Summary – Pesticides/ Insecticide:
1 No. of Members 100 140 200 200 200

Pesticide application in 4 4 4 4 4
4
Acres
Cost of pesticides
application per Acres
(Rs) 1500 1800 2000 2200 2400
5 Pesticide value (in Rs.)
40000 42400 44944 47641 50499
6 Pesticide revenue (in Rs.)
40800 43248 45843 48593 51509
Critical Assumptions:
 In market there are a range of pesticides and related suppliers. Therefore, we
have considered Rs 607 per Acres as purchase cost for the pesticide.
 6% margin is considered on the pesticide purchase cost.
Business Activity – II (Aggregation and Sale of Produce):

 Proposed business activity:
Farmers of this block undertake individual sale of their produce. They sell their
produce to traders in the local mandis only. They have limited exposure to other
markets or sales channels. They have inadequate knowledge of business terms &
conditions of other procurers like processors, traders of terminal markets, direct
license holders etc. They submit to the dictates of the local traders due to inability to
scout and link with other potential buyers and suffer from unfavorable trading terms.
About 90% of the famers in this block go for distress sale of their produce in order
to service credit availed for agro-input purchase and domestic requirements. This
becomes more pressing after kharif due to the need for reinvesting on agro- inputs
for Rabi cropping.
The FPC members decided to explore other markets with assistance from the FCSC
service provider and line department officials to help the farmers expand their market
in search for better prices and trade terms. They also decided to facilitate aggregated
sale of produce.
Operational Plan:
a) Scouting buyers:
FPC Leaders will scout market players and make exhaustive commodity-wise list of
potential buyers along with the terms of trade. They will shortlist potential buyers
based on negotiated settlements and draw up rate contracts. The PC will be
supported by the FCSC service provider during the 1st year of this business so as
to enable them to do it independently in subsequent years.
b) Awareness generation:
The PC will brief the PC leaders the terms of trade and quality specifications and
prices prevalent at higher order markets. The PC leaders will in turn share the same
with PC members and enlist quantum of surplus produce that each member is willing
to sell collectively through FCSC. Public notices will also be put at important locations
(like GP, School, Hospital, FCSC etc.) to make other farmers of the block aware
about the initiative of the FCSC. Quality requirements and price offers of higher order
market will be mentioned in such notices along with invitation to sell through FCSC.
c) Aggregation of produce:
Each FPC leader will create a list of interested group members along with surplus
quantum available for sale through FCSC. These lists will be submitted to the FPC
BoD. Non-members directly convey their willingness and quantum of surplus produce
to be sold through FCSC to the FPC BoD. Final list outlining the quality and quantum
of produce available for sale through FCSC will be drawn up by the FPC BoD. 70%
of produce after cleaning grading will sold immediately to the bulk purchasers in the
region and rest of the produce will be stored at nearest SWC (Farmer will be
motivated by FPC to store at least 30% at SWC for good remuneration with support
of pledge by nearest nationalized bank).
Following are the details of the nearest Storage facilities:
S.No. Name Godown Storage Capacity (MT)

1 Primary Processing Center- Poondi 1000 (MT)
d) Soliciting and servicing orders:

The FPC will identify buyers from higher order markets and negotiate with them for
rate contract and supply orders. As per the demand from these identified buyers the
FPC will undertake supplies at pre-negotiated rates. The FPC will also undertake
regular market scouting and maintain liaison with other buyers to ensure that regular
enquiries are received by the FCSC. As and when a suitable order comes up, the
FPC will intimate the farmers through FPC leaders and open notices about the crop,
quality specifications and quantum requirement. The FPC will intimate the terms of
payment and time and location of aggregation under the same notice.
The FPC will also take up spot sales from time-to-time based on queries from the
market. In such cases, the FPC will announce the rates to the farmers on daily or
deal basis after deducting FPC facilitation charges. Farmers will be asked to bring
their produce to the FCSC at a given time. FPC will monitor the entire process based
on terms of the buyer. Record of the quality of produce & price offered will be noted
at the FCSC and supply and payment receipts will be issued to the farmers. The
FPC will keep equipment like moisture meter and weighing machine for free use of
members to facilitate trading.
e) Payment to farmers:
Buyer will pay money of produce bought to FPC that the FPC will pass on to the
members either through the FPC bank account or directly to farmers in cash after
deduction of facilitation charges. FPC will then transfer money to members in case

of account transfers. For other farmers, the treasurer of the FPC will directly make
the payment from FCSC counter.
The FPC will insist on advance or spot payment from the buyer. It will pay the farmer
after receiving payment from the buyer. Under ideal circumstances, the farmer will
get money within 48 hours of the transaction.
In the financial calculations, the rates for the produce have been maintained at the
average Mandi price of nearby APMCs at the time of preparation of this proposal. No
variations have been shown over the 5 years of project period. This has been done
to overcome possibility of hazardous estimation due to inconsistent movement of
commodity prices and low annual increment of MSP.
Sale of produce
Marketing Strategy:
The FPC has extensively discussed the challenges and opportunities in marketing of
agro-produce in the district and other major markets. Such deliberations were
facilitated by inputs from the FCSC service provider. The FCSC service provider
gained insights on the same through interaction with various market players covering,
local traders, processing industries and terminal market traders. It was found that
willingness exists among processors and terminal market traders to procure directly
from a farmers’ organization if quality and supply issues are suitably addressed. They
are ready to offer rates that were better than those offered by the local traders with
whom the farmers of this block have been traditionally dealing. Many of these buyers
from higher order markets are ready to lift the produce from the FCSC if supply
quantity is adequate and timely availability is ensured.
The FPC will establish contacts with potential buyers. They will be guided by the
FCSC service provider in the process. Samples of produce will be sent to the buyers
and purchase terms negotiated with defined targets regarding price and payment
terms.
The FPC will undertake sale facilitation for both processed (cleaned, sorted and
graded) and unprocessed (assorted) products. They will try to target specific market
segments as buyers of different categories of product. Pricing of the products will
also be different for the processed and unprocessed categories. It is assumed that
the unprocessed produce will sell at a discount of 25% compared to processed
product.
The FPC intends to reduce its dependence on local markets for sale of the farmers’
produce with an eye on maximizing returns. Therefore, it targets to sell 80% or
more of the produce to processing industries and traders of terminal markets. It is
assumed that better price will be realized from the higher order markets. However,
for financial calculations the lower rates similar to those quoted at nearby APMCs
have been used in keeping with the conservative nature of accounting practices.
FPC can provide the marketing support to its members in two ways:
1. Trading: FPC may purchase the produce of its members at the rates prevailing in
the local market. Aggregate, Clean, Sort, grade, pack and sale the aggregated lots
in local/ terminal market or to the processors. In this case the ownership of produce
will get transfer from member to FPC upon purchase of the produce and FPC will
be required to pay the farmer at the committed price irrespective of loss or gain in

the transactions. This is a risky proposition for the FPCs and shall be exercised
very carefully.
2. Alternatively, FPC can provide aggregation, segregation, cleaning, sorting,
grading, packaging, standardization, quality assaying and marketing support to its
members i.e. small and marginal farmers who have small quantities by aggregating
the lots of similar qualities in trackable lots to derive economy in transport. Proper
record of Quantity and Quality received from each member shall be maintained by
the FPC. Aggregated lots shall be sent for sale to local / terminal markets or
processors. Sales realization per quintal or per Kg is derived by dividing the total
sales realization of the lot by the lot quantity. Sales realization is distributed to the
members at this particular rate multiplied by his quantity after deduction of transport
charges and service charge of the FPC for the services provided. In this case the
ownership of the produce remains with the member (farmer) till the produce is sold.
FPC have neither incure any profit nor any loss on such transactions and earn
only the service charges at a fixed percentage of the sales realization which is fixed
well in advance for all the transactions.
Business plan may include the quantities transacted by both the above methods in
the tables below for the five years
Business Summary – Aggregation and Sales of Produce (Trading):
1 No. of Members 100 140 200 200 200
Budgeted
4 Procurement
Quantity (in Qtls)
Garlic
85 88 90 93 96
Potato
30 31 32 33 34
Green Peas
75 77 80 82 84
Carrot
55 57 58 60 62
Sub Total (Rs.) 245 252 260 268 276
Budgeted
5 Procurement Value
(in Rs.)
Garlic
1997500 2057425 2119148 2182722 2248204
Potato
48000 49440 50923 52451 54024
Green Peas
412500 424875 437621 450750 464272
Carrot
66000 67980 70019 72120 74284
Sub Total (Rs.)
2524000 2599720 2677712 2758043 2840784
Budgeted Sale Value
6 (in Rs.)
Garlic
159800 169388 179551 190324 201744
Potato
3840 4070 4315 4574 4848
Green Peas
49500 52470 55618 58955 62493
Carrot
16500 17490 18539 19652 20831
Sub Total (Rs.)
229640 243418 258024 273505 289915
7 Budgeted Profit / Loss
(Rs.) 2294360 2356302 2419688 2484538 2550869
Business Summary – Aggregation and Sales of Produce on behalf of members:

1 No. of Members 100 140 200 200 200
4 Budgeted Quantity (in

Qtls)
Garlic
1386 1414 1442 1471 1500
Potato
444 453 462 471 480
Green Peas
164 168 171 174 178
Carrot
690 704 718 732 747
Budgeted Sale
5 Value (in Rs.)
Garlic
2605680 2762020 2927742 3103407 3289611
Potato
56794 60201 63813 67642 71701
Green Peas
108405 114909 121804 129112 136859
Carrot
207060 219483 232653 246612 261408
Sub Total (Rs.)
2977939 3156615 3346012 3546773 3759579

Business Activity – III (Primary and secondary processing of surplus
produce):
Need of the proposed business activity
Farmers have expressed their concerns regarding lack of remunerative prices for
their produce in all group meetings. However, during interaction with market players
(traders, procurement agencies, processing units etc.) it was clearly stated that they
are unable to pay better prices as produce brought in by the farmers are a mix of
good and poor quality and supply consistency is lacking. The market players,
especially the industries, expressed their willingness to pay more for quality produce
specifically for cleaned and graded products supplied as per order and specifications.
During subsequent meetings these findings were shared with FPC leaders. The
leaders discussed the matter among themselves and group members and expressed
their desire to take up basic cleaning & grading through the FCSC and also facilitate
aggregation and collective marketing of the produce to higher order markets to
achieve better price through negotiated settlements long-term tie-up. This will help
farmer members to realize better prices for their produce.
Operational Plan:
Plant capacity & product priority:
The common facility center will have a cleaning, sorting,

grading and packing unit with capacity to process 1-2 tons of produce per hour. In
terms of cleaning and grading unit, it is assumed that with 8 hours of daily operation
with 70% Efficiency around 1 tons of produce will be processed per day. This
capacity will allow the processing unit to clean and grade only a small portion of
total grain production in the block. Keeping this limitation in mind, priority will be
accorded to those crops that have the highest volume of production and good
market demand. Therefore, Garlic will be the priority products for this processing
unit.
Batching and Queuing:
Particulars Year Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May
Quantity (in
Qtls) Garlic
Yr 1 2 0 0 0 0 1 2 2 0 0 1 2
Yr 2 2 0 0 0 1 1 1 2 0 1 1 1
Yr 3 3 1 1 2 2 3 2 1 1 1 1 2
Yr 4 5 1 1 2 4 5 3 1 1 2 2 3
Yr 5 6 1 1 4 5 5 2 3 2 4 4 3

Service charges:
Members will have to pay Rs. 8000 per quintal (Rs. 10000 per quintal for non-
members) for cleaning, sorting, grading and packing or part thereof as processing
fee after weighing of the produce at the entry gate. The payment will be entered in
the processing log book and a receipt will be issued to the farmer. The processed
goods will be handed over to the farmer on production of the receipt. The FPC
Secretary will compile and maintain FPC wise records of all processed produce on a
daily basis. This information will come in handy while interacting with buyers and
fixing actual transaction days during sale of the produce. The rates and revenue
realization figures are presented in the following tables. Processing charges will be
enhanced by 5 % every year.
Business Summary - Cleaning and Grading Unit
No. of
100 140 200 200 200
1 Members
No. of Active
2 Members 100 140 200 200 200
No. of Non-
3 Members 0 10 25 35 35
Processing
Quantity (in 1 1 2 3 4
4 Tonnes)
Service
Charges (in 9000 9000 10000 11000 12000
5 Rs.)
General Profile of FPO:
S. No Particulars Details
1 Name of Organization Kurinji Malai Farmer Producer
Company Limited
2 Status of Organization Active
Type of Farmer Common Service

3 Centre
4 Location of Producer Association Dindigul

5 Catchment Location Kodaikanal
6 Gram Panchayat Mannavanur, Poondi, Kookal
7 District Dindigul
8 Block Kodaikanal
9 No. of Villages in the block 5
Share collection till 31/03/2023 Rs.1,00,000

10
Share Allotment till 31/03/2023 100

11
Paid-up Capital at the time of Rs.1,00,000

12 registration (in Rs.)
13 Bank balance as on 31/03/2023 Rs.127,316
14 Proposed PC Paid-up Capital (in Rs.) Rs. 1,00,000
15 Authorized Paid-up Capital (in Rs.) Rs.10,00,000
16 FPO Project Land Detail -
FPC village wise detail:

Distance Average
No of Village
from FCSC Land
S. No Village producers Area
block in Holding
in block of
Kms (Acre)
(Acre)
1 Poondi 8 0.98 1 0.98
2 Mannavanur 0 0.65 66 43.12
3 Kumbur 3 0.32 33 21.06
4 Keelanavayal 6 00 00 00
5 Kauvnji 7 00 00 00

Crop wise area, production, and productivity of Block (Based on Baseline and
DPR):
Productivity
Name of
Sr. No Area (Acre) Production (MT) (KG/Acre)
the Crop
1 Potato 2028.62 23329.18 11.5

2 Green Peas 1000.64 6254.03 6.2
3 Carrot 977.52 9775.20 10
4 Garlic 676.65 4229.06 6.2
5 Banana 1777.58 100433.27 56.5
6 Coffee 6814.47 0.80 5451.5
7 Orange 1251.39 7.5 9385.4
8 Pepper 455.37 0.14 65.4
9 Pear 551.14 18738.76 34
10 Plums 375.14 4126.59 11
Crop wise Area, production, and productivity of shareholders:

Productivity
Name of the
Sr. No Area (Acre) Production (MT) (Quintal/Acre)
Crop
1 Garlic 39.60 138600 35
2 Potato 9.86 44370 45
3 Green Peas 6.57 16425 25
4 Carrot 9.86 69020 70

Personal Information about BoDs:
BoD Profile:
Designation Name Age Gender Landholding Role

(Acre)
Managing 52 Overall responsibility
S G.Sakthivel Male 0.86
Director for FPC
35 Financial Planning
Director Janaharaj Male 0.22
and Bank Activities
37 Execution of official
Director Dhinakaran Male 0.45
activities
43 Aggregation of
Director Magudeswaran Male 0.95
Produce
39 Aggregation of
Director Aarikrishnan Male 0.41
Produce
42 Purchase of Inputs
Promoter Gopalakrishnan Male 1.04
and Machinery
46 Sale of Produce
Promoter Dhanapal Male 1.52
39 Sale of Produce
Promoter Dhanamurugan Male 1.57
47 Marketing planning
Promoter Kannadhasan Male 0.32
and supporting FPC
37 Interaction with
Promoter Azhagujothi Female 0.16 Farmers for procuring
produce
Main Objective of the Producer Company:
The main aim of FPO is to ensure better income for the producers
through an organization of their own. Small producers do not have the volume
individually (both inputs and produce) to get the benefit of economies of
scale. Besides, in agricultural marketing, there is a long chain of intermediaries
who very often work non-transparently leading to the situation where the producer
receives only a small part of the value that the ultimate consumer pays. This will be
eliminated. Through aggregation, the primary producers can avail the benefit of
economies of scale. Farmers Producers will also have better bargaining power in
the form of the bulk buyers of produce and bulk suppliers of inputs . To double the
farmers income by value addition of farm produce through FPC.
The Kurinji Malai Farmers’ Producer Company will improve the income of its
farmer members from an average of Rs.25,000 per annum per household by 15
percent in three years starting from 2022.

Business Intervention Proposed by Producer Company:
Value chain in the block for agriculture produce:
Value chain gap versus proposed interventions:

Value Chain Gaps Interventions
Input Services All ready Exisit Sales of Inputs with lesser

Margin
Procurement  Knowledge on  Daily updation of
marketing situation market Price and
 Weighing machine Availability
 Moisture measuring  Training for BoDs
knowledge and Marketing Team
 Grading Technique  Equipment Training
knowledge
Storage No own building for storage Using government PPC at
Poondi
Processing  No drying yard  Pack House for FPO
 Transportation cost  Procurement of
to storage PPC Cleaning and
 Packing materials Grading Machine for
 Cleaning and FPO
grading Machine  Subsidy from
government for
Packing Materials
Market Linkages  Genuine Buyer  Facilitating
 Buyer with better marketing tie ups
price for the products between buyers of
 Mobilization of produce and FPO
Buyer  E-Nam Marketing
 and GEM Portal
Marketing
 Digital Marketing
viz…Flipkart,Indiam
art,Amazon,Bigbask
et,

Gaps identified, and interventions proposed:
Proposed Business
S. No Period Issues
Idea
1 Pre-sowing  Lack of labor for land Usage of machineries
Preparation
2 Supply of inputs  Shortage of Inputs  Advanced
on season procurement of input
values at FPC
 Delivery of inputs to
farmers on time
Agri. equipment  Unavailability of  Availing rental Agri
3 rental vehicle during Equipment from Agri
after harvesting/
harvest engineering
Value Addition  Too much of rental Department.
cost
4 Marketing  Intervention of local  Partnership between

buyers FPO and large
 Market distance from companies and
FPO location Exporters

Chapter 2: Business Idea and Business Opportunity –
Value Chain
Analysis – Scope in the area – Key Commodities / Activities:
Value Chain Analysis:

A successful Business Plan is one that has found a way to create value for customers
– i.e., a way to address a need of customers. The customers in an FPO can be farmer
members or retailers or wholesalers depending on the type of product or service the
FPO chooses to operate with. The very foundational objective of an FPO is adding
value to the produce as against selling the raw product directly in the market.
“Value Chain Development” in the context of FPO: Value chain development activities of
an FPO, may be defined as under for easy understanding of our share holder farmer
members
“The full range of activities that is required to produce a product or service
from pre-production, soil preparation, sowing of seeds and up to packing and
sale to the final customers constitutes the Value Chain. It involves combination
of physical transformation and the input of various producer services.”
In short, a value chain effectively:
• Traces product flows and shows value addition at different stages
• Identifies key actors and their relationships in the chain
• Identifies enterprises that contribute to production, services and required financial
support
• Identifies bottlenecks preventing progress
• Provides a framework for sector specific action
• Identifies strategies to help local enterprises to compete and to improve earning
Opportunities
• Identifies relevant stakeholders for program planning
Value Chain in Practice:
Value chain thinking begins from the farmer’s point of view as well as from the
consumer’s point of view. Farmer’s point of view refers to the scope of developing
the value chains based on existing gaps in processes or activities/products of the
farmers. As this is planned from the viewpoint of farmers this can be called as supply
driven value chain.
Farmers buy in retail and sell in wholesale losing at both the ends
So, an FPO should learn to buy in wholesale (Inward logistics) and sell in
retail or up markets (Outward logistics), for its farmer members.
Value Chains of Interest:
Value Chain Analysis shall be conducted for the Primary and Secondary crops
allotted to the FPOs.
Exploring the market opportunities, include:
 Displacing existing suppliers whose customers are finding them unreliable
 Import substitution
 New products
 Opportunities currently being missed such as reaching to the FMCG base of
a product
 Understanding the consumers’ piece of the value chain thinking puzzle
should lead farmers to ask:
 What products, and what characteristics of those products, are consumers
looking for?
 Which crops and how much should I grow and how should I grow them?

 Can I process those crops to make them more attractive/valuable to the
consumers?
 How can I improve my share, in the overall process leading to the crop
reaching the consumer?
Though simple in definition, the concept of value chain holds tremendous meaning
to it. Farmers start their agricultural activities from pre-sowing and end up with
marketing of their produce, during which, the initial produce will transform into a
consumer good. A full range of value chain prism is to be visualized from pre sowing
to marketing for describing this value chain. A habit of looking at any agricultural
produce through its value chain prism must be cultivated for understanding the
business elements of operation of the produce.
Mapping the Value Chain:

Value Chain of priority for our FPOs has already been identified and communicated
as primary and secondary crops allotted to FPOs. Now let us proceed with the next
step of mapping of each value chain.
Mapping the value chain has three main objectives:
 Visualize networks to get a better understanding of connections

between actors and processes in a value chain
 Demonstrate interdependency between actors and processes in a value
chain
 Create awareness of stakeholders to look beyond their own involvement in
the value chain
“An FPO can become sustainable if …50… % of its activities are

focused on input supply for the .............. core crops identified,
…30……. % on marketing of one core commodity and …20. % on
technology and services.
An FPO should learn and plan to buy in wholesale (Inward logistics) and
plan to sell in retail or up markets (Outward logistics), for the benefit of its
farmer members.

Chapter 3: Market Plan & Risk Analysis
Market Plan and Risk Analysis:
Once the Business Opportunities are identified, analysis should be made on markets.
i.e., market for selling the inputs to its members and non-members and market for
selling its products.
Many FPOs struggle to find potential markets for their produce. Sometimes even the
availability of potential markets is enough as they lack professional approach to
markets. Due to this, they prefer to restrict themselves to input businesses with their
share holder farmers and non-shareholders as it is a low hanging fruit and risk free.
However, the role of marketing gets very important as an FPO matures from selling
the primary products to secondary and tertiary products or processed goods. To
sustain in the business, it is advised to cater to the needs of both members as well
as non- members albeit with an advantageous treatment towards members to
encourage their presence and growth with the FPO.
Assessment of Market Opportunities:

Assessment should begin with analyzing the strengths and weaknesses of an FPO
in terms of its product/service, access to consumers and the capability to reach
different segments of the market. This can be done by
Understanding the markets - Complete information about the market - its
coordinates like distance, climate, seasons, traders etc. It is good to target more than
one market so that one can hedge the other in times of eventualities
Profiling the customers - Profiling is about understanding the type of consumers,
them
needs, and their attitude towards the product/service of the FPO. Complete
information about buyers or consumers - their age group, ethnicity, sex, behaviour,
preferences, occasions of buying, frequency of buying, education levels and cultural
demographics among others
Type of product Type of customer targeted
S. No. Type of Product Type of customers targeted
1 Garlic Garlic Oil producer/ Exporter

2 Potato Wholesale Trader
3 Green Peas Wholesale Trader
4 Carrot Wholesale Trader
An understanding about the quality of the product - Quality is the extent to which
a product or service meet the needs, from the customers’ point of view. Quality
includes functionality, attractiveness, and safety with respect to certification
requirements. Profile the product/service to be marketed. Its uniqueness is an
important aspect. Ask yourself the question “why market should buy our product
instead of the other competitor’s product?” Profile the product in terms of its shelf life,

quality, consumer preference, Price advantage, competitiveness in processing and
other special features such as organic or residue free
Understanding the Competitors - To the extent possible an FPO should match if
not exceed to the “essential needs” offered by the competitors
Understanding the pricing of the product - Pricing depends on transportation
charges in addition to cost of production, processing, value addition, packaging etc.
In certain instances, it may not be workable to handle a customer at a faraway place,
if the transportation charges are included or its shelf life doesn’t support for the
duration of its transport or for any other factors affecting its viability
Understanding features of your product – Based on the markets it is catering to,
appealing features such women produced products made from natural ingredients,
product with unique features like tribal products etc. can be marketed by emphasizing
this value proposition
Robust Supply Chain Model:
Supply Chain and Market are closely existing entities. FPO should have a robust
supply chain model in place before attempting to approach markets. The key
informants about of a robust supply chain model are
 Total saleable quantity in the given season/week/sale period
 Specifications about packing/labelling/branding etc.
 Grading and quality specifications meeting the market best standards of that
commodity
 Weekly/daily/monthly volume of saleable quantity out of total saleable
quantity
 Point or place of delivery (Ex-delivery point)
 Transport details
 Sample circulation norms
 Expected Price
 Payment terms
 Tax related information
Without the above informants firmly in place, any attempt by an FPO to approach
markets,
may sometimes be a less remunerative exercise and on occasions may even result
in a failure.
Designing the Strategies for Marketing:

Strategies for marketing in most cases are for increased sales. Sales is about
contacting
potential customers and convincing them to buy the product or service of the FPO.
An FPO handles the products that are seasonal in nature. Planning for marketing
requires logistics such as warehouse, cold storage etc. In the absence of strong initial
capital, it can sometimes be difficult for an FPO to survive without a down payment
by the customers. However, this may not always be possible keeping in view the
market standards and sales policy of the competitors. In such cases setting a credit
policy is also plays a major role. However, the credit policy should clearly state:
• The customers for whom the credit will be extended
• Credit amount limits for each customer type
• Duration of the credit
• Penalties and consequences of default or delayed payment
• Maximum quantity of sales that should be allowed in credit
Post Sales Service that an FPO can offer:

• Terms of replacement of goods
• Compensation for damaged goods
• Insurance in transit
• Risk free transport without damage
Customer Communication:
Communication is a process of business (“Sender”) giving “information” related to
products and services to the customer (receiver). The receivers here can be:
 Farmer members for the input sales and product procurement requirement
 Suppliers of services such as seed and fertilizer business dealers, mulching,
drip equipment dealers etc
 Retailers, wholesalers, and the final consumers, about the products/services
of the FPO
While an FPO can do the business with both members and non-members, to sustain
its business, preferential treatment can be given to the members as a privilege
feature for being associated with the FPO. As this communication strongly reaches
out to across, there is a possibility of increasing the membership of the FPO leading
to its growth. It is the responsibility of the FPO to identify the robust suppliers of
services in the market and communicate them about the potentiality of their FPO.
Similar is the case with retailers, wholesalers, and customers of the product market.
Considerable time must be spent on communication which becomes the key factor
to achieve the desirable growth of the FPO. Hence, planning for communication
involves,
• Deciding the objective

• Understanding the target audience
• Designing and executing the plan of reaching the target audience
It is better to discuss and finalize the credit policy in the FPO board meeting
Risk Management:
Identification of risks and setting possible safeguards to manage them is an integral part
of the risk analysis. Though in an ideal world all risks can be envisaged to be eliminated,
it is an impossible proposition. So, risk management must involve the process of
identifying risks and assessing whether they can be eliminated entirely or mitigated to
manageable proportion through operational resilience. If the risks seem unmanageable
to the extent of affecting the very existence of the business, then one may discard the
business idea all together. As risks may continue to remain in the business environment
both internally and externally, even after starting the business, it is extremely important
to develop a risk assessment mechanism and risk mitigation strategy. Some of them can
be:

Identifying and mapping the processes/factors that would have the biggest impact
on earnings, if disrupted. For Example, a bad monsoon may severely affect crop
production in rain-fed areas thus reducing earning of the FPO considerably
Identifying critical infrastructure - including processes, relationships, people,
regulations, plant, and equipment - that supports the FPO’s ability to generate earnings.
For instance, the
break-down in the Bulk Milk Chilling unit, could lead to the whole stock of milk to be spoilt
and go waste, besides adversely affecting the supply chain.
Identifying the main vulnerabilities - Vulnerability is the inability to cope with the
adverse effects of an event or risk. For Example, storage, processing, and trading of
commodities can come under new regulation, imposing conditions which the FPO may
find difficult to comply with, at a short notice.
Identifying the weakest links - the elements on which all the others depend. For
instance, a single buyer for all produces, is the weakest link in this scenario
Developing planned response to mitigate the risks. Consider an enterprise creating
some critical infrastructure like a spare refrigerated van for ferrying chilled milk as part of
its contingency plan
Support from Government departments and Corporate for market linkages
State and Central Governments have schemes for preferential procurement of produce
from FPOs. For Ex: procurement of certified seeds through FPOs has been implemented
by the Government of Chhattisgarh. The facilitating agency should be able to get the
relevant information from the respective Governments.
The corporate need continuous supply of desired quality produce for processing and
value
addition. Therefore, they prefer to enter a contract with few FPOs who will meet their
requirements.
Usually the following mechanisms are adopted:
 Retail chains tie up with FPOs for procurement, especially for continuous supply
of vegetables & fruits and processed staples
 Corporates extend dealership for farm machinery and inputs to FPOs
 Corporates provide primary processing machinery to an FPO with a buy-back
arrangement for the produce
 Corporates can initiate contract farming with buy back arrangement of assured
markets

Harvesting Schedule:
Crops Jan Feb Mar Apr May Jun July Aug Sept Oct Nov Dec
Garlic Yes Yes
Potato yes
yes
Green yes yes Yes yes Yes Yes
Peas
Carrot yes
Plan for Purchase of Inputs and sale of Outputs:

Purchase plan for Kharif inputs:
Items Specifications Total Volume UNIT Rate/Unit Amount (Rs.)
Seeds Garlic 00 00 00 00
Seeds Potato 00 00 00 00
Seeds Green Peas 00 00 00 00
Seeds Carrot 00 00 00 00
Pesticides Yyyyyyyyyyyyy 00 00 00 00
Fertilizer Yyyyyyyyyyy 00 00 00 00
Total
Purchase plan for Rabi inputs:
Items Specifications Total Volume UNIT Rate/Unit Amount (Rs.)
Seeds Garlic 00 00 00 00
Seeds Potato 00 00 00 00
Seeds Green Peas 00 00 00 00
Seeds Carrot 00 00 00 00
Pesticides 00 00 00 00
Fertilizer 00 00 00 00
Total
Sale Plan of Agriculture Outputs:
Items Specifications Total Volume UNIT Rate/Unit Amount (Rs)

Karif
Potato
Green Peas
Carrot
Rabi
Garlic
Potato
Green Peas
Carrot

Total
Plan for Sale of Inputs and Outputs:
 Sales plan for Kharif inputs

 Sales plan for Rabi inputs
 Sales plan of Agriculture outputs
Monthly Sales Plan of Agriculture outputs:
Items Apr Ma Ju Jul Au Se O No De Ja Fe Ma Tota

y n g p ct v c n b r l
Garlic
Potato
Green
Peas
Carrot
Available Market and Input Traders for FPC

:
S. No. Name of Input Company Name of Representative Location
1 Syngenta
2 HM Cluse
3 VNR
4 Nunhems
5 Rassi(Hyveg)
6 PestisideIndia
7 Biostad India
8 Garada Chemical
9 Saha Seeds
Monthly Sales Plan of Agriculture outputs:

Items Apr May Jun Jul Aug Sep Oc t Nov D J Fe M To
e a b ar tal
c
n

Available Market and Input Traders for FPC:
S. No. Name of Input Company Name of Representative Location
1 Syngenta
2 HM Cluse
3 VNR
4 Nunhems
5 Rassi(Hyveg)
6 PestisideIndia
7 Biostad India
8 Garada Chemical
9 Saha Seeds

Chapter4: Organizational and Management Plan
Human Resource Plan:
Human Resources required for the smooth running of the FPC
 CEO
 Accounts/MIS
 Supervisor
Role and Responsibility of Staff:

CEO:
 Manage affairs of FPO
 Operate / authorize to operate bank account
 Safe custody of cash /assets
 Sign documents as authorized by the Board
 Maintain books of accounts, prepare annual accounts, present audited
accounts to Board & Members in AGM
 Inform Members about operations & functioning of PC
 Make appointments subject to delegated powers
 Assist Board in formulation of policies / objectives /strategies
 Advise Board on legal & regulatory matters
 Exercise powers required in ordinary course of business
 Any other functions / powers as delegated by the Board
Accounts/MIS:
 Preparing accounts and tax returns
 Administering payrolls and controlling income and expenditure
 Auditing financial information
 Compiling and presenting reports, budgets, business plans, commentaries, and
financial statement
 Analyzing accounts and business plans
 Providing tax planning
 Financial forecasting and risk analysis
 Managing colleagues, workloads, and deadlines
 Designing, Monitoring, analyzing the IT systems
Supervisor:
 Set goals for performance and deadlines in ways that comply with Company’s
plans and vision and communicate them to subordinates
 Organize workflow and ensure that employees understand their duties or
delegated tasks
 Monitor the productivity and provide constructive feedback and coaching to
farmers
 Receive complaints and resolve problems
 Maintain timekeeping and personnel records
 Pass on information from upper management to employees and vice versa
 Prepare and submit performance reports to CEO
 Decide on reward and promotion based on performance
 POP training to Farmers

Role of Responsibility Governing Board (BODs + Promoters):
 Approval of budget and adoption of annual accounts
 Issue of bonus shares
 Declaration of limited return & distribution of profit
 Conditions and limits of loans to Directors
 Include new members into the company
 Appointment/superintendence/Control of CEO and Staffs
 Make sure the books of accounts are maintained properly; Prepare annual
accounts
 present in AGM with Annual’s report
 Buy and sell properties in the ordinary course of business
 Sanction loans to members not being the directors or his relatives
Organogram:
Chapter 5: Financial Plan

The financial plan translates all the other parts of the business - the value chain
proposition, opportunity, the operating plan, the marketing plan into anticipated financial
results. It contains the status and the future projection of financial performance of the
business with the selection, evaluation, and interpretation of financial data along with
other relevant information in financial decision making. It represents the best estimates
of the risks involved and the return on investment.
Three financial areas are generally discussed in the financial plan:

A. Capital requirement and financing pattern
B. Financial projections indicated in the form of statements
C. Financial returns indicated in the form of financial ratios
A. Capital Requirement and Financing Pattern:

Any FPO will have financial requirement to start and run the business. The capital
requirement will depend on the nature and volume of business which would vary from
one business to another. Both fixed costs and variable costs determine the capital
requirement of an FPO.
Estimating Costs and Margins for an FPO:

Measuring costs and margins enables the FPO to determine the priority with which the
activities are to be taken up among the core processes identified. It compares profit
potential of one value chain with that of another, to assess whether it may be worthwhile
to switch from one chain to another.
Margins for FPO may not always be the top priority. If farmer members’ margins are
increased because of the FPO activities, they remain loyal to the organization. Loyalty
pays off in terms of patronage-based business and equity payment.
Variable Costs:
These are costs that are dependent on the production output. While calculating some of
the variable costs such as transport costs, they may change based on volume as well as
distance to be transported. Cost of transit losses are also to be accounted while
calculating transport costs, storage costs etc.
Examples of Variable Costs of an FPO:

 Procurement of raw material, storage cost, processing, transportation,
insurance, etc.
 Management and administration cost for day to day activities, which may
include staff
 Salary, (Manager/CEO, Production Officer, Accountant, Marketing officer, etc.)
travel,
 Electricity, water, meeting expenses of BoD/GB, insurance & other statutory fee
and other miscellaneous expenses
 Training and Capacity Building of BoDs and PC functionaries: Training on
subjects as
 Provisions in the act, rules and regulations, statutory compliances, roles and
responsibilities of BoD/General Body, banking operations and also by exposure
visits to successful FPOs.
Fixed Costs:
 These are the costs, for the expenses paid out regularly that do not fluctuate

with the sales level.
 Examples include general office expenses, rent, depreciation, utilities,
telephone, property tax etc.
 Land tenant charges, an amortization, capital costs (interest on long term loans)
then it should be counted as fixed costs.
Other Costs:
 Money spent on repaying loans
 Money spent on buying productive assets (e.g. machinery, land etc.)
 Direct costs - Money spent specifically for production of goods or providing
services. The examples are raw material cost and labor cost
 Indirect Costs are money spent on running the business but on activities not
directly related to production of goods or services. For Ex: interest on loans
Understanding Revenue:
Revenue is the money that a business earns by selling its products or services
Following are NOT accounted as revenues
 Borrowing money for running the business

 Capital investment by the owner
 Money received through selling of productive assets (like building,
machinery)
Understanding Profitability
 Profitability, as a percentage number, tells us how many rupees out of

100 rupees revenue is the profit
 Profitability % = (Profit/Revenue) x100
Understanding Capital:
 Capital is the total amount of money needed by the business to perform

business operations
 Capital in business consists of Fixed Capital and Working Capital
 Fixed Capital is necessary for buying productive things (assets) such as
machinery, land,
 buildings, storage etc. Working Capital is used for the day-to-day tasks
such as buying
 materials, paying wages, paying salaries, etc.
Sources of Capital: Equity capital, Reserves and Short-Term Loans

Opportunity Cost:
It is defined as the foregone benefit that would have been derived by the option not
chosen.
For Ex: an FPO has a working capital of Rs.2 Lakhs. It has two choices for doing
business. One is supplying high quality seed and the other is supplying fertilizers at
wholesale price to the farmer members. Only one business can be done with its limited

working capital availability. The business the FPO will forego to undertake the other
business is the opportunity cost.
Financial Statements Include:
 Trading and Profit & Loss Account (Expenses & Losses and Incomes &
Gains)
 Cash Flow Statements (How cash flows through operations, investing
and financial activities)
 Balance Sheet (Assets, Liabilities and Capital)
Working on Variables (Assumptions):

The CEO of an FPO along with key office bearers and board members should collect the
basic financial data regarding the FPO. Profiling on basic business aspects of FPO
including its present position in terms of members, share capital collected, asset position
and costs will help in working out the financial statements. The assumptions regarding
the yield, procurement cost, transportation cost, storage costs etc., should also be
considered based on the current year’s data by discussing with experts. An example
sheets for Basic Assumptions are placed below for ready reference.
Area, Yield and Production of the shareholders of primary and secondary crops:
Crops No of Total Area Average Total Total Estimate Total
or Shareho under yield of Producti Producti d Unit Procurem
Commo lders shareholde the on of the on rate for ent Cost
dities r members Crop(Q/A Crop (in market FPO (Rs. (Rs.)
(Acres) cre) Q) Surplus /Quintal)
available
for FPOs
(in Q)
1 2 3 4 5 6 7 6x7
Garlic
Potato
Green
Peas
Carrot
Please
specify
any
other
commodi
ties
Input requirement of the crops based on area (in Tonnes)

Guide to Business Plan Development in FPOs:
Crops or No. of Total See approxi Urea Approxi DAP approxi pota Approxi Bio approxi Total
Commo Shareho Area ds mate (Ton mate (Ton mate sh mate Fertili mate Cost on
dities lders under (in cost es) cost es) cost (Ton cost zer s cost input
shareh Q) (Rs.) (Rs.) (Rs.) es) (Rs.) (in Q) (Rs.) requirem
older ent (Rs)
membe
rs
(Acres)
1 2 3 4 5 6 7 8 9 10 11 12 13
(5+7+9+1
1+13)
Garlic
Potato
Green
Peas
Carrot
Projected P&L in Rs.
Source Income Expenditure Remarks
Capital Investment:
The infrastructure and machinery equipment enlisted below are as per the need of the
FPC in that block to establish a FCSC for (C&G). This is in accordance with the support
that Implementing Agency has proposed for primary processing during Stage – I of
establishment of FCSC. The FPC even highlighted the need for storage facility as
currently they do not have any in their village. They propose to have rural go down of
around ……… MT after few years of establishment of FCSC. During the first few years
of the business, the FPC will be able to assess the no. of producers that would be
interested in availing storage facility and also the quantum that would be stored in the go
down before sale of the produce through FCSC.
Work Shed:
FPC had approached for government land and got gram panchayat approval and they
are waiting for district collector’s approval. A pucca structure with concrete floor and tin
roof will be constructed having ........... sq. ft. plinth area. The work shed will have 3
sections
 Produce Receiving Area (preferably raised dock)

 Office equipped with computer, printer, internet and telephone
 cleaning and grading section equipped with necessary equipment
 storage section and
 input shop
 Going forward a Generator of suitable capacity
An electric motor driven machine with sieves will segregate dirt and refuse matter from
the grains under the first step and grade it into …00... or ……00... categories as per the
operations. The machine has a processing capacity of …00…. tonne per hour @
………… % efficiency but taking into consideration of external factors like electricity
cut. It will require ……00…... labours to feed and operate the machine. Output will be
collected in sacks.
Moisture Meter:
A multi-grain digital moisture meter fit for simple use will be procured with guidance from
experts from the Implementing Agency. It may be battery operated with changeable
power cells.
Weighing Machine:
A platform type digital weigh scale with capacity of 150 Kg and sensitivity of 10 g will be
purchased through shopping. The machine will be electric powered with provision for
operation through batteries.
Bag Stitching Machine:
Electric/battery operated handheld bag stitching machine with double run stitch facility
will be procured. It will be used to seal the sacks after weighing.
Capital Investment that would be needed to start the FCSC and undertake the Business
of FPO.
Amount PC Contribution Grant

S. No Particulars (Rs.) (Rs.) (Rs.)
Building and
A Interiors
Plant and
C Machinery
Working Capital
E Margin
Total
Add Assumption:
Capital Investment Details:
Per unit
No. of Total Cost Total Cost
S. No Particulars Unit cost
unit (Rs.) (Rs.)
(Rs.)
Building and
A.
Interiors
Work-shed
Construction (sq. ft.)
Sub-total
C. Plant and Machinery
Weighing Machine
(Kg)
Moisture Meter
Grain Cleaning,
Grading & Sorting

Processing Machine
(TPH)
Machine
Transportation
Bag Stitching
Machine
Sub-total
Working Capital
E.
Margin
Sub-total
Grand total
Expenditure Estimates:
Fixed Cost
S. No Description Y1 Y2 Y3 Y4 Y5
1 Administration expenses
i. Repair and maintenance cost

Repair and Maintenance expenses:
1 Repair and maintenance cost
ii. Institutional expenses:

1 Institution expenses
iii. Fixed Electricity Expenses:

Fixed monthly connection charge

1
(minimum connected load)
iv. Advertisement Expenses:

Conservative
Advertisement
1 lump-sum
expenses
estimate

Manpower Expenses (Indirect):
S. No Manpower Description Y1 Y2 Y3 Y4 Y5
1 CEO 25000
2 Marketing Manager 00
3 Accountant 10000
4 Supervisory Staff 00
5 Machine operator 00
6 Watchman/ Security
Variable Cost:
i. Raw Material Cost – Agriculture Produce:
Agri-produce purchase quantity in quintals:
Procurement Quantity
(in QTLS)
1 Garlic
2 Potato
3 Green Peas
4 Carrot
Agri-produce procurement expenses

S. No Particular (Rs.) Description Y1 Y2 Y3 Y4 Y5
1 Garlic
2 Potato
3 Green Peas
4 Carrot
Sub Total (Rs.)
Input Purchase Cost: Agri. Input quantity

Seed
Quantity
A (in kg)
1 Garlic
2 Potato
4 Green Peas
5 Carrot

Fertilizer
B (in kg)
1 Urea
2 DAP
Any other
Fertilizer/
Manure
Pesticide
C (in Ha)
Pesticide
Variable Electricity Expenses:

Variable electricity cost estimates:
Expenditure
S. No Y1 Y2 Y3 Y4 Y5
component
1 Net drawn power

2 No. of working hours
Variable tariff per
3
unit
Total variable tariff
Manpower Expenses (Direct):

Direct manpower expenses:
S. No Component Particulars Y1 Y2 Y3 Y4 Y5
1 Aggregation and marketing
2 Cleaning and grading
3 Input Shop
Total
Depreciation estimates:
Depreciation employing the Straight-Line Method:
Depreciation Y1 Y2 Y3 Y4 Y5
Building
Asset Value
Depreciation
Accumulated Depreciation
Net Fixed Assets

Plant and Machinery
Asset Value
Depreciation
Net Fixed Assets
Gross Fixed Asset

Total Depreciation
Net Fixed Assets
Income estimates:
Cleaning and Grading:
Members’ and Non-Members’ Cleaned and Graded Quantity in Quintals:
1 Members 100
Non- 00
2
Members
Cleaning and Grading Income Estimates:

Cleaning
& Grading
S. No Commodity Y1 Y2 Y3 Y4 Y5
Charges
(Rs)
1 Member 100
Non- 00
2
Members
Total
Trading:
Agri-produce trade quantity in quintals:
Traded Quantity (in Q)
1 Garlic
2 Potato
3 Green Peas
4 Carrot

Agri-produce trade estimates:
S. No Commodity Description Y1 Y2 Y3 Y4 Y5
1 Garlic
2 Potato
4 Green Peas
5 Carrot
Total
Input Shop:
Agri-input trade quantity:

Seed
Quantity
A (in kg)
1 Garlic
2 Potato
4 Green Peas
5 Carrot
Fertilizer
B (in kg)
1 Urea
2 DAP
Any other
3 Fertilizer
Pesticide
C (in Ha)
Pesticide
Agri-input trade estimates:

S. No Commodity Description Y1 Y2 Y3 Y4 Y5
A Seed
1 Garlic
2 Potato
3 Green Peas

4 Carrot
B Fertilizer
1 Urea
2 DAP
Any other
3
Fertilizer
C Pesticide
Total
Working Capital Requirement:

Assessment of working capital has been considered based on the following calculation:
Year
S. No Particulars Days Year 1 Year 2 Year 3 Year 5
4
A Current assets
Stock of Finished
1
Goods
Stock of Raw
2
Material
3 Receivables
Total current
assets
Current
B
liabilities
Creditors- raw
1
material
2 Creditors- others
Total current
liabilities
Working capital
Profit and Loss Statement:

Figures in Rs.
Particulars Y1 Y2 Y3 Y4 Y5
Income from C&G job

work services
Income from commodity
trading and input sales

Closing stock of finished
Goods
Total Revenue
Opening stock of closing
Goods
Variable Cost
Raw Material Cost
Purchase of Inputs
Manpower – Direct
Variable electricity cost
Fixed Cost
Administrative
Expenses
Institutional Expense
Manpower – Indirect
Repair and maintenance
Cost
Fixed electricity cost
Marketing and
Advertisement
Total Operational
Expenses
Earnings Before
Interest, Depreciation,
Taxes and
Amortization (EBITDA)
Depreciation
Earnings Before
Interest and Taxes
(EBIT)
Interest Expense
Earnings Before Taxes
(EBT)
Tax
Earnings After Taxes
(EAT)
Cash Flow Statement:
Figure in Rs.
S. No Particulars Y1 Y2 Y3 Y4 Y5
1 Profit After Tax (PAT)
2 Working Capital loan
3 Equity/ Share capital
4 IA Investment Grant
Increase of current
5
liabilities
6 Depreciation
Sub Total (A)

Cash Outflow (Rs.)
1 Capital Expenditure
A Building and Interiors
B Plant and Machinery
2 Increase of current asset
3 Loan Repayment
Working capital loan (interest
A
+ instalment)
Sub Total (B)
Net Cash Flow (A-B)
Opening Cash and Bank
Cumulative Cash Balance
Balance Sheet:
Figure in Rs.
Particulars Y1 Y2 Y3 Y4 Y5
ASSETS
Current Assets
Cash and Bank Balance
Accounts Receivables
Other Current Assets
Total Current Assets
Gross Fixed Assets
Less: Depreciation
TOTAL ASSETS
LIABILITIES & SHAREHOLDERS
EQUITY
CURRENT LIABILITIES
Accounts Payable & Accrued Expenses
Other Current Liabilities
Total Current Liabilities
TOTAL LIABILITIES
Share capital
Grant
Reserves and Surplus
Add: Opening Balance (P/L Account)
Profit & Loss) During the Year
Appropriation – Dividend
Total Reserves
TOTAL EQUITY
TOTAL LIABILITIES & EQUITY
Sensitivity Analysis:
Sensitivity Analysis
Quantity Variation (%) Y1 Y2 Y3 Y4 Y5
Income from C&G job work services
Income from commodity trading and input sales
Closing stock of finished goods

Total Income
Expenditure
Opening stock of closing goods
Fixed Cost (Excl. of Depreciation, Amortization and
Interest)
Variable Cost
Total Operational Expenses
Depreciation
Earnings Before Interest and Taxes
Cost Variation (%) Y1 Y2 Y3 Y4 Y5
Total Income
Expenditure
Interest)
Variable Cost
Depreciation
Quantity Variation (%) Y1 Y2 Y3 Y4 Y5
Total Income
Expenditure
Interest)
Variable Cost
Depreciation
Cost Variation (%) Y1 Y2 Y3 Y4 Y5
Revenue from processing service charge

Revenue from facilitation of sales
Revenue from facilitation of input supply
Total Income
Expenditure

Interest)

Variable Cost
Depreciation
Key Financial Indicators:

 Internal Rate of Return (IRR):
The project internal rate of return should be more than ............. % as per the current
financial scenario of the country. The project IRR is………. %, therefore, it is clearly
indicating that the project is feasible for investment.
 Break Even Point:

The average break-even percentage is ......... %and as per financial standards it should
be below ……%.
 Payback Period:
The Payback period for the project is almost ……… year ………. months whereas
equity payback is……… Months. It should be less than 4 to 5 years therefore the
project payback periods are within the limit.
 Net Present Value:

With a discount rate of …… % and a span of 5 years, the projected cash inflows are
worth Rs.…………../- today, which is greater than the initial cash outflow of Rs. ………….
/-. The resulting positive NPV of the above project is Rs .................../- which indicates
that pursuing the above project may be optimal.
 Return on Capital Employed:

The return on capital employed for the project is ......... % for the 1st year which is above
the expected financial standards of ………. % ................. %.

Chapter 6: Expected Impact of the proposed project
 Individual member benefit:
The members of the FPC are envisaged to gain from the activities of the FSCS. Such
benefits can be categorized into direct and indirect benefits. Under direct benefit, the PC
is set to benefit from their share in the profit due to ownership of shares in the PC.
However, the indirect benefits far outweigh the direct ones. Such benefits are noted
hereunder.
1 Purchase of inputs:
 Reduction in transport cost and time due to availability of inputs in the village.
 Lower price of inputs due to passing on of bulk purchase discounts by PC.
 Timely availability of quality inputs due to planned and negotiated purchases by
FPC.
2 Aggregated sale of produce:

 Better rates than APMC due to lower deductions in weight and lower transaction
charges.
 Proper weighing and rate fixation due to transparent operations.
 Stability in rates due to negotiated rate settlement with buyers by PC.
3 Processing of produce:
 Availability of facility for value addition where there was none.
 Better rates for produce after Processing.
4 Leasing of agro-equipment:
 Availability of mechanized farming facility where very few options exist.
 Cheaper access and user rates for thresher.
 Savings through low or no labour costs and reduced exposure to vagaries of
nature.
5 Incremental asset:
 Increased value of shares in a profitable business entity leading to asset
enhancement.

Chapter 7: Annexure
S. No Documents Required
1 Certificate of Incorporation
2 MoA
3 AoA
4 Route Map
5 Registration Copy
6 Copies of Licenses
 GST
 PAN
 Seed
 Fertilizer
 Pesticides/Insecticide
7 Organogram
8 Board Structure
9 Audited/Unaudited Financials Year
10 List of FPGs
11 List of working Committees
12 Area Map
13 Copies of MoA and AoA
14 Copies of Business Rules if any
15 Copies of Service conditions if any
16 Bank Statement
17 Subsidy Sanction letters
18 Merit Certificates/Testimonials
19 Case Studies/Success Stories if any
20 Photographs of Activities
Sources referred:
Practioners’ Guide for Business Development Planning om FPOs: National Institute of
Rural Development and Panchayati Raj, Ministry of Rural Development, Government of
India and Policy and process guidelines for Farmer Producer Companies, Department
of Agriculture, GOI
Operational Guidelines: Formation and Promotion of 10,000 FPOs, Department of

Agriculture, Co-operation & Farmers’ Welfare, Ministry of Agriculture & Farmers’ Welfare

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Template for Development of Business

Plan by Farmer Producer Organisation

Central Sector Scheme for promotion

Prepared by: National Project

Farmer Producer Organization Business Plan Page | 2

Farmer Producer Organization Business Plan Page | 4

PC village wise detail

Crop wise area, production, and productivity of block

Gaps identified and interventions proposed

Agri. Input quantity

Input purchase cost estimates

Variable electricity cost estimates

Depreciation employing the Straight-Line Method

Cleaning and Grading Income Estimates

Agri-produce trade quantity in quintals

Assessment of working capital

Farmer Producer Organization Business Plan Page | 5

BOD Board of Directors

FPO Farmer Producer Organization

FCSC Farmer Common Service Centre

HHs House Holds

IA Implementing Agency 10,000 FPOs Formation and Promotion Project

MRP Minimum Retail Price

PPP Private Player Parties

SWC State Warehousing Corporation

Sq. Ft Square Feet

MTG Multitask Group

Farmer Producer Organization Business Plan Page | 6

 To provide holistic and broad-based supportive ecosystem to form new 10,000

 To enhance productivity through efficient, cost-effective and sustainable resource

 To provide effective capacity building to FPOs to develop agriculture

Farmer Producer Organizations (FPO):

Broad Services and Activities to be undertaken by FPOs:

Farmer Producer Organization Business Plan Page | 7

Development of Business Plan:

Farmer Producer Organization Business Plan Page | 8

Farmer Producer Organization Business Plan Page | 9

Collectivization of producers, especially small and marginal

District and Block Details

Dindigul district is located between 10005” and 10009”

Farmer Producer Organization Business Plan Page | 10

Mannavanur cluster is located at a distance of 38 Km from the block headquarters

4 Registration number and date 14738 and 22/10/2021

Farmer Producer Organization Business Plan Page | 11

 Bank and branch ICICI Bank Kodaikanal

 Account number 080305006366

Farmer Producer Organization Business Plan Page | 12

 Markets Vadugapattu Garlic Market,

The company take up the following activities:

Farmer Producer Organization Business Plan Page | 13

Farmer Producer Organization Business Plan Page | 14

KURINJI MALAI FARMER PRODUCER COMPANY LIMITED

The Producer Company formed in Kodaikanal,Mannavanur. This

Block Index Map:

This Business Plan has been developed by generating

Farmer Producer Organization Business Plan Page | 15

Farmer Producer Organization Business Plan Page | 16

Farmer Producer Organization Business Plan Page | 17

 Need of the proposed business activity