Varun Nagar

Agricultural
Cooperative Society

A Quick Recap
Started in 1976 with 50 members
In 1991 existing with 300+ members
Procure agricultural produce from the farmers and market it to
the district mandies
Procured and supplied agricultural inputs (seeds, fertilizers and
pesticides) to farmer members.

VNACS

Our Current State

Facing an Overdraft of Rs 5 Lakhs from JDCB at 10%
interest
A 5 lakh payment due to our members due by March
31st
100 Tons of Paddy locked up as inventory, expected
base market price of Rs 5,000 per ton. Will reach close
to Rs 7,500 over the next 6 months if stored

Fresh Opportunities to Save

National Fertilizer Corporation offers 2000 bags of
Fertilizers at just Rs 250 per bag, instead of the usual
rate of Rs 300
We can save Rs 1 Lakh by taking this up
One time offer and payment to be done by 1st week of
April
Cannot be undertaken right away as we lack storage
space

The Dilemma and Solutions

Pay out the existing

member due of Rs
5,00,000
Important to keep
members happy to
ensure better future
yield

Delay the sale of 50

tons Paddy by few
months. Will help
generate additional
revenue of Rs
1,00,000 or more
Can generate Rs
2,50,000 by selling
50 tons immediately

Take up the special

price offer to buy the
required Fertilizers
Use existing cash
balance to purchase
2000 bags of
fertilizers at the
special price

The Math
Existing Funds

Bank Overdraft Rs 5,00,000

Cash balance Rs 5,00,000
Paddy Sale Rs 2,50,000
Total Rs 12,50,000

Immediate Expenses

Members payment Rs 5,00,000

New fertilizers Rs 5,00,000
Storage, Labour and Insurance cost Rs 68,000
Lost Fertilizer Rs 25,000
Bank Interest Rs 50,000
Total Rs 11,43,000

Plan for
Future, while
keeping
Present
satisfied!