CONTENTS

1. INTRODUCTION
2. ABOUT THE WORMS
3. LOCATIONS
4. USES
5. COMPONENTS OF A COMMERCIAL UNIT
5.1 Sheds
5.2 Vermi-beds
5.3 LANDS
5.4 BUILDING
5.5 SEED STOCK
5.6 Fencing and Roads/Paths
5.7 WATER SUPPLY SYSTEM
5.8 MACHINARY
5.9 TRANSPORT
5.10 FURNITURE
5.11 OPERATION COST
6. PROJECT PROFILE
7. EXTENSION SERVICE
8. ANNEXURES I-VI
 PROJECT
VERMI-COMPOSTING UNITS

1.0 INTRODUCTION

There is a growing realisation that vermi-composting

provides the nutrients and growth enhancing hormones necessary
for plant growth. The fruits, flowers and vegetables and other
plant products grown using vermi-compost are reported to have
better keeping quality. A growing number of individuals and
institutions are taking interest in the production of compost
utilising earthworm activity. Some of them ventured into
commercial production as well. As the cost of production of this
compost works out to about Rs.1.5 per kg, it is quite profitable
to sell the compost even at Rs.2.50 per kg. Other organic
manures like neem cake, groundnut cake, etc., are sold around
this price.

The process of composting crop residues using earthworms

comprise spreading the agricultural wastes and cow dung in
layers as 1.5 m wide and 0.9 m high beds of required length.
Earthworms are introduced in between the layers @ 350 worms per
m3 of bed volume. The beds are maintained at about 40 - 50%
moisture content and a temperature of 20 - 30o C by sprinkling
water over the beds. The earthworms being voracious eaters
consume the biodegradable matter and give out a part of the
matter as excreta or vermi-castings. The vermi-casting
containing nutrients is rich manure for the plants.

When the commercial scale production is aimed at in addition to

the cost of production, considerable amount has to be invested
initially on capital items. The capital cost may work out to
about Rs.1500 to Rs.2500 for every tonne of compost produced
annually. The high variability in the unit capital cost is due
to the fact that large units require considerable expenditure on
machinery and transport particularly when the source of raw
materials is away from the site of production facility and the
finished product has to be transported to far off places before
being marketed. However, in most of the cases, the activity is
viable and bankable. Following are the items required to be
considered while setting up a unit for production of vermi-
compost.

2.0 ABOUT THE WORMS

Of about 350 species of earth worms in India

with various food and burrowing habits, Eisenia fetida, Eudrilus
eugeniae, Perionyx excavatius are some of the species for
rearing to convert organic wastes into manure. The worms feed on
any biodegradable matter ranging from coir waste to kitchen
garbage and vermicomposting units are ideally suited to
locations / units with generation of considerable quantities of
organic wastes. One earthworm reaching reproductive age of about
six weeks lays one egg capsule (containing 7 embryoes) every 7 -
10 days. Three to seven worms emerge out of each capsule. Thus,
the multiplication of worms under optimum growth conditions is
very fast. The worms live for about 2 years. Fully grown worms
could be separated and dried in a oven to make 'worm meal' which
is a rich source of protein (70%) for use in animal feed.
 
3.0 LOCATION

Suburbs of cities and villages around urban centres

can be ideal locations for practice of vermicomposting on a
large scale, from the view point of availability of raw material
and marketing of the produce. As use of the compost is said to
have ameliorative effect on product from fruit, flower and
vegetable crops, vermicomposting units may be located in areas
with concentration of fruit and vegetable growers and
floriculture units.

4.0 USE

As the wastes are pulverised as they pass

through the worm, the surface area of the material increases
which in turn helps as base for nutrients. Vermicompost, apart
from supplying nutrients and growth enhancing harmones to
plants, improves the soil structure leading to increase in water
and nutrient holding capacities of soil. Chemical fertilizer in
moderate doses can go along with vermicoposting.

5.0 COMPONENTS OF A COMMERCIAL UNIT

5.1 Sheds

For a vermi-composting unit,

whether small or big, this is an essential item and is required
for having the vermi beds. They could be of thatched roof
supported by bamboo rafters and purlins, wooden trusses and
stone pillars. If the size is so chosen as to prevent wetting of
beds due to rain on a windy day, they could be open sheds. While
designing the sheds adequate room has to be left around the beds
for easy movement of the labour attending to the filling and
harvesting the beds.

5.2 Vermi-beds

Normally the beds are 75 cm - 90 cm thick

depending on the provision of filter for drainage of excess
water. The entire bed area could be above the ground. Care
should be taken to make the bed with uniform height over the
entire width to the extent possible to avoid low production
owing to low bed volumes. The bed width should not be more that
1.5 m to allow easy access to the centre of the bed.

5.3 Land
 
About 0.5-1 acre of land will be needed to
set up a vermiculture production cum extension centre. The
centre will have at least 8-10 sheds each of about 180-200
sq.ft. It should also have a bore well, and pump set or watering
arrangement and other equipments as described in the scheme
economics. The land can be taken on lease of at least 10-15
years. Even sub marginal land also will serve the purpose.

5.4 Buildings

When the activity is taken up on a large

scale on commercial lines, considerable amount may have to be
spent on buildings to house the office, store the raw material
and finished product, provide minimum accommodation to the
Manager and workers. The cost of the buildings along with the
electrification of these buildings and the vermi-sheds may be
included under this item.

5.5 Seed Stock

This is an important item requiring

considerable investment. Though the worms multiply fast to give
the required numbers over a period of 6 months to a year, it may
not be wise to wait till such a time having invested on the
infrastructure heavily. Thus, worms @ 350 worms per m3 of bed
space should be adequate to start with and to build up the
required population in about two cycles or three without unduly
affecting the estimated production.

5.6 Fencing and Roads/Paths

The site area needs development for

construction of structures and development of roads and pathways
for easy movement of hand-drawn trolleys/wheel barrows for
conveying the raw material and the finished products to and from
the vermi-sheds. The entire area has to be fenced to prevent
trespass by animals and other unwanted elements. These could be
estimated based on the length of the periphery of the farm and
the length and type of roads/paths required. The costs on
fencing and formation of roads should be kept low as these
investments are essential for a production unit, yet would not
lead to increase in production.
 
5.7 Water Supply System

As the beds have always to be kept moist

with about 50% moisture content, there is need to plan for a
water source, lifting mechanism and a system of conveying and
applying the water to the vermi-beds. Drippers with round the
clock flow arrangement would be quite handy for continuous
supply and saving on water. Such a water supply/application
system requiring considerable initial investment, however,
reduces the operational costs on hand watering and prove
economical in the long run. The cost of these items depend on
the capacity of the unit and the type of water supply chosen.

5.8 Machinery
 Farm machinery and implements are required
for cutting (shredding) the raw material in small pieces,
conveying shredded raw material to the vermi-sheds, loading,
unloading, collection of compost, loosening of beds for
aeration, shifting of the compost before packing and for air
drying of the compost, automatic packing and stitching for
efficient running of the unit. Costs of providing necessary
implements and the machinery have to be included in the project
cost.

5.9 Transport

For any vermi-composting unit

transport arrangement is a must. When the source of raw material
is away from the production unit, an off-site transport becomes
major item of investment. A large sized unit with about 1000
tonnes per annum capacity may require a 3-tonne capacity mini-
truck. With small units particularly with the availability of
raw material near the site, expending on transport facility may
become infructuous. On-site transport facilities like manually
drawn trolleys to convey raw material and finished products
between the storage point and the vermi-compost sheds could also
be included in the project cost.

5.10 Furniture

A reasonable amount could also be

considered for furnishing the office-cum-stores including the
storage racks and other office equipment. These enhance the
efficiency of operations.

5.11 Operational Costs

In order to operate the unit, expenditure

on some items have to be incurred on a recurring basis. These
items include salaries of the staff, wages to the labourers,
cost of raw material, fuel cost on transport of raw materials
and finished goods, packing material cost, repairs and
maintenance, power, insurance, etc. The number of office
personnel and labourers have to be decided breaking each
activity into a number of sub-activities and for each sub-
activity estimating the work involved and the capacity of the
labour to finish the work in a given time. The number of persons
should be so chosen to keep them engaged throughout by providing
enough persons at various work points like stores, vermi-beds
and equipping them with adequate number of implements to avoid
undue waiting.

6.0 PROJECT PROFILE

Vermi-composting could be taken up on

any scale starting from 10 tonnes per annum (tpa) to 1000 tpa
and above. As the production is proportional to the vermi-bed
space, it is advantageous to start with less capacities and
later expand the unit after gaining production experience and
developing assured market for the product.

The Society for Preservation of Environment and Quality of Life

(SPEQL) organised a pilot project on vermi-composting in fruit
market premises, Kothapet, Hyderabad. The project, being
operated currently on commercial lines is serving as a
demonstration unit. The estimates of costs and benefits,
presented in the profile are based on the experience of that
pilot project.

A bed volume of 330 m3 spread over sixteen beds - 15 m long, 1.5

m wide and 0.3 m high is estimated to produce vermi-compost of
200 tpa over 5 cycles/crops of 75 days each annually. These beds
are housed in 8 open sheds of 15 m x 5.4 m.

The cost of construction of sheds, cost of machinery and tools,

operational cost/production cost of compost are set out in
annexures I, II and III respectively. The costs and benefits of
the unit are set out in annexure-IV. As can be seen, the
investment cost is Rs.2,77,000/-, operational cost Rs.3,68,000.
Operational cost of two cycles amounting to Rs.1,47,200 is
capitalised. Production of 60% in the first year and 90% in the
subsequent years is assumed. Benefits include the income from
sale of vermi-compost @ Rs.2500 per tonne and worm @ Rs.50/- per
kg. The net income from the 2nd year onwards would be about
Rs.1,37,000 annually. The financial analysis of the project
suggests that the activity is financially viable with financial
rate of return of 36% (Annexure-V). Economics have been worked
out with out the subsidy component. With the subsidy its
viability will be much better. The loan could be repaid over a
period of 8 years with a grace period of 1 year. The repayment
schedule is set out in annexure-VI.

7.0 EXTENSION SERVICE

 
The unit will provide extension services to
the near by villages. Under this the unit will provide cultural
material of the desired species, and train farmers and
entrepreneurs who would like to set up their own small units for
use in their farms. Those who want to set up commercial units
also can get know-how and culture material at a reasonable cost.
The technical graduates who will establish such an unit under
the scheme for agri-clinics will train more people, demonstrate
practically the production methodology on the unit that will be
set up by him and also supply the pure culture with quality
worms. He may also try to explore marketing for small units that
will be promoted by him at a reasonable cost. The following
benefits can be assumed under extension services for the unit:

 Sale of culture material @5-10 paise

 Consultancy for setting up new units @Rs.1,000/- per unit
and say 10 units per year comes to Rs.10,000/-.
 It is advised that the same unit will also construct models
of simple, alternate methods of compost making to serve as
demonstration to the local farmers. One of the simple
method is NADEP compost process. Two NADEP tanks of size
10x6x3 feet will be constructed at a suitable location. In
addition any other simpler low cost methods also may be
installed inconsultation with research
institutions/Universities and give wide publicity to
popularise the sustainable practices for wider adoption

 
Annexure-1

Estimate for construction of temporary shed for setting up 200

TPA vermicompost unit

(Size 8 m x 15m x 5.4 m)

 
Sl.No. Particulars Quantity Rate Amount
 (Rs.) (Rs.)
1 Wooden ballies (3 m long) 472 25 7800
2 Wooden ballies (3.6 m long) 48 30 1440
3 Bamboos (3 m long) 800 15 12000
4 Bamboos (6 m long) 240 20 4800
5 Bamboo mats for covering the 720 25 18000
roof
6 Coir rope 6 mm dia 200 kg 15 3000
7 Binding wire for tying bamboos 100 kg 25 2500
& mats
8 Labour charges for erection of LS   20000
sheds
9 Miscellaneous     2460
  Total     72000
 

Annexure-II

200 TPA vermi-compost unit - Implements and machinery

 
Sl.No. Particulars of item Amount (Rs.)
1 Shovels, spades, crowbars, iron baskets, 2800
  dung fork, buckets, bamboo baskets,  
  trowel, wire mesh sieves (3 mm and 6 mm)  
2 Plumbing and fitting tools 1000
3 Power operated shredder 20000
4 Sieving maching with 3 wire mesh sieves 35000
  0.6 m x 0.9 m size - power operated with out  
motor
5 Weighing scale (100 kg capacity) 1500
6 Weighing machine (platform type) 5000
7 Bag closer 3000
8 Empty barrels (200 L capacity) 4 Nos. 1600
9 Culture trays (plastic) (35 cmx 45 cm) - 4 Nos 200
10 Wheel barrows - 2 Nos. 10000
  Total 80100
    Say 80000
 

Annexure-III

Total operational cost for one cycle of 75 days

Bed volume 330 m3 Recovery percent: 30%

 
Sl.No. Particulars Unit Rate Amount
(Rs.)
1 Agricultural waster @ 320 kg per m3 105.6 100 10560
ton
2 Cow dung @ 80 kg/m3 26.4 150 3960
ton
3 Worms @ 350 per m3 500 worms per kg 231 kg 50 11550
4 Formation of vermibed with agro-waste, 330 m3 46 15180
cow dung and worms
5 Harvesting, sieving, packing, etc., 40 ton 0.45 18000
including cost of bags
6 Electrical charges for pump, - - 4800
machinery, lighting etc.
7 Repair and maintenance - - 7950
  Total     72000
  Cost for 5 cycles     360000
  Rent on lease @Rs 8000/year     8000
  Total operating cost     368000
 

Annexure-IV

200 TPA vermi-composting unit - Costs and Benefits

 
  Years
    I II
onwards
1 Costs    
a) Investment costs    
i) Open sheds with bamboo mat roofing 72000 -
  over bamboo frame work supported    
  by wooden ballies    
ii) Machinery and tools 80000 -
iii) Office-cum-store 60000 -
iv) Water source 60000  
v) 2 NADEP tanks 5000  
  Total 277000  
b) Operational cost 360000 360000
  For 5 cycles in a year @ Rs. 72,000 per cycle of    
75 days
  Lease rent 8000 8000
  Total 368000 368000
2 Benefits    
a) Sale of vermicompost of 200 tonnes 300000 450000
  @ Rs.2500/- per ton (60% in first year and 90%    
 from 2nd year onwards)
b) Sale of worms @ 5 kg per tonne of compost and - 45000
Rs. 50 per kg
c) Consultancy & ext. services - 10000
  Total 300000505000
  Net Benefit 79200*137000
 
* Operational cost for two cycles is capitalized in the first
year
 

Annexure-V

200 TPA vermicomposting unit - Financial Analysis

 
  (Rs. in lakhs)
  Particulars Years
    I II to
IX
1 COSTS    
A Capital Cost    
i) Buildings 1.32 -
ii) Machinery / tools 0.8 -
iii) Water supply system 0.6 -
iv) NADEP tanks 0.05 -
B Operational cost 3.68 3.68
  Total Cost 6.45 3.68
2 BENEFITS    
i) Sale of vermicompost 3.00 4.50
ii) Sale of worms   0.45
iii) Consultancy and extension services   0.10
  Total benefit 3.000 5.05
3 Net benefit *0.792 1.37
  Discounting Rate 15%    
  NPV 2.35  
  IRR 36%  
  NPV of benefits 22.31  
  NPV of costs 19.97  
  BCR 1.12  
 
Annexure-VI

Repayment schedule

Outlay- Rs.4.242 lakh*

Bank loan -Rs. 3.394 lakh

Interest (%)- 15
 
      Repayment    
Year Loan Net Principal Interest Total Net Surplus
Outstanding Income outgoing
             
1 339400 79200  - 50910 50910 28290
2 339400 137000 31000 50910 81910 55090  
3 308400 137000 36000 46260 82260 54740  
4 272400 137000 41000 40860 81860 55140  
5 231400 137000 47000 34710 81710 55290  
6 184400 137000 54000 27660 81660 55340  
7 130400 137000 62000 19560 81560 55440  
8 68400 137000 68400 9510 77910 59090  
 
* including capitalization of operational cost for 2 cycles
(Rs.1,47,200/-