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(Roll No. 10016-10030 & 10062) MBA- BT- II


Department of Management Sciences, PUMBA

This is to certify that the project report on A BUSINESS PLAN ON VERMICOMPOST FARMING The Agrovermi Fertilisers has been submitted by Group 2 (Roll No. 10016-10030 & 10062) MBA BT II (2010-12)

In partial fulfilment of the requirement for the Degree of Master in Business Administration Biotechnology (MBA-BT) from the Department of Management Sciences, University of Pune.

Examiners Sign
Department of Management Sciences, PUMBA 2

Department of Management Sciences, PUMBA

Name of the Company: The Agrovermi Fertilisers Type of Company: Partnership Company Product: Vermicompost By-Product: Earth-worms Type of Industry: Organic Fertilizers Owners of the Company: Group 2 (Roll No. 10016-10030 & 10062) Location: Baramati, Maharashtra Vision: To establish the company as a strong producer of organic fertilizer in the market. Mission: To produce good quality organic fertilizer product and make it available at a profitable and affordable price in the market. Objectives: To produce organic fertilizers that is environmental friendly. To produce products that satisfies the farmers by helping them achieve the expected and required yield of crops. To maintain reputation of the company and its products by consistent performance. To carry out business in tandem with the current market dynamics. To sustain in the market by formulating competitive strategies. To ensure that proper steps are taken against the threats to the business.

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Index of the Report

Topic Page No.

1.Introduction to the Product Introduction to Vermicompost Importance of Vermicompost 2. Market Scenario Market Study Demand Analysis for Product: Scope Competitive Market analysis 3. Industry Scenario The Organic Fertiliser Industry The Vermicomposting Industry 4. Environmental Analysis Environmental appraisal SWOT Analysis 5. Operations Plan Manufacturing Process for Vermicomposting Operating details about the plant 6. Marketing Plan Plan for executing marketing and distribution of the product 7. Human Resource Plan Organization Structure, Employee structure, Payment Structure, Corporate Social Responsibility 8. Financial Plan








9. Bibliography


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1. INTRODUCTION TO THE PRODUCT 1.1 Introduction to Vermicompost: Vermicomposting is a simple biotechnological process of composting, in which certain species of earthworms are used to enhance the process of waste conversion and produce a better end product. Vermicomposting differs from composting in several ways It is a mesophilic process, utilizing microorganisms and earthworms that are active at 1032C (not ambient temperature but temperature within the pile of moist organic material). The process is faster than composting; because the material passes through the earthworm gut, a significant but not yet fully understood transformation takes place, whereby the resulting earthworm castings (worm manure) are rich in microbial activity and plant growth regulators, and fortified with pest repellence attributes as well! In short, earthworms, through a type of biological alchemy, are capable of transforming garbage.

1.2 Importance of vermicompost a) Source of plant nutrients Earthworms consume various organic wastes and reduce the volume by 4060%. Each earthworm weighs about 0.5 to 0.6 g, eats waste equivalent to its body weight and produces cast equivalent to about 50% of the waste it consumes in a day. These worm castings have been analyzed for chemical and biological properties. The moisture content of castings ranges between 32 and 66% and the pH is around 7.0. The worm castings contain higher percentage (nearly twofold) of both macro and micronutrients than the garden compost. From earlier studies also it is evident that vermicompost provides all nutrients in readily available form and also enhances uptake of nutrients by plants. Sreenivas et al. (2000) studied the integrated effect of application of fertilizer and vermicompost on soil available nitrozen (N) and uptake of ridge gourd (Luffa acutangula) at Rajendranagar, Andhra Pradesh, India. Soil available N increased significantly with increasing levels of vermicompost and highest N uptake was obtained at 50% of the recommended fertilizer rate plus 10 t ha-1 vermicompost. Similarly, the uptake of N, phosphorus (P), potassium (K) and magnesium (Mg) by rice (Oryza sativa) plant was highest when fertilizer was applied in combination with vermicompost
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Nutrient Composition of Vermicompost and Garden compost

Nutrient element Organic Carbon Nitrogen Phosphorus Potassium Calcium Magnesium Sodium Zinc Copper Iron Manganese

Vermicompost (%) 9.813.4 0.511.61 0.191.02 0.150.73 1.187.61 0.0930.568 0.0580.158 0.00420.110 0.00260.0048 0.20501.3313 0.01050.2038

Garden Compost (%) 12.2 0.8 0.35 0.48 2.27 0.57 <0.01 0.0012 0.0017 1.1690 0.0414

b) Improved crop growth and yield Vermicompost plays a major role in improving growth and yield of different field crops, vegetables, flower and fruit crops. The application of vermicompost gave higher germination (93%) of mung bean (Vigna radiata) compared to the control (84%). Further, the growth and yield of mung bean was also significantly higher with vermicompost application. Likewise, in another pot experiment, the fresh and dry matter yields of cowpea (Vigna unguiculata) were higher when soil was amended with vermicompost than with biodigested slurry (Karmegam et al. 1999, Karmegam and Daniel 2000).

c) Reduction in soil C:N ratio Vermicomposting converts household waste into compost within 30 days, reduces the C:N ratio and retains more N than the traditional methods of preparing composts (Gandhi et al. 1997). The C:N ratio of the unprocessed olive cake, vermicomposted olive cake and manure were 42, 29 and 11, respectively. Both the unprocessed olive cake and vermicomposted olive cake
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immobilized soil N throughout the study duration of 91 days. Cattle manure mineralized an appreciable amount of N during the study. The prolonged immobilization of soil N by the vermicomposted olive cake was attributed to the C:N ratio of 29 and to the recalcitrant nature of its C and N composition. The results suggest that for use of vermicomposted dry olive cake as an organic soil amendment, the management of vermicomposting process should be so adjusted as to ensure more favorable N mineralizationimmobilization (Thompson and Nogales 1999).

d) Role in nitrogen cycle Earthworms play an important role in the recycling of N in different agroecosystems, especially under jhum (shifting cultivation) where the use of agrochemicals is minimal. Bhadauria and Ramakrishnan (1996) reported that during the fallow period intervening between two crops at the same site in 5- to 15-year jhum system, earthworms participated in N cycle through castegestion, mucus production and dead tissue decomposition. Soil N losses were more pronounced over a period of 15-year jhum system. The total soil N made available for plant uptake was higher than the total input of N to the soil through the addition of slashed vegetation, inorganic and organic manure, recycled crop residues and weeds.

e) Improved soil physical, chemical and biological properties Limited studies on vermicompost indicate that it increases macropore space ranging from 50 to 500 m, resulting in improved air-water relationship in the soil which favorably affect plant growth (Marinari et al. 2000). The application of organic matter including vermicompost favorably affects soil pH, microbial population and soil enzyme activities (Maheswarappa et al.1999). It also reduces the proportion of water-soluble chemical species, which cause possible environmental contamination (Mitchell and Edwards 1997).

Types of earthworms Earthworms are invertebrates. There are nearly 3600 types of earthworms in the world and they are mainly divided into two types: (1) burrowing; and (2) non-burrowing. The burrowing
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types Pertima elongata and Pertima asiatica live deep in the soil. On the other hand, the nonburrowing types Eisenia fetida and Eudrilus eugenae live in the upper layer of soil surface. The burrowing types are pale, 20 to 30 cm long and live for 15 years. The non-burrowing types are red or purple and 10 to 15cm long but their life span is only 28 months.The non-burrowing earthworms eat 10% soil and 90% organic waste materials; these convert the organic waste into vermicompost faster than the burrowing earthworms. They can tolerate temperatures ranging from 0 to 40C but the regeneration capacity is more at 25 to 30C and 4045%
moisture level in the pile. The burrowing type of earthworms come onto the soil surface only at night. These make holes in the soil up to a depth of 3.5 m and produce 5.6 kg casts by ingesting 90% soil and 10% organic waste.

Earthworm multiplication
Numerous organic materials have been evaluated for growth and reproduction of earthworms as these materials directly affect the efficacy of vermicompost. Nogales et al. (1999) evaluated the suitability of dry olive cake, municipal biosolids and cattle manure as substrates for vermicomposting. They reported that larger weights of newly hatched earthworms were obtained in substrate containing dry olive cake. In another study, maize straw was found to be the most suitable feed material compared to soybean (Glycine max) straw, wheat straw, chickpea (Cicer arientinum) straw and city refuse for the tropical epigeic earthworm, Perionyx excavatus (Manna et al. 1997). Zajonc and Sidor (1990) evaluated and compared various nonstandard materials for the preparation of vermicompost. A mixture of cotton waste with cattle manure in the ratio of 1:5 was found to be the best. The use of grape cake alone increased earthworm weight slightly. Tobacco (Nicotiana tabacum) waste, used as substrate, increased earthworm weight but the earthworms failed to reproduce. A mixture of tobacco waste with rabbit manure in the ratio of 1:5 was found to be lethal to the earthworms.

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2.1 Market Potential for Vermicompost Vermicompost is a valuable input for sustainable agriculture and wasteland development. This also can be used widely in pot culture and in home gardens. Several farmers are successfully using Vermicompost. Studies in Maharashtra have shown that usage of vermicompost has improved the production and quality of grapes. There are many successful farmers experiences of using vermicompost from different climatic zones of the country. There will be lot of demand for vermicompost in future for developing cultivable land subjected to some form of degradation. Government agencies and NGOs are popularizing organic agriculture using vermicompost by organizing awareness campaigns and film show in rural and urban areas. In some cities like Bangalore and Bombay, vermicompost is sold at the rate ofRs.2 per Kgs. and is being used in pot culture and kitchen gardens.

2.2 Market Demand For Vermicompost In 1985, Maharashtra Agricultural Bioteks was formed and established a small plant to manufacture vermicompost from agricultural waste. Those involved believed that a successful commercial venture based on regenerative principles might convince others to adapt sustainable practices. The organization currently produces 5,000 tons of vermicompost annually. Its real achievement, however, has been in raising awareness among farmers, researchers and policy makers in India about regenerative food production methods. The group is directlyresponsible for 2,000 farmers and horticulturists adopting vermicomposting. These converts have begun secondary dissemination of the principles they were taught.In 1991-92, Maharashtra Bioteks and the India Department of Science and Technology promoted the adoption of vermicompost technology in 13 states in India. The group has also established a vermicompost unit with Chitrakoot Gramodaya University, Madhya Pradesh which produces five tons of vermicompost per month. It has been computed that India, as a whole, generates as much as 25 million tonnes of urban solid waste of diverse composition per year. But per capita waste production in India is minisculous compared to the per capita production of wastes in the industrialized countries.
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Even so, the problem of waste disposal in India has of late attaining serious proportions posing as it does immense health hazards and an environmental crisis of the first magnitude. Today, many corporate units and business agencies are making a fortune by marketing vermicompostan excellent soil conditionerto the farmers and gardeners. For thousands of years now, the process of vermicomposting has been in vouge in nature due to the activities of earthworms which excrete droppings called vermicastings. It has been estimated that about 5,000 earthworms can degrade a heap of organic wastes of the dimension 1.2x2.4mx0.6m speedily and efficiently. BERI has established six large-scale vermicomposting projects, and motivated nearly 5,000 farmers in 16 Indian states to use worms in their farming practices. Several experiments have proven that vermiculture can contribute significantly to crop yields and quality. In the Pune district, grape production increased 50 percent at a vineyard that employed earthworms. In Maharashtra State, vermiculture helped stabilize soil pH and increase potash (a type of potassium and key plant nutrient) content of the soil. In Auroville, Southern India, worms are credited for doubling wheat production and quadrupling grass pasture production. Savings on input costs such as fertilizer and water have dramatically increased profits. However, for further increasing the efficacy of vermicomposting, care should be taken to see that worms thrive on organic matter, breed faster, tolerate moisture and withstand climatic fluctuations. The most beneficial feature of vermicomposting is that it eliminates foul smell of decaying organic wastes. Japan imports 3000-million tonnes of earthworm per annum for waste conversion. But India is still a long way behind in fully exploiting the promises of vermiculture technology for waste disposal and manure generation. With the amount of waste produced in India, the country could easily produce 400 million tonnes of plant nutrients and considerably reduce the outflow of foreign exchange towards the import of fertilizers. Today, many industrial units covering paper, pulp and tanning make use of vermiculture technology for waste treatment. Now there is an all-round recognition that adoption and exploitation of vermiculture biotechnology would besides arresting ecological degradation could go a long way towards meeting the nutrient needs of the agricultural sector in a big way. On another front, widespread use of vermicultural biotechnology could result an increased employment opportunity and rapid development of the rural areas. It is hightime that the scientific
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community of the country gave a serious attention to standardizing and popularizing vermiculture technology on a countrywide basis.

2.3 Scope of Vermicomposting From vermiculture, we get well decomposed worm casts, which can be used as manure for crops, vegetables, flowers, gardens, etc. In the process, earthworms also get multiplied and the excess worms can be converted into vermi-protein which can be utilized as feed for poultry and fish etc. The vermiwash can also be used as spray on crops. Thus various economic uses can be obtained from organic wastes and garbage and prevent pollution. The total annual waste generated in India in the form of municipal solid waste is 25 million tons, agriculture waste residues 320 million tons, cattle manure 210 million tons and poultry manure is 3.3 million tons (Central Pollution Control Board, 2001). Traditionally the solid waste management practices involve collection and transportation to far off low dumping sites. This leads to fowl smelling area, disease spreading, and mosquito breeding grounds that the aesthetics of urban as well as rural dwellings. The other option is composting which involves the dumping of waste into a pit. The bio-conversion of waste to vermicompost by this method takes about 3- 4 months. There is a tremendous scope to convert the bio-degradable waste into organic manure through vermiculture biotechnology or vermicomposting. Organic food exports from India Organic food exports from India are increasing with more farmers shifting to organic farming. With the domestic consumption being low, the prime market for Indian organic food industry lies in the US and Europe. India has now become a leading supplier of organic herbs, organic spices, organic basmati rice, etc. The exports amount to 53% of the organic food produced in India. This is considerably high when compared to percentage of agricultural products exported. In 2003, only 6 - 7% of the total agricultural produce in India was exported (Food Processing Market in India, 2005).

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Exports is driving organic food production in India The increasing demand for organic food products in the developed countries and the extensive support by the Indian government coupled with its focus on agri-exports are the drivers for the Indian organic food industry. Organic food products in India are priced about 20 -30% higher than non-organic food products. This is a very high premium for most of the Indian population where the per capita income is merely USD 800. Though the salaries in India are increasing rapidly, the domestic market is not sufficient to consume the entire organic food produced in the country. As a result, exports oforganic food are the prime aim of organic farmers as well as the government. The Indian government is committed towards encouraging organic food production. It allocated Rs.100 crore or USD 22.2 million during the Tenth Five Year Plan for promoting sustainable agriculture in India. APEDA (Agricultural and Processed Food Export Development Authority) coordinates the export of organic food (and other food products) in India. The National Programme for Organic Production in India was initiated bythe ministry of commerce. The programme provides standard for the organic food industry in the country. Since these standards have been developed taking into consideration international organic production standards such as CODEX and IFOAM, Indian organic food products are being accepted in the US and Europeanmarkets. APEDA also provides a list of organic foodexporters in India.

2.4 Competitive Market analysis Madhya Pradesh is one of the fore runners in promotion of organic farming. The State Government has adopted a concept called Bio farming through bio-villages for the promotion of organic farming. Bio-farming is implemented in 1565 villages selected from 313 blocks of 48 districts in the state. It is reported that the message of growing crops through organic resources is spreading from village to village through farmers contact programme. The survey conducted by the Indian Institute of Soil Science (IISS-ICAR), Bhopal on organic farming in Central Madhya Pradesh revealed that the major crops grown under organic farming
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are soybean, wheat, lentil, safed musli, maize, pigeon pea, vegetables and sugarcane. The survey also revealed that more number of large and medium farmers are involved in organic farming as compared to small farmers. The average area under organic farming varied from 0.80 ha (with small farmer) to 5.00 ha (with large farmer) Adoption of organic farming is reported to have a positive correlation with the number of cattle maintained by the farmers, in the state. The large farmers have more cattle and hence more resources for organic manure which facilitates more area under organic farming. Compost or Farm Yard Manure (FYM) is the common source of organic manure used by the farmers, followed by Vermicompost and Narayan Devaraj Pandey (NADEP) compost. Farmers are also using bio-gas slurry, green manure and cow horn manure. Poultry manure, neem cake, karanjee cake and bio-fertilizers like rhizobium, azospirillum, phosphate solubilizing bacteria etc, are the other supplements under off-farm organic sources.The IISS survey has indicated that the quantum of organic manure applied by the farmers do not have any scientific basis to meet the nutrient requirements of the crops grown. The quantity applied is based on the on-farm availability and the nature of crops grown. However, the periodicity of application is found to be regular, either every season or crop grown under organic farming as against application once in two or three years under conventional farming. In Karnataka, the players involved in vermicompost production activities are the farming sector, government organizations, private organizations, and other agencies. This has encouraged many government and non-government agencies to promote vermicompost production. Many enterprises by farmers and private agencies have shown keen interest in undertaking of vermicompost production. These prospectives clearly show that vermicompost could contribute enormously to farm production and economic conditions of rural people, besides being an eco-friendly activity. In recent years, concerted efforts have been initiated by the state as well as by private sector including many NGOs to create awareness among farming community about need for application of suitable soil amendments mainly in the form of organic matter for sustainable agricultural production. In this direction, vermicompost is an important source of organic matter to the soil as well as soil amendment due to its
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multifunctional roles and benefits. Though there is no documented information on quantities of vermicompost produced in the state, the rough estimates indicate that Karnataka state produces around 40,000 to 50,000 metric tons annually. An approximate breakup of the total of 40,000 tons of vermicompost is as follows: a. Farming sector: At around 1,000 tons per district, farmers account for nearly 25,000. b. tons / annum. c. Government sector accounts for nearly 5,000 tons / annum. d. Private sector accounts for nearly 5,000 tons / annum. e. Other accounts for nearly 5,000 tons /annum. Vermicompost produced in the state is being utilized in agriculture, horticulture and sericulture. The government of Karnataka procures huge quantity of vermicompost every year for coconut crop for management of coconut mite. From utilization point of view, there is tremendous potential in horticulture crops, agriculture crops and moriculture. Keeping in view the advancement in organic farming in the state, a substantial increase in vermicompost production can take place in the state in recent years.

3. THE ORGANIC AGRICULTURE INDUSTRY Since 1980s, agricultural scientists in the world have been realizing the limitations of chemical fertilizers used for fertility management. While on one hand research is being initiated to improve the use efficiency of chemical fertilizers, on other hand alternative inputs are being considered. Organic matter recycling has been in use in India for centuries. The shift towards organic production is supported by consumers who are aware of health hazards: demand for food grown organically is increasing by 20-25% in developed countries where awareness is comparatively high. The organic agriculture is indeed being pursued in India; the national programme of organic products (NPOP) was launched in 2000. Its aim is mainly to create certification facilities; since its inauguration, 2.5 million ha (6.2 million acres) have been certified as organic, providing 115 to 238 metric tons of produce by the end of 2004-05 (Gauri 2005). Organic agriculture, a holistic system that focuses on improvement of soil health, use of local inputs, and relatively high-intensity use of local labor, is admirably fit for
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dry lands in many ways, and the dry lands offer many benefits that would make it relatively easy to implement. The organic agriculture is key element for development and sustainable environment. It minimizes environmental pollution and the use of non-renewable natural resources and conserves soil fertility and soil erosion through implementation of appropriate conservation principles. In fact, India's national project on organic farming (NPOF), launched in 2004, has given top priority to the dry lands (NPOF 2005). The real achievement in organic method of farming has been in raising awareness among farmers, researchers and policy makers in India about regenerative organic food production methods. In 1991-92, India Department of Science and Technology promoted the adoption of vermicompost technology in 13 states in India. From 1997-98 onwards, several government agencies and NGOs are working individually to promote organic farming. The awareness of organic matter and concept of sustainable agriculture is gaining impetus among our farmers in recent years to produce good quality consumable agricultural produce. In this context, recycling of available bio-wastes of different sources is helpful and can reduce the environmental pollution. Vermicomposting is an important component of organic farming without much financial involvement, which can convert rural and urban biowastes into nutrient rich organic manures. (Sajnanath and Sushama, 2004).

Vermicomposting through organic farming is the pathway that leads us to live in harmony with nature. Vermicomposting is the secure system for agriculture. Use of this vermicomposting with increased efficiency by developing various methods which do not change the originality of the process i.e. use of earthworms for sustainable and secure system should be adopted. Several reasons have been emphasized for the need of organic agriculture including vermicomposting, like limited land holdings, poor socio- economic conditions of farmers, and rise in input cost. The broadest view shows two major reasons viz., population and environment, emphasized the ultimate need for eco-friendly technologies through vermicomposting. In the past ten years these agencies in India have prompted farmers and institutions to switch from conventional chemicals to the organic fertilizer, vermicompost. Noted for its ability to increase organic matter and trace minerals in soil, vermiculture has been the primary focus in India, these agencies which have initiated both commercial and educational ventures to promote
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vermiculture. In 1985 a small plant was established to manufacture vermicompost from agricultural waste. Those involved believed that a successful commercial venture based on regenerative principles might convince others to adapt sustainable practices. Farmers have reduced their use of chemical fertilizers by 90% by using vermicompost as a soil amendment for growing grapes, pomegranates and bananas. Similar work is underway on mangoes, cashews, coconuts, oranges, limes, strawberries and various vegetable crops. These agencies have devised methods to convert biodegradable industrial waste like pulp waste from paper mills and filter cake and liquid effluent from sugar factories into vermicompost.

4. ENVIRONMENTAL REGULATIONS ON THE ORGANIC AGRICULTURE INDUSTRY 4.1 Impact of Govt. (Political) Environment on Organic farming industry In response to the $26 billion global market for organic foods, the Indian Central Government set up a National Institute of Organic Farming in October 2003 in Ghaziabad, Madhya Pradesh. The purpose of this institute is to formulate rules, regulations and certification of organic farm products in conformity with international standards. The major organic products sold in the global markets include dried fruits and nuts, cocoa, spices, herbs, oil crops, and derive products. Non-food items include cotton, cut flowers, livestock and potted plants. Most farms in organic agriculture in India is not certified. The certifying agencies thus far named by the Centre include the APEDA (Agricultural and Processed Food Products Export Development Authority), the Tea Board, the Spices Board, the Coconut Development Board and the Directorate of Cashew and Cocoa. They will be accountable for confirming that any product sold with the new India Organic logo is in accordance with international criteria, and will launch major awareness and marketing campaigns, in India and abroad. Organic farming has been identified as a major thrust area of the 10th plan of the central government. 1 billion rupees have been allocated to the aforementioned National Institute of Organic Farming alone for the 10th five-year plan, Mann said. And by the end of 2004, according to APEDA chairman K.S. Money, 15% of farm products will be organically grown &
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processed. A working group has been set up by the Planning Commission, and the Department of Commerce has established National Organic Standards. Recognising the importance of organic farming in Indian Agriculture, Government of India has taken various initiatives to promote and support organic production. Setting up of National Centre of Organic Farming with Regional Centres at various places, launching of the National Programme on Organic Production encompassing National Standards and Accreditation Programme for Certification Agencies etc., are important steps in this direction. The importance of organic inputs in development of organic farming is adequately emphasized with the launching of the Capital Investment Subsidy Scheme for Commercial Production Units of Organic Inputs by Government of India.

NABARD, as an apex institution in the field of agriculture and rural development has identified Organic Farming as a thrust area and has taken various initiatives for its promotion. These initiatives include building capacities of bankers, NGOs, farmers through training programmes, exposure visits etc., technology development and its dissemination through various funds and suggesting policy measures for financing organic farming.

Package of practices for organic farming is being developed by many Universities and Research Institutions. These practices need to be developed into a bankable model for aiding financial institutions in extending credit for organic farming. Preparation of model bankable schemes based on package of practices developed by research institutions and those adopted by farmers is an attempt in this direction. I am certain that these model schemes may act as a catalyst in promoting organic farming amongst prospective entrepreneurs especially with the support of institutional credit. The recent policy measures and interventions by the Government, civil society organizations, and financial institutions like banks and National Bank for Agriculture and Rural Development (NABARD) are tuned to help farmers, particularly women, to access technical and financial resources for rural enterprises. The rise of Self Help Groups (SHGs) and Farmers Clubs has

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mobilized farmers and built their capacity to establish and organize enterprises and market their produce collectively. The organic agriculture based enterprises include the production of organic composts or other farm produce, value addition of organic produce, and improved marketability of organic produce with better packaging and preservation.

4.2 Economic Environmental Aspects India is bestowed with lot of potential to produce all varieties of organic products due to its agro-climatic regions. In several parts of the country, the inherited tradition of organic farming is an added advantage. This holds promise for the organic producers to tap the market which is growing steadily in the domestic market related to the export market. Currently, India ranks 33rd in terms of total land under organic cultivation and 88th position for agriculture land under organic crops to total farming area in the World. The cultivated land under certification is around 2.8 million ha. This includes one million ha under cultivation and the rest is under forest area (wild collection) (APEDA, 2010). India exported 86 items during 2007-08 with the total volume of 37533 MT. The export realization was around 100.4 million US $ registering a 30 per cent growth over the previous year (APEDA, 2010).

Organic farming has the potential to provide benefits in terms of environmental protection, conservation of nonrenewable resources and improved food quality. Countries like Europe have recognized and responded to these potential benefits by encouraging farmers to adopt organic farming practices, either directly through financial incentives or indirectly through support for research, extension and marketing initiatives. As a consequence, the organic sector throughout Europe is expanded rapidly (24% of worlds organic land). But, in the developing countries like India, the share is around 2 per cent only (included certified and wildlife). However, there is considerable latent interest among farmers in conversion to organic farming in India. But, some farmers are reluctant to convert because of the perceived high costs and risks involved. Those who have converted earning equal incomes to their conventional counterparts, if premium markets are exist for organic produce. Despite the attention which has been paid to organic

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farming over the last few years, very little accessible information actually exists on the costs and returns of organic farming in India. Similarly, there are only a few attempts of comparing efficiency between organic and conventional production systems in India.

Role of Organic Farming on Indian Rural Economy The role of Organic Farming in India Rural Economy can be leveraged to mitigate the everincreasing problem of food security in India. With rapid industrialization of rural states of India, there has been a crunch for farmland. Further, with the exponential population growth of India, the need for food sufficiency has become the need of the hour. Furthermore, the overuse of plant growth inhibitor, pesticides and fertilizers for faster growth of agricultural produce is detrimental to human health and the environment as a whole. The proposition of Organic Farming in India Rural Economy holds good, as an alternative to arrest this problem. The introduction of the process of Organic Farming in India Rural Economy is a very new concept. The huge furor over the overuse of harmful pesticides and fertilizers to increase agricultural out put has in fact catalyzed the entry of Organic Farming in India Rural Economy. The process of organic farming involves using of naturally occurring and decomposable matter for growth and disease resistance of different crops. The concept of organic farming in India dates back to 10,000 years and it finds its reference in many Indian historical books.

The main advantages of Organic Farming in India Rural Economy are as follows Organic fertilizers are completely safe and does not produces harmful chemical compounds The consumption of chemical fertilizers in comparison to organic fertilizers is always more, especially in unused cultivable lands. Moreover, chemical fertilizer needs huge quantities of water to activate its molecule whereas, organic fertilizers does not need such conditions. Further, chemical fertilizers almost always have some harmful effects either on the farm produce or on the environment. Furthermore, it can also produce harmful chemical compound in combination with chemical pesticides, used to ward-off harmful pests.

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It is estimated that there is around 2.4 million hectare of certified forest area for collection of wild herbs. The actual available area for cultivation of organic agriculture in India is much more than that is identified and certified so far. India has around 1,426 certified organic farms. India produces approximately 14,000 tons of output annually. It is estimated, that around 190,000 acres of land is under organic farming in India. The total annual production of organic food in India in the last financial year was 120,000 tons.

4.3 Social Aspects of Organic Farming The potential social benefits of going organic range from the small to the dramatic. Farmers who transition to organic production often have a renewed interest in farming; they join together with others who have a similar passion for farming in a new way. Perhaps they collaborate on renovating an abandoned grain mill for handling organic grains, or a processing facility for organic poultry. Young, new farmers, drawn to farming because of the organic appeal, add more vitality to their rural communities. And because organic farming is often about building relationships and connections, consumers can support these farmers in a variety of ways. A network develops and flourishes.

Social Benefits Organic farming practices can be adopted in small farms and benefits for marginal farmers. It could reduce dependency on external inputs and costly technologies thus reducing the competitiveness and disparity among the farmers in a community. It will also lead to food security at the family level and national level. Organic farming is revival of a culture and brings back the indigenous knowledge, beliefs and value system that are almost on extinction now. It also contributes to employment generation at the community level.

4.4 Technological Aspects of Organic Farming in India (Vermicomposting) In India, the integration of crops and livestock and use of manure as fertilizer were traditionally the basis of farming systems. But development of chemical fertilizer industry during the green
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revolution period created opportunities for low-cost supply of plant nutrients in inorganic forms which lead to rapid displacement of organic manures derived from livestock excreta. The deterioration of soil fertility through loss of nutrients and organic matter, erosion and salinity, and pollution of environment are the negative consequences of modern agricultural practices. In India, millions of tons of livestock excreta are produced annually. Odour and pollution problems are of concern. Currently the fertilizer values of animal dung are not being fully utilized resulting in loss of potential nutrients returning to agricultural systems. The potential benefits of vermicomposting of livestock excreta include control of pollution and production of a value added product. Vermicomposting of different livestock excreta including cattle dung; horse waste; pig waste; goat waste; sheep waste; turkey waste and poultry droppings has been reported. Organic wastes can be ingested by earthworms and egested as a peat-like material termed vermicompost. Recycling of wastes through vermicomposting reduces the problem of non-utilization of livestock excreta. During vermicomposting, the important plant nutrients such as N, P, K, and Ca, present in the organic waste are released and converted into forms that are more soluble and available to plants. Vermicompost also contains biologically active substances such as plant growth regulators. Moreover, the worms themselves provide a protein source for animal feed. Considering the tropical climate of India, vermiculture technology seems to be one of the most appropriate technologies for Indian farmer.

4.5 Ecological Appraisal of Vermicomposting Organic agriculture, through its systemic approach and avoidance of agro-chemicals, prevents natural resource degradation and the loss of land and productive potential. In organic agriculture, nature is both instrument and aim. As organic farmers cannot use synthetic substances (e.g. fertilizers, pesticides, pharmaceuticals) they need to restore the natural ecological balance because ecosystem functions are their main productive "input". For example: Many unspecific pests like aphids, thrips, whiteflies or spider mites, economically damaging in many crops, can be kept below the economic threshold with naturally occurring or purposely released predators and parasitoids. The former are direct goods and services of hedges, botanically diverse field margins, intercropping or weedy

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undergrowth, and the latter do better when released in botanically and ecologically enriched habitats. The only way to suppress soil-borne pests and diseases in organic agriculture are wide crop rotations with several components of botanically different crops. Adhering to such rotations is crucial to providing agro-ecosystem diversity. Diverse crop rotations, or agro-forestry systems, guarantee a better uptake of nutrient elements from the soil and very efficient use of water and light, thanks to varying spatial and temporal root growth and leaf dispersion. Soils with a high functional diversity of micro-organisms, which occur very often after decades of organic agriculture practice, develop disease suppressive properties and can help to induce resistance in plants. By restricting farm inputs farmers have to use preventive techniques appropriately. The ban on herbicides, for instance, makes it impossible to ignore good crop rotation principles and disastrous in terms of yields and long-term problems with weeds. The ban on soluble and purchased fertilizers makes nutrient-conserving crop rotations and the sparing use of organic fertilizers to reduce losses, economically worthwhile.

4.6 Legal aspects of Organic Farming S.O. 908(E).- Whereas the draft of the Municipal Solid Wastes (Management and Handling) Rules, 1999 were published under the notification of the Government of India in the Ministry of Environment and Forests number S.O. 783(E), dated, the 27th September, 1999 in the Gazette of India, Part II, Section 3, Sub-section (ii) of the same date inviting objections and suggestions from the persons likely to be affected thereby, before the expiry of the period of sixty days from the date on which the copies of the Gazette containing the said notification are made available to the public. And whereas copies of the said Gazette were made available to the public on the 5 th October, 1999; And whereas the objections and suggestions received from the public in respect of the said draft rules have been duly considered by the Central Government

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4.7 Risk Factors Associated with Solid waste composting (Vermicomposting) Political risk factors Considering the nature of the projects, political factors may not be perceived to be major risk posers, however they have a very strong potential to affect sustainability of MSW treatment plant related projects. For instance in case of Trivendrum compost plant the different political set up at the ULB and state level and changes after the general elections created a new set of constraints for the city planners and the operator. The assurances given by the city government/previous government were not honoured by the state/new government. Likewise the assurances on fiscal incentives and preferential treatment given by the urban development department could not be honoured by the agriculture department. The plant operator is unable to address evolving situation and faces several unmanageable risks. Administrative risk factors Change of a Mayor or a municipal Chief Executive Officer/Commissioner can create a set of risk factors which perhaps are not envisaged and factored in the agreement at the outset of the project. For instance operations at the compost plant at Mysore (location not part of the study) came to a stand still after one such change and the operators inability to meet the emerging exigencies.

A major risk factor which the Manual on Municipal Solid Waste Management has also attempted to address pertains to the countrywide practice of entrusting the responsibility of MSW management to public health professionals who by training are clinical professionals. They are expected to manage the curative facilities and measure indicators of public health rather than get involved in logistics of collection, transport, treatment and disposal of solid waste, management of fleet of dumper, loaders and earth moving machinery etc. The latter set of tasks typically require engineering knowledge and skill which are best left for the engineering departments. Because of this mismatch, it is no wonder that the solid waste operations are in a rather poor shape across the country. In this context, it is encouraging to note the decision of
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the Andhra Pradesh High Court which disallowed petition of the health professionals to prevent transfer the responsibility to the engineering staff at the Municipal Corporation of Hyderabad. As a consequence of this positive change the improvements in the city of Hyderabad in terms of manpower and fleet planning, contractual arrangements, work allocation, demarcation of responsibilities etc. are highly commendable. Promoter background and contractual agreement Some of the projects which came up in early stages of evolution of the sector witnessed entry of inexperienced players with limited technical, financial and organisational strengths. Their commitment was not towards long term sustainability rather in availing short benefits which made them pursue the waste to wealth paradigm. Integrated solid waste management requires technical and logistical capabilities akin to mining operations with commensurate financial resources. Lack of such capabilities has been demonstrated in many projects across the country to have emerged as a major risk for short and medium term sustainability. It is understandable that with the above kind of players and lack of appreciation on the part of the urban local bodies on required expertise/resources, the contractual agreements were slanted by the promoters towards availing capital subsidy and compensation in the event of deficit in delivery of assured quantity of waste or closure of the plant. The fundamental premise of converting waste to wealth and expectation of royalty on the part of the ULBs entailed operators to adopt short cuts to achieve operating profits. The contracts typically did not define the responsibility of collection, transport and safe disposal of rejects, which highlights the misplaced priority on the paradigm of waste to wealth rather than on the paradigm of safeguarding the environment and public health. Location of the plant Nobody wants a waste treatment and disposal facility in his/her back yard. As a result, there is severe protest by the affected community to any such proposals of the urban local bodies across the country. Proximity to a habitation necessitates conducting due diligence (irrespective of the size of capital investment), identification of impacts and incorporation of remedial
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measures in terms of higher order technology and effective and robust pollution control measures e.g., odour/emission control system, effluent treatment plant etc. On the social side, unlike a typical large scale industrial project, a MSW treatment plant does not involve considerably high capital investment and thus there is not enough budget for compensation, resettlement and rehabilitation of the project affected people. However, there is an utmost need to address real fear of the community of being ostracised, loss of property values and potential health impacts. Provision for host community fee and/or augmenting basic infrastructure/services could help in reducing the risks, however these features are still not in vogue. FEEDSTOCK RELATED RISK FACTORS Municipal solid waste to be treated and thereby receive value addition needs to be considered not just as waste but as feedstock from the point of view of the plant operator. As in case of an industrial plant, feedstock/raw material delivery, quality and quantity become crucial from operational efficiency point of view. Any shortfall on these counts can undermine plant operations.

Delivery system In this regard lack of a seamless integration between treatment plant and the collection and transport system emerges as a significant risk factor. Under the existing system the plant operator has no control over the municipal personnel and fleet drivers who are entrusted with the responsibility of delivery of the feedstock to its plant. The latter groups are well known for their low efficiency and lack of accountability and the operator can be held at ransom or could be a helpless observer when it comes to timely delivery of required quantity and quality of feedstock. Secondly, in the evolving system of contracting out transport of waste, while there is significant revenue for transport contractors, the plant operator does not get gate fee in proportion to the quantity of waste delivered at its premises. Integration of transport and treatment systems/services will reduce such risk factors and offer higher motivation for a private operator to make a competitive and realistic bidding.
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4.8 SWOT Analysis

Good Quality and near to the market Good quality products Healthy and eco-friendly fertilizers No Bio magnification unlike chemical fertilizers Basic raw materials free of cost

New In this Area Farmers are not habituated to using organic fertilizers No brand image and brand equity in the market

Less competitive market Easy availability of raw materials New Market Futuristic Market Health conscious Government subsidies

Environmental effect is very high No skilled workers available Farmers demand for quick results on the contrary to the fact that organic fertilizers take a longer time to give reults

5. Operations Plan
Plant and Production Facilities: Land Area of the Plant: 2 acres which includes half acres for future expansion Main product: Vermicompost By-product: Earthworms Production Capacity : 20000 kgs of vermicompost per batch Capacity Untilisation: 100% Price/bag of 50 kg: Rs.150 Annual Sales: Rs. 30,00000 from Vermicompost & Rs. 48,0000 from earthworms Number of vermicomposting beds: 2000 beds Dimensions of a single bed: 10x5x3 Capacity of vermicomposting per bed: 500 kgs of vermicompost

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Number of batches produced per year: 3 batches i.e 100 metric tones Water supply Facility: Bore well water system Means of Transportation: Tractor for farm use as well as for collection of garbage and cow-dung For every bed kg of earthworms are required which amounts to 200 kgs for one batch. From initial batch reproduction of earthworms leads to 600 kgs after the first batch. Out of these 200 kgs will be retained for the culture of second batch and 400 kgs will be sold in the market.

Next batches will not require any further purchase of earthworms. In every batch henceforth there will be 400 kgs of earthworms as by-product that amounts to 1200 kgs from three batches to be sold as a by-product.

Raw Materials used: Garbage from different sources like industrial as well as household wastes, Various Municipal Solid waste Living organisms used: Earthworm weighing half kgs per bed of vermicomposting Chemical used as a catalyst for vermicomposting: Agroculture 1 kg per 3 beds of vermicomposting Production type: Batch Production Time required for one batch production: 4 months

Note: Time for first batch of yearly vermiculture start: June-July

Yearly Batch production: 3 batches

Plan for labourers For maintenance of the farm 4 labourers will be on the field Apart from these, 3 labourers will be used extra for 10 days during the initial spreading of the garbage and preparation of the beds for vermiculture Henceforth for 3 batches 90 days of extra working days of labourers will be required

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Garbage and cowdung will be collected from the surrounding localities around the farm in Baramati

Plant Lay Plant layout for vermicomposting plant



Vermicomposting plant

Storage plant


Filtering Plant

Industrial garbage

Vermicomposting process It is an aerobic, bio-oxidation, non-thermophilic process of organic waste decomposition that depends upon earthworms to fragment, mix and promote microbial activity. The basic requirements during the process of vermicomposting are Suitable bedding Food source Adequate moisture Adequate aeration Suitable temperature Suitable pH

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Climate and Temperature requirement

The most common worms used in composting systems, red worms (Eisenia foetida, Eisenia andrei, and Lumbricus rubellus) feed most rapidly at temperatures of 1525 C (59-77 F). They can survive at 10 C (50 F). Temperatures above 30 C (86 F) may harm them. This temperature range means that indoor vermicomposting with red worms is suitable in all but tropical climates. (Other worms like Perionyx excavatus are suitable for warmer climates.) If a worm bin is kept outside, it should be placed in a sheltered position away from direct sunlight and insulated against frost in winter.

Fig: Flowchart for vermicomposting process

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6.1 Marketing Strategy Pre-executing Marketing Strategy Post-executing Marketing Strategy

Pre-executing Marketing Strategy: Identification of the Area: Area should be near to the market so that it is easy to communicate with the farmers. Area should also be near to the suppliers of raw materials. Moreover it should be such that water is easily available. Area should be isolated from human dwelling so that there is no issues regarding the bad odour of the garbage compost of the farm Mass Campaigning: The farmers who are the end customers will be made aware of the vermicompost product, its features and its advantages, its availability through mass campaigning. This is very necessary since the farmers are used to using the conventional chemical fertilizers. Through mass campaigning they will also be made aware about the harmful effects of the chemical fertilizers on their land as well as on their health and the dangers associated with their small children as well. Village meeting: The farmers can also be made aware of the product and its competitive advantages through village meeting. Also we can seek the help of the village authorities like the Panchayat , or the farmers welfare unit since they have a high influence on the farmers. They can help in convincing the farmers about the product as well as the govt subsidies available for this product and its cheaper rates. Meeting with the target farmers Meeting with the target farmers is very important to convince them and demonstrate them about the product. Moreover it will be easy to understand their expectations and their min set about the product. It is also necessary to remove the confusions and wrong notions of the farmers about the product. It will also help in making them aware about the financial assistance available for this product.
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Post-Execution Marketing Strategy Mass campaigning Publicity: Product publicity can be made through various ways like wall posters, banners, free samples etc. Colourful posters usually attract the village folk and make them curious So it will be easy to attract the attention of the farmers. Various tools that can be used for publicity are as follows: 1. Literature Distribution 2. Wall Painting 3. Shop Painting 4. Farming Equipment Painting 5. Press news Coverage 6. Print Media 7. Local Radio Mega Farmer Meeting Product Display: The product will be physically displayed to the farmers to give them a clear idea about the features of the product and its usability Demonstration: This is very important since most farmers are used to the chemical fertilizers and are not aware of hoe to use the organic fertilizers. Demonstration of the product will help them in using the product in their fields. 1. Result Demonstration 2. Crop Specific Demonstration 3. Result group demonstration

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7. HUMAN RESOURCES PLAN Organization and Employee Structure

(Administrative Head)





1. Finance Department: Financial Manger, Head Accountant, Assistant Accountant 2. Marketing Department: Marketing Manager, Sales, Promotion and distribution team of 8 members Two drivers for driving the carrier van 3. Operations Department: Two supervisors for the Vermicomposting plant One supervisor for the packaging plant Eight field and packaging labour 4. Human Resources Department: One recruiting officer Human resource Policies Employee Motivation: Bonus for outstanding performance Organisation Culture: Transparency within organization, Unity of Command Health and Safety: Health check up, Medical Facility Employee retention policy: Promotion policy, Career development policy Corporate Social Responsibility Health Conciousness Ecofriendly System Free soil testing and water testing for friends

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1. Cost of Project (in Rupees) Investment in Fixed assets Land and Building Machinery IT equipment Earthworm Miscellaneous assets Contingency (10%) Investment in Working Capital Investment in Preliminary expenses TOTAl Expenses Amount (Rs) 800000 3000 19000 80,000 20000 20,300 2,49,627 50000 12,41,927

2. Means of Finance Particulars Loan Long Term Loan Equity Capital Total 7,40,000 11,10,000 18,50,000 Amount(Rs)

3. Financial Cost S.No. 1 Particulars Interst on Term Loan TOTAL 1st Year 0 2nd Year 55500 3rd Year 44400 99900

Note: Loan is taken from NABARD @ the rate of 7.5% for Organic farming

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4. Loan Repayment Schedule:

Year 1st year Amount OPENING CLOSING 2nd Year OPENING CLOSING 3rd Year OPENING CLOSING 740,000 592000 592000 444,000 44400 148,000 444,000 740,000 740000 55500 148,000 592,000 Interest@ 7.5% p.a. Installment Paid 0 Balance 740,000

5. Cost of Capital
Particulars Interst Rate of Debt Interst rate of Equity dividend Income tax rate Amount of Debt Amount of Euity Cost of Capital Amount 7.5% 16% 30% 7,40,000 111,0000 11.7%

6. Projected Sales Revenue

Products sold: A. Vermicompost B. By-product: Live earthworms 10% % Increase in S.P wt. /bag Selling Price 10% Vermicomppost Earthworms 50 113 400 Kg Rs./bag Rs/kg

1st year Rs./Unit(kg) Sales Projection (Units) Vermicompost 3 Units 1000000 Rs. 3000000 Rs./Unit 3.3

2nd Units 1100000 Rs. 3630000 Rs./Unit 3.63

Units 1210000

Rs. 4392300











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7. Cost of Raw Material 1st Batch: 6667 bags of vermicompost of 50 kgs each 2nd batch: Purchase Earthwrorms is not required from the start of the second batch as there will be around 600 kgs of freshly reporoduced earthworms. This will lead to cut down of the costs as follows: 1st batch cost of raw materials/bag of 50 kg= Rs.51.5 From second batch onwards the cost of raw materials will decrease since purchase of earthworms will no more be required Therefore only in the first batch purchase of earthworms are require % increase= average rate of inflation in food industry= 10% Therefore growth in prices = 10%
1st Batch Qty / Batch Cow Dung Garbage Agroculture Earthworms 40000 160000 10000 200 kg kg kg kg 6667 bags Qty / Packet 10 40 0.5 0.01 1000000 Rs./Kg. 1 0 75 400 Total Kgs 1st year Rs./Packet 10.00 0.00 37.50 4.00 51.50 2nd year 3rd year




7. Working Capital Requirement Statement

1ST Year 1) WORKING CAPITAL REQUIREMENT Amount (Rs) Holding Period (Days) 10 0 0 15 30 Total Cost Amount (Rs) 2 Year Holding Period (Days) 120 0 0 7596 9567 15 30 Total Cost Amount (Rs)

3 Yea Holding Period (Days) 10 0 0 15 30 Total Cost


(i) (ii) (iii) (iv) (iv) (V)

RM WIP FG Less: Creditors Debtor Working Capital Requirement

9923 0 0 9923 11438

99227 0 0 148841 343142 293528


911538 0 0 113942 287006 1084602

8356 0 0 8356 10524

83558 0 0 125337 315707 273928

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8. Depreciation on Fixed Assets (WDV Method)

Fixed assets Depreciation Rate 1

2 Depreciation Net Block (WDV) 450000 2700 225000 14850 7200 2250 702000


3 Depreciation Net Block (WDV) 405000 2430 202500 13365 6480 2025 631800


Gross Block Land and Building Plant& Machinery Tractor Computer Furniture Laser Printer TOTAL 10% 10% 10% 10% 10% 10% 500000 3000 250000 16500 8000 2500 780000

Gross Block 450000 2700 225000 14850 7200 2250 702000

Gross Block 405000 2430 202500 13365 6480 2025 631800


Net Block (WDV) 364500 2187 182250 12029 5832 1823 568620

50000 300 25000 1650 800 250 78000

45000 270 22500 1485 720 225 70200

40500 243 20250 1337 648 203 63180

10. Operating Expenses (SG & A)

% Sales % Growth 1st Year 2nd Year 3rd Year 4th Year 5th Year

Salary Electricity expenses Telephone expenses Printing and stationery Fuel 0.25% 10% 10% 10%

960000 36000 7200 8700 15000

1056000 39600 7920 10395 16500

1161600 43560 8712 12433.96 18150

1277760 47916 9583.2 14886.57 19965

1405536 52707.6 10541.52 17838.23 21961.5







11. Salary Statements

Person s % Growt h 1st Year 2nd Year 3rd Year

Salary/Mont h MANAGERS ACCOUNTAN T OFFICE BOY SALES PERSON Total 3 1 1 1 10% 10% 10% 10% 20000 10000 5000 5000

Yearly Salary 720000 120000 60000 60000 960000

Salary/Mont h 22000 11000 5500 5500

Yearly Salary 792000 132000 66000 66000 1056000

Salary/Mont h 24200 12100 6050 6050

Yearly Salary 871200 145200 72600 72600 1161600

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Cost Sheet
Particulars Raw Materials Wages Prime cost Inner 2976816 250000 3226816 Outer

Factory Overheads 1)Water Supply charges 2)Electricity charges 3)Packaging charges 4) Factory Rent Depreciation on Machinery 3000 0 15000 69600

Factory Costs Add: Addministrative Overhead Salary Electricity expenses Telephone esxpenses Printing and stationery Cost of Production 7200 8700 900000



Add: Selling and Distribution Overheads 1) Salesman 2) Travelling 60000 30000 90000 TOTAL COST Profit TOTAL SALES 4320316 432032 3480000

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11. Projected Profitability Statement

Year 1 Sales 3480000

Year2 4158000

Year3 4973584

Raw Materials 1)Water Supply charges 2)Electricity charges 3)Packaging charges 4) Factory Rent 5) Labour charges

2976816 0 15000 69600 0 250000

2370000 0 16500 76560 0 275000

2607000 0 18150 84216 0 302500

8) Operator, Supervisor and Incharge Cost of production

120000 3431416

132000 2870060

145200 3157066

Operating Profit Insurance SG&A Rent Depreciation Cost of Sales EBIT Less Interest 0 78000 1026900






70200 1104900 -1056316 0 -1056316 87325 26198 1200615 87325

63180 1307636 508882 55500 453382 136015

Less Taxes

Net Profit




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12. Capital Budgetting a) Cash Flow Statement

Particulars Net Profit Year 1 (1056316) YEAR 2 61128 Year 3 317367

ADD Non Cash Charges Depreciation ADD Non Operating expenses Interest Charges 0 0 55500 78000 70200 63180

Changes in Working Capital




Cash Flow from Operations




Investment Activiites

Plant Property & Equipment Vehicles

(780000) 0

Cash Flow from Investment


Financing Activities

Debts Raised Interest charges Debt Repayement Share Holders Equity

740000 0 0 1110000

0 0 0 0

0 (55500) (148000) 0

Cash Flow From Financing Activities



Total Cash flow for This year Cash From Previous Year Year end Cash Flow


(659747) (201843)

1043222 (861590) 181632



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b) Net present Value and Pay-back period

NPV and PAY Back period

Cost of Capital

12% Year 0 Year1 Year 2 Year 3 Year 4 Year 5

Cash inflows Discounting Factor Present Value

-1111327 1 -1111326.667

-451500 0.8928571 -403125

131328 0.79719388 104693.479

380547 0.7117802 270866.14

759607 0.6355181 482743.98

1353542 0.567426856 768036.336

13. Balance Sheet

Sources of Funds Year 1 Shareholders Funds Shareholders Equity Resrves and Surplus Loan Funds Secured Loans Repayment of Loans Balance TOTAL Application of Funds Fixed Assets Net Block Current Assets Cash Trade Recievables Inventory Less Current Liablities Trade Payables Net Current Assets Profit & Loss Account TOTAL 148841 148841 91685 1056316 1850000 113942 113942 223012 0 854812 125337 125337 455559 0 1024179 -201843 343142 99227 240525 -861590 287006 911538 336954 181632 315707 83558 580896 702000 702000 631800 631800 568620 568620 740000 0 740000 1850000 740000 0 740000 854812 740000 148000 592000 1024179 1110000 0 1110000 1110000 -995188 114812 1110000 -677821 432179 Year 2 Year 3

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9. BIBLIOGRAPHY Economics and Efficiency of Organic Farming vis--vis Conventional Farming in India By D.Kumara Charyulu and Subho Biswas1 American-Eurasian Journal of Agricultural & Environmental Sciences Special Issue onVERMICULTURE & SUSTAINABLE AGRICULTURE By Ravi Sinha Production and marketing ofproduction and marketing of vermicompost in karnataka: a case of dharwad district: Thesis submitted to theUniversity of Agricultural Sciences, Dharwad m_feeding.htm Wikipedia :

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