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This document presents a research study on the financial and institutional analysis of vegetable cooperatives in Dhading district of Nepal. The study aims to analyze the financial performance, organizational efficiency, and member opinions of 9 vegetable cooperatives through quantitative and qualitative methods. Key findings include most cooperatives being in early stages of growth transition, poor market linkages reported, lower profit ratios and higher operating ratios found in financial analysis, and mixed member views on transparency though majority agreed cooperatives benefitted them. The study utilized surveys, interviews, focus groups, financial ratios, and institutional assessments to analyze constraints and performance of the cooperatives.
Prashant presentation
- 1. Prashant Bhandari Agri-Intern, Zone Implementation Unit (Vegetable-Zone), Dhading, PMAMP Financial and Institutional analysis of Vegetable co-operatives in Dhading district of Nepal
- 2. Supervising Committee: Asst. Prof. Ankit Koirala, Major Supervisor Sr. Horticulture Dev. Officer Reeti Singh, Member Supervisor Sr. Agriculture Dev. Officer Keshav Raj Kafle, Site Supervisor Researcher: Prashant Bhandari Roll no- 91
- 3. Outline of Presentation Introduction Statement of problem Rationale of Study Objectives of the Study Literature Review Methodology Results and Discussions Conclusions Suggestions Glimpses of research
- 4. Introduction • Nepal’s agricultural status - Productivity & competitiveness - low; adoption of improved technology - limited(ADS, 2015) • Annual growth rate of the Agriculture sector in FY 2016/17 - %; growth remained by 0.03 % (SINA, 2016) • Growth over the last decade has been (SINA, 2016)
- 5. ICA (1995) – “ A co-operative is an autonomous associations of persons united voluntarily to meet their common economic, social & cultural needs and aspirations through a jointly-owned & democratically controlled enterprise” Principles • Voluntary & open membership • Democratic member control • Member economic participation • Autonomy & independence • Education, training & information • Co-operation among co-operatives • Concern for community
- 6. with Kathmandu and access to national highway gives • Makes ever growing agriculture markets of Kathmandu within reach (Supply of vegetables to Kathmandu since late 1970s) • Cooperatives pivotal for production inputs and vegetables sale
- 7. Statement of the Problem • Inefficiency in cooperative management (DCO Dhading, 2073) • Low bargaining power of vegetable farmers (DADO, 2073) • Initial institutional assessment (before cooperatives formation) hadn’t been done
- 8. Rationale of the Study Institutional analysis • can increase the • increase • identify major factors of coops performance; plan accordingly Financial analysis • can point in financial management • movement towards and financial
- 9. Objectives General Objective: Analysis of financial and institutional performance of vegetable co-operatives in Dhading Financial ratios analysis Study organizational efficiency by institutional analysis Study members opinions on coops performance Specific Objectives
- 10. Literature Review Sources: Journal publications, Books, DADO Dhading Publications, Publications from Ministry of Agriculture, Land Management and Cooperatives Coverage of Literature Review 1. History of cooperatives in Nepal 2. Types of Farmer Cooperatives 3. Status of vegetable production in Nepal and Dhading 4. Status of vegetable co-operatives in Nepal 5. Financial analysis of cooperatives 6. Institutional analysis of Co-operatives 7. Cooperatives in regards of Cooperative Act 2074 B.S. 8. Limitations and challenges of farmer cooperatives
- 11. Methodology Study site: Figure 1. Map of Study area Source: Google maps, 2018 N
- 12. Sample Size and Sampling • Total vegetable cooperatives in Dhading: 19 • Total vegetable cooperatives in Vegetable Zone Dhading: 9 • Cooperatives studied in this study: 9 • Household population : 9399 (Zone profile, 2018) • No. of HH interview schedule: 50 ( Slovin’s formula, Snow ball method of sampling)
- 13. Data Collection Techniques Primary: • FGDs • Interview schedule • Direct observation . Secondary: • Audit report of co- operatives • Annual book , DADO Dhading • Publications of Ministry of Agriculture, Land management and Cooperatives
- 14. Data Analysis Technique Indexing I importance = Ʃ (Si× fi/4N) Where, I importance = Index of importance ∑ = summation Si = Ith scale value Fi = frequency of ith severity given by the respondents N = total number of respondents Used for : • Ranking of cooperatives performance • Production constraint ranking • Marketing constraint ranking • Cooperative management problems ranking
- 15. Data Analysis Technique Checklist Eight indicators created & each indicator assigned a number of questions with binary variables Used for: • Focus Group Discussions (FGDs) Principal Component Analysis Analysis for variance within components-used for indicators and their variance Scree plot for showing variance within components
- 16. Data Analysis Technique Financial ratios analysis: • Profit (loss) ratio: ratio of net profit to sales • Operating ratio: ratio of operating expenses to sales • Equity to assets ratio: ratio of equity to total assets • Fixed assets to total assets : ratio of fixed assets to total assets • Return on equity (ROE): ratio of net profit to total equity • Current ratio: ratio of current assets to current liabilities Software used: SPSS 24.0 MS-Excel 2010
- 17. 83 841 317 226 251 100 425 122 235 10 288 56 42 22 82 89 17 65 0 100 200 300 400 500 600 700 800 900 NumberofMembers Male Female Source: DCO Dhading, 73/74 Figure 2. Cooperative members by sex
- 18. 18 2 6 17 3 4 0 2 4 6 8 10 12 14 16 18 20 Agriculture Agriculture + service Agriculture+ Business Agriculture+ Abroad Agriculture+ Labor Agriculture+ Business+ Abroad Frequency Occupation Figure 3. Distribution of respondents by education level
- 19. 34% 26% 40% Brahmin Chhetri Dalit and Janjati Figure No.4 Ethnic composition
- 20. 4604.01 1165 457.31 7152.29 2032.29 476.83 222.52 0 1000 2000 3000 4000 5000 6000 7000 8000Production(kg)inthousands Figure 5. Total yearly vegetable production through cooperatives
- 21. 106503.51 45809 17911.62 139522 70915.46 13721.27 3578.64 0 20000 40000 60000 80000 100000 120000 140000 160000 TotalVegetablesale(NRs)in thousands Figure 6. Total yearly vegetable sale through cooperatives
- 22. 23.13 39.32 39.17 19.51 34.89 28.78 16.08 0 5 10 15 20 25 30 35 40 45 Priceperkg(yearlyaveragefor allvegatables) Figure 7. Average price per kg for vegetables sold through cooperatives
- 23. S.N Production problems Index Rank 1 Lack of irrigation 0.728 I 2 Lack of quality seed, and inputs 0.684 II 3 Problem of pest attack 0.428 III 4 High price of inputs 0.336 IV 5 Lack of training 0.216 V 6 Lack of financial resources 0.208 VI 7 Lack of inputs in time 0.212 VII 8 Lack of technical facility 0.188 VIII Table 1. Production problem of farmers
- 24. S.N Marketing problem Index Rank 1 Price distortion by local middlemen 0.868 I 2 Fluctuation in price 0.756 II 3 Lack of storage facility 0.648 III 4 Transportation cost 0.416 IV 5 Lack of market price information 0.312 V Table 2. Marketing problem of farmers
- 25. Name of Cooperatives Profit (loss) Ratio Operating Ratio Equity to Assets Ratio Fixed Assets to Total Assets Return on Equity (ROE) Current Ratio Krishak Sudhaar 4.6% 13.3% 86.6% 38.4% 6.2% 6.51 Jankalyan -0.6% 56.9% 44.8% 59.6% -0.7% 2.36 Ako 58.4% 96.3% 80.9% 65.3% 7.9% 0.42 Saamudaik 5.7% 84.8% 14.1% 73.5% 14.8% 17.50 Salangahat 11.6% 31.2% 54.1% 75.1% 6.3% 1.60 Malekhu -0.5% 78.2% 52.4% 80.6% -0.2% 0.00 Bhairabi 11.1% 18.0% 100.0 % 46.4% 4.4% 0.00 Gramin bikas -37.1% 107.9% 59.3% 90.6% 2.1% 2.21 Janbhawana 17.6% 10.9% 79.6% 82.8% 28.0% 4.71 Table 3. Ratio analysis of cooperatives
- 26. S.N. Indicators Mean 1 Legal status, organization, planning 0.81 2 Cooperative planning procedure 0.44 3 Human resource management 0.50 4 Financial management 0.61 5 Service to members 0.46 6 Cooperative production 0.82 7 Market linkage 0.37 8 Membership strategy 0.55 Table 4. Mean of indicators
- 27. S.N. Name of Cooperatives Index Rank 1 Krishak Sudhaar 0.70 I 2 Janbhawana 0.65 II 3 Salanghat 0.62 III 4 Ako 0.60 IV 5 Saamudaik 0.59 V 6 Bhairabi 0.59 V 7 Jankalyan 0.56 VI 8 Malekhu 0.50 VII 9 Gramin bikas 0.32 VIII Table 5. Rank of cooperatives
- 28. Total Variance Explained Component Initial Eigenvalues Extraction Sums of Squared Loadings Total % of Variance Cumulat ive % Total % of Variance Cumulat ive % legal status organization and planning, 3.67 45.88 45.88 3.67 45.88 45.88 cooperative planning procedure 1.75 21.89 67.77 1.75 21.89 67.77 human resource management 1.51 18.90 86.67 1.51 18.90 86.67 financial management 0.63 7.89 94.57 service to members 0.25 3.15 97.72 cooperative production 0.15 1.86 99.58 market linkage 0.03 0.42 100.00 membership strategies 0.00 0.00 100.00 Extraction Method: Principal Component Analysis.
- 29. Figure 8. Scree plot of components
- 30. 20 % 24 % 36 % 20 % 0 5 10 15 20 25 30 35 40 Strongly Disagree Disagree Agree Strongly Agree Percent The decision making processes of cooperatives are transparent. Figure 9. Members opinion on decision making
- 31. 26 % 10 % 44 % 20 % 0 10 20 30 40 50 Strongly Disagree Disagree Agree Strongly Agree Percent The organization is able to resolve conflicts among members effectively. Figure 10. Members opinion on conflict resolution
- 32. 10 % 20 % 54 % 16 % 0 10 20 30 40 50 60 Strongly Disagree Disagree Agree Strongly Agree Percent The organization is working for the benefits of its members Figure 11. Members opinion on cooperatives work
- 33. Constraints Index Rank Lack of marketing infrastructure and cooperative stalls 0.72 I Government policies towards cooperatives 0.62 II Lack of technical assistance to the members both on production and marketing 0.27 III Lack of agricultural road links to all production pockets 0.27 III Lack of sufficient fund to provide loan to the members 0.24 IV Lack of cooperative education and training 0.23 V Deficiency in financial/accounting management skill 0.17 VI Deficiency of understanding of cooperatives spirits 0.17 VI Deficiency in operation skill 0.16 VII Poor linkage with other related program 0.15 VIII Table 6. Organizational constraint ranking of Cooperatives
- 34. Conclusion • Two cooperatives were found mid transition to growth , rest-early transition to growth( criteria: EMIRGE, 2013) • Market linkage was reported poor • Profit ratio - lower& operating ratio- higher • Members didn’t feel cooperatives were as transparent, while majority agreed coops had benefits for them
- 35. Glimpses of Research activities
- 36. Glimpses of Research activities
- 37. Thank you for your time