Presentation of the bachelor thesis defence at Agriculture and Forestry University, Rampur, Nepal

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