VARUN NAGAR AGRICULTURAL

CO-OPERATIVE SOCIETY
-Case Study Report

SUBMITTED BY
Alpesh Sosa
PGP 2020-22
IIM Bangalore
Problem statements:
1. Whether to fund farmers now or to defer it by six months
2. Whether to sell paddy now and settle the overdraft or hold the paddy for six months and
sell it.
3. Whether to buy fertilizers at a discounted price now or buy it after six months at a normal
price.
Objectives:
Long Term: -
To ensure sustainability of the cooperative through:
1. Confidence of farmers.
2. Confidence of bank
Short Term: -
To decide on the purchase plan for fertilizers and the selling plan of paddy, so as to
ensure maximum returns to farmers without incurring any losses to the cooperative society.

Analysis of Case:
The society currently has Rs. 5 Lakhs cash reserve and 100 tons of paddy ready to be sold and
have an option to sell paddy now or to defer the sell by six months. The society has taken an overdraft
amount of Rs. 5 Lakhs from the bank. It also has a choice to buy fertilizer at discounted price or buy
at the nominal price after six months.
These are the following course of actions Mr. Agarwal may undertake for operation of the society: -
1. He can give Rs. 5 Lakhs cash reserve to the members of the society, which is a due payment
towards paddy procurement.
2. He can sell paddy in a few days at a rate of Rs. 5000 per ton and raise Rs. 5 lakhs.
3. He can delay the sale of paddy by 6 months so he can sell at higher price.
4. He can buy the fertilizers at a special price of Rs.250 per bag before the end of first week of April
1991.
5. He can buy the fertilizers at a nominal price of Rs.300 per bag after six months.
6. He can pay Rs. 5 Lakhs overdraft and with 10% interest to the bank
7. He can continue Rs. 5 Lakhs overdraft and pay only 10% interest to the bank.