Area Development Scheme – Vermicompost

Hapur

1. Introduction
An Area Development Scheme (ADS) is a focused, combined & time bound effort to
enhance credit flow for a particular activity in a particular area. Chemical fertilizers played
a significant role in Indian Agriculture facilitating green revolution and making the country
self-reliant in food production. However, continuous, concentrated and indiscriminate use
of chemical fertilizers disturbs the soil health, leading to acidification, micro nutrient
depletion, soil degradation, reduction in the activity of micro flora and fauna, poor crop
health and lower crop yield and quality. Besides, use of chemical fertilizers contributes to
environmental risks like increase in global warming, ground and surface water pollution
etc. In view of this it is desirable that we return to practices which are ecofriendly and meet
the nutrient depletion and sustain quality food production.
2. Vermi Compost:
Vermi stands for earthworms. The process of subjecting the organic matter to
decomposition, with the help of earthworms, is known as vermicomposting and the
resultant product is vermicompost. The multiplication of Vermi in organic waste is
vermiculture. Earthworms eat soil and various organic matter. These undergo complex
biochemical changes in the intestine of earthworms and excrete out in granular form with
earthy smell. These granules are rich in nutrients and when applied to soil improves its
structure and help in productivity of crops.
3 Objective:
As our land’s productivity is not commensurate with the money spent on inputs, labor, it is
urgently required to be treated well and this activity must be taken up on a commercial
basis on a large scale. The objective is not only to popularize the scheme of
vermicomposting but also demonstrate that if adopted in a scientific manner it will increase
the fertility of land and minimize the cost of inputs. As compared to chemical fertilizers
vermicompost is cheaper as well as devoid of the side effects of fertilizers.
4. Scope:
From vermi culture, we get decomposed worm casts, which can be used as manure for
crops, vegetables, flowers, garden etc. In the process, earthworms also get multiplied which
can be used for expansion of farms, setting up new hatchery etc. The excess worms can also
be converted into vermi protein which can be utilized as feed for poultry, fish etc. Vermi
wash can be used as spray on crops. Thus various economic uses can be obtained from
organic wastes and garbage and prevent pollution.
5. Market Potential:
Our country needs to continuously increase agriculture production to meet the demands of
growing population. As the availability of land is limited, the productivity of land has to be
increased and for that reason we depend upon use of fertilizers. Chemical fertilizers are
going to be costlier because of reduction in subsidies. Also chemical fertilizers in the long
run affect soil health leading to acidification, micro nutrient depletion and soil degradation
leading to poor crop health and poor yields. Chemical fertilizers also increase ground and
air pollution and it results in increased greenhouse effect. Also for small and marginal
farmers organic fertilizers is both essential and affordable. This will also bring down cost of
crop production. Organic fertilizers will also lead to productive use of wastelands. Vermi
composting offers immense scope to small and marginal farmers in creating their own
organic manurial resources and alternative income generation. Organic resources available
in the country can produce about 20 million tons of plant nutrients per year.
6. Scenario in Hapur District:
Hapur lies on the western upper Gangetic plains of Uttar Pradesh, covering an area of 660
sq. km. The district has a population of 13.38 lakh (as per the census of 2011) and the rural
population is 9.4 lakh. The other elements of the district i.e. the demographic profile is

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 Area Development Scheme – Vermicompost
Hapur

predominantly rural in character, with agriculture being the main occupation. It is divided
into 04 blocks with 329 villages and 253 Gram Panchayats. There are around 83726
farmers in the district (Zila Sankhyakiya Patrika 2016) out of which 75353 are in Small and
Marginal category. The district is endowed with fertile alluvial and loam soil. Irrigation
facilities are well developed in the district.
Land Holdings:
No. of Total Land No. of Total Land Size of Land Avg. Size of
Holdings Holdings(% of Holding in ha (% Land
total holdings) of total size) Holding
Total of the District 115817 (100%) 95656 (100%) 0.41 ha
By Marginal Farmers 88131 (76.09%) 36414 (38.06%) 1.43 ha
By Small Farmers 17257 (14.90%) 24706 (25.82%) 3.29 ha
Other Farmers 10429 (9.01%) 34356 (36.10%)

 Gross Cropped Area – 141055 Ha.

 Net Sown Area – 87025 Ha.
 Gross Irrigated Area – 87025 Ha.
 Major Crops Cultivated – Wheat, Paddy, Sugarcane, Maize, Mustard, Potato and
Vegetables

7. Reason for selecting Vermi Composting as Area Development Scheme:

There is a scope for increasing or scaling up the vermi compost production in the district
as almost all farmers are involved in dairy activity as after agriculture this allied activity is
most preferred by farmers. The raw material for vermicomposting is crop residue and cow
dung, which is abundantly available with farmers.
8. Uses and Advantages of Vermicompost:
It is well known that the use of chemical fertilizers deteriorates the soil health. The
alternative to avoid usage of chemical fertilizers, pesticides, growth regulators etc. is
organic farming. Hence the shift from chemical farming to organic farming or use of
vermicompost is proposed due to following reasons.
 It improves the pH of the soil. Earthworms have the characteristic of changing the
acidic or alkaline soil to neutral soil. Waste land can also be converted to fertile land.
 Vermicompost increases the soil texture, fertility and soil moisture and reduces
the water requirement in the long run.
 The optimal carbon/nitrogen (C/N) ratio is available in vermicompost which
determines the quality of compost.
 Increases productivity
 Provides safe and clean environment
 Rich in nutrients( 0.50 -1.0% N,0.15-0.56% P2 O5 ( phosphorus oxide) and 0.6-
0.30%K2O (potassium oxide)
9. Forward and backward market linkages:
Raw material: The total population of cow and buffalo in the district is 14.02 lakh as per
the Census of 2012, which may provide abundant raw material in the form of cowdung for
vermicomposting.
Source of earthworms: There are several hatcheries in and around Delhi from where
the required variety of earthworms can be procured. Few progressive farmers in district
also practicing vermicomposting, where earthworms are available.
Market: The market is readily available for vermicompost in the form of cultivating
farmers, private nurseries and households in the NCR region.

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 Area Development Scheme – Vermicompost
Hapur

10. Selection of area:

Hapur block of the district is proposed for the implementation of the scheme. The block is
having 110 inhabited villages, with total animal population (cow and buffalo) being 118168.
11. Selection of beneficiaries:
Implementing bank have the sole discretion for selection of borrowers as per their norms,
however to facilitate the process of financing the units Animal Husbandry Department may
provide the list of the perspective borrowers to concerned Branch Manager implementing
ADS.
12. Unit Size:
Unit size of 200 TPA vermicompost may be adopted in the project. However bankers are
free to finance units of other sizes also as per the technical feasibility and financial viability
of the project.
13. Capacity building of the beneficiaries
The AH department, Dairy department/Milk Union in district may offer training to the
farmers on various aspects of vermicomposting
 By granting EDPs to RSETI by NABARD/DRDA/NRLM
 By sanctioning MEDPs to Anchor Agency of the district
 Sponsoring programmes to KVK by NABARD from its promotional funds.
14. Technical details
a. About the earthworms:
Of about 350 species of earth worms in India with various food and burrowing habits,
Eisenia fetida, Eudrilus eugeniae, and Perionyx excavatius are some of the species for
rearing to convert organic wastes into manure. The worms live for about 2 years.
b. Components of a commercial unit:
Sheds, Vermi-beds, Land, Buildings, Seed Stock, Water Supply System, Machinery,
Transport, Furniture.
c. Process:
The process of composting crop residue and cow dung using earthworms comprise
spreading the agricultural waste and cow dung in layers as 1.5 m wide and 0.9 m high
beds of required length. Earthworms introduced in between the layers @ 350 worms
per cubic meter of bed volume. The beds are maintained at about 40-50% moisture
content and a temperature of 20-30 degree C by sprinkling water over beds. The
earthworms being voracious eaters consume the biodegradable matter and give out a
part of the matter as excreta or Vermi-castings.
For commercial production, Vermicomposting is done in cement and brick tank. The
tank is constructed on raised land, that is, above ground to avoid water logging. The
floor is higher in the center and slopes on sides. Standard tank size is 10' x 6' x 2.5'.
Adequate numbers of holes (8 x 5 cm dia) are dug at the bottom for draining of water.
Bed is about 5 to 10 cm thick of broken bricks or saw dust. On the floor 15 to 20 cm thick
worm inhabiting soil is spread. A layer of cow dung is spread over the soil layer. 200 to
500 worms selected and stored in earthen vessels is then spread in the tank. Cow dung
slurry is spread over and the bed covered with straw or dry leaves. The tank is covered
with a fine wire mesh. A thatched roof is provided for cover from above. After two
weeks, another layer of 5 to 6 cm thick organic matter is spread. Turning of beds is done
twice or thrice a week. The bed should be neither dry nor have excess moisture as tested
by a wooden rod. Watering should be done regularly to keep the soil moist. The
temperature should not exceed 30 degree C and moisture requirement is around 40-

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 Area Development Scheme – Vermicompost
Hapur

15. PROJECT PROFILE:

Vermi-composting could be taken up on any scale starting from 10 tonnes per annum (TPA)
to 1000 TPA and above. 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. Detail analysis is given in tables given:
Estimate for construction of temporary shed for setting up 200 TPA
vermicompost unit
(15m x 5.4 m x 8 no. of shed)
Sl. No. Particulars Quantity Rate (Rs.) Amount (Rs.)
1 Wooden ballies (3 m long) 472 35 16520
2 Wooden ballies (3.6 m long) 48 40 1920
3 Bamboos (3 m long) 800 15 12000
4 Bamboos (6 m long) 240 20 4800
5 Bamboo mats for covering the roof 720 25 18000
6 Coir rope 6 mm dia 200 kg 15 3000
7 Binding wire for tying bamboos & mats 100 kg 25 2500
8 Labor charges for erection of sheds LS 20000
9 Miscellaneous 1260
Total 80000
 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 machine with 3 wire mesh sieves 35000
0.6 m x 0.9 m size - power operated without 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
 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 waste @ 320 kg per m3 105.6 ton 100 10560
2 Cow dung @ 80 kg/m3 26.4 ton 150 3960
3 Worms @ 350 per m3 500 worms per kg 231 kg 75 17325
4 Formation of vermibed with agro-waste, cow dung 330 m3 46 15180
and worms
5 Harvesting, sieving, packing, etc., including cost of 40 ton 0.45 18000
bags

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 Area Development Scheme – Vermicompost
Hapur

Sl.No. Particulars Unit Rate Amount

(Rs.)
6 Electrical charges for pump, machinery, lighting - - 4800
etc.
7 Repair and maintenance - - 2175
Total 72000
Cost for 5 cycles 360000
Rent on lease @Rs 8000/year 8000
Total operating cost 368000
Operational cost for two cycles in the first year 2 73600 147200
 200 TPA vermi-composting unit - Costs and Benefits
Year
I IInd year
onwards
1 Costs
a) Investment costs
i) Open sheds with bamboo mat roofing over bamboo frame 80000 -
work supported by wooden ballies
ii) Machinery and tools 80000 -
iii) Office-cum-store 60000 -
iv) Water source 60000
v) 01 NADEP tank 5000
Total 285000
b) Operational cost
For 5 cycles in a year @ Rs. 72,000 per cycle of 75 days 360000 360000
Lease rent 8000 8000
Total 368000 368000
2 Benefits
a) Sale of vermicompost of 200 tonnes
@ Rs.3000/- per ton (45% in first year and 90% from 2nd 270000 540000
year onwards)
b) Sale of worms @ 5 kg per ton of compost and Rs. 50 per - 45000
kg
c) Consultancy & ext. services - 10000
Total 270000 505000
137000

 200 TPA vermicomposting unit - Financial Analysis

Rs in lakh
Particular Years
I II to IX
1 COSTS
A Capital Cost
i) Buildings 1.40 -
ii) Machinery / tools 0.8 -
iii) Water supply 0.60 -
iv) NADEP tank 0.05 -
B Operational cost (Capitalised for two cycles in Ist year) 1.472 3.68
Total Cost 4.322 3.68
2 BENEFITS
i) Sale of vermicompost @ 3000/ton (45% in Ist year and 2.70 5.40
90% in IInd year)

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 Area Development Scheme – Vermicompost
Hapur

Particular Years
I II to IX
ii) Sale of worms 0 0.45
iii) Consultancy and extension services 0 0.10
Total benefit 2.70 5.95
3 Net benefit -1.622 1.37
Discounting Rate 15%
NPV 5.38
IRR 199 %
NPV of benefits 18.274
NPV of costs 12.897
BCR 1.417

Repayment schedule:
Outlay- Rs.4.322 lakh* Bank loan -Rs. 3.457 lakh
Rs in lakh
Year Bank Loan* Outstanding Gross Payment Repayment Total Net
End Surplus of principal repayment
Beginning of Surplus
interest
a b c d e f g h
1 3.46 2.77 1.56 0.41 0.69 1.11 0.45

2 2.77 2.07 2.62 0.33 0.69 1.02 1.60

3 2.07 1.38 2.62 0.25 0.69 0.94 1.68

4 1.38 0.69 2.62 0.17 0.69 0.86 1.76

5 0.69 0.00 2.62 0.08 0.69 1.60 1.02

Bank Loan presumed at 80% of capital cost and rate of interest on term loan @ 12% p.a.
* including capitalization of operational cost for 2 cycles (Rs.1,47,200/-)

16. Banking network & Trends in Credit flow:

The Lead Bank of the district is Syndicate Bank. As on 31 March 2017, there are 110
branches of Commercial Banks, 13 branches of Sarv UP Gramin Bank, 13 branches of
Cooperative Bank and 3 branches of UPSGVB in the district. The total deposits as on
31.03.17 were Rs. 4732.34 crore and advances Rs.3510.21 crore. The CD ratio of district as
on 31.3.2017 was 74.18 %.
17. Financing Agencies:
i) Names of the Implementing Bank – It is proposed that 8 branches of Lead Bank i.e.
Syndicate Bank and 6 branches of SUPGB in the block will be participating in ADS.
18. Physical and financial programme:
Rs in Lakh
Blocks Name of Unit No. of TFO Bank Loan Margin
the Bank Cost Units (80%) (20%)
Syndicate 4.32 40 172.88 138.304 34.57
Hapur Bank
SUPGB 4.32 30 129.66 103.278 25.93
Total 70 302.54 241.582 60.50

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 Area Development Scheme – Vermicompost
Hapur

19. Sensitivity Analysis & SWOT analysis:

(I) Sensitivity analysis
By assuming 5% increase in cost and 5% decrease in benefits, NPV, BCR and IRR is worked
out and presented below.
Sr. Particulars Year
No. I II III IV V
I Total cost (5% 4.5381 3.864 3.864 3.864 3.864
increase from S.N.
1c in above table)
II Income (5% 2.87375 5.985 5.985 5.985 5.985
decrease from S.N.
2 in above table)
III Gross Surplus/ -1.66435 2.121 2.121 2.121 2.121
Benefit
IV DF @ 15% 0.870 0.756 0.658 0.572 0.497
V PWC at 15% 3.948147 2.921184 2.542512 2.210208 1.920408
VI PWB at 15% 2.5001625 4.52466 3.93813 3.42342 2.974545
VII NPV 4
VIII BCR 1.282
IX IRR 122.21%

(II) SWOT analysis

a. Strengths:
i. Dairy farming is practiced widely in the area hence raw material is not a
problem.
ii. Few progressive farmers are producing Vermi compost in the district.
iii. Market of Vermi compost is available due to district being in NCR.
iv. Adequate availability of forward and backward linkages in the scheme area
b. Weaknesses:
i. Lack of awareness about scientific methods of Vermi composting
ii. The activity is yet to get popularized in the district
c. Opportunities:
i. Area being in NCR, the demand of milk is likely to grow in the coming years.
ii. The central and state government offer support to Vermi compost units.
iii. Financing of Vermi compost units can play a major role in doubling of
farmer’s income by 2022.
d. Threats:
i. The farmers are reluctant to shift to organic farming and depend upon
chemical fertilizers
ii. Disease of animals resulting into reduction of cow dung for raw material.
20. Implementation and Monitoring
i. Initial approval at the DCC level
ii. Branch-wise allocation at BLBC meetings
iii. Review of the implementation in DCC and BLBC meetings
iv. Involvement of stakeholders’ agencies in review meetings for ensuring the
extension of support services committed by them.
v. The progress should be monitored regularly in DCC/DLRC as an agenda

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 Area Development Scheme – Vermicompost
Hapur

vi. A Sub-Committee of DCC/DLRC headed by LDM, DDM, CVO, Local Heads of all
the participating Banks, Expert from KVK and concerned Branch Managers, may be
formed and would be meeting quarterly to review and monitor the progress.

21. Conclusion:
i. The Area Development Scheme on Vermi composting, will focus and facilitate the
implementation of perspective plan of the State Govt., infrastructure gaps, available
incentives/schemes from both Central and State Govt., fiscal incentives (taxes,
subsidies etc.) available/being proposed for development of the Sector, support
mechanism available/needed for procurement and marketing from State and
Central Govt., and identify scope for convergence of efforts and areas for financing
in the entire value chain of the sector.
ii. The Area Development Scheme on Vermi composting is likely to reduce the cost of
cultivation of famers by shifting from chemical fertilizers to cheaper organic
fertilizer and will increase Ground Level Credit Flow.