Vrindavan

Registration and Shareholding

VAPCOL was registered under the Section 581-A of the Companies Act, 1956 on July 2004.There are 15 Cooperatives operating in Gujarat, 28 Farmer Organisations operating in Maharashtra and 12 Producer Groups from other States (namely Madhya Pradesh, Uttar Pradesh, Chhattisgarh, and Rajasthan) who are members of VAPCOL. These are Cooperatives, SHG federations or unregistered producer groups. VAPCOL has allowed the member institutions to grow on their own so as to enjoy independence and autonomy.

The basic information on the organization is as below:

How to Become a Member?

Any individual farmer or any Cooperative or any other Farmer Producer Organization, whether formal or informal (including SHGs), engaged in producing, processing and marketing of agro-based products is eligible to become a member of VAPCOL.
Eligible members have to purchase minimum 10 equity shares of Rs. 100 each through formal share application.

The first two activities are part of the commercial operations of VAPCOL and are carried out on commercial principles. The operating profits from these operations are distributed as Patronage Dividend to member organisations in proportion to their contribution to the business of VAPCOL and an Equity Dividend in proportion to the equity share-holding of the members. The last four of the above activities are developmental activities in the nature of member-services and are carried out of the financial resources that can be mobilized for these specific activities.

Operations

VAPCOL operations are handled through 3 of its branch offices located at Vansda (Gujarat), Peint (Maharashtra) and Udaipur (Rajasthan) and it is headquartered at Pune (Maharashtra). Main operations undertaken by VAPCOL are procurement and marketing of the products under the brand name of “Vrindavan”.

Procurement

The member organizations of VAPCOL directly own the entire chain of activities right from procurement of raw produce from the farmer upto the final processing and quality-wise grading of the produce, while VAPCOL is responsible for the marketing of these products. It also provides technical support in production processes, quality management and packaging. Other than that, it disburses working capital loan to members for smoothly carrying out their operations. This loan has been availed from NABARD which is further extended to the members. All the above mentioned activities are carried out in all three branch offices.

Quality Control

VAPCOL ensures quality of products under supervision of Food Technologists and Agri-graduates. All the products have to pass through the procurement norms set by the Company.

Marketing

VAPCOL is promoting and marketing the farmers’ produce under the brand name “Vrindavan”, which presents varied range of products such as fresh fruit and derivatives of raw and ripe Mango, Amla derivatives, plain and flavored Cashew Kernel and other F&V preserves. All the branches are involved in marketing of the products. It has explored several marketing options including retail, distributor, wholesale, Kiosks as well as hyper-marts. In addition to that, VAPCOL has also forayed in e-market channels such as Snapdeal and Amazon with Vrindavan products. The profit generated from these commercial operations is majorly paid back to the member organizations either as patronage dividend or as equity dividend. There is minimal surplus that is retained by VAPCOL and this is mainly applied for expanding the marketing activities and for covering the organizational overheads.

Key Initiatives and Innovations

To help members establish themselves on a firm footing, and conduct operations profitably and smoothly, VAPCOL has undertaken a number of measures and innovative mechanisms:

Access to working capital:

VAPCOL has accessed a working-capital credit limit of Rs 50 million from NABARD under its Umbrella Programme for Natural Resource Management (UPNRM). The amount availed (Rs 1.95-Rs 3.50 million annually so far) is loaned further to members, for procurement of cashew nuts from farmers in their area. While VAPCOL gets the loan at an interest rate of 10% per annum, members get it at the rate of 12%.

Equitable profit distribution across a multiple commodity base:

To ensure that members get an equitable share in profit, according to the variable profits obtained from sale of different commodities, VAPCOL maintains commodity-wise partitioned records of procurement and sale. This enables fair and transparent calculation of commodity-wise profitability, and distribution of commodity-wise patronage bonus to members.

Equitable profit sharing among members at different stage in the value chain: Procurement of semi-processed produce by VAPCOL from its members at different stages in the value chain generates profits at VAPCOL in inverse proportion to the value of procurement.  Hence, VAPCOL introduced a more equitable system of calculating patronage bonus on the basis of a “rectified value” of procurement linked to profit accrual at VAPCOL.

Mechanism for managing assets given to unregistered members:

An innovative mechanism has been created for proper use of assets, such as machinery and implements, acquired for the benefit of unregistered members, through grants received by BAIF or its associate organizations. The assets and grants were transferred to VAPCOL’s account, with the grant (value of assets) treated as the unregistered members’ equity contribution. As this contribution could not be treated on par with paid-up equity, a category of Class B shares was created. Holders of these shares are entitled to dividend at a fixed percentage (1%). Beneficiary members were trained to manage and generate income by hiring out the machinery or implements. The members pay VAPCOL a service fee for use of the assets. The fee compensates for the depreciation loss VAPCOL suffers on account of the assets being on its books. Thus, a win-win situation has been legitimately created for all the entities concerned.

Marketing Initiatives:

A number of initiatives are explored to expand market reach:

• Use of kiosks at VAPCOL branch offices to sell products directly to customers.
• Sales promotion through announcements on FM radio channels, and temporary (seasonal) call centers.
• Appointment of exclusive distributors for the Vrindavan
  Sale of corporate gift hampers in partnership with fair trade organizations; to use the fair trade tag, members underwent a rigorous certification process.
• Market linkages with online retail and large-format retail stores.