Sarvodaya Samiti

1) Evaluate all the options presented in the case.

There was a proposal to form a consortium between the Samiti, KVIC, and ORMAS, working under DRDA, Koraput. ORMAS would find ways to increase productivity of honey in the district with necessary support from KVIC and the Samiti and DRDA would provide financial support to the producers (bee-keepers) through SGSY to encourage bee-keeping activity. ORMAS and the Samiti would procure the honey through some financially supported SHG's of producers to meet the target of 30 tonne per annum. KVIC would fund setting up of a processing plant of 30-tonne/annum capacities to be later upgraded to 90 tonne/annum. The processed honey would be marketed by ORMAS.

According to Mohanty, the objectives of the Samiti are:

• to help the farmers as well as the consumers

• to develop the bee keeping industry in Orissa so that production increases with a number of farmers taking up bee-keeping

• to get a good response from the market.

The primary objective of the Samiti requires that it becomes a volumes player so that more and more farmers take up bee-keeping activity. This would ensure better returns to the farmers and would also bring down transportation costs.

The following strategic options are available to Mohanty:

Option 1 — Be a part of the consortium:

• The honey would be procured by ORMAS, processed by the Samiti, and marketed by ORMAS.

• ORMAS would pay the Samiti Rs 26/litre as processing fee. The miscellaneous expenditure incurred by the Samiti for processing would be Rs 20/litre. Thus, the Samiti's margin would be Rs 6/litre for processing and the procurement cost would be Rs 60/litre. The total cost of production would therefore be Rs 86/litre. ORMAS was planning to sell this bottled honey at 5 per cent (Rs 4.3/litre) margin, i.e., at the rate of 90.3/kg to a food company.

• Under this option, the Samiti can also market its own honey through its own or KVIC marketing network.

• The Samiti had two sub-options:

Option I a: Focus only on processing and withdraw from marketing completely Option 1b: Join the consortium while doing independent marketing of its own procured honey.

Option 2: Not be a part of the consortium:

• KVIC would not finance the proposed new processing plant. The Samiti would have to set up its own processing plant and Agmark testing unit with an investment of Rs 0.45 million to Rs 0.65 million.

• The Samiti would be responsible for independent procurement, processing, and marketing of honey