Content
Part I
About Joint-Utilization Business
1.Definition of Joint-Utilization Business
2.Why has agricultural cooperative not run joint-utilization business?
3.Problems Faced by Members of Agricultural Cooperative
4.Advantages of Joint-Utilization Business
5.Roles of Joint-Utilization Business
6.Cash Transaction Is a Principle of Joint-Utilization Business
Part II
How to start Joint-Utilization Business
Step1: Business opportunity finding of board of director and staff
Step 2: Prepare list of business in BoD’s meeting
Step 3: Business selection by member
Step 4: Preparation of business plan
Step 5: Implementation
5.1 Operation management
5.2 Notification of service schedule
5.3 Service fee payment
5.4 Acceptance of opinions for improvement
Sample
How to start Tractor Joint-Utilization Business
Step 4: Preparation of business plan
Step 5: Implementation
5.1 Operation management
5.2 Notification of service schedule
5.3 Service fee payment
5.4 Acceptance of opinions for improvement
Part I
About Joint-Utilization Business
1. Definition of Joint-Utilization Business
Joint-utilization business is a business which agricultural cooperative purchases agricultural tools, machineries, or other equipment, constructs warehouse or other infrastructures in order to rent and provide service to members with reasonable price. This business can offer services that an individual member cannot make it.
Joint-utilization business is one of major businesses of agricultural cooperative around the world.
For example:
1. An agricultural cooperative buys a harvesting machine to provide service towards its members.
2. An agricultural cooperative constructs dryer to provide service to its members.
3. An agricultural cooperative constructs warehouse to provide service to its members.
4. An agricultural cooperative constructs canal to provide irrigation service to its members.
5. An agricultural cooperative buys truck to provide transportation service to its members.
2. Why has agricultural cooperative not run joint-utilization business?
- Not yet understand clearly on joint-utilization business
- Not yet know how to make joint-utilization business plan
- Not yet study the demands of members
- Not provide service to meet the demands of members
- Lack of knowledge concerning with facilities or advanced machineries
- Not yet increase capital for running joint-utilization business
3. Problems Faced by Members of Agricultural Cooperative
- Not have ability to purchase agricultural facilities by themselves
- Use service from outside in high price
- Receive service improperly by not following technical guidance
- Not receive service on time
- Not receive all kinds of service demanded by them
- Receive dishonest service
- Get loan from outside with high interest rate for buying agricultural facilities
To solve these problems, BPAC project prepares this guideline on utilization of agricultural tools to assist agricultural cooperatives in Cambodia to apply in running joint-utilization business successfully.
4. Advantages of Joint-Utilization Business
An agricultural cooperative which runs joint-utilization business gives following benefits to itself and its members:
- Member can get service that an individual member cannot make it.
- Member can receive service on time.
- Member can reduce daily expense on agricultural works.
- An agricultural cooperative can create work for members.
- An agricultural cooperative can earn more incomes for its development.
- Member can get patronage refunds from this business (if any).
5. Roles of Joint-Utilization Business
Joint-utilization business plays important roles and provides benefit to members of agricultural cooperative as follows:
5.1 Provide service on time:
- An agricultural cooperative prepares a clear schedule in accordance with the demanding time of service of members of agricultural cooperative.
- Members can make an proper production plan when they know a clear schedule to receive service
5.2 Reduce expense:
- Utilize advanced technology that can reduce an expense
- Provide service with appropriate or lower fee than other private companies
- An agricultural cooperative provides service in accordance with proper techniques, which can reduce the expense.
5.3 Save time:
- Using machineries or technological devices to replace human labour can save the time
- Using machineries or technological devices can cut down time consumption
- Members can have more time to do other tasks that can increase household income
5.4 Provide service in accordance with proper techniques:
- Focus on members’ benefits rather than profits of agricultural cooperative and focus on quality
- Receive guidance on using agricultural machineries from concerning persons
5.5 Add value to agro-product:
- Operating agricultural works by following proper techniques helps increase quality of agro-products and add value to them.
- When products are packaged properly, the price of products will increase and members will receive more profits.
- Storing agro-products to sell when there are high demands can get higher price
5.6 Create jobs for members:
- Members can work in agricultural cooperative such as tractor driver, fertilizer sprayer, pesticide sprayer, etc.
6. Cash Transaction Is a Principle of Joint-Utilization Business
An agricultural cooperative should set up “Cash Transaction” to be a principle of joint-utilization business. When members do not have money to pay for the service or request to use in credit, an agricultural cooperative should recommend them to request loan from credit business of agricultural cooperative and pay for the service fee. In this case, an agricultural cooperative should provide loan to members by following internal regulation for credit business of agricultural cooperative.
Part II
How to start Joint-Utilization Business
Step1: Business opportunity finding of board of director and staff
Board members and staff always have to pay attention to what services members utilize from outside and think whether AC can provide similar services for members' benefit.
For example, if they have seen tractors coming from outside plough members' farmland or combine harvesters harvest paddy field, they must consider the possibility that AC would start joint utilization business by using such machines.
Board members and staff also always have to pay attention to what problems members face in their farming and living and think AC can solve them by AC's joint-utilization businesses.
For example, if they have seen many members dry their wet paddy on the road, they must think AC has to construct concrete ground for members' use.
Step 2: Prepare list of business in BoD’s meeting
Board members and staff discuss about seeds of joint utilization business at a board meeting and select several candidate types considering about AC’s financial and management capability.
Table 1: Businesses selected by BoD
No / Type of Business / Other1
2
3
4
Step 3: Business selection by member
Board members shall convene general meeting of agricultural cooperative (extraordinary or annual general meeting) to adopt one business among businesses selected in step 2 with majority vote.
Table2: Summing up Table of consumers of each business
No / Type of Business / Number of consumers1
2
3
4
Step 4: Preparation of business plan
After determining service type, an agricultural cooperative shall prepare business plan whose contents are as follows to ensure the success of business:
(The format of business plan is attached)
1) THE SUMMARY
2) DEMAND OF FARMERS IN AC
3) SCHEDULE ON PROVIDING SERVICE
4) DETERMINATION OF TIME TO PROVIDE SERVICE TO MEMBERS
5) NECESSARY INVESTMENT TO START THE BUSINESS
6) WAY OF RAISING NECESSARY FUNDS FOR INVESTMENT TO START THE BUSINESS
7) MANPOWER PLAN AT THE BEGINNING
8) COMPETITORS
9) COMPARISON OF SUPPLIERS
10) COMPARISON OF CUSTOMERS
11) LIST OF COOPERATORS
12) TARGET TURNOVER
13) ESTIMATED EXPENSE
14) TARGET PROFIT AND LOSS
15) REPAYMENT OF LOAN
These contents are the contents of general business plan of agricultural cooperative. These contents shall be modified in accordance with each type of business such as joint-utilization, marketing, supply, and credit business of agricultural cooperative, etc.
The business plan shall be adopted in general meeting of agricultural cooperative so as to be officially implemented.
This business plan shall be attached to annual action plan and financial plan of agricultural cooperative.
Step 5: Implementation
5.1 Operation management
An agricultural cooperative shall assign one member of board to be responsible for operation management of this business and can have some staffs equipped with their own skill as necessary.
5.2 Notification of service schedule
An agricultural cooperative shall inform members concerning with service provision ……… days in advance so that they have enough time to utilize the service of agricultural cooperative.
Service provision shall be implemented following with the schedule prepared in the business plan.
5.3 Service fee payment
After using service of agricultural cooperative, members shall pay all service fee immediately to agricultural cooperative.
If members know that they do not have enough money to pay for service fee, they shall get loan from agricultural cooperative in accordance with internal regulation for credit business of agricultural cooperative in advance so as to pay for the service fee.
5.4 Acceptance of opinions for improvement
An agricultural cooperative should listen to opinions from members related with the implementation of joint-utilization so as to improve this business and to expand this business.
When an agricultural cooperative expand its joint-utilization business with the better business plan, private companies will start to lower their price observed by agricultural cooperative.
Therefore, an agricultural cooperative shall observe to get more information related with the service fee or other activities of private companies’ so that agricultural cooperative can use the obtained information to improve the fee of joint-utilization in order to enhance its joint-utilization business plan.
Sample
How to start Tractor Joint-Utilization Business
Step 4: Preparation of business plan
After determining tractor service as type joint utilization business, an agricultural cooperative shall prepare tractor joint utilization business plan whose contents are as mention in step 4 of part II. The format and sample of tractor of joint utilization are attached.
The business plan shall be adopted in general meeting of agricultural cooperative so as to be officially implemented.
This business plan shall be put in annual action plan and financial plan of agricultural cooperative.
Step 5: Implementation
5.1 Operation management
An agricultural cooperative assigns Mr. Mean Sok, member of board, to be responsible for operation management of this business and can have some staffs equipped with their own skill as follows:
5.2 Notification of service schedule
An agricultural cooperative shall inform members concerning with service provision 7 days in advance so that they have enough time to utilize the service of agricultural cooperative.
Service provision shall be implemented following with the schedule prepared in the business plan.
5.3 Service fee payment
After using service of agricultural cooperative, members shall pay all service fee immediately to agricultural cooperative.
If members know that they do not have enough money to pay for service fee, they shall get loan from agricultural cooperative in accordance with internal regulation for credit business of agricultural cooperative in advance so as to pay for the service fee.
5.4 Acceptance of opinions for improvement
An agricultural cooperative should listen to opinions from members related with the implementation of joint-utilization so as to improve this business and to expand this business.
When an agricultural cooperative expand its joint-utilization business with the better business plan, private companies will start to lower their price observed by agricultural cooperative.
Therefore, an agricultural cooperative shall observe to get more information related with the service fee or other activities of private companies’ so that agricultural cooperative can use the obtained information to improve the fee of joint-utilization in order to enhance its joint-utilization business plan.
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