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ENTREPRENEURSHIP REPORT 2012

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CHAPTER ONE

1.0 INTRODUCTION

1.1 Background

Experts are of the conviction that the agricultural industry is one of the major important

sectors of any nation‟s economy because it makes available products for immediate and

future consumption to feed its populace and other countries of the world, for the production

of other goods through its produce and by-products, and for revenue generation both internal

and external. It is an established (long aged) working system right from the evolution of

mankind, although recent agricultural farming practice combines technology and

administration for the production of quality and reliable goods needed for mans welfare.

Following the recent drought, soaring prices of food, and the downward trend of agricultural

export production globally attention has drawn to the need for a vigorous and intensive

participation of individuals and cooperate bodies in the agricultural sector. In Nigeria,

following the increase in price of food, unemployment, non-performing agricultural export

production etc have drawn attention to the need for the Nigerian government to sensitize and

encourage mechanized agricultural practice be it small-scale, medium-scale and/or large-

scale rice, cassava, corn, cocoa farming. Thus Nigeria has the potential of feeding one-fifth of

the countries of the world or one-fifth of the world‟s population in equivalent (CNN, 2011)

following the recent food crisis rocking the globe.




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1.2 Project Objectives

The need for the resuscitation of the agricultural sector in Nigeria (being the most populous

black race in the world) cannot be overemphasized as this will help to reduce unemployment

of troop of graduates being pumped out the universities every year into this harsh and

extremely challenging and corrupt world of ours, reduce the high rate of social vices in the

country ranging from terrorism to kidnapping to armed robbery and prostitution, also to

reduce the high rate of starvation of the masses who can‟t afford to buy the very expensive

staple foods they are used to buying for survival. Also gross involvement and expansion of

mechanized agricultural farming for local and export production will ensure adequate feeding

of its populace thereby reducing drought and also ensure more foreign exchange earnings

thereby reducing our total dependence on crude oil for foreign exchange earnings

respectively. Meanwhile increased food output will reduce food prices to reasonable levels

from the “law of demand and supply” which states that when demand is high and supply is

low the price(s) of commodities tend to increase but when it is vice versa the price(s) of

commodities tend to reduce.

This project is aimed at assessing the feasibility and viability of a small-scale and/or

medium-scale agricultural enterprise conducted and/or studied in some selected states and/or

regions of the federation and the findings of this study is obviously believed would do well

to give both existing and potential entrepreneurs direction in the course of consultation or

practice.




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1.3 Scope Of Work

In Mechanized agricultural farming which is better than the crude method of farming some

major constraints observed from the study survey reveals that the machineries and

equipments used are very sophisticated and complex to operate and maintain, as such these

machines require the appropriate personnel to handle their operation and maintenance so that

their efficiency and efficacy can be harnessed when harvesting the farm produce thereby

ensuring the quality of the farm produce and these machine(s) and equipment(s) is/are

expensive to be procured by a beginner. Therefore, in every project where there is a fair gain,

there also exist an equal and opposite possibility for losses, thus, I do not assume a total

possibility of successes and gains, but also of turned down proposals may exist at the long

run.

1.4 Methodology

For the purpose of this project, technical and economic feasibility studies were carried out

and professional advice and consultations were sought to analyze and evaluate the success of

the enterprise. Assumptions and conclusions were made based on the feasibility studies

carried out.




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CHAPTER TWO

2.0 LITERATURE REVIEW

2.1 Rice

Rice has been a major food staple and a mainstay for the rural and urban populace of the

nation and their food security. It can be cultivated by small and big farmers in holdings of

less than 1 hectare. Rice is also a wage commodity for workers in the cash crop or non-

agricultural sectors. Rice is vital for the nutrition of much of the population in Asia, as well

as in Latin America and the Caribbean and in Africa also; it is central to the food security of

over half the world population. Developing countries account for 95 percent of the total

production, with China and India alone responsible for nearly half of the world output but

with Nigerian government investing, encouraging and facilitating its production he country is

sure going to be on the list of the world‟s highest producer of rice.

World production of rice has risen steadily from about 200 million tonnes of paddy rice in

1960 to over 678 million tonnes in 2009. The most productive farms for rice, in 2009, were in

China producing 6.59 tonnes per hectare. The three largest producers of rice in 2009 were

China (197 million tonnes), India (131 Mt), and Indonesia (64 Mt). At 44 million hectares,

India had the largest farm area under rice production in 2009. The rice farm productivity in

India were about 45% of the rice farm productivity in China, and about 60% of the rice farm

productivity in Indonesia. If Nigeria could adopt the farming knowledge and technology in

use in China, India and Indonesia, Nigeria could produce an estimate of 100 million tonnes of

rice, enough staple food for about 400 million people every year, and US$50 billion in

additional annual income to its rice farmers (adjusted to 2010 dollars and global rice prices

per tonne).




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2.2 Maize

Most of the work done on maize prior to 1950 can be described as agronomic. Research on

methods of cultivating maize was to a large extent secondary since the designing of efficient

farming system was given priority. Maize was used merely as a test crop for soil fertility to

determine the influence of green manners and various sequences of crops in the rotation.

Most of this work was done at Moor Plantation in Ibadan, Ogba near Benin City and

Umudike near Umuahia. Maize has been in the diet of Nigerian‟s for centuries. It started as a

subsistence crop and has gradually become more important crop it has now risen to a

commercial crop on which many agro-based industries depend on as raw materials. The first

attempt at Agricultural research in Nigeria was made in 1899 (Fakorede et al., 1993). Initial

Agricultural research work in Nigeria was directed at promoting the development of various

cash crops including cocoa, oil palm, cotton, groundnut for export purposes. The advent of a

very destructive rust disease known as the American rust incited by Puccinia polestar, which

entered West Africa in 1950, called attention to the importance of maize as food crop. The

absence of resistance or tolerance in the local maize varieties to the American rust shaped the

first approach towards an improvement of the maize crop and introduction of maize materials

from all over the world. Subsequently, organized approach towards a systematic study of the

crop was established at the Federal Department of Agricultural Research (FDAR) Moor

Plantation, Ibadan in 1956. This initial approach was to breed for disease resistance the

screening of local and introduced varieties was the first step towards the recognition of

promising maize materials. This first step was followed immediately by selection work,

which served to improve the adaptability and the suitability of the new varieties. The idea of

breeding for resistance to multiple diseases was initiated from the early years of maize

breeding in Nigeria. Varieties having multiple disease resistance became available with time;

for example NCBRbU (Nigeria composite B) with combined resistance to rust (R) and blight




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(B) and an upright leaf orientation (U) (Fakorede et al., 1993). In 1961, some maize varieties

were artificially inoculated to test for their quantitative reaction to the Polestar rust under

field conditions (Craig, 1962). A total Of 137 maize cultivars were screened over a period of

three years for resistance to polestar rust, maize blight, Curvularia leaf spot, streak virus and

brown leaf spot (Fajemisin, 1978). All the entries exposed to streak had 70% disease

incidence. Next to streak, rust appeared to be the most destructive of the diseases, followed

by Curvularia leaf spot. The important diseases have changed with time. Steak virus that was

relatively unimportant up to about 1970 is now easily the most devastating disease of maize

nationwide. Downy mildew that was unknown in the early stages of maize improvement

came “on the stage” in 1975 in some specific zones and is now the most deadly constraint to

maize production in the endemic zones. Resistance to both downy mildew and streak had

been bred into maize – (DMRSR Varieties) through the effort of research institutions in

Nigeria. These varieties produced more than 3t/ha under severe downy mildew pressure

during which susceptible varieties gave very low yield of about one tonne per hectare

(Fakorede et al., 1993).

Cocoa

Early attempt to introduce cocoa one of the most important tree crop into parts of parts of the

eastern states, particularly bonny and Onitsha, in the late nineteenth century failed (Ayorinde,

1966). Similar efforts made by successive government, missionaries and the educated elite on

the Lagos interior were more successful. This was due in the main to the enthusiasm of a

section of the wealthy class in Lagos. Who had taken up large pieces of land for the

cultivation of food crops, coffee, and cocoa in the Agege area. Further impetus to the

cultivation of cocoa in the area was provided by missionaries and Christian converts, who

advocated a better life through…… religious worship and the achievement of prosperity

(Webster, 1962 and 1963; Berry 1968). In addition, the government provided the necessary




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encouragement by distributing seeds from the Ebute-Metta botanical gardens from 1887

onwards, and by providing advice on the crop‟s cultivation through the Agricultural

Department, which was established early in the nineteenth century.

Notable places to which cocoa spread early in the nineteenth century were Ibadan and Ondo.

While missionaries played an important role in introducing cocoa into the Ibadan area, the

influence of the then Agege plantations on the returning labourers, especially there financial

successes, encouraged farmers to cultivate the crop in the Ondo area. However, neither the

scale of production nor the technical expertise shown in the production of the crop at the then

agege was repeated in these interior locations (Berry, 1968). This was due to the fact that

while the agege farmers had abundant resources of purchased lands, capital to employ labour,

and an intimate knowledge of quality standards in the export trades, the interior farmers

lacked these resources and, being illiterate, did not assimilate the technical details required in

the production of the crop. The introduction and spread of cocoa of cocoa into western

Nigeria had some initial spatial, social, and economic implications. Widespread cultivation of

cocoa at first appeared to be related to distance from Lagos. The then Agege area had the

locational advantage of nearness to Lagos, a factor which facilitated the purchase of land by

the wealthy class for agricultural development. Many cocoa farms were already established in

the Agege area by the 1890‟s, and by 1910 the crop was already in production (Webster,

1962). The extension of the railway to Ibadan in 1901 and the presence of large numbers of

traders from Lagos encouraged rapid cocoa development in the area. By 1905, hundreds of

farmers were moving into land south of Ibadan for this purpose and the first fruits were

probably reaped before 1920. In contrast, cocoa was not grown in the Ondo area until after

1910, and it was not widely accepted until the mid-1920s. The advantages of areas which

started the cultivation of the crop early were still in evident in production figures of different

provinces well into the 1940s.




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An important social implication of the acceptance of cocoa cultivation in western Nigeria is

the modification of tenure arrangement from communal forms towards those of individual

property rights adjustable through purchase and sale. This is mainly due to the fact that cocoa

is a permanent crop; the methods of acquiring rights to land, of obtaining credit, and of

mobilizing and employing labour service were all modified according to the requirement of

the cocoa farmer. In addition, farmers employed labour for a whole growing season and paid

for services at the end of the period.

The economic impact of cocoa cultivation was initially demonstrated by the prosperity which

existed among cocoa farmers. For instance cocoa producer incomes rose from 264,000 NGN

in 1914 to 4,600,000 NGN inn 1928, before the slump in world trade had adverse effect on

the production. The more prosperous growers invested their savings in the transport trade and

houses, and pressure was brought to bear on government to speed up rural road

developments. As a result of these trends, Berry argues justifiably that the rapid expansion of

cocoa exports involved not only „the employment of hitherto idle land and labour . . . but also

reallocation and recombination of available resources‟ (Berry, 1970).

Despite the initial developments in cocoa production in the agege area, the general response

of farmers to the cultivation of the crop was slow at first. Only 5018 tonnes of cocoa were

exported from Nigeria in 1914, although export trade in the crop started almost two decades

earlier (Helleiner, 1966). After the First World War, the world supplies of cocoa were

doubled, Nigeria increased her production more than twelvefold and accounted for about

10% of the total world output by 1930, this further increased to 18.5% in 1941 when

production reached a peak of 106355.9 tonnes (Galletti et al . , 1956). Nigeria cocoa industry

survived both the slump in world trade during the 1930s, and the low prices paid for

production during the Second World War.




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Nigeria’s position in the world’s cocoa producing countries




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CHAPTER THREE

PRODUCT SPECIFICATION, TECHNICAL AND ECONOMIC

FEASIBILITY STUDIES

The species of the agricultural products in view are Rice (oryza sativa), Maize (zea mays),

and cocoa (theobroma cacao), these agricultural product are preferred because of their

respective nutritional values to man, economic advantages and their healthcare applications

for the overall benefit of the society.

3.1 Technical feasibility studies

3.1.1 Location of Facility

Location of an industry, facility or farm is the establishment of an industry in any place or

region or zone (onwuka, 2001). The farm site will be located in an area that have good access

route and away from residential areas to curb pollution and good soil composition since the

success of the farm business majorly depends on the fertility of the soil, soil texture, nearness

to market amongst others. Market here implies the corporate buyers and users and the

exporting agencies. Also the site or location will be located in areas where less

developmental works and industrial projects are going on so as to ensure preservation of soil

fertility and avoid soil contamination from industrial waste. Moreover the site will be located

where there is proximity to source of raw material supply, Finally skilled labour requirement

is also considered. These considerations are necessary so as to reduce cost of production

(Etebu, 2011).

3.1.2 Labour

Labor, a significant factor in agricultural production, is supplied by farm operators, their

families, and regular and seasonal employees. Regular farm employees are those who work

150 days or more at one farm job, their importance cannot be overemphasized because due to




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the nature of their duty they tend to develop a special skill which helps to boost productivity

while the seasonal farm employees are hired for short time periods ( less than 150 days) to

meet large labor requirement should in case need arise

3.1.3 Staff Requirement, Recruitment, Training And Development

Staffing is an important aspect of the organisational function. by staffing, organisational

positions are manned by people that can ensure the accomplishment of the organisational

goals. This is done through the recruitment and selection, placement, traning and

development of personnel that occupy organisational positions and perform the associated

roles created in the organisation.

• Recruitment and Selection

Farm managers recruiting must communicate two main points: (1) farm jobs are competitive

with nonfarm jobs in salary, fringe benefits, and working condition and (2) good labor

management tends to make farm employment desirable. Thus this involves stating the least

qualification an applicant must have before he can apply for the administrative and technical

department of the farm as skilled personnel are required in this departments of the company

but for the other sectors of the company. Requiremennts are put down in writtings.

Notifications are made on flyers and boards for intrested applicants. The natives of the area

will be employed more say 60% of our workforce so as to ensure engagement and good

relationship with our host for sustainable development of the area and success of the

enterprise.

• Training and Developmment

Training and development are very important tools of preperation for both new and old

employee of the organisation. The aim is to equip the workforce with the desired skills and

knowledge to attained the company‟s requirement, goals and targets.




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3.1.4 Resources

Land - land is a complex resource with many characteristics to be identified: soil types

(slope, texture, and depth), current fertility and acidity levels, surface and subsoil drainage,

soil conservation structures and so on. The evaluation of the land resource starts with a good

field map of the farm showing field sizes, fences, drainage ways and so on.

Capital – every enterprise need the basic requirement which is capital to startup because

without capital one cannot takes a leap of step not to talk of a bold step to venture into the

enterprise

Buildings - buildings are an important consideration for agricultural product storage since

some enterprise require costly, specialized structures. Buildings and other facilities, such as

feedlots, should be identified by size, capacity, and potential uses

Transportation - Another success of any business is the strategized transportation planning,

directing, organizing, controlling and coordinating of its product to the market while reducing

cost and other constraints to meet market and consumer demands. We as engineers intend to

apply our engineering management skills to organize a good transportation network of

product delivery

3.1.5 Technology

Machinery and Equipment - the number, size, and capacity of available machinery and

equipment is also one of our major technology that we decided to identify to make our

product very different so as to win the market because “only he that has a quality product

different from the existing ones wins the market” so therefore we intend to use our

engineering and technology skills to win the market.

Management – although managing some enterprises is relatively easy to learn, managing

others is more complex and requires greater knowledge. Since the enterprise is a

structure, we intend to use combined skills of the board of directors ranging from managerial




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skills, experience, strength, and weaknesses. Also plans will be made for training and

educational programs for better management of the enterprise. Here we intend to use our

engineering management skill which was derived from industrial engineering to manage the

enterprise as engineers for optimum output.

Linear programming – since linear programming is used for a variety of problems, as

engineers we intend to use it as a mathematical technique that finds the combination of

alternative enterprises that maximizes the return above variable costs within the resource and

other constraints limiting production. Considering the type of farm involved since we are

dealing with more than one crop linear programming is the best tool to use for both solving

problems that may arise during the cause of operation and for optimization of the available

resources in the enterprise to maximize profit and reduce cost i.e. expenses

A linear programming analysis of enterprise in this case is used as a substitute for, or a

supplement to budgeting. Although it requires the same data as budgeting it is more

systematic than budgeting because it guarantees the profit of any enterprise. As engineers we

intend to use our linear programming skills to carry out budgeting on the enterprise.

Constant Power Supply - Adequate and constant power supply is necessary in the farm to

ensure preservation of farm produce, proper functioning of storage facilities, preservation of

perishable and non-perishable farm products and to ensure quick product and service

delivery. Alternative source of power supply is therefore very important for the adequate

functioning of the facility. A generator set is therefore obtained as part of the company

properties.

Constant Water Supply - Water they say “Is the source of life” therefore a borehole will be

built close to the farm to supply constant and adequate water supply, because aside rain

which is unreliable a reliable source of water supply is needed to make the crops grow at the

right time and healthy so as to ensure appropriate harvesting time.




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3.2 Economic feasibility studies

3.2.1 Rice

Rice (Oryza sativa, L.) is the staple food of over half the world's population. It is the

predominant dietary energy source for 17 countries in Asia and the pacific, 9 countries in

North and South America and 8 countries in Africa (Nigeria included). Rice provides 20

percent of the world‟s dietary energy supply, while wheat supplies 19 percent and maize 5

percent. In Nigeria considering the recent economic hardship facing the country rice which

has now become the common food is becoming too expensive because supply is low while

demand is quite high, proper investment into rice production with mechanized farming will

further help to expand the rice production thereby reducing the soaring cost of the product for

the common to be able to afford for survival. Research has in that Nigeria imports one

million tonnes of rice, valued at $700m or aboutN106 billion. An average Nigerian now

consumes 24.8 kg of rice per year, representing 9% of total caloric intake (Rice Web, 2001).

As at 2003, demand for rice was put at 5million metric tonnes. Rice is now staple food to

over 60% of Nigerian homes; External demand for Nigerian Rice is estimated at 7 to 10

million metric, Nigeria has a population of over 150 million people: A viable market.

Profitability

On 1 hectare, all things being equal, a farmer can harvest close to 3-5 tonnes of rice

depending on the variety which is about 100bags (25kg). A 25kg of rice is about N3, 500. So

about N350, 000 can be realized from 1 hectare of land. An investment on 100 hectares will

yield N35, 000,000 per harvest and rice can be grown twice a year if it is mechanised.

3.2.2 Maize

Maize (Zea mays, L.) is one of the main cereal crops of West Africa, and the most important

cereal food crops in Nigeria. It comes after wheat and rice in terms of world importance.




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Maize is not only a major cereal crop in the present day world but it was also one of the basic

foods in America before the arrival of Christopher Columbus at the end of the 15th Century,

and among the Indians in Mexico and Guatemala, and also among the Incus in Peru, Bolivia

and Equator (Rouannent, 1987). Maize (just as Rice) is becoming the miracle seed for

Nigeria‟s agricultural and economic development. It has established itself as a very

significant component of the farming system and determines the cropping pattern of the

predominantly peasant farmers. Its consumption is also very vast because in most part of

Nigeria the application and consumption of maize is enormous; to the low class citizens it is

consumed in the form of pap popularly known as “akamu”, tuwo, etc; to the middle and first

class citizens it is also consumed as akamu, tuwo, cornflakes, golden morn, etc. It has

established itself in the power generation industry with its application as an alternative

resource called “feed maize” which is increasingly used as a feedstock for the production of

ethanol for power generation. With all these several applications maize is sure an agricultural

product to invest in.

Profitability

On 1 hectare, all things being equal, a farmer can harvest close to 3-4 tonnes of maize

depending on the variety which is about 100bags (25kg). A 25kg of maize is about N3, 000.

So about N300, 000 can be realized from 1 hectare of land. An investment on 100 hectares

will yield N30, 000,000 per harvest

The profitability of maize production is welcoming cause from our technical and economic

analysis we discovered that maize is a profitable crop to invest in whose output is un

measurable because of its nature its harvesting processing is also a very important part of

production process.




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3.2.3 Cocoa

Cocoa (Theobroma cacao, L.) , which is the main crop for the production of chocolate which

the world enjoys more of all the confectionary products is sure another source of revenue

income generation for both individuals and government. Over the years cocoa has always

proved to be a profitable agricultural product because in the nineteenth century, the then

western region of Nigeria was built from revenues generated from cocoa production, it was

from this agricultural product that the elite and literate westerners made their wealth from.

And this has not changed because with the recent development from research on other

applications of cocoa the world‟s yearning for adequate supply of cocoa is increasing thereby

making the demand for cocoa high and also creating the avenue for cocoa production to

thrive and soar high. However, it is not only used for chocolate production alone, research

carried out over the years has proved that it also has some application in health care, animal

husbandry etc which will be discussed in the next chapter of this report. With these several

applications cocoa is sure another agricultural product with enormous economic importance

and is a blessing to mankind just as the name implies, cacao-“ food of the gods”.

Profitability

On 1 hectare, all things being equal, a farmer can harvest close to 2-3 tonnes of cocoa

depending on the variety which is about 100bags (25kg). A 50kg of cocoa is about N6, 000.

So about N600, 000 can be realized from 1 hectare of land. An investment on 100 hectares

will yield N60, 000,000 per harvest.

The profitability of cocoa spreads beyond consumption alone because profit is also derived

from the it‟s application in healthcare so therefore cocoa proves itself as a worthy crop and as

the food of the gods indeed




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CHAPTER FOUR

4.0 THE PRODUCT-CENTRED FUNCTION

4.1 Research and developments

4.1.1 Cocoa

Cocoa (Theobroma cacao, L.) contains a high level of flavonoids, specifically epicatechin,

which may have beneficial cardiovascular effects on health. Prolonged intake of flavanol-rich

cocoa has been linked to cardiovascular health benefits, though it should be noted that this

refers to raw cocoa and to a lesser extent, dark chocolate, since flavonoids degrade during

cooking and alkalizing process Studies have found short term benefits in LDL cholesterol

levels from dark chocolate consumption. The addition of whole milk to milk chocolate

reduces the overall cocoa content per ounce while increasing saturated fat levels, possibly

negating some of cocoa's heart-healthy potential benefits. Although one study has concluded

that milk impairs the absorption of polyphenolic flavonoids, e.g. (-) epicatechin, a followup

failed to find the effect.

Researchers found that humans who drink cocoa had significantly lower rates of heart disease

and cancer compared to those who do not drink cocoa. It is believed that the improved blood

flow after consumption of flavanol-rich cocoa may help to achieve health benefits in hearts

and other organs. In particular, the benefits may extend to the brain and have important

implications for learning and memory

Foods rich in cocoa appear to reduce blood pressure but drinking green and black tea may

not, according to an analysis of previously published research in the April 9, 2007 issue of

Archives of Internal Medicine, one of the JAMA/Archives journals. In June 2009, Mars

Botanicals, a division of Mars Inc., the candymaker and food company, launched Cirku, a

cocoa extract high in flavanols. A 15-year study of elderly men published in the Archives of

Internal Medicine in 2006 found a 50 percent reduction in cardiovascular mortality and a 47




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percent reduction in all-cause mortality for the men regularly consuming the most cocoa,

compared to those consuming the least cocoa from all sources

Animal consumption of cocoa

Chocolate is a food product with appeal not only to the human population, but to many

different animals as well. However, chocolate and cocoa contain a high level of xanthines,

specifically theobromine and to a much lesser extent caffeine, that are detrimental to the

health of many animals, including dogs and cats. While these compounds have desirable

effects in humans, they cannot be efficiently metabolized in many animals and can lead to

cardiac and nervous system problems, and if consumed in high quantities, even lead to death.

However, since the beginning of the 21st century, some cocoa derivatives with a low

concentration of xanthines have been designed by specialized industry to be suitable for pet

consumption, enabling the pet food industry to offer animal-safe chocolate and cocoa

flavored products. It results in products with a high concentration of fiber and proteins, while

maintaining low concentrations of sugar and other carbohydrates, thus enabling it to be used

to create healthy functional cocoa pet products.

4.1.2 Rice

An illustrative comparison between white and brown rice of protein quality, mineral and

vitamin quality, carbohydrate and fat quality suggests that neither is complete nutrition

source. Between the two, there is a significant difference in fiber content and minor

differences in other nutrients.

Brilliantly colored rice strains such as the purple rice derives its color from anthocyanins and

tocols. Scientific studies suggest that these color pigments have antioxidant properties that

may be useful to human health. In purple rice bran, hydrophilic antioxidants are in greater

quantity and have higher free radical scavenging activity than lipophilic antioxidants.




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Anthocyanins and γ-tocols in purple rice are largely located in the inner portion of purple rice

bran.

Comparative nutrition studies on red, black and white varieties of rice suggest that pigments

in red and black rice varieties may offer nutrition benefits. Red or black rice consumption

were found to reduce or retard the progression of atherosclerotic plaque development,

induced by dietary cholesterol, in mammals. White rice consumption offered no similar

benefits, and the study claims this to be due to absent antioxidants of red and black varieties

of rice.

4.1.3 Maize

Maize is increasingly used as a feedstock for the production of ethanol fuel Ethanol is mixed

with gasoline to decrease the amount of pollutants emitted when used to fuel motor vehicles.

High fuel prices in mid-2007 led to higher demand for ethanol, which in turn lead to higher

prices paid to farmers for maize. This led to the 2007 harvest being one of the most profitable

maize crops in modern history for farmers. Because of the relationship between fuel and

maize, prices paid for the crop now tend to track the price of oil. The price of food is affected

to a certain degree by the use of maize for biofuel production. Higher energy costs affect

these costs, especially transportation. The increase in food prices the consumer has been

seeing is mainly due to the higher energy cost. The effect of biofuel production on other food

crop prices is indirect. Use of maize for biofuel production increases the demand, and

therefore price of maize

Wikipedia (2006), reported that maize is hydrolyzed and enzymatically treated to produce

syrups, particularly high fructose corn syrup, a sweetener and in some cases fermented and

distilled to produce grain alcohol which is traditionally the source of bourbon whisky. Sweet

corn is a genetic variation that is high in sugars and low in starch that is served like a

vegetable. is one of the most abundant food crops in Nigeria. About 80% is consumed by




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man and animals while 20% is utilized in variety of industries processes for production of

starch, oil high fructose, corn sweetener, ethanol, cereal and alkaline. Maize consists of 71%

starch, 9% protein and 4% oil on a dry weight basis. Despite the economic importance of

maize to the teeming populace in Nigeria, it has not been produced to meet food and

industrial needs of the country. This could be attributed to low productivity from maize farms

or that farmers have not adopted improved technologies for maize production.

4.2 Production

4.2.1 Rice

Land preparation and Soil Tillage – since upland rice is the type of rice we intend to grow

the type of soil favourable for it is fertile, loose loamy soil which is the predominant in the

southern part of Nigeria. Therefore clearing all trees is the first stage after soil determination

after clearing, soil tillage by ploughing using mechanical plougher and harrowing using

Planting materials – upland rice is planted with seeds (grains) at the rate of two to three

seeds per hole at a spacing of about 0.2m x 0.2m. The seedlings could be raised in the nursery

and transplanted into the field at the same spacing at four to five leaf stage. The seeds is to be

dressed with insecticides such as fernasan D prior to sowing to prevent insect encroachment.

Planting date – upland rice for early planting, it is planted March/ April to be harvested in

august and for late planting, it is planted in August to be harvested in November / December

both of which favours the market because with the first harvest in august and second harvest

in November/December it provides enough rice for sale because of the encroachment of the

festive season and enough for storage with the presence of modern storage facilities.

Planting depth – 3cm to 4cm deep when planting at stake and also bury seedlings to soil-

mark when transplanting.

Post – Planting operations – supplying vacant stands within one week of germination or

transplanting. Weed control is controlled with selective herbicides, thinning and detillering is




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carried out as necessary to attain optimum plant density depending on the carrying capacity

of the soil. Pest such as birds, rodents, bugs, and stemborers are controlled by scaring with

scarecrow, trapping and fencing the farm, and crop rotation respectively. Diseases such as

blast ( Piricularia oryzae), smut (Tilletia horrida), black spots ( Nigrosporea oryzae), false

smut and so on are controlled by avoiding excessive nitrogen fertilizer, treating seeds with

formalin before planting, uprooting and burning attacked plants and crop rotation

respectively.

Application of manures and fertilizers are done by pre-planting and the fertilizers to be used

is/are

Maturity – rice flowers three and half to four months after planting while it matures in four to

six and half months. Harvesting rice can be harvested in two ways but we intend to adopt the

following method whereby the pinnacle is cut with s strong knife (the sickle), collected (i.e

harvested), dried, and threshed. From threshing it is then parboiled before it is been milled to

remove all the unwanted part to make it look fresh and clean ready for sale.

4.2.2 Maize

Planting time: Sowing date is an essential component of crop management. Yields decline

with lateness of planting after an optimum time, usually the start of the rains. Response of

varieties to other inputs is dependent upon planting time. Optimum planting in each of the

major agro-ecological zones of Nigeria falls with these following ranges:

1. Forest zone – Mid April – 2nd week in May

2. Forest – Savanna transition – 3rd week in April – 3rd week in May

3. South Guinea Savanna Last week in April – 3rd week in May.

4. Northern Guinea Savanna – last week in May – 1st week in June

5. Sudan Savanna – First 2 weeks in June




22

Plant population: An optimum plant population is essential for maximum yield in maize.

Farmers grow maize at very irregular and wide spacing, due to the fact that most farmers

inter-crop maize with other crops. A direct relationship between plant population and final

yield to some extent, is obvious because total grain yield is positively and significantly

correlated with the number of ears and hence with the number of harvestable plants. A plant

population of 53,333 plants/ha is recommended. This is obtainable with 75 cm x 50 cm

spacing at 2 plants per hill or a 75 cm x 25 cm spacing at 1 plant per hill we will prefer wide

spacing so as to afford easy movement for weeding and other operations.

Plant nutrients and Fertilizer applications: For good growth and high yield, the maize

plant must be supplied with adequate nutrients particularly nitrogen, phosphorus and

potassium. The quantity required of these nutrients particularly nitrogen depends on the pre

clearing vegetation, organic matter content, tillage method and light intensity (Kang, 1981).

The most important of these micronutrients for maize growth are sulphur, zinc and

magnesium particularly in the savanna and under continuous cropping of maize in the Forest

ecology. The nutrient requirement is satisfied by the application of the right form of fertilizer

containing the requisite combination of the element.

4.2.3 Cocoa

The production of cocoa is quite different because it is a delicate and special produce so its

process is quite a big task and must be handled with care from the harvesting stage to the

storage stage. Upon harvesting, using special techniques and tool fermentation follows suit

which involves turning the beans for (seven days) to allow air enter it to prevent beans from

growing mould or developing bad smell which it is prone to. After this process comes the

drying which takes place immediately after fermentation, then follows the proper packaging

and storage for present and future purpose.




23

4.2.4 Recommended Fertilizers – the popular chemical fertilizer NPK (nitrogen,

phosphorus, potassium), organic manures (bulky organic manure, green manure),

biofertilizers or bio – inoculants, recyclable wastes.

4.2.5 Storage facilities – owing to the fact that we intend to win the market with our

marketing strategies the need to store and preserve our agricultural produce cannot be over

emphasized therefore we will make available the following storage facilities with necessary

chemicals (such as pesticides, insecticides, etc) to prevent them from diseases, pest and

insects:

Modernized silos for the rice storage and preservation

Modernized weatherproof and un damped building with proper ventilation should be built for

the cocoa for cocoa storage and preservation

Modernized silos should be built for the maize proper storage and preservation

4.3 Marketing

Marketing is the performance of all business activities involved in flow of goods and services

from the point of initial agriculture production until they are in the hands of the ultimate

consumer ( Richard kohls, 1984). Since marketing is another important part of any business

we intend to use efficient marketing system such as:

Ensure proper availability of consumer products

Ensure proper price spread

Ensuring adequate marketable surplus

Assembling

Grading and standardization

processing

Transportation

Storage




24

Packaging

Distributing

Financing

Market intelligence

Risk bearing

Marketing channels we intend to market our produce are:

Under cover

Open auction system

Sales by private agreement

Co-operative societies

Close tender system: here tenders are from the buyers and the tender with the highest

amount is accepted and the commodity will be given to the individual.

Dara sales: here the agricultural produce of different qualities will be sold at a flat

rate.

4.4 Securing Financial Assistance

The dormant partners will generate most of the capital required for the start up of the and

maintenance of the enterprise. Loan also will be obtained from bank(s) with asset of the

dormant partners as collateral

4.5 Secure Fixed Assets

For the initial start up of the enterprise buildings such has administrative building, storage

facilities, warehouse to keep machines and equipment will be built for the operation of the

enterprise. The warehouse and admin block will be partitioned such that it partitioned will

form its own department. The farm will be sited in a location that has good access route to

market and good power supply.




25

CHAPTER FIVE

5.0 ESTABLISHMENT AND OPERATION OF THE ENTERPRISE

5.1 Structure of the Enterprise

The structure of the enterprise is partnership because research has it that most successful farm

businesses are partnership due to the huge amount needed to establish a mechanized modern

farming system. The organogram for the enterprise is thus shown below:

SITE MANAGER

GM, ADMIN.

SAFETY DEPT. MAINTENANCE DEPT. OPERATION DEPT.

GM, FARM SITE

BOARD OF DIRECTORS

MARKETERS

DISTRIBUTOR

ACCOUNTING DEPT.

DRIVERS

SALES & MARKETING

PRODUCT STORE KEEPER FERTILIZER MANAGER

MISEQUIP. STORE KEEPER

FARMERS




26

5.2 Legal status

The legal status for mechanized farming is recommended to be partnership or cooperative as

the business require quite a huge amount of investment. Therefore as stated before in chapter

the structure of this proposed enterprise is partnership. Specifically a four man partnership

with all partners active. Benefits of registering the enterprise as a partnership business:

• Less legal requirement for registration

• Lower tax rates as compared to private or public limited company.

5.3 Enterprise Registration

The partners will enroll the services of a lawyer after paying the required retainer fees. The

lawyer would apply for the registration of the enterprise at the Corporate Affairs

Commission.

The application would only be approved after it is confirmed that the chosen name is unique

to only the proposed enterprise. The barrister prepares the memorandum of association and

relevant legal documents, only then will the enterprise be registered and given a registration

number.

The memorandum of association specifies the following

i. Name and address of business

ii. Name and address of directors

iii. Purpose of business engaged in

iv. Amount and kind of shares to be issued

v. Amount of capital authorized

vi. Statement of limited liability




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5.4 Proposed farm Capacity and Rationale

The proposed enterprise has a capacity of producing 1500 bags (50 kg) of rice, 2000 bags (50

kg) of maize and a reasonable 900 bags (50 kg) of cocoa respectively upon the first year of

operation and with our marketing strategy our production is going to increase over a long

period such that the option of exporting will be put into considerations.

The attainment of the project capacity will depend on the following factors:

i. Availability of resources needed for the enterprise

ii. Machinery and equipment

iii. Involvement of management to facilitate production, marketing and quality of the

produce.

iv. The skills and motivation of the labor force involved in the enterprise

5.5 Methods of maintaining competitiveness

To maintain efficiency and competitiveness as a producer and management practices,

effectiveness marketing, progressive industrial relations, quality assurance and production

improvement, proper financial control are some of the mandatory practices that can help

achieve it. Trainings programs will be held for each employee of the enterprise on how to

improve the quality of the farm produce, research will be made on how to improve and step

up the standard of our produce in terms of quality and packaging.

5.5.1 Sound management practices

Every organization has to adhere strictly to set objectives for it to grow and maintain

competitiveness. Since our company is profit-oriented, practice that will yield maximum

profit while offering our services to client and to public should be adopted. The process of

achieving this desired result through efficient utilization of human and material resources for

effective competitiveness follow a set of defined functions. These functions include:

Planning, organizing, directing and controlling.




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Planning: this involves establishing of the framework or boundaries within which decisions

are made or carried out to influence present and future actions.

Organizing: it entails dividing company objectives into jobs, grouping similar jobs into

departments and assuming human, material and financial resources needed for the work unit.

Directing: it involves guiding and influences the action of our workers towards the

achievement of our organizational goals.

Controlling: this is a means through which we monitor or check current operations and

compare results, goals and other standard of performance establishment during the planning

stage and make correction where necessary.

5.5.2 Effective Marketing

The process of planning and executing the concepting pricing, promotion and distribution of

ideas, good and services to create exchanges that satisfy consumer, as well as our

organizational goals cannot be over emphasized. The ability to get finished product and

services to consumers requires people with adequate structure, functions and after-sale

maintenance. The following marketing strategies were adopted to improve our profit and get

our products and services to:

a. Building a market orientation program.

b. Creating an efficient advertisement

c. Designing a powerful sales promotion

d. Selecting the right marketing communication

e. Evaluating sales representatives




29

5.5.3 Progressive industrial relations

A strong and well motivated personnel department is one of the key ways of maintaining

competitiveness since an organization is as good as the people in it, it is essential for the

personnel to have the right frame of mind to enable them carry out their duties efficiently and

effectively. One of the ways of achieving this is through good employer-employee

relationship. In a bid to ensure that personnel department is in line with the objectives of the

company, strategies to motivate staff were employed. Strategies such as:

a. Payment of good salaries and allowance benefits

b. Scholarships for children of staffs

c. Promotion as at when due

d. Job security

e. Provision of recreational activities

f. Housing facilities of staff as well as transport facilities.

5.5.4 Quality control

For a company to retain its costumers and gain new ones, products and services must be up to

or exceeding expected standards and quality. The minimum quality requirement may be

specified by the standard organization or other statutory bodies vested with the responsibility

of ensuring that the products from out plant are not inferior. Meanwhile controlling of

activities involves the evaluation of performance and the possible application of both

preventive and corrective measures to ensure that performance is in line with a pre-conceived

plan. In order to improve services control methods are either by manual inspection or by

automated means of inspection. The manual means involves human testing of products and

services using human shields or testers from the public and cross-referencing their responses

with the desired responses while the automated testing machines and performances testing

computer programs.




30

5.6 Financial Accounting

Accounting records detailed financial transaction of a business and information derived from

various financial statements. Strategies are employed to ensure financial control in our

organization. Internal auditing is a means of achieving such a control internal auditors are

employed to audit financial records of the company on regular basis and report findings to

management. This enables management to employ checks and balances in controlling the

financial resources of the enterprise and also to properly utilize resources to achieve set goals.

Production over head comprises all production expenses except direct materials, direct labor,

and direct expenses, incurred in the process of converting the basic raw materials into

finished products. To arrive at the cost of raw material consumed, requires adding the cost of

raw material currently purchased to the cost of opening raw materials and deduction of the

cost of closing or ending raw material from the aggregate of two (Schiff, 1990).

5.6.1 Financial Analysis

5.6.2 Expenses

a) Startup Expenses

Class of Fund Amount

Asset ( Property and Equipment) 5,000,000

Other Expenses 500,000

Total N5,500,00

A breakdown of these expenses is as follows:




31

b) Property and Equipment with respect to Cost Estimate

Asset classification Amount

Vehicles (purchased) 2,400,000

Maintenance of Machineries per month 300,000

Power Generating plant (300KVA) 1,000,000

Computer Equipments 250,000

Furnitures and Fixtures (administrative

building)

100,000

Total N 4,050,000

Property and Equipment with respect to

Cost Estimate

N 4,050,000

Startup Expenses N 5,500,00

Total N 4,600,000

c) Other Expenses

Cost of Research and Development – N 150,000

Advertisement Cost - N 100,000

Miscellaneous Expenses – N 50,000

5.6.3 Salary structure

Projected salary per month for a five year span

Personnel Year 1 Year 2 Year 3 Year 4 Year 5

Board of

Directors

50,000 55,000 65,000 85,000 100,000




32

General

managers

35,000 37,000 40,000 45,000 50,000

Operations

manager

30,000 32,000 35,000 40,000 45,000

Safety

manager

25,000 27,000 30,000 35,000 40,000

Maintenance

manager 1

(mechanical)

30,000 32,000 35,000 40,000 45,000

Maintenance

manager 2

(electrical)

30,000 32,000 35,000 40,000 45,000

Accountant 20,000 22,000 25,000 30,000 35,000

Head of sales

and

marketing

30,000 32,000 35,000 40,000 45,000

Site manager 30,000 32,000 35,000 40,000 45,000

Management

Information

system

30,000 32,000 35,000 40,000 45,000

Equipment

store keeper

20,000 22,000 25,000 30,000 35,000

Drivers 20,000 22,000 25,000 30,000 35,000

Product store 23,000 25,000 28,000 33,000 38,000




33

keeper

Labourers 15,000 17,000 20,000 25,000 30,000

5.6.4 Projected Revenue

The projected revenue for five years is given as follows:

Revenue Income for five years

Year 1 Year 2 Year 3 Year 4 Year 5 Total

Rice 4,000,000 5,000,000 6,000,000 8,000,000 10,000,000 N33,000,000

Maize 3,000,000 4,000,000 5,000,000 7,000,000 9,000,000 N28,000,000

Cocoa 1,500,000 2,500,000 4,000,000 6,000,000 15,000,000 N29,000,000

Expenditure for building and maintain storage facilities

Rice 250000 60000 55,000 50,000 50,000 N465,000

Maize 200000 60000 55,000 50,000 50,000 N415,000

Cocoa 300000 100000 80,000 80,000 70,000 N630,000

Expenditure for Machinery and Equipment Maintenance

Tractor 500,000 100,000 100,000 70,000 50,000 N820,000

Thresher 200,000 50,000 50,000 50,000 50,000 N400,000

Milling machine 200,000 50,000 50,000 50,000 50,000 N400,000

Maize combine 150,000 40,000 40,000 40,000 40,000 N310,000

Pod breaking

machine

150,000 40,000 40,000 40,000 40,000 N310,000

Plougher 150,000 40,000 40,000 40,000 40,000 N310,000

Shelling Machine 180,000 40,000 50,000 40,000 45,000 N355,000




34

5.7 Planning for the growth of the enterprise

All managers irrespective of their organization or managerial position perform the same

management function of planning. It is regarded as the most fundamental of all management

function. In essence, planning consist of anticipating opportunities for growth or threat to

survival, establishing objectives based on the perceived opportunities or threats, and selecting

the best action to accomplish the set objectives.

In performance of our managerial function of planning for the growth of the company, we

carried out a lot of activities which we are in phase. These phases are as follows:

Phase one: Establishing Objectives

Our enterprise operates in a dynamic environment which affects our daily operations.

Developments in our environment create opportunities for our company to grow or threats to

our existence. Objectives are set to help us make efficient use of opportunities while reducing

threats. The objectives are set based on present and anticipated future events. Our primary

objective for organizational growth is the production of agricultural produce to meet

consumer and customer needs and satisfaction.

Phase two: Development premises

This includes monitoring developments in the environment that are likely to influence the

accomplishment of the objectives established in phase one. To be able to get the required

information and facts, managers have to carry out a total scan of the environment. This is to

enhance the premises to fit production activities and customer and consumer accessibility.

Phase three: Decision making

Decision making is the management‟s inherent function. But in planning function, our

enterprise takes decision in selecting the best alternatives and practices to accomplish our set

objectives. Four essential steps are taken to ensure proper decision making.




35

They are:

1. Identification of feasible alternative causes of action

2. Evaluation of alternative causes of action

3. Selection of the criteria for judging which alternative cause of action is the best.

4. Selecting of the best cause of action

Phase four: Implementing a source cause of action

Since planning is a mental activity, we have to translate the plans into actual performance by

initiating action.

Phase five: Evaluating results

This step involves checking current operations, enterprise actual results to expected results,

and then making connection when necessary.

5.8 Planning for eventual closure of the enterprise

Our enterprise having been created by legal processes, i.e by registration can only be brought

to an end by a legal process too. It follows therefore that the life of our enterprise can be

brought to an end in various under law. The following are ways of dissolving an enterprise

under the act.

1) The first of such methods is by winding up or liquidation. The winding of an

enterprise may be effected

2) By the court

The commencement of winding up by the court

Before presentation of petition for winding up of the company by the court, the enterprise

must have come to a resolution for voluntary winding up of the enterprise. All proceedings

taken in the winding up is deemed to have been valid, unless the court directs otherwise on

grounds of mistake or fraud being proven. When winding up is completed, the enterprise is

then dissolved and stroked off the register as a registered enterprise.




36

CHAPTER SIX

6.1 CONCLUSION AND RECOMMENDATION

From the feasibility studies conducted for this project, it can be seen that mechanized

agricultural farming is technically feasible provided every adequate measures, from the

feasibility studies it is observed that investing in the agricultural sector of Nigeria‟s economy

has shown to be cost effective if proper measures are taken and it is for sure environmentally

friendly compared all other type of enterprise. For the success of the enterprise measures

should be taken to raise sufficient capital and the strategies developed here for the effective

growth and development of the enterprise adopted




37

REFERENCES

David, T.J. (1990): “The Business of Farming (A Guide to Farm Business Management in the

Tropics”. 2nd edition, Macmillan publication.

Panda, S.C. (2007): “Farm Management and Agricultural Marketing”. 1st edition, Kalyani

Publications

Gary, C.J. and et al (2007): “Ecologically Based Integrated Pest Management”. CAB

International. pp. 315 – 366.




38

Appendix A

Maize plantation

Varieties of maize

http://en.wikipedia.org/wiki/File:Corncobs.jpg

http://en.wikipedia.org/wiki/File:GEM_corn.jpg








39

APPENDIX B

A cocoa produce ready to be harvested Cocoa in its pod

Sets of Mechanical Cocoa milling Machine

http://en.wikipedia.org/wiki/File:Mexican_Cocoa_Mills.JPG

http://en.wikipedia.org/wiki/File:Cacao-pod-k4636-14.jpg

http://en.wikipedia.org/wiki/File:Cocoa_Pods.JPG










40

APPENDIX C

Uncooked polished White Rice Varieties of Rice

http://en.wikipedia.org/wiki/File:Rice_diversity.jpg

http://en.wikipedia.org/wiki/File:Rice_p1160004.jpg

http://en.wikipedia.org/wiki/File:Rice_diversity.jpg

http://en.wikipedia.org/wiki/File:Rice_p1160004.jpg




APPENDIX D

FARM MACHINERIES

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