PRE-FEASIBILITYOFF SEASON VEGETABLE FARMING (HIGH TUNNEL)

Presented by:

Muhammad Basharat (57509)

Shazaib Makhdoom (56574)

Bilal Kashmiri (57010)

Sheroz Khan (57491)

Presented to : Sir Raza Kamal

BUSINESS DESCRIPTION

Vegetables can be cultivated in off-season, with introduction of techniques like tunnel technology, in which temperature and moisture is controlled for growth of vegetables in specific conditions. The proposed project is designed as a medium sized off-season vegetable farming unit on 3.5 acres of land. Off-season vegetables, such as, tomatoes, chillies / hot pepper, cucumber, brinjal, sweet peppers, ridge-gourd (teenda) and bitter-gourd (karela) can be cultivated using high tunnel technology. However, for the purpose of this pre-feasibility, three crops are being proposed, namely, tomato, sweet pepper, and cucumber.

The farm will provide employment opportunities to seven (07) individuals directly, while seasonal pickers & packers would also be required. The estimated yield potential of the farm varies according to the selected type of vegetable. With above mentioned vegetable mix, yield of 148.5 tons per season excluding 10% wastage can be attained. The legal status of the proposed project can either be sole proprietorship or partnership.

CRITICAL FACTORS

Proper soil analysis for determining soil nutritional level. Use of high quality hybrid seeds. Fertile land and its maintenance within the tunnel during the

period of cultivation. Timely control of pests, diseases and implementation of all

recommended agronomic measures. Selection of profitable vegetables on the basis of best analysis

of cost and revenues for a given season. Cost efficiency through better management.

CONTINUE…

Maintenance and control of internal temperature and humidity of the tunnel.

Timely irrigation, fertilization, training and grading of plantation. Fertilization as per expert(s) recommendation.

Appropriate post-harvest arrangement for washing, grading, packing, and transportation of product to the market.

INSTALLED & OPERATIONAL CAPACITY Following table provides information on the total production, exclusive of 10% wastage.

Vegetables

Area (acres)

Unit

Qty

Total

Production (Kg)

Tomato 1 .5 No. of Plants 22,500 81,000

Sweet pepper 1 No. of Plants 14,000 22,500

Cucumber 1 No. of Plants 18,000 45,000

GEOGRAPHICAL POTENTIAL FOR INVESTMENT

As per the information gathered from Agriculture Department, Government of Sindh, and National Agricultural Research Center, Islamabad, following are the potential areas of off-season vegetable production:Dehrki, ubaro, Ghotki, Sukkur, Pano Aqil, Mir Pur Mtheloo, Dubar, larkana, mityari, saleh pat and etc.

POTENTIAL TARGET MARKETS / CITIES

Keeping in view the product price level, demand and purchasing

power of customers; whole sale vegetable markets in metropolitan

cities / urban areas are the potential markets for off season

vegetables.

We will focus on Dehrki, ubaro, Ghotki, Sukkur and Pano Aqil

because these areas better for investment and there consumption of

vegetables are better.

HIGH TUNNEL STRUCTURE SPECIFICATIONMaterial Material Description

Specification

Bamboo Diameter 2-3 inch Length8.5-20 ft (Different lengths)

Plastic 0.06 mm thick Tunnel Height 10 ft

Specification Width 30-32 ft

Length 200 ft No. of tunnels 6 per acre

SUPPORT STRUCTURE

Each tunnel will be 200 feet long, 10 feet high and 30-32 feet wide.

The tunnel is built by 2-3 inch diameter bamboo having 8.5-20 feet

length. The bamboos are fixed at regular distance of approximately

10 -15 feet. Each tunnel structure will then be covered by 0.06 mm

thick plastic sheet. Approximately 6 tunnels can be constructed on an

acre of land depending on the type of vegetable, i.e. tomato, sweet

pepper and cucumber.

PROJECT COST SUMMARYProject Economics

The proposed vegetable mix is tomato cultivated on 1.5 acre of land and sweet pepper & cucumber

cultivated on 1 acre each. The estimated produce would be 81 tons of tomato, 22.5 tons of sweet pepper

and 45 tons of cucumber excluding 10% wastage.

Vegetables Area

No. of Plants T o ta l P r o d u ctio n

(a c re s )

Quantity (kg)

Tomato 1.5 22,500 81,000 Sweet pepper 1 14,000 22,500

Cucumber 1 18,000 45,000

Total Production Capacity

PROJECT ECONOMICSDescription Details

Internal Rate of Return (IRR) 38%

Payback Period (Yrs) 3.23

Net Present Value (NPV) Rs. 4,583,669

Returns on investment and its profitability are highly dependent on the

entrepreneur having some practical knowledge about agriculture & farming,

selection of fertile land, selection of high yield seed, cultivation, vegetables and

selection of right time for vegetable cultivation.

PROJECT FINANCING

Description Details Total Equity (10%) Rs. 219,995

Bank Loan (90%.) Rs. 1,979,956

Markup to the Borrower (%age/annum) 8% Tenure of the Loan (Years) 8

Grace Period (Years) 1

PROJECT COST

Capital Investment for the Project

Capital Investment Amount (Rs.)

Machinery & Equipment 65,000

Tunnel Equipment 488,950

Pre-operating Cost 25,000

Total Capital Costs 578,950

Initial Working Capital 1,621,002

Total Project Cost 2,199,952

LAND REQUIREMENT

Vegetable Land Utilization Land Lease Cost Total Land Lease

(A cr e s) per Acre (Rs.) Cost (Rs.)

Tomato 1.5 50,000 75,000

Sweet pepper 1 50,000 50,000

Cucumber 1 50,000 50,000

Total 3.5 175,000

As land will be acquired on lease, hence total land lease cost during 1st year would be approximately Rs. 175,000.

LIST OF MACHINERYDescription Replacement Q u a n tity C o st Total

Y e a r R s./u n it Rs.

Working Tables 5 3 5 ,0 0 0 15,000

Chairs 5 6 2 ,5 0 0 15,000

Farm Tools (Hand Tools) 5 1 2 0 ,0 0 0 20,000

Spray Machines 5 3 5 ,0 0 0 15,000

Total 65,000

STRUCTURE REQUIREMENT FOR HIGH TUNNEL

Replacement

Unit U n its Unit T o ta l

Description

fo r 3 .5

Cost

Amount Y e a r

/A cr e

a cres

(Rs.)

(R s .) Bamboos (No.) 3 1 0 8 0 3,780 110 415,800

Wire (G. Iron) (Kg) 3 40 140 135 18,900 Wire stretchers (No.) 3 1 0 0 350 75 26,250

Structure installation cost 3 8,000 28,000 Total Cost 488,950

RAW MATERIAL REQUIREMENTS

P la n ts C o st

Vegetables

Area N o . o f P la n ts

U n it R a te Total Cost

(a c re s )

R s.

of Plants

Tomato 1.5 22,500 2.45 55,125

Sweet pepper 1 14,000 1.80 25,200

Cucumber 1 18,000 3.00 54,000

Total Cost of Plants 134,325

OTHER RAW MATERIAL REQUIREMENT Farm Inputs U n it Q ty /A cr e Unit Rate Total Fertilizer

(Rs./Bag) Cost (Rs.)

CAN B a g s 3 2,250 23,625

Nitrophos B a g s 5 3,500 61,250

DAP B a g s 3 4,250 44,625

SOP B a g s 3 4,250 44,625

Total 174,125

HUMAN RESOURCE REQUIREMENT

Description N o . o f Salary per Salary / Employees Month Season

Owner / Manager 1 25,000 200,000

Permanent Labor 6 12,000 504,000

Total Staff 7 704,000

Human Resource Requirement (Temporary)

D e sc r ip t io n

Number Wages (Rs. per Total Seasonal

picking / person)

W a g e s (R s .)

T e m p o ra ry

11 Male: 250

144,375

Labor Female: 250

EXPECTED PRODUCTION AND LAND UTILIZATION

Vegetable Land Sale Price First Year F ir st Y e a r U tiliz a t io n (Rs./ Kg ) Production excl. S a le s (A cr e s) W a sta g e (K g ) Revenue (Rs)

Tomato 1.5 25 8 1 ,0 0 0 2,025,000

Sweet pepper 1 30 2 2 ,5 0 0 675,000

Cucumber 1 15 4 5 ,0 0 0 675,000

Sale of empty fertilizer bags 490

Total Sales Revenue 3,375,490

REVENUE ASSUMPTIONSales price growth rate 10%

Percentage wastage 10%

Production capacity utilization year 1 – 10 100%

OTHER COST ASSUMPTIONSTransportation of farm produce

Cost per kilometer (Rs.) 25

Farm to market distance (km) 125

Per trip cost (Rs.) 3,125

Load per trip (tons) 2

No. of trips 74

Pesticides expense per Acre per season (Rs.) 40,000

Water expense

Number of months for irrigation 7

Total number of irrigations per season 10

Cost per irrigation per acre (Rs.) 450

Total cost of green manuring, land preparation and sowing per 12,500 acre (Rs.) Total cost of Mechanical Hoeing – twice per season per acre 1,750 Average packing expense per kg (Rs.) 1.06