Prime Off-seasonal Vegetables Farming
Group# 6
Submitted to;
Sir Javaid Iqbal
Submitted By;
Group # 06 Shahzad Mushtaq 17 Atif Ali 26 Khuram Shahzad 28
M.Com 4th (MOR) (2007-2009)
M.com 4th Morning
1 --
Prime Off-seasonal Vegetables Farming
Group# 6
TO OUR
PARENTS &
TEACHERS My kind Teacher Sir Javeed Iqbal By virtue of who’s Prayers, We have been able to reach at this position and whose hands always rose for prayers and wellbeing. We feel proud by having guide ling from our teacher Sir Javeed Iqbal We cannot forget their cooperation and sacrifices.
We pay our humble gratitude, with humility and submission, to ALLAH, the Almighty, the Omniscient, the Omnipotent & the Omnipresent, who bestowed our potential to accomplish this task. M.com 4th Morning
2 --
Prime Off-seasonal Vegetables Farming
Group# 6
The completion of this issue is, mere, the blessing of ALLAH and Holy Prophet Hazrat Muhammad (Saw). We feel honor to express my sincere gratitude to Sir Javeed Iqbal for this supervision, guidance and encouragement throughout this project. We always found him very much alive, full of zeal, vitality and intellectual curiosity. With out him ideas, remarks and endless interest out and completed and thanks to all teachers.
Ch:N o 1
Introduction
5
2
Executive Summary
6
3
SWOT Analysis
12
Contents
M.com 4th Morning
Page #
3 --
Prime Off-seasonal Vegetables Farming
Group# 6
4
Market Analysis
14
5
Technical Analysis
16
6
Personnel Analysis
24
7
Financial Analysis
25
8
Financial Ratio
9
Conclusion
10
Reference
Chapter
1 Introduction Agriculture sector is the backbone of Pakistan’s economy employing 44 % of the work force and contributing 25% towards GDP. Nature has blessed our country with an ideal land and different climate for growing variety of vegetables. Agriculture is still the mainstay of the economy. The geographical location provides a large variety of agricultural crops, which are used, for food and as well as a raw material for processing industry. Vegetables grown in Pakistan are unique in taste, aroma and almost organic as very low quantity of chemicals is being used in their production. Moreover, these are not genetically modified. M.com 4th Morning
4 --
Prime Off-seasonal Vegetables Farming
Group# 6
Vegetables are rich source of vitamins, carbohydrates, salts and proteins. The farmers do not get reasonable price of their production in normal vegetable season mainly due to abundance/flooded supply, which result in financial loss or low profitability to them. In order to control/handle the situation properly, growing of vegetables in off-season is recommended to tackle the standing problem being faced by the farmers and ensure reward for their hard work & investment in the shape of profits. With increased health awareness in the general public and changing dietary patterns, vegetables are now becoming an integral part of average household’s daily meals. In addition, high population growth rate has also given rise to high demand in basic dietary vegetables. Increased health awareness, high population growth rate, changing dietary patterns of increasingly affluent middle class and availability of packaged vegetables, has therefore generated a year round high demand for vegetables in the country in general and in major city centers in particular. However, our farmers have yet not been able to encash this opportunity and still follow traditional sowing and picking patterns. This results in highly volatile vegetable supply market wherein the market is flooded with seasonal vegetables irrespective of demand presence on one hand and very high priced vegetables in off-season on the other. Lack of developed vegetable processing and storage facility robs our farmers from their due share of profit margins. In natural season local vegetables flood the markets substantially bringing down the prices. In the absence of storage infrastructure and vegetable processing industry in the country, off-season vegetables farming is the only viable option that can add value to the farmer produce. The term plasticulture is used to describe the broad and general use of plastics in agriculture. Plasticulture can extend the growing season and improve crop health and growth.
Chapter
2 Executive Summery The proposed project is designed as a medium size Farming Unit spread over a land parcel of 25 acres capable to cultivate various offseason vegetables, such as, tomatoes, chili, Cucumber, Bottle Gourd, Bitter Gourd, Ladyfinger and Vegetable Morrow The land can also be utilized for growing seasonal vegetables like Potato, Carrot, Onion, Garlic and Cabbage etc. in the other idle period.
M.com 4th Morning
5 --
Prime Off-seasonal Vegetables Farming
Group# 6
The estimated production capacity of the project is 2,200 tons per annum of various vegetables at 100% capacity. The proposed project can bring green revolution in the Agri Sector by producing and making available vegetables in the seasons other than their normal ones. There is a huge demand for fresh off-season vegetables in the local as well as international markets, which include Europe, Middle East, U. K, Far East etc. and help in earning valuable foreign exchange for the country. The Government of Pakistan is also emphasizing for the increase in production of vegetable and offering loans to the growers, in order to boost the production of Agricultural Sector.
Name of company: Prime Off-seasonal vegetable Farm Address: Location:
Jhangi Wala Bahawalpur
Product Rang:
3
Products:
M.com 4th Morning
6 --
Prime Off-seasonal Vegetables Farming
Group# 6
M.com 4th Morning
7 --
Prime Off-seasonal Vegetables Farming
Group# 6
M.com 4th Morning
8 --
Prime Off-seasonal Vegetables Farming
Group# 6
Installed Capacity: The estimated production capacity of the project of various vegetables is at 100% capacity.
Capacity Achieved (At different level) In first year we achieved 70% in 2nd year 80% in 3rd year 90% in 4th year 100% and in 5th year also 100%.
Estimation cost of project:
Fixed cost Initial Fixed Working Capital Rs.685000 Total
Means of finance Debt (40%) Equity (60%) Total (100%)
Rs.16, 468,312 Rs.17, 153,312
Rs.6, 861,324.67 Rs.10, 291,987 Rs.17, 153,312
Name of Sponsors/directors: i. ii. iii.
Shahzad Mustaq Atif Ali Khuram Shahzad
35% 35% 30%
Name of civil Contractors: i.
Asad ali
Implementation Schedule: S.N Activities o 1 2 3 4 5
Engineering studies and designing of civil works: Order for Local Machinery: Arrival of local machinery at site Construction of building and civil work: Order for Raw Materials
Month
1. Start 2. Complete
1. Start 2. Complete
M.com 4th Morning
Year
Novembe r
2009
Novembe r December December
2009 2009
Novembe r December December
2009 2009
2009
2009
9 --
Prime Off-seasonal Vegetables Farming 6
Group# 6
Start of commercial Production
April
2010
Name of financers ZARI TARAQIATI BANK(ZTBL)
Financial Summary: Net Profit Margin Debt/Equity Ratio Current Ratio IRR Payback period
17.8% 32% 2.86:1
OPPORTUNITY RATIONALE The year around increasing demand for vegetables in the country is evident from the following aspects:• • • • • •
Natural environment for vegetables growing. Increase in population at a rate more than 2% Increase in per capita income by 2 to 5%. Patronage by Ministry for Health regarding creation of habit for vegetable eating in order to maintain healthy food balance. Availability of cheap labor, and Lower cost of production as compared to other countries.
The above factors depict that there is a great potential for marketing off-season vegetables in the local market at a threefold higher price as compared to price in the normal season. The production of off–season vegetables also provides opportunities for exports. With the induction of an artificial technique for cultivating vegetables in off-season through tunnel technology by controlling temperature and moisture to the extent required for specific growth and grow vegetables in off season as against their normal production time. Resultantly, an investor can earn more than Rs.100, 000 per acre per annum and multiply his/her income. The production of vegetables all around the year has a great charm for the growers to fully utilize the resources and supplement income from vegetables growing as compared to other normal agricultural crops.
VIABLE ECONOMIC SIZE
M.com 4th Morning
10 --
Prime Off-seasonal Vegetables Farming
Group# 6
The project is recommended on a land holding of 10 acres as an economic size, however, the other land holding capacity of 50, 75 or 100 acres also represent good investment opportunity.
PROJECT COST Rs.17,
153,312
IMPACT OF FERTILIZER ON PRODUCTION Three types of fertilizers i.e. Nitrogen, Phosphorus and Potash are required for proper growth of plant. If only Nitrogen is used, the plant growth will be one time. If Nitrogen and Phosphorus fertilizers are used, the plant growth will be two times and in case of use of Nitrogen, Phosphorus and Potash fertilizer, the plant growth will be threefold. With the use of balanced fertilizer quantity, the plant growth extensively as is evident from the diagram shown below: Impact of fertilizer on productivity and growth
M.com 4th Morning
11 --
Prime Off-seasonal Vegetables Farming
Group# 6
Chapter
3 SWOT Analysis Off-season vegetables Strengths Off-season vegetables have various strengths and they are as follows: • • • • • • • •
adoption of different methods of off-season production, government policy supportive to off-season vegetable production, abundance of suitable and potential microclimatic pockets, cooperative marketing system in the developing process, women contributing equally in marketing activities, grading gradually being introduced, such as tomatoes are graded into two grades (small and big ones), cucumber grown in hill are found competitive in the domestic market due to its appealing taste, farmers becoming more aware about the domestic market potentials, Farmers started establishing linkages with the wholesalers and retailers in the local markets etc.
Weakness The weaknesses of off-season vegetables are as follows: • •
lack of year round irrigation, lack of all season agricultural roads, lack of access to inputs and credits,
M.com 4th Morning
12 --
Prime Off-seasonal Vegetables Farming • • • • • • • •
Group# 6
inadequacy of internally grown high quality seeds of suitable varieties, lack of continuous support of improved technologies, inefficiency of farmers on production techniques, unavailability of proper packaging materials no access to market information systems, farmers not aware about tomato processing technology, unorganized market centers at the production areas, Lack of marketing education, marketing extension system and farmers more often becoming lesser in price determination process.
Opportunities Opportunities are as follows: • • • • • • •
increasing demand of off-season vegetables in the domestic markets, possibility of export market to different countries, climatic suitability of hills to produce some unique vegetables with specific taste and quality, production potentials of cauliflower, tomato and beans in the early winter months, government's provisions include various facilities such as technically capable agriculture extension department, research agency to deliver services to the farmers, presence/availability of exporters and various stakeholders, availability of commerce and trade related department to provide facilities and advise to the exporters/traders, availability of the technical institutions related to processing and packaging technology , availability of plastic crates in the market, Existing opportunities to trade at local regional and global levels and government liberal policy support in providing more open export markets to the farmers/traders.
Threats Threats of these commodities include: • • •
Crop failure in any year Effect of change in the government regulation. Absence of crop insurance
M.com 4th Morning
13 --
Prime Off-seasonal Vegetables Farming
Group# 6
Chapter
4 Market Analysis Pakistan is a land of many splendors and opportunities. It ranks as ninth most populous country of the World with 141 million tough, conscientious, hard working and devoted people representing a huge consumer market. Pakistan is, spread over a landmass of 796,095 square kilometers offering vast, relatively cheap land for farming. Pakistan is a federation of four provinces i.e., Punjab, Sindh, NWFP and Balochistan. In addition to the broad based local market for consumption of vegetables, the markets of Afghanistan and those of the Central Asian Republics & Middle East can be effectively and conveniently catered from Pakistan. DISTRIBUTION CHANNELS
M.com 4th Morning
14 --
Prime Off-seasonal Vegetables Farming
Group# 6
Vegetable
Land Utilization (Acres)
Production Quantity (Kgs) Acre
Total Production Quantity (Kgs)
Sale Price Rs (Kg )
Cucumber Chili Cotton
6 4 10
480000 16000 1000
2880000 64000 10000
25 38 50
The final product will directly supply to the wholesaler eliminating role of intermediaries. Distribution network of product is illustrated below:
Expected Production and Sale price
Expected production and sale price of some vegetable is given in Table below: Production of various vegetables during the year 2005-06
M.com 4th Morning
15 --
Prime Off-seasonal Vegetables Farming
Group# 6
Chapter
5 TECHNICAL ANALYSIS PROCESS FLOW:
M.com 4th Morning
16 --
Prime Off-seasonal Vegetables Farming
Group# 6
TOTAL FLOW SYSTEM: • • • • • • • • • • •
Sowing of seeds in a separate plot of land for Nursery. Preparation of seed beds in the land for cultivation of vegetables. Using fertilizer in the soil to maintain its fertility. Re-plantation of nursery in the soil or sowing of seeds directly in the soil. Maintaining level of moisture in the soil. Protection from the pests, diseases and other wild growths by using pesticides/sprays of chemicals and training & trimming. Using fertilizer of different varieties for the smooth growth of plantation. Picking/harvesting at various times as per nature/requirement of the plantation. Grading of crop on the basis of quality and other standards. Application of post harvesting technology for seasoning, packing and storing the vegetables in order to fetch the maximum price. Transportation to the sale points in local or export markets for its onward disposal.
Plantation & Growth Essentials There are 15 essential requirements for healthy growth of a plant. The requirement and their respective sources are provided in the following table:
M.com 4th Morning
17 --
Prime Off-seasonal Vegetables Farming
Group# 6
Fertilizers on Production Using fertilizers containing Nitrogen, Phosphorus and Potash the yield of the crop can be maximized. Appropriate quality and quantity of fertilizer plays a great role in the production and quality of vegetables Off-season cultivation methods There are number of ways and methods to cultivate vegetables in off-seasons. Some of the methods are explained as under: Natural method by selection of appropriate area The off-season vegetables are grown in the areas where the climatic conditions are moderate for both normal as well as for off-seasons. Winter vegetables are grown in summer on hilly/semi hilly areas where climatic conditions are favorable for a particular vegetable. Like wise summer vegetables are grown in winter season in the valleys and across the sea areas. The production cost of vegetables under above conditions is very high due to transportation of crop to the markets. Moreover, the transportation of crop over long distance markets causes post-harvest losses. These drawbacks lead to the adoption of artificial methods of cultivation in off-season, nearer to markets to tackle heavy transportation cost and to reduce post-harvest losses. Artificial Methods Vegetables can be grown in off-season through artificial methods; the details of these methods are given below: Growing Beneath the Sarkanda3 This is an old method and is usually adopted near the big cities. The main vegetables grown under this method are tomato, chili, cucumber, and bottle gourd. The nursery of these vegetables is planted in October/November and a wall of Sarkanda is affixed in the direction of North South, which protect plant from cold winds and mist. This method of cultivation is not beneficial because the growth of the plant tends to be slow, as the plant does not receive required sunshine and desired humidity. Building of Green Houses
M.com 4th Morning
18 --
Prime Off-seasonal Vegetables Farming
Group# 6
Through building green houses, the sunshine intensity is controlled. The vegetables under this method are grown mostly in the winter season. Here the temperature, humidity, carbon dioxide, ventilation of air and irrigation etc. is controlled. Green houses can be built of plain glass or of fiberglass material. The main drawback in the usage of this method is heavy capital cost. Plastic Tunnel Cultivation by this method is gaining popularity because of low cost and easy usage. Plastic tunnels are transparent which provides required sunshine to the plants, and the plastic also plays a barrier against the cool air in winter. Structures Various types of structures are available to lengthen the growing season for the crop and improve overall crop health and quality. The following are just a few of the structures available, such as high tunnels, low tunnels, walk-in tunnels, and greenhouses. Structures that are used for winter production must be able to withstand heavy rainfall, snow, and wind. Structures that are used for summer production must have good ventilation. Many structures may not be suitable for year-round production. In the construction of tunnel the major materials involved are mild steel bars and plastic sheets. Plastic sheets are used for roof covering of the tunnel shaped construction, which is built with steel bars. Bamboo lengths can also be used in some proportion with the mild steel bars. Plastic sheet is to be spread in such a manner that it enables the stoppage of cold air from outside. The tunnel construction offers maximum crop yield, better maintenance of the fertility of land, controlled temperature and humidity, protection from wild animals and insects and better water conservation. There are three types of tunnels, known as high, low and walk-in tunnels. Low Tunnel It is cheaper than high tunnel but creates difficulty for soil preparation, spraying and picking. The tunnels are suitable for cucumber sown flat bed, melons, watermelons, bitter gourds, squashes, and snake gourds etc. The crop yield in this type of tunnel is however low compared to high tunnels.
M.com 4th Morning
19 --
Prime Off-seasonal Vegetables Farming
Group# 6
Walk-in Tunnels Walk-in tunnels are lower than the high tunnels but they are gaining popularity as they provide high yield compared to low tunnels. The tunnel is suitable for growing tomatoes, cucumbers, sweet pepper and hot pepper. High Tunnel High tunnel facilitates easy access for soil preparation, picking and spraying due to its width and height. The crop yield is maximum in this type of tunnel. The tunnel is suitable for growing tomatoes, cucumbers and sweet peppers.
M.com 4th Morning
20 --
Prime Off-seasonal Vegetables Farming
Group# 6
Recommended Tunnel Cultivation is recommended with the use of high tunnels on the basis of its high production capacity. All the calculations are done on the basis of high tunnel technology. The specification of high tunnel is given in the following table: Dimensions of High Tunnel:
The cost of such tunnel amount to Rs.85, 000 excluding the cost related to plastic used as a shield (Cover) and mulch.
M.com 4th Morning
21 --
Prime Off-seasonal Vegetables Farming
Group# 6
PLANT & MACHINERY Following plant and machinery is required for an off-season vegetable farm of 10 Acres: Rotavator Soil Leveler/ Scraper Spray Machines & Farm Tools Tractor & Cultivator Planter Other farm equipments MATERIAL AVAILABILITY: 1. Tunnel material like MS bar, Plastic Sheet, Iron Wire, Bamboo, \is available locally from different suppliers 2. Seed suppliers like Agriculture Department and Punjab Seed Corporation are the major suppliers of hybrid seed 3. Fertilizers of all varieties are available locally 4. Pesticides of different nature are also available locally 5. Water is available from canal or can be had from tube well installed by the farmer
M.com 4th Morning
22 --
Prime Off-seasonal Vegetables Farming
Group# 6
Utilities Required 1. 2. 3. 4.
Electricity Diesel (for tube well operations) Water Telephone/Fax
SOWING & PICKING PERIOD IN NORMAL SEASON: Table: Sowing and Picking period of certain vegetables
Vegetables
Sowing Period
Cultivation/Picking Period
Cucumber (Khera) Chili (Mirch) Cotton (Kapas)
February & March
April to July
February & March
April to July
April
October
M.com 4th Morning
23 --
Prime Off-seasonal Vegetables Farming
Group# 6
Photos during Visits
M.com 4th Morning
24 --
Prime Off-seasonal Vegetables Farming
Group# 6
Chapter
6 Personnel Analysis HUMAN RESOURCE REQUIREMENT The Human resources at farm are depicted below in tabular form.
Human Resources Category
General Manager Technical Manager skilled labor un skilled labor TOTAL
Nos
Salary per Month(Rs .)
Annual Cost
1
40,000
480,000
1 5
35,000 8,000
420,000 480,000
5,000
600,000 1,980,000
10
M.com 4th Morning
25 --
Prime Off-seasonal Vegetables Farming
Group# 6
Chapter
7 Financial Analysis
M.com 4th Morning
26 --
Prime Off-seasonal Vegetables Farming
Group# 6
Chapter
8 Ration Analysis: Profitability Rations Net Profit Margin Gross Profit Margin Operating Profit Margin
Year 1 17.8%
Year 2 22.8%
Year 3 27%
Year 4 30.4%
Year 5 28%
47.5%
40.8%
42%
42.3%
39%
38.7%
32.3%
33.7%
34%
30%
Liquidity: Rations Current Ratio Quick Ratio A/c Receivable Turnover Inventory Turnover Days Sale’s in inventory Days Sale in A/C Receivable
Year 1 2.86 .59 5
Year 2 1.44 .24 5
Year 3 1.03 .08 5
8.9 41
10.51 34.7
9.85 37
73
73
73
Debt Ratio: Ratios
Year 1
Year 2
Debt/Equity Ratio
32%
25%
M.com 4th Morning
27 --
Prime Off-seasonal Vegetables Farming
Group# 6
Conclusion Pakistan has an abundance of fresh vegetables and cheap labor. During the production season, prices of vegetables are very low. For example, one kg fresh spinach was sold nnnn The institutional market for off season vegetables is huge and growing. Middle East and Far East countries offer many opportunities to Pakistani exporters of off season vegetables. Off season vegetable line does not require very heavy investment. Include tunnels material, all other equipments can be made locally. The approximate cost of tunnels in an acre is Rs.100000 which can provide 1200 mun cucumber in an acre... The capacity of a tunnel is very important as it is the main component of the off seasonal farming process. This is an excellent time to enter into off season vegetables market. Local market is developing rapidly and demands for off season food is increasing due to growing population. To satisfy the growing demand, many farmers enter into this market. The main purpose to enter into this project is to provide fresh vegetables for the people of Pakistan in off season. And other aspect of this project is to get huge profit because off season vegetables provide good profit for the investor. In this project we chose two vegetables i.e. cucumber and shimla mirch and a crop i.e. cotton for cultivate in 10 acre. The importance of this project is that to grow the off-seasonal vegetable and to provide the fresh vegetable whole the year.
References 1. Sir Javeed Iqbal 2. Project management by Persana Chandra 3. www.smeda.org.pk 4. www.google.com 5. www.yahoo.com
M.com 4th Morning
28 --
