Jimma Univerrsity: Assignment of Business Plan Development

Assignment of Business Plan Development
JIMMA UNIVERRSITY
COLLEGE OF AGRICULTURE & VETERINARY MEDICINE
Department of Agri Business and Value Chain Management
Course: Investment Analysis and Business Plan Development
Program: Agribusiness and Value Chain Management
By
Sadam A/Gojam
ID.№ WM0317/10
Project title: Vegetable Production Project in Gomma Woreda Bore Dinsera Kebele by the
year 2019 E.C.
Submitted to instructor: - Submitted to: Amsalu Mitiku (Associate Prof)
Date of Submission: -July , 2019
July , 2019
Jimma, Ethiopia
[Type text] Page I

Table of Contents
Contents Page
Table of Contents............................................................................................................................I
LIST OF TABLES.......................................................................................................................III
Executive summary.......................................................................................................................III
1 INTRODUCTION......................................................................................................................1
1.1 Description of the Project goals.............................................................................................2
1.2 Objectives of the project........................................................................................................3
1.2.1 The general objective the project....................................................................................3
1.2.2Objectives of the project...................................................................................................3
3 Project justification /rational of the project.............................................................................3
4 Location of the project or the project area..............................................................................4
5 Project activities and strategies.................................................................................................4
6 Expected outcomes of the project..............................................................................................5
7 Market potential and opportunities..........................................................................................5
8 Market trends analysis...............................................................................................................5
9 Pricing..........................................................................................................................................6
10 Environmental impact..............................................................................................................7
11 Compatibility to government policies.....................................................................................7
12 Assumption and risks...............................................................................................................7
13 Project cost summary...............................................................................................................7
13.1 Project economics..................................................................................................................7
14 Project financing.......................................................................................................................8
15 Target group and project beneficiaries..................................................................................8
16 Capital investment cost............................................................................................................9
17 Farm operational cost...............................................................................................................9
17 First term production cost of input.......................................................................................10
19 Human resource requirement...............................................................................................11
20 Total Production Capacity of the project.............................................................................11
21 First term Production sales of the project............................................................................12
22 Total expected production and the total sales of product...................................................13
[Type text] Page I

23 Vegetable production volume and sales................................................................................14

24 Project cash flow statement...................................................................................................16
25 Measure of project worthiness..............................................................................................17
26 Internal rate of return of the project....................................................................................18
27 Conclusion..............................................................................................................................19
Submitted to: Amsalu Mitiku (Associate Prof) July, 2019 Page II

LIST OF TABLES
Tables Page
Table 1: project activities and seasons.............................................................................................5
Table 2: Market trends analysis........................................................................................................6
Table 3: Total physical investment and financial source.................................................................8
Table 4:Total capital investment cost..............................................................................................9
Table 5:Total farm operational cost.................................................................................................9
Table 6:First term production fertilizer requirement.....................................................................10
Table 7:Total production cost of input..........................................................................................10
Table 8: Human resource requirement..........................................................................................11
Table 9:Total Production Capacity of the project..........................................................................12
Table 10:First term Production sales of the project.......................................................................12
Table 11: Total expected Production and the total sales of product..............................................12
Table 12 : Financial analysis.........................................................................................................14
Table 13: The project cash flow statement....................................................................................16
Table 14 : Measures of project worthiness....................................................................................17
Table 15: Internal rate of return of the project..............................................................................18
Executive summary
Submitted to: Amsalu Mitiku (Associate Prof) July, 2019 Page III
Vegetables are daily food requirements for balanced diet and a good source of vitamins, proteins,
essential nutrients and carbohydrates. Due to lack of advanced production technology of
vegetables and lack of suitable condition, youths are limited to grow seasonal vegetables through
the year and they are dependent on rain fed production mechanism and low supply so they could
not get good prices to sustain vegetable business. Due to presence of negligible number of
vegetable processors and lack of cold storage infrastructure, youths could not get the reasonable
profit margins by selling their produce at the time when market is flooded with seasonal
vegetables. Summer vegetables are susceptible to insects, pests and diseases that can be grown in
winter by well-established production technology of vegetable through modern irrigation. This
enables the youths to produce vegetables three times the year by using irrigation. The off-season
vegetable project modern irrigation technology on area of 3/three/ hectors land needs a capital
investment estimated at 99,200.00 Birr for purchasing machinery and equipment, Working
capital at 39,690.00 Birr and In addition to this a sum of 96,825.00 Birr is required as
Operational Expenses, which would be used for purchasing of seeds, fertilizers and pesticides
etc. The total project investment requirement is estimated at approximately Birr 235,715.00. The
project will create employment opportunities for 10 youth members’ individuals and 15 daily
laborers, one guard and one agronomist total of 27 individual will get employment opportunity.
And the project will provide steady and secure income for dairy producers (out-growers). The
project is financially viable. The project NPV & BCR shows that its acceptability and
Profitability. Thus, investing on vegetable production in Ethiopia is a profitable business for the
investors
Submitted to: Amsalu Mitiku (Associate Prof) July, 2019 Page IV

1. INTRODUCTION
Vegetables are very significant sources of vitamins, fiber, minerals, anti-oxidant and plant
proteins in human diet which are useful for normal functioning of body systems and prevention
of cancer (Knavel, D.E. and J.W. Herron, 1981). Vegetable cultivation is becoming more costly
due to the increasing use of purchased inputs such as pesticides and fertilizers to sustain
production levels (Muhammad, S., 2011).In Ethiopia, cabbage (Brassica oleracea var. capitata)
ranks 5thin total area coverage (7,197.70 ha) after red pepper, Ethiopian cabbage, tomato and
green pepper and ranks 4th in production after Ethiopian cabbage, tomato and green pepper from
vegetable crops cultivated.
However, the mean yield of cabbage in southern region is 5.473 t ha which less than national
mean yield of 6.435 t is ha. In spite of its wide production and utilization, the optimum
production of cabbage has not been attained in the country, which partly attributed by sub-
optimal application of fertilizers due to the high cost of synthetic fertilizers. This high cost of
chemical fertilizers (DAP and Urea) enforced farmers to stick to the application of sub-optimal
rate of on average 14.7 kg ha, which is far below the world average of 82.4 kg ha. Moreover, this
rate deviates much from the nationally recommended rate of 200 kg ha DAP and 100 kg ha urea.
Cabbage (Brassica oleracea L. var. capitata) is an important and nutritious leafy vegetable for
winter season in Bangladesh. It is identified as one of the top twenty vegetables as well as an
important source of food globally (FAO, 1988). Nutritionally, it contains vitamin A, B, C, E, and
mineral such as iron, potassium, zinc, etc. Edible fiber content is significantly high in cabbage. In
addition, the various other nutrients present in cabbage such as protein, manganese, folate,
thiamin (vitamin B1), riboflavin (vitamin B2), omega-3 fatty acids, calcium, magnesium,
potassium, etc., are very useful and blended 250 mL of raw cabbage contains 21 kilocalories
whereas cooked contains 58 kilocalories(Haque, 2006).
Tomato (Lycopersicon esculentum Mill.) is one of the most widely grown vegetable crops in the
world, second to potato. It originally came from tropical area from Mexico to Peru (Maerere et
al., 2006; FAO, 2005). It is one of the most important vegetable in Ethiopia as well as in the
world in irrigated regions. It can be produced in a wide range of climatic conditions and many
types of soils.
Submitted to: Amsalu Mitiku (Associate Prof) July, 2019 Page 1

The importance of cultivated tomato to date is increasing in Ethiopia. It is widely accepted and
commonly used in a variety of dishes as raw, cooked or processed products more than any other
vegetables (Lemma, 2002, as cited on Abay, 2007).
Green Pepper (Capsicum sp.) is one of the most varied and widely used foods in the world.
From the various colors to the various tastes, peppers are an important spice commodity and an
integral part of many cuisines.
To grow vegetables in unfavorable weather conditions is called “growing off-season vegetables”.

Human nature ever wishes to get those things that are scarce. Off-season vegetables and fruits
are sold at high prices in the market. Vegetables are rich source of vitamins, carbohydrates, salts
and proteins. High population growth rate has 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 get benefited from this
opportunity and still using traditional methods.
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 farmers produce.
1.1 Description of the Project goals
The goal of this project is engage the youth to provide ecologically clean vegetables and fruits to
their communities while raising a reasonable income for themselves during off season. In order
to reach this goal we want to create an off season vegetable farm run by 10 youth as way to
demonstrate and encourage other youth to get involved in off season vegetable growing.

1.2 Objectives of the project
1.2.1 The general objective the project
Project proposal of Youth off season vegetable production Project in Gomma

woreda by the year 2019EC.
1.2.2Objectives of the project

 To create employment opportunity for youths in the project
 To increase vegetable product and productivity
 To increase the Gross domestic Product (GDP) of the country
 To introduce modern farming techniques to the local community
 To improve the quality of food produced and nutritional security
3. Project justification /rational of the project

The proposed project will be designed as a medium size off-season vegetable farming unit,
spreading over a land area of 3 hectares. Off-season vegetables, such as, cabbage tomatoes, green
pepper and will be cultivated using irrigation. For this project there will be a mix of vegetables
mentioned above. There is a huge demand for fresh vegetables in the local markets, the most
attractive opportunity available is the presence of Jimma university were the major consumer
and also there are supermarkets, traders & wholesale distributors but due to their perishable
nature it is difficult to export this commodity. The facility of growing off-season vegetables also
allows for growing non-conventional varieties and vegetables, which are in high demand in the
international market. The importance of vegetables cannot be denied due to their nutritional
value as these provide proteins, carbohydrates & salts that are essential ingredients for the
growth of human body. Vegetables are used in raw form as salad or cooked food according to the
taste, which provide a balanced diet and keep human being healthy. A large number of world
population now prefer vegetables in their daily diet due to the awareness that vegetables provide
better source of energy and nourishment to the body. Off-season cultivation of high value
vegetables will fetch better price for the youth and provide continuous supply to the consumers.
Higher prices can be obtained by producing the right crops, at the right times and of better

quality. They may also depend on negotiating skills and targeting high price buyers by the youth.
The project also creates job opportunity for those newly graduate.
4 Location of the project or the project area

The proposed project will be located in Jimma Zone Gomma District South east
Ethiopia Bore Dinsera kebele were there is modern irrigation canals that available through the
year. The project is farm vegetables in the off season when the prices are high. The project area
climatic condition were suitable for vegetable production and the economic condition of the
community were based on agriculture and petty trade, also there were good institutional structure
as well as infrastructure like road, electricity and irrigation water. Water Conservation and use of
irrigation system during the dry season will be of great advantage. The product will be farm fresh
vegetables, such as tomatoes, Cabbage and green pepper by the youth of Jimma Zone Gomma
District.
5. Project activities and strategies

Land preparation, Sowing of nursery, direct sowing and Transplanting Period of Off-season
Vegetables production activities can be done in three consecutive seasons starting from august
which is land preparation and September, October, and November one term, December will be
land preparation and also 1st term product marketing.
From January, February and march will be the 2nd term of production and April will be land
preparation season and also product marketing month and may, June and July will be the last
term of the project and august will be the marketing of the product and the end of project year.in
generally the project produces product three time in one year by using irrigation water in the
project area through the whole year.
Following table show that the activities used to manufacture products and activities are land
preparation, sowing and transplanting period of selected off-season vegetables.

Table 1: project activities and seasons
Activities Month Term one Term two Term three
Land preparation, 1-15 August Sep, Oct& Nov Jan, Feb& march May, June & July
Sowing of nursery December will be April will be August will be
&direct sowing product product product
harvesting& harvesting harvesting&
marketing marketing marketing
6 Expected outcomes of the project

 It improves economic status of the youths
 Create job opportunity for those youth
 support and provide the district with off seasons vegetables
 Raise and improve income for the youth
 More youth getting involved in offseason vegetable growing
 Vegetables in the food basket of the local communities increased
7. Market potential and opportunities

There is great demand of vegetables all year round and the price is high at the start of the season
and at the end of the season. There were a great market potential in the project area which
includes Jimma university, were the major product receiver and also restaurants, hotels, whole
sellers and retailers were the opportunity for the project. If off season vegetables are grown,
high prices can be fetched. Vegetables can be cultivated in off-season, with the induction of
better irrigation system and water conservation. The productions of vegetables all around the
year will enable the youth fully utilize their resources and supplement their income from off
season vegetable growing.
8. Market trends analysis

The potential consumers for the product of the project include supermarkets, traders, wholesale
and consumer’s consumption trends increase from time to time due to its significant sources of

vitamins, fiber, minerals, and anti-oxidant and plant proteins in human diet which are useful for
normal functioning of body systems and prevention of cancer.
Table 2: Market trends analysis

Vegetables types 2009 EC. 2010 EC. 2011 EC.
Unit Average Average Average

Price/Kg Price/Kg Price/Kg
Cabbage No- 7 9 11
Tomato Kg 14 16 18
Green pepper Kg 17 19 21
In the above table the price of vegetable increases from time to time, this show that there is
imbalance between demand and supply. When the price of goods increase due to shortage of
supply and the demand increase with respective price goods increase.
9. Pricing
The current market gate price of vegetables is rising due to rapid growing of population with
high demand with respective price. The price of 1 kg tomato is 20 Birr, 1kg of green pepper is 25
Birr and 1 quintal of cabbage is 300 Birr and the prices are the average of the year depending on
the seasons it may fluctuate during winter and summer.
Distribution of the products could be undertaken through direct sending of product for Jimma
University, restaurants, small retail outlets as well as large wholesalers and catering
establishments. The product can be distributed by establishing their own transport they come and
take the product from place of production with some discount price which attracts them. The
delivery system helps to avoid unnecessary price increment which will affect the purchasing
power of customers.
The price of the product in the market is an important factor influencing consumer demand.
Hence to be marketable, a vegetable product must be competitively priced. This implies that the

costs involved in production, packaging, marketing and distribution must be kept as low as
possible.
10 Environmental impact
Most agricultural practices has their own environmental impact due to the application of
different chemicals like fertilizers, pesticides and other chemicals which affects the soil fertilities
as well as impact other crops near to the project. However the project were designed by
considering those issues in to account to minimize adverse effect of the project up on
environment and the near farm of the community as well. By considering such problem the
project production process special the pest management process can be done through man power
that means rather than using chemicals which decrease the adverse effect of project up on
environment and the societies, thus, the envisaged project is environment friendly.
11 Compatibility to government policies

This project is in line with the food security strategy, nutritional security strategies and
agriculture led- industrialization and sustainable development and poverty reduction program of
Ethiopia. It also in line with the current concern that focuses youth employment creation and
attracts the society towards self-help through increasing their income base.
12 Assumption and risks

This project will have expected some risks, which include a serious drought and disease outbreak
during summer season in which different disease outbreak may appear and pests may attack
vegetable.
13 Project cost summary

13.1 Project economics
The source of project finance will be world vision Gomma area development program
provide 141,426.00 birr which is 60% of the project finance including farm materials and the
youth members by themselves about 94,286.00 birr which is 40% of the total investment and the
total of 235,715.00 birr were required. The total land of the project will be 3 hectares which get

permission from woreda agricultural office for the development of vegetable production by those
youth members by using modern irrigation available in the farm area.
14 Project financing
Table 3: Total physical investment and financial source
Investment Own capital (40 %) Fund (60%)

Total physical asset 99,200.00 39,680.00 59,520.00
investment
Working capital 39,690.00 15,876.00 23,814.00
Operational 96,825.00 38,730.00 58,095.00

Expenses
Total 235,715.00 94,286.00 141,429.00
15 Target group and project beneficiaries
The direct project beneficiaries would be the communities around where the project is taking
place and the youths that are interested in learning modern way of farming. This project will also
benefit the jobless since it will provide job opportunities in the society and also those who were
working in the area of trade, restaurants, and the project area smallholder farmers who were
interested in vegetable production benefits from the project.

Table 4: Total capital investment cost
16 Capital investment cost

Items Unit Qty Unit price Total price
Oxen No_ 4 11500 46000
Motorized water No_ 2 7500 15000
pump
Knapsack No_ 1 700 700
Packaging materials 30000
Other farm 7500
equipment
Total investment cost 99,200
Table 5: Total farm operational cost
17 Farm operational cost

Farm input /seed Unit Qty/ha Unit price of kg Total price
Cabbage Kg 0.4 600 240
Tomato Kg 0.3 1000 300
Green pepper Kg 0.75 150 75
Total cost 615

17 First term production cost of input

Table 6: First term production fertilizer requirement
Fertilizer requirement for each vegetable per hector in the 1st term production season cost
Farm input Unit Qty/ha Unit Total Urea Unit Total Sum total
/seed DAP price price /ha price price price
Kg Birr Birr Birr
Cabbage Kg 200 14 2800 79 13 1027 3827
Tomato Kg 242 14 3388 100 13 1300 4688
Green Kg 200 14 2800 100 13 1300 4100
pepper
Chemicals Lit 18 500 3000 3000
Total cost 15,615
Table 7: Total production cost of input
18 Total production costs of inputs
Fertilizer requirement for each vegetable per hector in the 1 st, 2nd and 3rdconsecutive term
production season cost from September 2019 EC- August 2019 EC
Farm Unit Qty/h Unit price Total Urea Unit Total Sum Sum
input /seed a Kg price /ha price price total total cost
DAP Birr Birr Birr price *3
Cabbage Kg 200 14 2800 79 13 1027 3827 11481
Tomato Kg 242 14 3388 100 13 1300 4688 14064
Green Kg 200 14 2800 100 13 1300 4100 12300

pepper
Chemicals Lit 18 500 3000 3000 9000
The sum total of the three terms 46845

19 Human resource requirement
Table 8: Human resource requirement
Description Number Monthly salary per person Annual salary

Agronomist 1 3000 36000
Labor 15 75 birr/day in 15 days 16875*3= 50625

Guard 1 850 10200
Total salary 96,825

20 Total Production Capacity of the project

Table 9: Total Production Capacity of the project
Total Production Capacity of the project in the 1st term (from September to November
2019 Ec.)
Vegetables Total area Production Total Production
(3 hectare) Quantity in (kg)/ ha Quantity in three terms
Cabbage 1ha 700quintal*2%=14 2100 quintal/ha
Lose due to perishability 2% 700-14 =686*3 2058
Tomatoes 1ha 40,000 kg/ha *5%=2000 120,000 kg/ha
Lose due to perishability 5% 40,000-2000=38000*3 114000
Green paper 1ha 20,000 kg/ha*2%=400 60,000 kg/ha
Lose due to perishability 2% 20000-400=19600*3 58800
21 First term Production sales of the project

Table 10: First term Production sales of the project
Total Production sales of the project in the 1st term (from September to November 2019
Ec.)
Vegetables Total area Production of Unit price of Total sales in each
st
(3 hectare) 1 term kg/quintal/ha term
Cabbage 1ha 700 quintal 300 birr 210,000 birr
Lose due to perishability 2% 686 300 205800
Cost of lost good 14 300 4200
Tomatoes 1ha 40,000 kg/ha 20 birr 800,000 birr
Green paper 1ha 20,000 kg/ha 25 birr 500000 birr
Total sales of 1st term product in birr without lose 1,510,000 birr
Total sales of 1st term product after lose 1,455,800 birr
Total cost of lost good 54200 birr
Table 11: Total expected Production and the total sales of product
22 Total expected production and the total sales of product

Expected Production and the total sales of product in 1 st, 2nd and 3rd consecutive production
seasons from September 2019 EC -August 2019 in one production year.
Vegetable Land Production Production Unit Sale Price* Total sales of

Utilization Quantity (kg)/ Quantity (kg ) Birr in the year

(hectors) Hectare (kg)
Cabbage 1ha 700 quintal 2100 quintal/ha 300 630,000 birr
Lose due to perishability 2% of 42 300 12,600
2% 700=14*3
Cabbage product sales 686*3 2058 300 617,400
after lose
Tomatoes 1 ha 40,000 kg/ha 120,000 kg/ha 20 2,400,000 birr
Lose due to perishability 5% of 40000 6000 20 120,000
5% =2000*3
tomatoes’ product sales 38000*3 114000 20 2,280,000
after lose
Green pepper 1ha 20,000 kg/ha 60,000 kg/ha 25 1,500,000 birr
Lose due to perishability 2% of 20000= 1200 25 30,000
2% 400*3
Green paperproduct sales 19600*3 58800 25 1,470,000
after lose
Total sales of 1st ,2nd and 3rd product in birr 4,530,000 birr
Total Lose due to perishability 162,600
Total sales after lose 4,367,400
23 Vegetable production volume and sales

Table 12 : Financial analysis
FINANCIAL ANALYSIS
vegetables production volume and sales
PARTICULARS
Term 1 Term 2 from Term 3
from from
January
September – June
-November march –
August

PRODUCTION
VOLUME
VEGETABLE
PRODUCE
CABBAGE 700 700 700
TOMATO 40,000 40,000 40,000
GREEN PEPPER 20,000 20,000 20,000
VEGETABLE
LOSS
CABBAGE 14 14 14
TOMATO 2000 2000 2000
GREEN PEPPER 400 400 400
NET PRODUCT
AVAILABLE
CABBAGE 686 686 686
TOMATO 38,000 38,000 38,000
GREEN PEPPER 19,600 19,600 19,600
SALES
VOLUME

CABBAGE 686 686 686
TOMATO 38,000 38,000 38,000
GREEN PEPPER 19,600 19,600 19,600
SALES IN BIRR
CABBAGE 205800 205800 205800
TOMATO 760000 760000 760000
GREEN PEPPER 490000 490000 490000
TOTAL SALES 1,455,800 1,455,800 1,455,800 4,367,400
PRODUCTION 16230 16230 16230 48,690
COST

24. Project cash flow statement
Table 13: The project cash flow statement
Year 2019 E.C

Cash outflow(costs)
Term 0 Term 1 Term 2 Term 3 Total cost in
Sep-Nov Jan-march June-Aug & out flow
Investment cost 99,200

Operational costs
Cabbage’s inputs 4067 4067 4067
tomatoes’ inputs 4988 4988 4988
Green pepper 4175 4175 4175

Wage of labor 16875 16875 16875
Salary 12000 12000 12000
Guard 3400 3400 3400
Total cash outflow (costs) 99,200 45505 45505 45505 136,515
Cash inflows (benefits)
Cabbage sales 205800 205800 205800
Tomatoes sales 760000 760000 760000
Green pepper sales 490000 490000 490000
Total cash inflow (benefits) 1455800 1455800 1455800 4,367,400
Gross benefit before tax 1410295 1410295 1410295 4,230,885
Tax provision 15% 211544.25 211544.25 211544.25 634,632.75
Net benefit after tax 1198750.75 1198750.75 1198750.75 3,596,252.25

25. Measure of project worthiness
Table 14 : Measures of project worthiness
Year Investment Gross Cost Discount Present Gross Discount Present

(oper+prod.cost) factor Value(birr) Benefit(birr) factor Value(birr)
0 99,200 99,200 1.00 99200
1 45505 .833 37905.67 1410295 .833 1174776
2 45505 .694 31580.47 1410295 .694 978744.7
3 45505 .579 26347.4 1410295 .579 816560.8
Total 99,200 195,033.5 2,970,081
Net Present Value (NPV) and Benefit ratio (BCR) computation at 20% discount rate
Net Present Value (NPV)
NPV = Present value of gross benefit - Present value of gross cost
NPV1 = 2970081- 195033.5
NPV1 = 2,775,047.5
Interpretation: NPV1 is positive then project should be accepted and also the owner of the
project can continue working with the project, but if it is negative and blow it should be rejected.

Benefit- Cost Ratio (BCR)
BCR = 15.2
 The benefit cost ratio is greater than one. This implies that the project owners or the
project will recover the investment, based on this value it will be profitable
26 Internal rate of return of the project

Table 15: Internal rate of return of the project
Internal rate of return r-50%
Year Investmen Gross Cost Discoun Present Gross Discoun Present

t (oper+prod.cost t factor Value(birr Benefit(birr t factor Value(birr)
) ) )
0 99,200 99,200 1.00 99200
1 45505 0.657 29896.785 1410295 0.657 926563.815

2 45505 0.444 20204.22 1410295 0.444 626170.98
3 45505 0.298 13560.49 1410295 0.298 420267.91
Tota 99,200 162861.49 1973002.70
l 5 5
Net Present Value (NPV)

NPV = Present value of gross benefit - Present value of gross cost
NPV2 = 1973002.705- 162861.495
NPV2 = 1810141.21
Benefit- Cost Ratio (BCR)

BCR = 12.1
 Internal Rate of Return is the interest rate that makes the Net present value zero
IRR=R1+ (R2- R1) (NPV1/ NPV1+ NPV2)
IRR=R1+ (R2- R1)
IRR= 20% + (50% – 20%)
IRR= 20% + (50% – 20%)
IRR = 20% + 30 %( 0.6)

IRR = 0.38
IRR = 38%

27. Conclusion
Vegetables are daily food requirements for balanced diet and a good source of vitamins, proteins,
essential nutrients and carbohydrates. To grow vegetables in unfavorable weather conditions is
called “growing off-season vegetables”. Human nature ever wishes to get those things that are
scarce. Off-season vegetables and fruits are sold at high prices in the market. Vegetables are rich
source of vitamins, carbohydrates, salts and proteins.
High population growth rate has 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.
Investing in vegetable production in Ethiopia is a promising opportunity for vegetable related
activities when used appropriate improved variety and modern technology including modern
irrigation that enables investors to produce vegetables through the years and satisfy the demand
of the societies. Investing on vegetable production in Ethiopia is a profitable business since
financially viable with having a high internal rate of return. The vegetable investments could
increase capacity in vegetable product into a range of markets including export
A) Cabbage

Tomato

Reference
Haque K. 2006. Yield and nutritional quality of cabbage as affected by nitrogen and phosphorus
fertilization. Bangladesh J Sci Ind Res 41:41–46.
FAO. 1988. Production Year Book. Basic Data Unit, Statistics Division, Food and Agricultural
Organization of the United Nations. Rome, Italy. pp. 157-158.

Jimma Univerrsity: Assignment of Business Plan Development

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Jimma Univerrsity: Assignment of Business Plan Development

Uploaded by

Copyright:

Available Formats

Assignment of Business Plan Development

COLLEGE OF AGRICULTURE & VETERINARY MEDICINE

Department of Agri Business and Value Chain Management

Course: Investment Analysis and Business Plan Development

Program: Agribusiness and Value Chain Management

Assignment of Business Plan Development

Submitted to instructor: - Submitted to: Amsalu Mitiku (Associate Prof)

Date of Submission: -July , 2019

[Type text] Page I

[Type text] Page I

23 Vegetable production volume and sales................................................................................14

Submitted to: Amsalu Mitiku (Associate Prof) July, 2019 Page II

Submitted to: Amsalu Mitiku (Associate Prof) July, 2019 Page IV

Submitted to: Amsalu Mitiku (Associate Prof) July, 2019 Page 1

To grow vegetables in unfavorable weather conditions is called “growing off-season vegetables”.

1.1 Description of the Project goals

Submitted to: Amsalu Mitiku (Associate Prof) July, 2019 Page 2

1.2 Objectives of the project

1.2.1 The general objective the project

Project proposal of Youth off season vegetable production Project in Gomma

1.2.2Objectives of the project

3. Project justification /rational of the project

Submitted to: Amsalu Mitiku (Associate Prof) July, 2019 Page 3

4 Location of the project or the project area

5. Project activities and strategies

Submitted to: Amsalu Mitiku (Associate Prof) July, 2019 Page 4

Table 1: project activities and seasons

Activities Month Term one Term two Term three

6 Expected outcomes of the project

7. Market potential and opportunities

8. Market trends analysis

Submitted to: Amsalu Mitiku (Associate Prof) July, 2019 Page 5

Table 2: Market trends analysis

Unit Average Average Average

Submitted to: Amsalu Mitiku (Associate Prof) July, 2019 Page 6

11 Compatibility to government policies

12 Assumption and risks

13 Project cost summary

Submitted to: Amsalu Mitiku (Associate Prof) July, 2019 Page 7

Table 3: Total physical investment and financial source

Investment Own capital (40 %) Fund (60%)

Operational 96,825.00 38,730.00 58,095.00

15 Target group and project beneficiaries

Submitted to: Amsalu Mitiku (Associate Prof) July, 2019 Page 8

Table 4: Total capital investment cost

16 Capital investment cost

17 Farm operational cost

Cabbage Kg 0.4 600 240

Tomato Kg 0.3 1000 300

Green pepper Kg 0.75 150 75

Total cost 615

Submitted to: Amsalu Mitiku (Associate Prof) July, 2019 Page 9

17 First term production cost of input

Table 7: Total production cost of input

18 Total production costs of inputs

Tomato Kg 242 14 3388 100 13 1300 4688 14064

Green Kg 200 14 2800 100 13 1300 4100 12300

The sum total of the three terms 46845

Submitted to: Amsalu Mitiku (Associate Prof) July, 2019 Page 10

19 Human resource requirement

Table 8: Human resource requirement

Description Number Monthly salary per person Annual salary