Practical No:

PREPARATION OF BUSINESS PLAN

Submitted to Submitted by

Asst. Prof. Ram Hari Timilsina Paras Regmi

Department of Agri Extension and BSc, Ag 6th semester
Rural Sociology Exam Roll No: 1355
AFU, Rampur
Table of Contents
EXECUTIVE SUMMARY 4
1. Introduction 5
2. Description of Business 5
2.1. General Objectives 6
2.2. Goals 7
2.3. Mission 7
3. Business Aspect 7
3.1. Technical Aspect 7
3.2. Marketing Aspect 7
3.3. Managerial Aspect 7
3.4. Socio-economic and environmental aspect 7
4. Production plan 8
4.1 Selection of good location 8
4 .2 Land preparation 8
4 .3 Varietal selection 8
4 .4 Seed rate 8
4 .5 Planting 8
4 .6 Fertilization 8
4 .7 Irrigation 8
4 .8 Mulching 9
4 .9 Weed management 9
4 .10 Pest and disease 9
4 .11 Harvesting 9
4 .12 Post Harvesting Tasks 9
5. MARKETING PLAN 10
5 .1 Market 10
5 .2 Purposed buyer 10
5 .3 Marketing strategy 11
5 .3.1 Village level traders: 11
5 .3.2 Pricing Farm Gate Price: 11
6. MANAGEMENTAL PLAN 11
7. FINANCIAL PLAN AND ANALYSIS
7.1cost of production 12
Table 2: Fixed Cost and Variable cost of production of potato 12
7 .2. Total income 13
7.3. Benefit Cost Ratio 13
8. SWOT ANALYSIS 14
9. Conclusion 14

LIST OF FIGURES

Table 1: Business Profile 6

Table 2: Generalized Crop calendar For Winter Season Potato 9
Table 3: Staff outline of the farmer 11
Table 4: Cost of Production 12
Table 5: Total Income 13
Table 6: Benefit/Cost ratio 13
Table 7: SWOT Analysis 13
EXECUTIVE SUMMARY
Jaljala Agro Farm, is a registered commercial potato farm that will be located in Jaljala 06,
Parbat which is a small initiation to supply potato in Baglung bazaar and Kushma Bazaar. We
have done our detailed market research and feasibility studies and we were able to secure a
suitable farm land to start our commercial potato farming. We are in the commercial potato
farming business because we want to leverage on the vast opportunities available in this area, to
export agricultural produce from the Parbat to other districts and all over Nepal and above to
make profit. is well known for its potato production due to land suitability and favorable
Climatic conditions for growing potato. The price of potatoes in this region is also high due to
better taste and organic production. So, our farm is focused on producing high quality organic
potato for consumers. Moreover, marketing is also easy in this location since it is easily accessed
to Baglung. The benefit/cost ratio of the farm tends to be 1.9. Moreover the farm is insensitive to
uncertainty due to decreased yield by 20% or increased cost by 20% or both at a time. This
analysis explored the feasibility of organic potato production and marketing in Jaljala, Parbat

1.INTRODUCTION
Potato is the most important vegetable crop of Nepal, known for their promising nutritional
content and relatively cheap source of nutrient. The demand of potato is in increasing rate but the
production doesn’t meet the demand. To fulfill the current demand the potato is import from
India mainly, and other country.

The productivity of potato in Nepal is 16.05 ton/ha(MOALD, 2019), which is way behind global
average productivity, 35.93 ton/ha (FAO, 2019). Terai region produces more vegetables, but
those grown in hilly and mountain region have greater value, as they produced potato during
rainy season when prices are higher (USAID/Nepal, 2011). Majority of farmer are involved in
potato farming either in subsistence or commercially as it is food crop as well as cash crop.

Today, potato production has become one of the most rapidly growing enterprise within the
reach of the poor, women, marginal farmers and entrepreneurs, considering the trends of
population growth, urbanization, road access, transportation linkages, increasing awareness on
nutrition and growing demands for consumer product, increasing awareness on nutrition and
growing demands for consumer products, increasing international level restaurants, it will be safe
to assume that potato production sector will constantly grow in a foreseeable future. In addition,
since potato farming are within the reach of all classes of society, including women, marginal
farmers and schedule caste and tribes, it could become one of the government’s strategic
activities for poverty reduction and for reaching the most disadvantaged socio-economic groups.

The major hindrances for the potato farm are lack of improved varieties, lack of knowledge of
proper storage, technique and labour unavailability etc. Potato demand is very high in Nepal
because it is consumed with any other vegetable mixed or alone, market carries huge
opportunities and profits if proper cultivation techniques are adopted.

1. DESCRIPTION OF BUSINESS
The business plan includes planting potatoes in 20 ropani land in Jaljala 06, Parbat. Seeds will
be obtained from local progressive farmers. The produced potato will be sold in nearby cities like
Kushma and Baglung bazzar. Jaljala Agro Farm, is a commercial farm that is committed to
cultivating organic potato.

Potatoes are grown for daily consumption as mixed with other vegetables or fried alone making
chips and finger chips etc. Though potato production is not new but the business activities related
to Potato production is new. Previously potatoes were produced in the subsistence level but now
a days due to influence of different organization it have been commercialized. It has help to
increase the annual income of these people. Our focus will be to grow organic, fresh and graded
potato than our competitor.

Table 1: Business Profile

Name: Commercial Organic Potato production

Business owner: Mr Babu Ram Regmi
Address: Jaljala 06,
Contact: 9817138503

1.1. General Objectives

i. To support local products by buying form local farmers will increase local economy.
ii. To fulfill the consumer demand.
iii. To provide efficient employment to the people residing here.
iv. To contribute in economy of the Parbat district

1.2. Goals
- To have a socio- economically feasible business.
 - To fulfill the consumer demand.
- To provide efficient employment to the people residing here.
- To have a sound farm practices.
- To contribute in agribusiness management in the area with environmentally sustainable
project projection.

1.3. Mission
Development of well-established and well-organized potato enterprise.

2. BUSINESS ASPECT
2.1. Technical Aspect
This is a small-scale industry to produce and supply potato. Location of the project is at
Parbat, Nepal. There is no problem of electricity to run Pump set but Irrigation facilities are
not so good. Necessary raw material like fertilizers, seeds etc. are easily available at the
reasonable price.

2.2. Marketing Aspect

The necessary inputs like fertilizers, seeds etc are easily available at right quantity, of right
quality and at feasible price. There is growing demand of potato in the local community and
neighbour districts due to the sound environment conditions favourable for potato cultivation.
So, it is feasible to cultivate potato as commercial crops as there will be no problem of
market.

2.3. Managerial Aspect

The labours can be easily hired during peak period of land preparation, weeding, harvesting
and storing.

2.4. Socio-economic and environmental aspect

The proposed project neither depletes natural resources nor causes any environmental
pollution. This firm directly or indirectly provides employment to the local people and helps
in increasing the living standard of people by generating income.
4. PRODUCTION PLAN
4.1 Selection of good location
The selected land will be well-drained and fertile. The potatoes can be grown on wide range of
soil, ranging from sandy loam, silt loam, loam and clay soils. The potato plants give best yield
when grown under well drained sandy loam and medium loam soils with rich organic content.
The potato plants can be grown in acidic soil. But the plants cannot be grown under waterlogged
soil. Saline and alkaline soils are not suitable for potato farming.

4 .2 Land preparation
Well pulverized bed will be prepared for commercial potato cultivation. Land will be ploughed
20-25 cm deep followed by 2-3 harrowing.

4 .3 Varietal selection
Regarding variety for commercial cultivation, a locally available variety ( Rato Dallo) which is
well adapted in this region will be selected.

4 .4 Seed rate
Disease free healthy potato tubers 70 kg/ropani will be used for planting.

4 .5 Planting
Tubers are planted in ridges so that the underground parts can get sufficient areas to grow. The
tubers will be planted 5-7 inches deep in ridges with eyes pointing upward. Plant to plant spacing
will be 25cm and row to row spacing will be 75 cm.

4 .6 Fertilization
About 1500 kg per ropani of FYM will be added during land preparation for organic farming.

4 .7 Irrigation
Timely and proper watering is very important for commercial potato farming business.
Depending upon soil moisture, 3-4 irrigation is required. Irrigation will be stopped 10-12 days
before harvesting.
4 .8 Mulching
Mulching is very helpful for retaining moisture in the soil and also for controlling weeds from
the soil. Organic mulch between the rows will be used after the potato plants have emerged.

4 .9 Weed management
Since, our business plan is to produce organic potatoes so weed management is done without use
of chemicals/ herbicides. Manual weeding and earthing up will be done at 40-45 days when crop
will attain height of 8-10cm.

4 .10 Pest and disease

In case of pest and disease, use of disease free seed will be the important management aspect in
case of organic farming. Removal of weeds, alternate and collateral hosts and use of bio-
pesticides can be effective.

4 .11 Harvesting
It is necessary to get virus free seed and for this dehaulming is utmost important. Dehaulming
means removing the above ground part leaving potato tuber inside 7-10 days before harvesting.
Dehaulming is one of the curing methods of potato tuber. The crop is ready for harvesting when
majority of the leaves turn yellow-brown and fall on ground. Crops will be harvested 7- 10 days
after dehaulming at proper moisture in soil.

4 .12 Post Harvesting Tasks

Sorting of potatoes will be done and cut, injured potatoes will be removed. And after sorting,
grading will be done depending upon diameter or size of tubers. Over size tubers have great
demand and value in the market, and they are very useful for chips making.

Table 2: Generalized Crop calendar For Winter Season Potato

 Date Days After Planting Activity

Magh 3rd week-falgun 0 Planting of tubers

1st week

Falgun 1st week-falgun 7-15 First Irrigation

2nd week

falgun 3rd week-chaitra 35-40 Earthing up, top dressing and

1st week weeding

chaitra 1st week-chaitra 50-60 Irrigation and Weeding, if needed

3rd

chaitra 3rd week- 90-120 Harvesting

Baisakh 3rd week

5. MARKETING PLAN
5 .1 Market
There is high demand for potato as it can be eaten with any vegetable and is needed on a daily
basis in almost all households in Nepal. Potatoes will be sold in wholesale rate in the local
market and consumers will buy our potatoes after it will be harvested oe we will store it in Rustic
House collect other potatoes nearby farmers and sell during the off season fetching high price
and high return. The market will be mainly Kushma and Baglung but we will focus on Pokhara
for our produced product. Due to an increasing population and many people shifting from
farming to service work, the demand of potato is increasing while the supply is still insufficient.

5 .2 Purposed buyer
Consumers of Parbat and Baglung are mainly targeted.

5 .3 Marketing strategy
As we are trying to diversify our market, the following will compose of our marketing strategy:
5 .3.1 Village level traders:

The role of village level traders is tremendous where potato marketing is concerned. These
traders are helpful when we are unable to sell our product to distant market. They collect from
farm gates and transfer them to either road head collection points or to the district
traders/merchants.

5 .3.2 Pricing Farm Gate Price:

The price during last few years has been increasing gradually. Trader or wholesaler are involved
in business and fix farm gate price so marketing is very easier.

6. MANAGEMENTAL PLAN
The success of a business lies on the team with which the farm is being operated. Team with
coordinated and positive spirit would always bring the best outcomes out of the any situations.
Table 3: Staff outline of the farmer

Position of Numbers Role

staffs
Local External Female Male Manage all the components of
the farm.

Manager 1 1 Manage all the components of

the farm.

Accountant 1 1 Maintain financial records.

Sales 1 1 Coordinate with different

Incharge wholesaler for the sales of the
product.

Supervisor 1 1 Monitors and evaluates the

work of the farm.

Labors 5 3 3 5 Carry out all the farm

activities.
 Technicians 1 1 Supervises the field condition
and guides for managerial
tasks.

6. FINANCIAL PLAN AND ANALYSIS:

6 .1 Cost of production
Cost of production includes fixed cost and variable cost. Machinery’s, farm equipment’s, and
depreciation cost of the machinery are fixed cost whereas variable costs includes labor cost,
input cost and other costs.

Table 4: Cost of Production

S.N Particulars Unit Quantity Per unit cost Total

A Fixed cost

1. Mini-tiller Number 1 70,000 70,000

2. Grader Number 1 150000 150000

machine

3. Kuto/kodalo Number 5 400 2000

4. Sickle Number 5 400 2000

5. Tax Number 5 400 2000

6 Concrete pond Number 1 200000 200000

construction

Total fixed 426000

cost

B Variable cost

5 Land Lease Ropani 20 1000 20,000

 6. Total labor Man days 150 700 1,05,000

8. Bullock labor Man days 1 500 500

9. Seeds kg 1400 60 84,000

10. FYM Kg 30,000 2 60,000

11. Post-harvest 20,000

activities
(Sorting,
Cleaning,
Grading and
Transportation)

Total variable 2,89,500

cost

C Total Cost 715500

6 .2. Total income

Table 5: Total Income

Year Quantity (in kg) rate Amount

1 16000 30 480000

7. Financial Analysis
7.1. NPV and B/C ratio analysis
Year Cost Income Discount Net Present PV of cost PV of
factor benefit value of Net income
benefit

1 515500 560000 0.89282 44500 39730.49 460248.7 499979.2

2 289500 560000 0.7972 270500 215642.6 230789.4 446432

 3 289500 560000 0.712 270500 192596 206124 398720

4 289500 560000 0.6355 270500 171902.8 183977.3 355880

5 289500 560000 0.5674 270500 153481.7 164262.3 317744

Summation 773353.5 1245402 2018755

NPV= Summation of present value of net benefit

= 1411965

Benefit cost ratio= Summation of PV of income/Summation of PV of cost

= 2523444/1111479

= 2.2703

Hence, NPV is positive (i.e., 1411965) and B/C ratio is found to be greater than 1 (i.e., 2.2703). So our
plan is found to be feasible.

8. SWOT ANALYSIS
Table 8: SWOT Analysis

STRENGTHS WEAKNESSES

● Favorable climatic condition, greater ● Very fragmented land holding and

comparative advantage. smallholder farmers.

● Fertile land. ● Very narrow product line.

● Committed Manpower. ● Under-trained employee.

 ● Established and renowned farm. ● Poor company location.

● Better marketing facility. ● Poor quality seed.

● Low cost of production. ● Inability to meet market demand

● Indigenous technical knowledge on ● Improper storage.

hand.
● High labor requirement.

OPPORTUNITIES THREATS

● Availability of subsidy. ● Climate change.

● Fluctuation of market price.

● Availability of improved technology.
● Unfavorable government policy.
● Easy market accessibility.
● Entry of competitor.

● Availability of inputs from ● High transportation cost.

government office.
● High disease and pest incidence.

● Shortage of manpower.

● Climate change.
9. CONCLUSION

Potato farming is very common and popular throughout the world. Potatoes are actually the most
common and are relatively inexpensive to purchase from any market. Potato is the most
important food crop as well cash crop of the world. The business is proved to be profitable. It has
contributed greatly in the market demand and supply of potato in Parbat and its neighboring
districts. Although problems like lack of timely supply of inputs, lack of proper machineries as
well as other environment factors hinders the production process, by various numbers of
solutions, a profitable business can be established. Thus, it is safe to open an organic potato
enterprise in this area.