FODDER DEVELOPMENT PROJECT

PROPOSAL

For

AGRI-BUSINESS DEPARTMENT

EWASO NGIRO SOUTH DEVELOPMENT

AUTHORITY

By Philip Koitelel
Sustainable Development Consultant

May 2009

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 TABLE OF CONTENTS

Page number

Table of Contents
1.0 EXECUTIVE SUMMARY ..................................................................................................... 3

1. INTRODUCTION .................................................................................................................. 4

2. PROJECT RATIONALE AND JUSTIFICATION ................................................................ 5

3. OBJECTIVES ......................................................................................................................... 5

4. STRATEGY AND SCHEDULING ....................................................................................... 5

5. MONITORING AND EVALUATION .................................................................................. 6

6. SUSTAINABILITY ............................................................................................................... 6

7. INVESTMENT IN FODDER PRODUCTION. ..................................................................... 6

8. PROJECTED INCOME & EXPENDITURE FIVE YEAR PROFILE................................ 11

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1.0 EXECUTIVE SUMMARY

Since ENSDA covers vast Arid and Semi -Arid (ASAL) that often prone to prolong period of dry
spell with insufficient quality feeds for meaning full dairy livestock production; however this
coupled with lack of appropriate technology in pasture improvement, conservation and
utilization makes the already fragile situation worse therefore there is need for capacity
building between ENSDA and the community in these areas of interest in order to realize their
true potential.
ENSDA in collaboration with Keekoyokie Trust initiated a pasture development at Suswa in
Narok North District with the aim of overcoming the shortages of quality pasture occasioned
by persistent droughty condition and thus alleviating the living standards of the local
communities through production and sale of pasture products (hay) as well as improved
livestock products.
Pasture improvement and conservation has remained a non-starter in most areas under
ENSDA due to lack of management skills in their production thus the ENSDA in collaboration
with the local community under took the Rhode grass project to produce pasture with a longer
growing season and potential high quality feeds with ENSDA providing productive assets
(seeds, fertilizers & land preparation) and technical staffs while the later provide land (lease),
security and fencing. The technical staff would visit the farm regularly to ascertain the progress
and the proceeds being shared on 50-50 basis.

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1. INTRODUCTION

Ewaso Ngiro South Development Authority (ENSDA) is a statutory organization established by

an act of parliament (Act No 12) of 1989 and officially launched in March 1991.
ENSDA occupies a vast ASAL area and scattered highlands. The region has vast potential for
both beef and dairy production. The potential however has not been realized particularly in
dairy sector due to several constraints. Among the major constraints towards the
improvement of livestock sector in general and dairy sector in particular are:

1. Unavailability of good quality feeds throughout the year due to persistent drought. This
is as a result of lack of awareness on technologies for feed conservation and utilization.
2. Animals’ production is further constrained by prevalent animal diseases, inadequate
animal health services and marketing of livestock product, socio-cultural practices also
compounds the livestock improvement in the area.
There is need to increase Agricultural and livestock production in ENSDA region. In the region,
animal production is constrained by prevalent animal diseases, inadequate animal health
services, and scarcity of proper adequate quality pasture feeds throughout the year and
marketing of livestock products. Since the Authority area has over 50 % of its land as ASAL
which is frequently affected by drought which consequently results in the death of livestock.
The Authority needs to promote and boost self sufficiency in pasture feeds development.
Indeed, 20% of ENSDA region is suitable for pasture development.

Pasture improvement has remained a non-starter in most of the districts under ENSDA. Land
under livestock has decreased due to population, and yet productivity per unit area has not yet
changed. A plan of action is therefore necessary to intervene and rescue these situations. One
of the possible courses of action is to support higher level of fodder production, preservation
and utilization which entails the use varieties of grasses and other fodder crops with longer
growing season and potentially higher feed value (quality). Several fodder crops show some
promise in carefully tended plots. But there is no fodder that can survive the dry season after
being cut in a practical farm situation. For forage conservation, one possible way to match the
feed supply requirements would be to conserve forage produced in the rains season to be
used in the dry season. The best way to preserve the fodder is through making Hay; here the
materials is sun-dried before baling with small loss in moisture and thus its quality is ensured
especially when fodder is harvested early in the season (shortly after flowering)before much of
the plants nutritive value/photosynthates are utilized.
Lucerne is the most important perennial fodder crop, especially when mixed with Rhodes grass
hay. The mixture gives greater and uniform forage production over a given period of time. The
mixture gives better nutrient balance and provides more production even in the dry season.
The mixture also increases soil fertility and the yield value of hay produced. Further more,
another suitable option for pasture production is the combination of Desmodium and Napier
Grass ideally to enhance the protein content in the feed.

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2. PROJECT RATIONALE AND JUSTIFICATION

Most of ENSDA region is facing an increasing competition on land use between crop
production, wildlife and livestock rearing. Already in the high and medium potential areas,
land is being intensively cultivated for crop production. Due to the growing population
pressure of livestock, and diminishing land size, expansion in these areas therefore is not
possible.
ENSDA region is susceptible to long periods of drought and land degradations. The prolonged
droughts and extreme lack of adequate feeds pose great dangers to sustainability of the
livestock sector in the region. By removing these constraints, the Authority will realize better
income from livestock production and hence improve the welfare and living standard of the
people in the area.

3. OBJECTIVES

3.1.1main objectives
1. To establish a seed production unit.
2. To establish proper Rhodes grass for hay production at Suswa.
3. To create community awareness and education on pasture development.

3.1.2 Specific Objectives

 Supply adequate quantities of good quality feeds throughout the year.
 To establish proper management on the utilization of appropriate Rhodes and Alba
mixture.
 To reduce dependency on protein supplement from commercial industries.
 To improve nutrition of the animals through new feeding techniques.
 To generate income to the Authority through the sale of hay.

4. STRATEGY AND SCHEDULING

Project Location

The pilot project will be based in Suswa Narok North District but will be extended to the other
regions finally. The main activities to be undertaken in this pasture fodder improvement
programme will include developing alternative sources of quality protein in hay production.
Soil conservation and rehabilitation of the depleted site will be completely controlled and a
sustainable ground cover will be established through pasture management and reseeding.
These will increase soil fertility, the yield and the value of the grass. The Authority Technical
Staff will monitor, supervise and evaluate the project.

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5. MONITORING AND EVALUATION

Monitoring and evaluation will be done by Monitoring and Evaluation team while the Agri-
business team is responsible for regular field visits to assess if the seed establishment, forage
growth and development is adequate from which the progress of the project viability made
from time to time is monitored & subsequently the success or failure of the project is judged.
The main objective of monitoring and evaluation is to ensure the projects is of economic value
to the Authority, which enhance income generation and self sustainability. The team will
monitor and ensure that operational cost will be maintained within the budgeted estimate,
and focus on the profit generated.

6. SUSTAINABILITY

The project will be undertaken through participatory ways which will guarantee sustainability
after the elapse of the project period. Community Based Organization (CBO) Keekonyokie
Trust donated the 100acres of land, fencing and providing security men whereas ENSDA
provided productive assets and technical staff. The project is expected to Break-even and be
self sustaining after the fourth year with the profit margin raising by 19.5, 21.4, 21.7 and 21%
in the second, third, fourth and fifth year respectively.

7. INVESTMENT IN FODDER PRODUCTION.

The initial capital outlays invested to start the project in the field are as follows:

OPERATING EXPENSES.

YEAR 1

ITEM QUANTITY UNIT PRICE ENSDA CBO TOTAL COST

(Kshs.) (Kshs.)
Land lease 100 3,000 - 300,000 300,000
Watchmen 3 heads 4,500/person/p.m - 162,000 162,000
Fencing - 640,000 640,000
Seeds 300kg 600/kg 180,000 - 180,000
fertilizers 5,000kg 60/kg 300,000 - 300,000
Ploughing 100 acres 2,000/ acre 200,000 - 200,000
Harrowing (2) 100 acres 1,500/ acre 150,000 - 150,000
Planting 100 acres 1,000/ acre 100,000 - 100,000
Weeding 100 litres 900/ acre 45,000 45,000 90,000
(herbicides)
Mowing 100 acres 500/ acre 25,000 25,000 50,000

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 Bailing 15,000 bales 50/bale 375,000 375,000 750,000
Loading & 15,000 bales 20/bale 150,000 150,000 300,000
transport
Sisal twines 50 pairs 1200/pair 30,000 30,000 60,000
Technical 1visit/week 1,000/visit 56,000 - 56,000
officer
Contingencies 83,499.50 83,499.50 166,999
(5%)
Grand Totals 1,694,500 1,810,499 3,504,999
a) Expected income in the first year. Scheduled of production: 150 bales per acre with a unit
selling price of Kshs. 200.
Total production: (150 * 100)
= 15,000 bales
Expected income: (15,000 * 200)
= Kshs. 3,000,000.
ENSDA of profit share: Expected income - operating expenses
(1,500,000 – 1,694,500)

= Kshs. (194,500)

Year 2
UNIT PRICE ENSDA CBO TOTAL COST
ITEM QUANTITY (Kshs.) (Kshs.)
Land lease 100 acres 3,000 - 300,000 300,000
Watchmen 3 heads 4,500/person/p.m - 162,000 162,000
Top Dressing 5000kgs 50/kg 250,000 - 250,000
Fertilizers
Mowing 100acres 500/acre 25,000 25,000 50,000
Bailing 16,000 bales 50/bale 400,000 400,000 800,000
Loading & 16,000 bales 20/bale 160,000 160,000 320,000
transport
Sisal twine 55 pairs 1200/pair 33,000 33,000 66,000
Technical officer 1visit/week 1,000/visit 56,000 - 56,000
Contingencies 50,100 50,100 100,200
5%
Total 974,100 1,130,100 2,104,200
b)
c) Expected income in the second year. Scheduled production of 160 bales per acre with a
unit selling price of Kshs. 200 i.e. an increase of 5%
Total production: (160 * 100)
= 16,000 bales
Expected income: (16,000 * 200)

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 = Kshs. 3,200,000.
ENSDA share of profit: Expected income - operating expenses
(1,600,000 –947,100)
= Kshs.625, 900.

Year 3

ITEM QUANTITY UNIT PRICE ENSDA CBO TOTAL COST

(Kshs.) (Kshs.)
Land lease 100 acres 3,000 - 300,000 300,000
Watchmen 3 heads 4,500/person/p.m - 162,000 162,000
Top Dressing 5000kgs 50/kg 250,000 - 250,000
Fertilizers
Mowing 100acres 500/acre 25,000 25,000 50,000
Bailing 17,000 bales 50/bale 425,000 425,000 850,000
Loading & 17,000 bales 20/bale 170,000 170,000 340,000
transport
Sisal twine 60 pairs 1200/pair 36,000 36,000 72,000
Technical officer 1visit/week 1,000/visit 56,000 - 56,000
Contingencies 5% 57,000 57,000 104,000
Total 1,019,000 1,165,000 2,184,000

d) Expected income in the third year.

Scheduled production of 170 bales per acre with a unit selling price of Kshs. 200 i.e. an
increase of 5%

Total production: (170 * 100)

= 17,000 bales
Expected income: (17,000 * 200)
= Kshs. 3,400,000

Profit margin: Expected income - operating expenses

(1,700,000 –1,019,000

= Kshs. 681,000

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Year 4

ITEM QUANTITY UNIT PRICE ENSDA CBO TOTAL COST

(Kshs.) (Kshs.)
- 300,000
Land lease 100 acres 3,000 300,000
Watchmen 3 heads 4,500/person/p. - 162,000 162,000
m
Top Dressing 5000kgs 50/kg 250,000 - 250,000
Fertilizers
Mowing 100acres 500/acre 25,000 25,000 50,000
Bailing 17,200 bales 50/bale 430,000 430,000 860,000
Loading & 17,200 bales 20/bale 172,000 172,000 344,000
transport
Sisal twine 62 pairs 1200/pair 74,400 - 74,400
Technical officer 1visit/week 1,000/visit 56,000 56,000
Contingencies 5% 57,410 57,410 104,820
Total 1,064,810 1,136,410 2,201,220

e) Expected income in the fourth year.

Scheduled production of 172 bales per acre with a unit selling price of Kshs. 200 i.e. an
increase of 2%

Total production: (172 * 100)

= 17,200 bales
Expected income: (17,200 * 200)
= Kshs. 3,440,000.

ENSDA share of Profit: Expected income - operating expenses

(1,720,000 –1,064,810)
= Kshs.655, 190.

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 YEAR 5

ITEM QUANTITY UNIT PRICE ENSDA CBO TOTAL COST

(Kshs.) (Kshs.)
Land lease 100 acres 3,000 - 300,000 300,000
Watchmen 3 heads 4,500/person/p 162,000 162,000
.m
Top Dressing 5000kgs 50/kg 250,000 - 250,000
Fertilizers
Mowing 100acres 500/acre 25,000 25,000 50,000
Bailing 16,500 bales 50/bale 412500 412500 825,000
Loading & 16,500 bales 20/bale 165,000 165,000 330,000
transport
Sisal twine 58 pairs 1200/pair 34,800 34,800 69,600
Technical 1visit/week 1,000/visit 56,000 - 56,000
officer
Contingencies 49,665 49,665 99,330
5%
Total 992,965 1,092,96 2,085,930
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f) Expected income in the fifth year.

Schedule production: would start declining by a margin of 2.5-5% hence expected
production yield will range between 165 to 168 bales per acre with a unit selling price of
Kshs. 200. This attributed to the aging of the fodder thus there would be a subsequent
decrease in production hence the need to replace the stand after 8 years due to decrease
in profitability.
Total production: (165 * 100)
= 16,500 bales
Expected income: (16,500 * 200)
= Kshs. 3,300,000

Profit margin: Expected income - operating expenses

(1,650,000 –992,965)
= Kshs. 657,035.

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 8. PROJECTED INCOME & EXPENDITURE FIVE YEAR
PROFILE.

YEAR ENSDA INCOME ENSDA EXPENSES (Kshs.) SURPLUS/DEFICIT (Kshs)

(Kshs.)
2009 1,500,000 1,694,500 (194,500)
2010 1,600,000 974,100 625,900
2011 1,700,000 1,019,000 681,000
2012 1,720,000 1,064,810 655,190
2013 1,650,000 992,965 657,035

4.5 INVESTMENT SUMARY REQUIREMENTS

INVESTMENT Year 1 Year 2 Year 3 Year 4 Year 5 Total

Item Amount Amount Amount Amount Amount Amount

Purchase of seeds 180,000 - - - - 180,000

Fertilizers 300,000 250,000 250,000 250,000 250,000 1,300,000
Ploughing 200,000 - - - - 200,000
Harrowing (2) 150,000 - - - - 150,000
Planting 100,000 - - - - 100,000
Weeding 90,000 - - - - 90,000
Mowing 25,000 25,000 25,000 25,000 25,000 125,000
Bailing 375,000 400,000 420,000 430,000 412,500 2,042,500
Loading & transport 150,000 160,000 170,000 172,000 165,000 817,000
Sisal twines 30,000 33,000 36,000 37200 34,800 171,000
Technical staff visit 56,000 56,000 56,000 56,000 56,000 280,000
Contingencies - - - - - 289,875
Total Investment 1,694,500 974,100 1,019,000 1,064,810 992,965 5,745,375
Budget Needed

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 PROJECTED INCOME AND EXPENDITURE SUMMARY.
Item Year 1 Year 2 Year 3 Year 4 Year 5
a).Total Operations 1,500,000 1,600,000 1,700,000 1,720,000 1,650,000
Income
b). ENSDA Total
Operating Expenses 1,694,500 974,100 1,019,000 1,064,810 992,965
RIO & BREAK EVEN ANALYSIS
Initial invested funds 1,694,500 - - - -
1. Return on Invested (194,500) 625,000 681,000 655,190 657,035
Funds(a-b)
2.Surplus or deficit c/f - (194,500) 430,500 250,500 404,690
Net surplus or deficit (194,500) 430,500 250,500 404,690 252,234
(1-2)
Break Even Analysis 1,889,000 1,264,000 583,000 (+72190)
Break Even Point X

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