Professional Documents
Culture Documents
Crop Upper Gibe Jimma Abraham
Crop Upper Gibe Jimma Abraham
PROJECT PROPOSAL
FOR
March, 2022
ADDIS ABABA, ETHIPIA
Page 1
Irrigation Crop Production at Jimma Zone
Contents
1 Executive Summary...........................................................................................................4
PART ONE................................................................................................................................5
1. INTRODUCTION.............................................................................................................5
1.1 Background......................................................................................................................5
1.2 Promoter’s profile............................................................................................................8
1.3. Objectives of The Project...............................................................................................8
1.4. Basic Features of Project Area.......................................................................................9
1.4.1. Location...................................................................................................................9
1.4.2. Geology.........................................................................................................................10
1.4.3. Relief......................................................................................................................11
1.4.4. Drainage system.....................................................................................................11
1.4.5. Climate...................................................................................................................12
1.4.6. Soils......................................................................................................................13
1.5 Socio Economic Activities Of The Population:.............................................................14
PART TWO.............................................................................................................................15
THE MARKET DEMAND POTENTIAL..............................................................................15
2.1. Market Situation...........................................................................................................15
2.2. Competition..................................................................................................................16
2.3. The Production of Crops...............................................................................................16
2.3.1 Production Hygiene....................................................................................................17
2.3.2 Agricultural input requirements..................................................................................17
2.2.2.1 Water for primary production..............................................................................18
2.2.2.2 Manure, biosolids and other natural fertilizers....................................................18
2.2.2.3. Soil......................................................................................................................18
2.2.2.4. Bio diversity........................................................................................................19
2.2.2.5. Natural Plant Nutrition.......................................................................................19
2.2.2.6. Natural Pest Management...................................................................................21
2.2.2. 7. Manuring and Composting................................................................................21
2.2.2.8. Biological Pest Control.......................................................................................22
Page 2
Irrigation Crop Production at Jimma Zone
2.2.2.9. Sanitation............................................................................................................22
2.2.2.10. Tillage and Cultivation.....................................................................................22
2.2.2.11. Conservation Tillage and Organic Farming.....................................................22
2.2.2.12. Supplemental Fertilization................................................................................23
2.3. Schedule of production plan.........................................................................................23
2.3. Sales Plan......................................................................................................................23
PART THREE.........................................................................................................................24
ORGANIZATIONAL STRUCTURE.....................................................................................25
PART FOUR...........................................................................................................................26
FINANCIAL REQUIREMENT..............................................................................................27
1.1 Fixed Investment.......................................................................................................27
4.1.1 Building & Construction.........................................................................................27
4.1.2. Farm Tools and Equipments..............................................................................28
4.1.3. Vehicles.............................................................................................................29
4.1.4. Office Equipments.............................................................................................29
4.2 Expenses........................................................................................................................29
4.2.1 Raw Material Purchase...............................................................................................30
4.2.2 Salary Expense........................................................................................................30
4.2.3 Other Operating Expenses......................................................................................31
4.2.4 Pre -Service Expense..............................................................................................31
4.4. Loan Repayment Schedule........................................................................................32
4.5. Financial Statement......................................................................................................33
4.6. Assumptions.................................................................................................................34
4.7. Summary.......................................................................................................................34
Environmental Impact of the Project.......................................................................................34
Future Development& Exit Strategies.....................................................................................36
Page 3
Irrigation Crop Production at Jimma Zone
Executive Summary
3.Nationality Ethiopian
Page 4
Irrigation Crop Production at Jimma Zone
PART ONE
1. INTRODUCTION
1.1 Background
Our country Ethiopia is one of the East African countries with the diversified climatic
conditions, natural scenery and resource bases. Currently the country has a total population
of about 100 million of which more than 40million is found in Oromia regional state. Oromia
is one of the regional states of Ethiopia with very fertile land, very conducive weather
condition both for crop production and animal husbandry. The country’s Gross Domestic
Product or GDP (was 19.39 billion US$ in 2007 with per capita income of 245 US$. In the
same year, agriculture accounted for almost 47 percent of GDP and about 85 percent of
exports. Ethiopia is the third largest populated country in Africa with a total population
number of 77.4 million (2005), out of which 84% of the populations reside in the rural area.
About 80 percent of the economically active population is engaged in agriculture. The
cultivated area covered in 2005/06 was about 11.3 million ha, of which 10.5 million ha and
0.77 million ha covered with annual and permanent crops respectively.
Agriculture in Ethiopia has a major influence on all development processes in the country, as
some 85% of the total employment and 90% of the country’s export are based on agriculture
(Environmental Policy, 1997). It also contributes about 50% of the country’s gross domestic
product (GDP) and supports around 70% of the raw material requirements of agro-industries.
This high proportion of the country’s economic gains made from agriculture depends mainly
on the existing diversity of indigenous crops/plants and livestock. Crop production is
estimated to contribute on average about 60%, livestock 27% and forestry and other
subsectors around 13% of the total agricultural value (Ministry of Water Resource, 2001).
As a result of shifts in rain patterns, crop production in the highlands and in most areas of
low elevation can be affected by drought, leading to food shortages. The response is often
food aid supply, which may involve grain distribution, especially of maize and wheat.
As a measure to mitigate the negative impacts of grain aid on the market of prices of local
crops, strategic arrangements have been made between donors and the government, whereby
Page 5
Irrigation Crop Production at Jimma Zone
grain aid supply is based on local sources as much as possible. This strategy has proven
useful in keeping the local grain prices at reasonable levels.
Agricultural practices and farming systems in Ethiopia are based on diverse agro-ecological
conditions that in turn require varying approaches in crop production. In general terms, the
agro-climatic zones of the country can be grouped into three types: Kolla (warm semi-arid, at
500–1500m above sea level), Woinadega (cool semi-arid, at 1500–2400m) and Dega (cool
and humid, higher than 2400m). More recent discipline oriented studies further distinguish
and define this agro-ecological classification by linking related a-biotic factors such as
annual rainfall, altitude and temperature (Negash et al, 1989).
The following five main agricultural production systems can be distinguished in the country:
• Frequently varying agro-climatic conditions with diverse cultural and farming practices
remain characteristics of agriculture in Ethiopia. These can be grouped into three major
systems (Feyissa, 1999):
The highland mixed-farming system practiced in areas of higher elevation, usually above
2000m as a crop-livestock complex involving the cultivation of diverse crops. Continuous
cropping is exercised through crop rotation, where cereal production alternates with the
production of legume and oil crops as a means of maintaining soil fertility. Barley, oats and
highland legume crops dominate.
The low plateau and valley mixed-farming system practiced in the intermediate or low
highlands, mountain foothills and upper valleys, at elevations ranging from 1500 to 2000m.
Both crop and livestock productions are economically essential; crop production is
dominated by sorghum and maize followed by wheat, teff and some legume and oil crops.
The pastoral and agro-pastoral farming system is practiced in the arid and semi-arid zones
mainly at elevations below 1500m and with annual rainfall less than 450mm.
In the arid zone, nomadic and semi-nomadic pastoral livestock production dominates, with
camels and goats as important components. In the semi-arid zone, semi-nomadic or semi
sedentary agro-pastoral production is practiced with sorghum and maize as main crops.
Livestock production in the semi-arid zone focuses on cattle and sheep. Water and range
Page 6
Irrigation Crop Production at Jimma Zone
evelopments are important elements for improving both crop and livestock production under
this system.
Major staple crops in Ethiopia vary according to the cultural and agroecological conditions.
The indigenous Ethiopian tetraploid wheat (Triticum durum) and the introduced bread wheat
(Triticum aestivum) have a wider coverage in the northern, central and south eastern parts of
the country. Other important staples are barley in the highlands; teff (Eragrostis tef) with its
wide adaptation to various agro-ecologies; sorghum, maize and millets in the lowlands; and
different root crops such as enset (Enset ventricosum) and yam (Dioscorea spp.). Major
legume crops are horse bean (Vicia faba), pea (Pisum sativum), lentil (Lens culinaris)
and vetch (Lathyrus satives); these are all essential dietary components along with the other
staples. Major oil crops are gomenzer (BrassicaCarinata), noog or niger seed (Guizotia
abyssinica), linseed (Linumusitatissimun) and sesame (Sesamum indicum) dominant in the
lowlands.
Coffee is an economically important crop in the east, southwest, and the western parts of the
country. Various types of spices, including Aframomuncorarima and Capsicum spp. and
Piper longum are widely distributed in humid areas. Cotton (Gossypium spp.), which has
three wild species in Ethiopia, and kenaf (Hibiscus spp.) are important cash crops particularly
for lowland farmers. There are also many wild plant species which are used as food,
particularly during food shortage in the interval between planting and harvest. Some
domesticated types of these plant species still occur with their wild relatives in some parts of
the country.
The government of the country has been excreting its maximum effort to expand investment
opportunities in the country by designing different policies and strategies that will facilitate
investment through attracting both domestic and foreign investors. Likewise, the Oromia
regional state government has been working day and night to make poverty history by
making its door open to investors both (domestic country and foreign) to come and invest in
the region. Therefore, it is this ample opportunity that attracts the new investors to come to
Oromia for investing in crop production. Hence, being one of the crop producers has its own
Page 7
Irrigation Crop Production at Jimma Zone
contribution to satisfy the demand of the current market. The crop production project is
planned to supply: different crops types.
The present economic policy of the country is highly inviting the private sectors to invest
their capitals too. As a result, the investors respond to the government’s invitation, by
contributing their share to the development process. The project is needed because of the
highly growing population of the country and its need of more crops supply.
Before turning the full focus to business activities the promoter has worked as Agronomist at
the Ethiopian Institute of Agricultural Research (Holetta Research Centre) from 2004 to 2007
and Planning officer at the Head quarter from 2009 to 2010 (two years in between spent
abroad for M.Sc. study in International Development and Management at Lund University in
Sweden). The undergraduate study in agriculture (plant science) and the on job experience as
agronomist has gave the promoter an opportunity to know the crop production sector at
expert level.
Back from study abroad, the promoter joined the UNWFP as program officer, from 2010 –
2017, in the sector where the organization was using its aid activities to promote market
opportunities for smallholders produces. The project used to purchase aid foods locally
through farmers’ unions – while coordinating the project in the SNNPR, the promoter was
managing (following up) of purchases of up to 300,000 MT of maize per crop season. This
role has given the promoter an opportunity to see the level of crop production potential in the
country and the gaps in the production system. The gap in terms of post-harvest handling of
maize crop and other crops were tremendous; the project tried to address the gap through
provision of trainings in post-harvest techniques and distribution of post-harvest equipment.
From July 2017 to September 2021 the promoter joined the New Zealand Embassy in Addis
Ababa as Development Program Coordinator covering 8 countries in the East African region,
Page 8
Irrigation Crop Production at Jimma Zone
including Ethiopia. The role involves receipt and assessment of development projects from
the 8 countries of accreditation and following up implementation of the financed
development activities. This gave the promoter a further opportunity to see the production
system, existing potentials and market opportunities at even regional level and across
different countries.
Along the way the promoter has been doing his own business on the side in the crop
production and animal fattening sector (on a family farm), car and machines renting.
Currently the private business needs full focus of the promoter and this is why he left the role
at the Embassy and giving full time to managing the existing businesses and expanding in to
new frontiers.
Page 9
Irrigation Crop Production at Jimma Zone
Jimma zone has 16 districts, 2 Urban Administrative Centers, which is the lowest
administrative unit of the zone. Physically, Jimma zone is bounded by Gojab River to the
west and south and Wabe ShabeleGibe River on the east and north. These two rivers and
their tributaries restrict surface transport communication with others zones and region.
Page 10
Irrigation Crop Production at Jimma Zone
Table 1: Map of Oromia National Regional State Jimma, Chora Botor District
Page 11
Irrigation Crop Production at Jimma Zone
1.4.2. GeologyDemography
Based on the 2007 Census conducted by the Central Statistical Agency of Ethiopia (CSA),
this Zone has a total population of 120,960, of whom 60,824 are men and 60,136 women.
With an area of 50.52 square kilometers, Jimma has a population density of 2,394.30 all are
urban inhabitants. A total of 32,191 households were counted in this Zone, which results in
an average of 3.76 persons to a household, and 30,016 housing units. The three largest ethnic
groups reported in Jimma were the Oromo (36.71%), the Amhara (27.14%) and the Dawro
(10.05%); all other ethnic groups made up 26.1% of the population. Amharic was spoken as a
first language by 41.58% and 39.96% spoke Afan Oromo; the remaining 18.46% spoke all
other primary languages reported. The majority of the inhabitants said they practiced
Ethiopian Orthodox Christianity, with 46.84% of the population reporting they observed this
belief, while 39.03% of the population were Muslim, and 13.06% were Protestant.
Page 12
Irrigation Crop Production at Jimma Zone
Amharic (41.58%)
Oromo (39.96%)
Other (18.46%)
The national 1994 census reported this town had a total population of 88,867, of whom
43,874 were men and 44,993 were women.
A few buildings have survived from the time of the Jimma Kingdom, including the Palace of
Abba Jifar. The city is home to a museum, Jimma University, several markets, and an airport
(ICAO code HAJM, IATA JIM). Also of note is the Jimma Research Center, founded in
1968, which is run by the Ethiopian Institute of Agricultural Research. The Center
specializes in agricultural research, including serving as the national center for research to
improve the yield of coffee and spices.
Football is the most popular sport in Jimma. The 50,000-capacity Jimma University Stadium
is the largest venue by capacity in Jimma. It is used mostly for football matches.
Jimma is served by Jimma Aba Jifar Airport. The airport completed a renovation in 2015 in
order to accommodate larger aircraft and more passengers.
Within the city limits people take bajajs (similar to “tuktuks”) or “line taxis” that are
converted mini vans.
Page 13
Irrigation Crop Production at Jimma Zone
The project requires about 200 hectares of land and it is allocated as follows.
1.4.5. Soils
In Jimma zone, about 30 types of soil (according to Atlas of Jimma zone, July 2004) have
been identified. The major are as follow;
1. Chromic and Pellic Vertisols: These are clay Black Basaltic soil which mostly develop
from tertiary volcanic rocks this soil are very fertile they fairly good Agricultural
potential .However, they have a limited agricultural use. The Soil shrink, develop deep
cracks and become very hard in dry season. They swell and become sticky during the wet
(rainy) Seasons. Besides, because of their low permeability, they are more prone to water
logging during the rainy season.
2. Dystric, Chromic, Eutric, Calcic and Vertic Cambisols: They develop from recent
lava and linked with sedimentary rocks .Their Agricultural value is limited as they are mostly
Page 14
Irrigation Crop Production at Jimma Zone
found on rugged and steep terrain. For this reason this type of soil left under natural plant
cover. It is found in the lowland of the woreda.
4. Dystric and Eutric Nitosols (deep with high clay continent): Soils have good
agricultural potential (good physical and chemical properties, stable structure and high
moisture storage capacity). Located around flat or gentle slope terrains of the northwestern .
It is around surrounding 630 km form Addis and it has a very attractive climate for the
growth of different kinds of cereals such as wheat, barely, teff and etc. In addition, it is very
conducive for the production of different fruits and vegetables. Moreover, the investment
office of the zone has been exerting its maximum effort to boost the investment opportunities
of the zone through different promotional strategies. The present favorable economic
situation put the Zone at the advantage of attracting the private sector investment. The
Page 15
Irrigation Crop Production at Jimma Zone
establishment of new Hotels and other infrastructural development are among others very
crucial for attracting investors in the Zone. Hence, the establishment of such project is very
important in creating employment opportunity in the area both for skilled and unskilled
labors. Other than being employed in government and private organization, most of the
population of the town is engaged in trade, be it formal or informal. Unlike the urban people,
the rural population is engaged in farming. Therefore aside with all other projects which are
undertaken so far by private and government, this project is deemed to provide employment
opportunities for about 123 individuals at the initial period and will continue employing
every year. From this total employment opportunity generated by the project 23 are skilled
labors 90 are unskilled labors.
Page 16
Irrigation Crop Production at Jimma Zone
PART TWO
Page 17
Irrigation Crop Production at Jimma Zone
production and marketing of agricultural commodities. During the 1990s, the policy reforms
on trade were enhanced with the conclusion of the Uruguay Round of the general agreement
on tariffs and trade (GATT) negotiations which culminated with the establishment of the new
World Trade Organization (WTO) and subsequent signing of agreements by member
countries in 1995. For agriculture, the negotiations led to the establishment of the agreement
on agriculture (AOA), which for the first time introduced a set of rules that emphasized
liberalization in international agricultural trade. The main elements of the AOA were to
improve market access, reduce domestic support and export subsidies.
As clearly indicated from the above export data, Ethiopia has not yet producing for export
and thus, this project is primarily deemed to export to different countries of the world.
Therefore, the envisaged project will export 20% of its products to different countries and
sells 80% of its products to the domestic market.
Hence to reach customers, different marketing vehicles will be used. Among the different
marketing strategies and tools for promotion and controlling the market the center will use:
Both printed and non printed forms of advertising,
Effective and customer centric marketing strategies that are the marketing
strategies that focuses on effectively handling customers.
Electronic advertising through internet, faxes and other technologies.
2.2. Competition
There are different forms of competition that may face this project. These are price and non
price based competition. Moreover, there are different competitors that will compete with the
project under discussion either directly or indirectly both in the domestic and foreign market.
But the project under discussion has diversified marketing strategies that could enable it
come up with the different competitors in the market. Moreover the Project will frequently
conduct competitors research which focuses on, the strength and the weaknesses, the
different competitor’s strategies, the techniques they use in rendering the service, their
customer handling methods, their product quality and others.
Page 18
Irrigation Crop Production at Jimma Zone
It is this combination of productivity and responsibility that most accurately describes the
term "Sustainable Crop Production Systems." The production process of this project is
environmentally benign as it produces organic crops. Different types of cereal crops are
grown and harvested under a wide range of climatic and diverse geographical conditions,
using various agricultural inputs and technologies, and on farms of varying sizes. Biological,
chemical and physical hazards may therefore vary significantly from one type of production
to another. In each primary production area, it is necessary to consider the particular
agricultural practices that promote the production of cereal crops, taking into account the
conditions specific to the primary production area, type of products, and methods used.
Page 19
Irrigation Crop Production at Jimma Zone
Page 20
Irrigation Crop Production at Jimma Zone
sprayers) that expose the edible portion of fresh fruits and vegetables directly to water
especially close to harvest time.
Hydroponic water
Plants grown in hydroponic systems absorb nutrients and water at varying rates, constantly
changing the composition of the re-circulated nutrient solution.
Because of this:
• Water used in hydroponic culture should be changed frequently, or if recycled, should be
treated to minimize microbial and chemical contamination.
• Water delivery systems should be maintained and cleaned, as appropriate, to prevent
microbial contamination of water. Therefore, the owner has Sami Ijara experience in this
area.
Page 21
Irrigation Crop Production at Jimma Zone
Humans and other animals extract minerals, along with sugars and proteins, from the food
they eat. Plants, too, obtain minerals — and a wide range of vitamins, antibiotics, and other
useful compounds— through digestion. However, plant digestive systems are not internalized
as they are in animals. Plants must rely on the external digestive processes of the soil system
within reach of their roots — a zone called the rhizosphere.
Whether conventional or organic, all farmers are concerned with pests. They spend a lot of
time and resources controlling them. However, in the organic “world view,” pests — whether
weeds, insects or diseases — are not simply scourges. They are indicators of how far a
production system has strayed from the natural ecosystems it should imitate. Certain weeds,
for example, tend to predominate when soils are too acidic or too basic; some become a
problem when soil structure is poor and conditions become anaerobic; others may be
stimulated by excessive fertilizer or manure salts. Organic proponents also believe that insect
pests are attracted to inferior or weak plants — the result of poor crop nutrition. Their logic
continues by asserting that pests are naturally repelled by vigorous, well-nourished plants.
This belief is often challenged, and significant research remains to be done. As scientific
understanding has grown, insect pest outbreaks are also being understood as imbalances in
the whole agro ecosystem and how it is managed. In nature, massive pest outbreaks are
Page 22
Irrigation Crop Production at Jimma Zone
relatively rare and short-lived, due to the presence of natural predators, parasites, and disease
agents that quickly knock the pest numbers back down to a moderate level. In farming
Page 23
Irrigation Crop Production at Jimma Zone
other practices build a diverse soil biology that works to keep soil pests in check. They also
provide substantial aboveground habitat for beneficials.
2.2.2.9. Sanitation
Sanitation can take on many forms:
• Removal, burning, or deep plowing of crop residues that could carry plant disease or insect
pest agents
• Destruction of nearby weedy habitats that shelter pests
• cleaning accumulated weed seeds from farm equipment before entering a new, “clean” field
• sterilizing pruning tools
As in human and animal health, sanitation practices can go a long way in preventing crop
pest problems. However, many practices— such as clean cultivation, deep plowing, and
burning crop residues — can increase erosion and reduce biodiversity. Thus, they may
conflict with sustainability. Good organic growers recognize this and treat those practices as
transitional or rescue options, rather than relying on them on an annual basis.
Page 24
Irrigation Crop Production at Jimma Zone
can be used for blind cultivation, delaying the first flush of weeds and giving the crop a head
start.
Page 25
Irrigation Crop Production at Jimma Zone
significant amounts of these materials only with the guidance of regular soil testing. Less
common are other rock powders and fines that are limited sources for the major nutrients but
are rich in micronutrients or have some other soil improving characteristic.
As clearly indicated in the production plan of the project the crops are produced within three
months period, which is it deemed to be produced twice a year.
Page 26
Irrigation Crop Production at Jimma Zone
PART THREE
ORGANIZATIONAL STRUCTURE
The organizational structure of the project is designed by including all the necessary
personnel under the right division. At the top of the organizational structure, there will be a
CEO with the responsibility of supervising the over all activity of the plantproject.
Depending up on the nature of the center and the amount of work to be performs; there will
be auxiliary units under the general manager. Employees under each unit will be supervised
by the unit head that is accountable for the general manager.
CEO
Page 27
Irrigation Crop Production at Jimma Zone
Production
Department Marketing Department
General Administration Department
As clearly shown in the organizational structure, the crop production project has CEO, three
Departments under the general manager, Advisor and the internal Auditing and Inspection.
These departments are the Production Department, The Marketing Department, and the
General Service Department. Under each Department there are different sections which are
undertaking different activities.
Hence the following section deals with the duties and responsibilities of each division.
3.1. The General Manager’s Duties and Responsibilities
He will plan, organize, direct and control the overall activities of the production center.
He will devise policies and strategies that will enable the project to be profitable and etc
3.2. General Administration and Finance Department
Is responsible for undertaking the following activities
To plan, organize direct and control the financial transaction of the project by using
necessary document.
To develop sound financial control system by developing modern financial control
systems.
To prepare the annual financial statements and prepare condensed reports for both the
General Manager and other concerned government body.
Page 28
Irrigation Crop Production at Jimma Zone
To control the human and non human resources of the project, which include:
effective handling of the different inventories of the project, and devise strategies of
controlling against fraud and damage and etc
3.3 . The Marketing Department
Will handle the overall marketing activities of the organization which include
planning, organizing, directing, and controlling.
Will develop the marketing strategies for future Integrated Agro Processing center’s
development.
Conduct both foreign and domestic market research for expanding the sales of the
company
Will develop effective customer handling strategies and etc
3.4. The production Department
It is the core department of the project as it handles and administer over all the production
scheme of the company and it encompasses sections like: cleaning of the production area,
preparation of selected seeds, planting, harvesting and other post harvest activities.
Thus it undertakes the following activities:
producing produces with less prices so as to make the company more competent
Produce products in different types so that customers have diversified choices.
PART FOUR
4. FINANCIAL REQUIREMENT
The financial resource is a prime resource for undertaking any activities. Hence for
implementing this project a total of 38,000,000.00Eth birr is required. From this 30% or
11,400,000birr will be owner’s contribution while the rest 70% or, 26,600,000 Eth birr will
be covered by bank loan. Therefore the said amount of finance is needed for undertaking the
following:
Page 29
Irrigation Crop Production at Jimma Zone
Page 30
Irrigation Crop Production at Jimma Zone
The company requires the above vehicles and farm machines. Currently, the company is
using a hired tractor for undertaking its harvesting schemes.
Page 31
Irrigation Crop Production at Jimma Zone
4.2 Expenses
Page 32
Irrigation Crop Production at Jimma Zone
Moreover, all the crops are not equally consuming the inputs. Therefore the company will
work on reducing costs by designing tightened cost reduction strategies. Additionally the
crop does not consume excessive fertilizer and thus it only need different pesticides at the
time of blooming. Again, the owners will implement the project after three months of taking
the land, and he will do the project phase by phase so as to use the working capital from the
project.
Page 33
Irrigation Crop Production at Jimma Zone
N.B. The above salary expense includes the salary of both skilled and unskilled labors.
No Description Cost
1 Project proposal 8,000
2 Licensing fee and others 600
3 0thers 2,000
Total 10,600
Page 34
Irrigation Crop Production at Jimma Zone
Page 35
Irrigation Crop Production at Jimma Zone
4.6. Assumptions
Salary expense increased by 5% after 2013 onwards, raw material purchase assumed to
be increase by 5% starting from 2013,
Sales by 20% starting from 2012,
Operating expense is increased by 10% starting from 2013
Raw material purchase increased by 10%
Moreover, the owner will sign the contract with different buyers and will receive money
from the buyers as a down payment for supplying the crops.
Therefore, the money received from the buyers will be used for transportation, insurance
and all other relevant costs.
Page 36
Irrigation Crop Production at Jimma Zone
4.7. Summary
As clearly the income statement shows, the promoter of the project will return her initial
investment costs within the first three month of operation because she will export to different
Middle East country. In general, the financial statement of the project shows that this project
under discussion will cover its entire investment costs with in short period of time. Hence
the promoter of the project has along term plan of engaging in other agro processing business
enterprises. Additionally, in the coming future the project owner has a plan to engage in other
businesses in near future.
Page 37
Irrigation Crop Production at Jimma Zone
Page 38