BUSINESS PLAN FOR
AGRICULTURAL DEVELOPMENT
PROJECT NAME: ABDURAHMAN HASSAN AGRICULTURAL
DEVELOPMENT PROJECT
PROJEC LOCATION: BENISHANGUL GUMUZ REGIONAL STATE
SUMMITED TO: BENISHANGUL GUMUZ REGIONAL STATE,
BUREAU OF INVESTMENT
REQUIRED AREA: 1000ha
MAY, 2022
Assosa, Ethiopia
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ABDULAZIZ MUSTEFA AGRICULTURAL DEVELOPMENT PROJECT
Table of Contents
Executive Summary ........................................................................................................................ 1
1
INTRODUCTION .................................................................................................................... 3
2
BACKGROUND INFORMATION ......................................................................................... 4
2.1
The Applicants Background ............................................................................................... 4
2.2
The Project Overview ......................................................................................................... 4
2.3
Goal and Objective ............................................................................................................. 5
3
CONTRIBUTION OF THE PROJECT FOR THE SOCIETY ................................................ 6
3.1
Technology Transfer ........................................................................................................... 6
3.2
Development of Infrastructure ............................................................................................ 6
3.3
Job Opportunity .................................................................................................................. 6
3.4
Environmental protection plan ............................................................................................ 6
4
DESCRIPTION OF THE PROJECT AREA ............................................................................ 7
4.1
Location .............................................................................................................................. 7
4.2
Physical and Natural Condition of the Project Site ............................................................ 7
5
5.1
6
PROPOSED DEVELOPMENT................................................................................................ 9
Justifications for Selection of Investment ........................................................................... 9
TECHNICAL ASPECTS ........................................................................................................ 10
6.1
Land Development ............................................................................................................ 10
6.2
Land Preparation ............................................................................................................... 10
6.3
Sowing/ Planting and Fertilizing ...................................................................................... 11
6.4
Plant Protection ................................................................................................................. 11
6.5
Harvesting ......................................................................................................................... 11
6.6
Post-Harvest Management ................................................................................................ 12
7
PROJECT IMPLEMENTATION PLAN (5 YEAR) .............................................................. 12
8
ORGANIZATIONAL STRUCTURE AND MANAGEMENT ............................................. 13
8. FINANCIAL ANALYSIS ...................................................................................................... 15
8.1
Fixed investment Capital .................................................................................................. 16
8.2
Working Capital ................................................................................................................ 18
8.2.1Direct Production Costs .......................................................................................................... 18
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
ABDULAZIZ MUSTEFA AGRICULTURAL DEVELOPMENT PROJECT
8.2.2Staff Salary for Second 5th Year ............................................................................................ 19
9. SOURCE OF CAPITAL ......................................................................................................... 19
10. PRODUCTION FORCAST /YEAR ....................................................................................... 20
11. REVENU FORCAST/YEAR ................................................................................................. 21
12. SUMMERY OF SOCIO-ECONOMIC CONTRIBUTION.................................................... 22
12.1
Economic benefit for the society ...................................................................................... 22
12.2
Economic benefit for the community ............................................................................... 22
12.3
Economic Benefit for the Country .................................................................................... 23
III
BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
Executive Summary
1. Project
Title/Name:
ABDURAHMAN
HASSAN
AGRICULTURAL
DEVELOPMENT PROJECT
2. Project Intervention Area: Crop Production
3. Total Size of the Land required: 1000 hectors
4. Duration of the project: 30 years
5. Promoter’s Profile:
The anticipated “Crop Production Project” is initiated by the Proponent ABDURAHMAN
HASSAN.
6. Location of the Project:
The area identified for implementing the anticipated project is will be in the north-Western
part Assosa, Kurmuk, Bambasi or Homosha woreda of Benishangul Gumuz Regional State,
of. The plots should be located near the main roads in the region.
7. Project Goal and Purpose:
The overall goal of the project is to contribute towards the economic development of
Ethiopia through using the existing investment opportunities in the Country and taking
advantage of the expressed policy incentives that emphasize on greater commercialization of
agriculture and enhancing private sector development.
The project’s main objective is to implement an agricultural investment project using
partially mechanized farming for the production of export-focused oil seeds; which primarily
involves sesame, and soybean cultivation with high standards and quality of production;
while ensuring optimal economic returns as well as socially and environmentally acceptable
production system that will attain full production level within one or two years’ time starting
from the 2023/2024 production season.
8. Estimated Cost of the Project
At the beginning of the production year the project will have the following costs:

Initial Capital of the Project: 6,738,722.00 ETB.
Investment Cost: 6,738,722.00 ETB
Operating Cost: 2,000,000.00 ETB
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ABDULAZIZ MUSTEFA AGRICULTURAL DEVELOPMENT PROJECT
9. Project Component

Total Production area: 500ha

Types of Investments:
Camp Establishment and Land Preparations; Mainly
Construction of Buildings for Office, Stores, Workshop, Agricultural Machineries
&Implements, Vehicles, Site Clearance and Preparations.

Estimated Production for Consecutive Growing Seasons (Qt)
Crop Type
Year 1
Year 2
Year 3
Year 4
Year 5
Sesame
100
3,000
3,000
3,000
3,000
Soybean
800
1,875
1,875
1,875
1,875
Sorghum
250
750
750
750
750
10. Expected Beneficiaries:

Permanent employee:
12

Temporary employee:
40
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
ABDULAZIZ MUSTEFA AGRICULTURAL DEVELOPMENT PROJECT
1
INTRODUCTION
This investment proposal is prepared and submitted to the Benshangul Gumz Regional State,
Investment Office, as a partial fulfillment of the application, on the basis of which our company
hopes to receive the necessary approvals from your good offices and other concerned bureaus,
particularly for land acquisition and investment certification. The purpose of the proposal is to
describe the promoter’s view in regard to his envisaged investment project that is mainly
focusing on agricultural production and basically intended as a business entity.
The proposal document comprises mainly of the technical, financial and market analysis and
justification to meet the necessary requirements of investment and obtain approval of the land
acquisition that the project requires.
A brief description of the background information of the project & applicant, the project area,
including the physical features (location, climate, land and water resources etc), and availabilities
of existing infrastructures, services and facilities, is presented in the first section of the proposal.
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2
BACKGROUND INFORMATION
2.1
The Applicants Background
Table 1. Background Information of the company/ applicant
Name of Organization:
ABDURAHMAN HASSAN
Nationality:
Ethiopian
Owner(s):
ABDURAHMAN HASSAN
Type of business:
Crop Production (Dominantly Sesame, Soybean, Sorghum)
Manager :
Address: ABDURAHMAN HASSAN
Project Name:
Crop Production Project
Status of the Project:
New for this Plot
Proposed Site:
Kurmuk/Homosha/Bambasi/Menga/ Woreda, Assosa woreda
of, Benshangul Gumuz Regional State
Specific Location:
Size of Proposed Land:
1000ha
Total Estimated Initial Capital:
512,331.32 ETB
Legal Form of Organization:
Privet company
Registering Agency:
Benshangul Gumz Regional State Investment Office
Taxpayer Identification No.:
Value Added Tax Registration No.
Right of Occupancy:
Lease agreement
Contract Period:
30 years (2023 - 2053)
Name: ABDURAHMAN HASSAN
Contact Person & Address:
B/G, ASSOSA TOWN, WOREDA 01, KETANA 04
Mobile:
2.2
09 13 22 49 27
The Project Overview
The project envisages establishment of a new crop production enterprise with specific focus on
sesame and soybean farming as its immediate objective. Nevertheless, other crop types and/or
enterprises could be included based on results of future studies.
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
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Ethiopia is endowed with immense natural resources that offer it greater comparative advantages
of producing different type’s agricultural products and it is a country of great agro-ecological
diversity having areas of different physical features and altitude. This variation is mainly
correlated with great diversity of climate, soil and vegetation cover that are favorable conditions
for agricultural development.
Considering the suitability of the country for agriculture, a big leap forward can be made
encouraging potential investors to bring the capital and technologies to the country. To this end,
the Country’s successive Development Programs during the past decades have given; foremost
among others, a particular emphasis on greater commercialization of agriculture and enhancing
private sector development.
2.3
Goal and Objective
Overall Goal
The overall goal of the project is to contribute towards the economic development of Ethiopia
through using the existing investment opportunities in the Country and taking advantage of
expressed policy incentives that emphasize on greater commercialization of agriculture and
enhancing private sector development.
The project's contributions to the economy, upon realization of a full production level; include
creation of jobs and permanent employment opportunities to the local people as well as bringing
considerable annual income in hard currency and tax revenues; part of which will be reinvested
in the immediate community infrastructure.
General objective
The project’s main objective is to implement an agricultural investment project using intensive
mechanized farming for the production of export-focused oil seeds and food crop for local
consumption.
Specific objective
The specific objectives of the project are:
To help increase income of the investor and improve living standards of his family
To generate hard currency through export of high quality oil seed products.
To raise the standard and quality of oil seeds& sorghum crop.
Create jobs and help locals acquire skill through training.
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To support the surrounding farmers by involving them as out grower farmers.
3
3.1
CONTRIBUTION OF THE PROJECT FOR THE SOCIETY
Technology Transfer
ABDURAHMAN HASSAN AGRICULTURAL DEVELOPMENT PROJECT is planning to use
mechanized agricultural technologies for its success. As it is known that agricultural practice of
BGRS farmers is traditional method and its product is from hand to mouth. The newly
establishing ABDURAHMAN HASSAN AGRICULTURAL DEVELOPMENT PROJECT will
share good experience of using agricultural technologies like using tractors, selected seeds,
fertilizers, environmentally safe herbicides and pesticides. In addition to this the project will be
engaged in importing agricultural machineries and creates direct market linkage between
exporters and producers.
This modernized and mechanized agricultural development project plays role in transfer of
technology and accessing modern machineries and technologies to the community.
3.2
Development of Infrastructure
Even though the responsible body to access infrastructures for investment is Government, the
ABDURAHMAN HASSANalso will play its own role in constricting road to the project site;
access either hydro or diesel generator electric power for his project and the community. In
addition the project will participate in constructing schools hand pump water, shallow water
wholes, Kebele administrative offices, and other infrastructures as much as possible.
3.3
Job Opportunity
When the project enters in to implementation it needs many professional and non-professional
man powers. So this creates significant permanent and temporary job opportunity for jobless
youths and females.
3.4
Environmental protection plan
Agricultural development projects are mandatory for a country for it development and to attain
food security for the nations. Even though its importance is known it do have its own negative
environmental impacts like pollution, land degradation, vegetation removal and etc. so the
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
ABDULAZIZ MUSTEFA AGRICULTURAL DEVELOPMENT PROJECT
project in addition to agricultural activities, planned to perform environmental protection
activities as follows.
Table 2. Environmental protection plan of ABDURAHMAN HASSAN
No.
Activities
Measur
Quantity in 5 consecutive years
ement
2023
2024
2025
2026
2027
No.
1
1
1
1
1
No.
1000
2000
4000
8000
16000
seedlings
No.
1000
2000
4000
8000
16000
Soil protection activity like
hectare
100
200
300
300
100
tracing, fled protection
s
1
Development of nursery site
2
Germination of indigenous and
agroforestry plant seedlings like
3
4
4
4.1

Cordia

Bamboo

Mango

Neem

gravilia
Plantation of different plant
DESCRIPTION OF THE PROJECT AREA
Location
The area to be identified for implementing the anticipated project will be located in the northwestern
part
of
Benishangul
Gumuz
Regional
State,
within
Assosa
Zone
in
Homosha/Bambasi/kurmuk/MengaWeredas.
4.2
Physical and Natural Condition of the Project Site
Land Features & Topography
The project site is located within the Blue Nile (Abay) river basin. The topographic features of
the proposed project area are characterized by flat to gently sloping terrain. The average altitude
of the project area is 900masl; with general land gradient of 1.5 to 2.5%. The topography of the
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
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project area generally indicates availability of favorable opportunity for low cost installation of
infrastructures and land preparation requirements.
Climate
The climatic conditions of the project area could be broadly categorized as sub-tropical, hot
lowland to warm sub humid moist lowlands. According to traditional classification of agroclimatic zones in Ethiopia; and, considering the high rainfall, low altitude (below 900 m.a.s.l.);
the project area might be classified as wet kolla.
Temperature
According to the climatic data obtained from the Ethiopian Meteorology Agency (Assosa
Branch); the average minimum and maximum temperatures of the project area are 20.97 0C and
34.190C respectively.
Rainfall Trends
The project area has average annual rainfall of 942.64 mm; which is higher than the average
precipitation requirements of most field crops. The monthly rainfall distribution of the project
area shows that the area has a mono-modal rainfall pattern where the wet months are May –
October, during which 95.77% of the annual rainfall occurs.
Soil Conditions of the Project Area
Results of soil sample analysis from the project area should be clay and sandy loam with strong
coarse structure. The PH of surface soil ranges from 7.1 - 7.9, which implies moderately alkaline
soils. These soils are chemically and physically suitable for soybean and sesame cultivation. In
addition, the proposed investment area refers to well drained soils that occur on almost flat to
gentle slope. The proportion of the land is suitable to most of annual crops.
Existing Infrastructures
Road:
Generally, the project area can be accessed by all-weather roads up to its capital town, Assosa as
well as the woreda towns.
Electric Power
The capital town of the districts of the project area has access to hydroelectric power. However
there are great problems regarding the supply of continuous power supply. Providing continues
power supply for the town has been a great constraint.
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
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Water Supply
Generally, rivers, shallow well and boreholes are the main sources of water supply in the region.
Currently, access to safe drinking water is a problem in the project area. However, the Water,
Irrigation and Energy resource Development Bureau and other stakeholders in collaboration with
the community has established different safe water generating schemes such as hand dug wells,
hand pump, developing spring water, deep well and shallow well to alleviate the problem,
5
PROPOSED DEVELOPMENT
The proposed development will mainly focus on production of sesame, soybean and sorghum
crops; for which improved seed varieties will be used and optimal application of fertilizers will
be made. As a result, there will be improved productivity of each commodity where the
anticipated production per ha of each crop with and without project are described as below.
Table 3: Anticipated production per ha of each planned crop with and without project
Production per ha (Yield = Qtls/ha)
Crop
Without project
With project
Increment
Sesame
5
8
60%
Soybean
10
15
50%
Sorghum
25
30
20%
The production of the oil seeds, sesame & soybean are meant for export market whereas the
sorghum crop production is to be used for local consumption particularly to meet the food
requirement of laborers at the project site.
Area of land for investment might be expanded in the future with possibility of available land
within the vicinity of the project area. The land ownership is to be acquired through a lease
contract from the Ethiopian Government for a period of 30 years.
5.1
Justifications for Selection of Investment
Availability of suitable land for sesame, soybean and sorghum production with good
combinations of topography, climate and soil characteristics that allow optimal production of
these crops;
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
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Minimal requirements for infrastructure development because of the topography and visible
prospects of on-going development initiatives in the area including power supply,
telecommunication and other basic infrastructures;
The land is more convenient for minimum land development.
Low population density in the area and minimal competition for land – i.e. no visible
adverse effects on the community and settlement patterns in the area;
Accessibility of the area by all-weather roads and ease of making choices between
marketing options (e.g. transporting to the major export markets in Ethiopia and/or the
Sudan;
Profitability of the business
6
6.1
TECHNICAL ASPECTS
Land Development
The main production process of the farm will be started with land development activities, such as
land clearing and surveying (for land parceling and access/ farm road marking). The land
development activities are expected to be undertaken by machinery and equipment such as
Bulldozers, and surveying instruments. Other land development works would include such
operations as cleaning, burning and disposal of fallen trees & bushes. The execution of these
operations may need only labor force equipped with hand tools. Since the farm land has already
been in use by other investor, land clearing operation may not be required at all or with small
areas to be involved. Machinery and equipment are expected to be rented from other enterprises
if the need arises.
6.2
Land Preparation
Generally, land development for the production of the indicated crops is followed by land
preparation. It comprises ploughing and harrowing. Ploughing operation may be omitted after the
first year operation and be replaced by minimum or no tillage practices. Ploughing may only be
practiced if the soil is found hard enough and unworkable for disc harrows.
Harrowing will follow immediately after completion of ploughing and will be completed in 10
days, assuming a one hour per hectare performance rate. Second harrowing will be conducted
immediately after the first harrowing is over. In this way, the whole harrowing operation will be
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
ABDULAZIZ MUSTEFA AGRICULTURAL DEVELOPMENT PROJECT
completed at the end of August. For this purpose, tractors with various implement attachments
like disc plough and disc harrows are to be employed in general.
Land preparation for soybean and sesame is similar to that of simple farming crops like maize.
They can be achieved by one ploughing and disking or harrowing.
6.3
Sowing/ Planting and Fertilizing
Sowing follows harrowing with fertilizer application. Row planters and fertilizer applicators or
drillers will be used to make the operation well mechanized. The sowing time varies from place
to place. The best time for sowing in tropical and subtropical regions is just after the rains are
well started, i.e. from the end of May to early July. The crops should always be sown in rows.
Fertilizing may be done either manually or using machinery and is accomplished by broadcasting
or drilling.
6.4
Plant Protection
The plant protection activities in sesame & soybean production usually involves weeding,
thinning, cultivation, insect pest and disease control. These operations may be accomplished
either manually or using machinery. Weeding & thinning are assumed to be conducted
consecutively after the crop is at its early & mid growth stage. Machineries and/or manual labor
is to be used to undertake these operations where manual or tractor mounted chemical sprayers
are to be applied.
6.5
Harvesting
Harvesting of the mentioned crops will be carried out manually. In manual harvesting, the
harvesting of sesame begins when two third of the plant and seed pods turn yellow and is
undertaken by cutting the stems near ground level. It is then bound and stocked in the field to
ripen the seed.
Harvesting is always done before the pods shatter. The best stage is when the pods are fully
mature with the seeds in the hard-dough stage. The seeds should have a moisture content of less
than 15% and should be stored at a moisture content of 10-12% or less. With the dehiscent type,
the heads are also cut and dry in bunches hanging down ward on racks for 1-2 weeks .The
bunches and the dried heads including the stocked is usually shacked by hand to dislodge the
seeds on cemented floor where the seed is collected.
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
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6.6
Post-Harvest Management
Post-harvest in sesame as well as soybean include, packing/bagging, storing and marketing.
After the harvested and threshed seeds are well packed, the bagged products are transported to
the farm storage house for temporary storage and later be transported to market place.
Transporting will be done by tractor driven trailers and trucks, from the farm and stores,
respectively.
7
PROJECT IMPLEMENTATION PLAN (5 YEAR)
The project implementation schedule as per the various operations planned for the next six
consecutive years will be as shown here under.
Table 4. Five year project implementation plan
Unit of
Operation Year
Measurement
No. Operation
Year 1
1
Remark
Year
Year 2
Year 3
Year 4
5
Camping and mobilization of
labor, machinery, etc
2
Land development
2.1
Trees & bushes cutting
Ha.
2.2
Uprooting & raking
Ha.
2.3
Burning & disposal
Ha.
3
Land preparation
Ha.
3.1
Plugging
Ha.
300
400
500
1000
1000
3.2
Harrowing
Ha.
300
400
500
1000
1000
4
Sowing/Planting
Ha.
300
400
500
1000
1000
5
Fertilizer Application
Ha.
300
400
500
1000
1000
6
Cultivation/Thinning
Ha.
300
400
500
1000
1000
7
Plant protection
Ha.
300
400
1000
1000
7.1
Weeding 1st
Ha.
300
400
1000
1000
300
500
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
ABDULAZIZ MUSTEFA AGRICULTURAL DEVELOPMENT PROJECT
7.2
Weeding 2nd
Ha.
300
400
500
Pest & disease control
Ha.
1000
1000
200
400
500
1000
1000
Ha.
200
400
500
1000
1000
7.3
(chemical spraying)
8
Harvesting & threshing
9
Post-harvestoperations
9.1
Weighing & bagging
Qt.
4,500
10,500
10,500
10,500
10,500
9.2
Loading unloading
Qt.
4,500
10,500
10,500
10,500
10,500
9.3
Storing
Qt.
4,500
10,500
10,500
10,500
10,500
9.4
Transporting
Qt.
4,500
10,500
10,500
10,500
10,500
Furthermore, the annual cropping plan of the project is as shown below.
Table 5. Annual cropping plan and expected production
Crop Type
Area (ha)
Yield (Qt/ha)
Production (Qt)
Sesame
400
15
6,000
Soybean
300
30
9,000
Sorghum
300
40
12,000
Total
1000
8
27,000
ORGANIZATIONAL STRUCTURE AND MANAGEMENT
The project will have its own organizational set up (structure) to run the production and sales
management of the farm. The responsibility bounded to the farm site would be delegated to the
farm operation manager who will direct the overall activities carried out on the farm. Under the
farm manager, 2 major sections/departments will be organized, the management and the
technical offices. Various workers lead by each officer like field supervisor/, foreman, tractor
operator, office workers, storekeeper … etc will exist, each being responsible to their respective
job descriptions provided by the respective section head. These workers will in turn directly
perform or supervise the daily activities of the manpower and machinery assigned to the
respective working areas.
The overall farm production activity will be headed by an agronomist or similar profession in
agriculture and be responsible for the proper execution of the various crop production &
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
ABDULAZIZ MUSTEFA AGRICULTURAL DEVELOPMENT PROJECT
protection activities. The technical performance of farm machinery & equipment will be led by
the technical section head assigned under the farm operation manager. Similarly, the
management officer will also be responsible for doing the financial issues, sales business and the
management of personnel administration.
The manpower hiring and allocation will be on permanent and temporary basis. The proposed
organizational structure for startup of the project is as shown below.
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
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General Manager
Secretary (1)
Driver (1)
Farm Operation Manager (1)
Management Officer 1)
Technical Officer
(Agronomist) (1)
Field Supervisor (1)
Accountant (1)
Foreman (1)
Cashier & Store
Keeper (1)
Store Guards (1)
Time Keeper (1)
Tractor Operator (1)
Ass. Operator (1)
Crop Guards (1)
Figure 1: Organizational Structure of the Project
8. FINANCIAL ANALYSIS
The required finance for the implementation of the proposed crop production project consists of
two basic investment capitals namely:
1. Fixed Investment Capital
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
ABDULAZIZ MUSTEFA AGRICULTURAL DEVELOPMENT PROJECT
2. Working Investment Capital
8.1
Fixed investment Capital
Most essential fixed farm assets required for the project includes.
Land development
Farm machineries such as Tractor Trailer, implements equipment, irrigation facilities.
Civil works such as office, store machinery shade, staff and labor living house, access road,
farm road etc.
Vehicles and Others.
These fixed investment costs are estimated on the bases of existing market prices to the extent
possible. Details are discussed below in the table.
Table 6- Machineries and Agricultural Inputs Supplied by Using Fixed Investment Capital
Item
Description
Qty
Total
Cost Remark
(ETB)
1
Land Development
--

Tree cutting
--
--

Root grouting
--
--

Land leveling
--
--

Layout of land
--
--
Sub Total 1:
2
1000ha
500
600,000.00 2000ETB/Ha.
Farm Machinery
2.1
Tractor, 95 Hp Italy made
1
1,000,000.00
2.2
Ditcher, adjust able Italy made
1
102,235.00
2.3
Land leveler 3m width Italy
1
50,312.00
2.4
Seed planter hydraulic
1
150,000.00
Sub Total 2:
3
1,302,547.00
Transport Facilities
3.1
4-wd, double cabin, Toyota Hilux
3.2
Motor cycles 175 cc, yamaha with
Cary boy, helmet, wind shield
1
1,200,000.00
2
130,000.00
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ABDULAZIZ MUSTEFA AGRICULTURAL DEVELOPMENT PROJECT
Sub Total 3:
4
1,330,000.00
Building Facilities
4.1
Office (5m*4m)
3
90,000.00
4.2
Staff living rooms
6
110,000.00
4.3
Store (18m*10m)
1
130,000.00
4.4
Machinery shade
1
20,000.00
4.5
Workers dining hall
1
10,000.00
4.6
Rural Water Supply Schemes
1
100,000.00
4.7
Sub Total 4:
5
460,000.00
Office Furniture
5.1
Office table
1,200.00
5.2
Office documentation tools
2,000.00
5.3
Shelves (file)
4,000.00
5.4
Computer laptop
15,000.00
5.5
Weighing scale
15,000.00
Sub Total 5:
37,200.00
6
Farm Hand Tools
6.1
Spade
20
1,000.00
6.2
Pick axe
10
300.00
6.3
Axe
25
250.00
6.4
Sickle
25
625.00
6.5
Shovel
25
500.00
6.6
Shovel small
10
200.00
6.6
Measuring tape 50mt
3
150.00
6.8
Saw
2
200.00
6.9
Rope and string(round)
15
1,500.00
6.10
Stone hammer
3
600.00
6.11
Nail hammer
3
100.00
6.12
Steel bar
2
300.00
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
ABDULAZIZ MUSTEFA AGRICULTURAL DEVELOPMENT PROJECT
6.13
Wheel harrow
5
250.00
6.14
Other camping facilities
-
3,000.00
Sub Total 6
8,975.00
Grand Total
8.2
3,738,722.00
Working Capital
Working capital includes both direct and indirect production costs of the project which relate to
the annual costs for operation such as farm inputs labor machinery operation fuel & oil costs
Maintenance of machinery and vehicles.
The working capital for operation and maintenance are estimated related to similar project costs
in the project woreda, while those related to, service charges are taken from the concerned
government offices details of these costs are presented in the next tables.
8.2.1 Direct Production Costs
Table 7.Summary of Direct Production Costs
No
Description of Inputs
1
Labor
2
Tractor Operation
3
Material
Total Cost
10,500.00
160,500.00
60,000.00
4,200.00
64,200.00

Seed
65,000.00
4,550.00
69,550.00

Fertilizer
15,000.00
1,050.00
16,050.00
--
Chemical

UREA
Herbicide
25,000.00
1,750.00
26,750.00

Pest & fungicide
10,000.00
7,000.00
17,000.00
8,000.00
560.00
8,560.00
7,000.00
490.00
7,490.00
5
Grain bag
6
Tuine
7
Threshing canvas
Total
150,000.00
-
DAP
4
Remark *0.0070
-
348,000.00
378,660.00
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
ABDULAZIZ MUSTEFA AGRICULTURAL DEVELOPMENT PROJECT
8.2.2 Staff Salary for Second 5thYear
Table 8. Staff Salary for Second 5th Year
No
Employment Position
Staff No
Monthly Salary
Annual Salary
(ETB)
(ETB)
Head office
1
General Manager
1
7,000.00
84,000.00
2
Secretary cashier
1
2,500.00
30,000.00
3
Driver
1
2,000.00
24,000.00
Sub Total
1
2
3
4
5
6
7
8
3
Farm site
Farm manager
Production officer
Forman
Time keeper
Tractor operator
Ass .tractor operator
Store guard
1
1
1
1
1
1
1
1
Crop guard
SUB Total
12
Total
15
9. SOURCE OF CAPITAL
138,000.00
4,000.00
2,800.00
2,500.00
2,000.00
4,000.00
2,700.00
48,000.00
45,600.00
30,000.00
24,000.00
48,000.00
32,400.00
24,000.00
24,000.00
276,000.00
2,000.00
414,000.00
2,000.00
The total investment capital required to implement the project proposal is 512,331.32 ETB. Out
of this capital 3,738,722.00ETB is fixed investment cost which is invested on farm machineries
transport facilities, office furniture and farm hand tools in the past 4 years which are ready now
for implementation on the new proposed site.
The rest is allocated for working capital. The source of this budget would be 30% from owner
contribution which is deposited in the bank which is 512,331.32Br (11.4%) as shown by bank
statement attached with this proposal and the rest (18.6%) can be obtained from next year crop
sales income but the rest 70% will be from bank credit.
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
ABDULAZIZ MUSTEFA AGRICULTURAL DEVELOPMENT PROJECT
10. PRODUCTIONFORCAST /YEAR
Table 9: Production forecast /year
No
Crop
Area Total (Ha)
Yield/ Ha
Total Yield (Qt)
1st year
1
Sesame
200
10
2000
2
Soya bean
150
20
3,00
3
Sorghum
150
25
3,750
Total
500
8,500
2nd year
1
Sesame
200
10
2000
2
Soya bean
150
20
3,00
3
sorghum
150
25
3,750
Total
500
8,500
3rd year
1
Sesame
400
15
6,000
2
Soya bean
300
25
10,000
3
Sorghum
300
30
9,000
Total
1000
25,000
4th year
1
Sesame
400
15
6,000
2
Soya bean
300
25
10,000
3
Sorghum
300
30
9,000
Total
1000
25,000
5th year
1
Sesame
400
15
6,000
2
Soya bean
300
25
10,000
3
Sorghum
300
30
9,000
Total
1000
25,000
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
ABDULAZIZ MUSTEFA AGRICULTURAL DEVELOPMENT PROJECT
11. REVENU FORCAST/YEAR
Table 10. Revenue forecast/year
No
Crop per Year
Yield Total (Qt)
Sales Price
Total Revenue
(ETB/ Qt)
(ETB)
1st year
1
Sesame
2000
3,500.00
7,000,000.00
2
Soya bean
3,000
1,200.00
1,440,000.00
3
Sorghum
3,750
1,000.00
2500,000.00
Total
10,940,000.00
4500
2nd year
1
Sesame
2000
3,500.00
7,000,000.00
2
Soya bean
3,000
1,200.00
1,440,000.00
3
Sorghum
3,750
1,000.00
2500,000.00
Total
10,940,000.00
8,750
3rd year
1
Sesame
6,000
3,500.00
21,000,000.00
2
Soya bean
10,000
1,200.00
12,000,000.00
3
Sorghum
9,000
2,500
1,000.00
Total
9.000,000.00
33,000,000.00
4th year
1
Sesame
6,000
3,500.00
21,000,000.00
2
Soya bean
10,000
1,200.00
12,000,000.00
3
Sorghum
9,000
1,000.00
9.000,000.00
Total
33,000,000.00
2,500
5th year
1
Sesame
6,000
3,500.00
21,000,000.00
2
Soya bean
10,000
1,200.00
12,000,000.00
3
Sorghum
9,000
1,000.00
9.000,000.00
Total
2,500
33,000,000.00
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
ABDULAZIZ MUSTEFA AGRICULTURAL DEVELOPMENT PROJECT
12. SUMMERY OF SOCIO-ECONOMIC CONTRIBUTION
In line with the objective of the enterprise, the proposed project has economical, technical, social
benefit to the country in general and to the region and community in particular.
12.1
Economic benefit for the society
The socio-economic impact of the project is expected to be positive, as the operational area is
devoid of major settlements, precluding any potential displacement/ eviction of conflicts. The
positive impacts are more pronounced in view of the development of an abandoned and
uninhabited rural area, bringing large employment opportunities to the surrounding population.
As the project requires labor for undertaking its operational activates, a number of people will
have the opportunity of being employed in the project. In this regard, the project will create new
employment post for about 14 individuals on permanent basic and for up to 55 casual laborers.
The project will undoubtedly play its role in alleviating the existing poverty level through the
creation of employment opportunity, provision of training on the uses of modern farming system,
and other social benefits for the unemployed youth, women and the poor sector of the
community around the project area.
12.2
Economic benefit for the community
The cultural practice of agriculture production in the project woreda as well as in the region is
very backward. To improve such backward technology the project has plan to teach and transfer
modern agricultural technology particularly which increases crop productivity per hectare. The
technologies which are selected are economical easily adapted and most important to increase
crop yield per hectare.
These includes:
To use selected crop seed variety;
Dressing selected seed before planting against termites and other soil borne diseases;
Inoculating pulse seeds with nitrogen fertilizer fixing bacteria to double yield;
Planting crop seeds in raw instead of broadcasting;
To improve pre and post-harvest crop management such as herbicides pesticides etc on
time;
Teaching how to use crop residual for cattle and goat feed after the residual is treated for
certain months with urea fertilizer;
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
ABDULAZIZ MUSTEFA AGRICULTURAL DEVELOPMENT PROJECT
Facilitating better market service for major crops together with project product sales;
The project will also be committed to provide agricultural machinery and implements
rental services and other related technical support like the use of modern agricultural
practices and supply of inputs etc;
To implement all the above mentioned innovations the project will promote project crop
out growers and create good linkages with the surrounding farmers and the use of the
project facilities knowledge and experience there by increasing the economic activities of
the inhabitants of the project area;
12.3
Economic Benefit for the Country
This investment project will have significant socio-economic benefits, both to the national
economy of the country at large, and the region in particular in which the project is to be
established. The specific direct benefits will include;
Development of uninhabited part of the country and exploitation of hitherto abandoned
physical resources of the particular area through the establishment of modern agriculture.
Supply of agricultural commodities to the national and export markets, thereby enlarging
the domestic basket of food items and contributing to the foreign exchange balance of the
country, both through generation of foreign exchange and import substitution.
Provision of physical and social infrastructure, thereby creating conducive and suitable
environment for regional development.
Substantial increase in federal and regional government revenue, through direct & indirect
taxation.
Upon realization of its full production stage within five years, the project’s economic
contributions to the country’s economy will primarily create jobs; which provide direct
employment opportunities. Exports of the crop produced by the project will bring about hard
currency. The project will also generate over ETB Million in tax revenues. The project will also
reinvest about 3% of its net profit, which amounts about ETB 1 Million for immediate
development of community infrastructure within the locality.
There are also indirect but essential contributions that the enterprise could contribute as a
socially responsible company. The company’s commitments to the latter, among others, are
demonstrated by its steadfastness towards maintaining higher standards of corporate
23
BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT
ABDULAZIZ MUSTEFA AGRICULTURAL DEVELOPMENT PROJECT
responsibilities in all its internal operations and management system. Likewise, it will work
persistently through making sure that all the company’s external communications, selfpromotion and business dealings are conducted in a traceable, transparent and accountable
manner. This corporate values and principles shall be demonstrated in implementing the
anticipated project, and thus; help realizing of tangible influences on the corporate culture and
mode of operations of other companies of relevance. As observed from experiences of other
countries, the long term benefits of internalizing such higher standards of corporate
responsibilities among companies within a given production sector often lead to a more prudent
and systematic exposition of a country's export market opportunities in relation to specific
products.
As
described
below
ABDURAHMAN
HASSAN
AGRICULTURAL
DEVELOPMENT PROJECT believes to accomplish the latter scenario with the sesame and
soybean crops it intends to produce through the project.
In view of its anticipated commitment to ascertain high standards and quality of its productions;
the project would likely grasp a share among the high vale niche markets in the US, Japan and
Europe. This will apparently influence production and quality standard other producers of
relevance; which in turn improves the Country’s production quality standards, and therefore,
enhances its share of export market opportunities.
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BUSINESS PLAN FOR AGRICULTURAL DEVELOPMENT