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Cassava is one of the most popular and widely consumed food crops in
Nigeria. Because it is such an important food in our dear country and an
extremely versatile crop, it is in fact, the cornerstone of food
security in Nigeria. The competing needs for cassava cut across both human and
animal consumption. It is fast becoming a popular raw material in
industrial production and is now a preferred material for making biofuels.
Due to the very short shelf life (2-3 days) of harvested cassava
tubers, inadequate road and power infrastructure, most of the cassava produced
in
Nigeria is consumed locally, where it is still unable to address the
growing consumption. As a result, a lot of the cassava harvested every year
can
get spoilt and never make it to the market. This wastage is
estimated to be worth millions of naira every year. However, by adding value
to the
cassava crop and processing it into a ready-to-eat staple like
garri, entrepreneurs can earn a very healthy profit on the open retail market.
Garri is one of the most staple Nigerian diets because not only is
it cheap, but it is easy to make and can be taken in majorly two ways that are
fast
to prepare. Those in the garri business know that this is the
fastest way to make money especially in the agro processing industry.
Garri is one of the major products from processed cassava the staple
food for almost all Nigerians, as about 75% of Cassava is processed into
garri.
Some entrepreneurs are going into the garri processing business
especially as this product is recession proof. The recent economic downturn in
the
country has seen more and more people turning to garri. Also,
another factor in favor of the garri processing business is the growth in the
population which has pushed the demand for garri and has also caused
more garri processing businesses to crop up to be able to meet the growing
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demand.
Description of Business
It is no news that many people are into cassava farming and garri
production in southwest Nigeria, yet the local and international demand is
still
high. To thrive in the business as a new entrant, creativity and
innovativeness in farm management, quality control and garri marketing is
necessary. The branding of the garri is expected to be diligently
explored and exploited.
Business Objectives
2.1.2 Weeding
Weeds can retard the growth and reduce the performance of cassava. A
well-weeded cassava farm can yield 30–40% more roots than a poorly
weeded farm. Weed control forms a significant part (30% – 50%) of
the labour costs in cassava production. The exact weeding frequency will
depend on the type and severity of the local weed problem, but in
general: It is important to start weed control 3–4 weeks after planting.
This can
be done at the same time as the replacement of the failed cuttings
(in week 3) in order to maximize the use of labour. Weeding should be repeated
in weeks 8 and 12, while the final weeding should be done between 20
and 24 weeks after planting, depending on the rainfall. During dry phases
weeding may not be required but it is always recommended to destroy
weeds before dry phases and after the resumption of rains. Once the canopy
of the cassava and of the intercrops (if any) has closed the shading
will effectively control most weed growth. The overall total number of weeding
cycles depends, in part, on the resilience of the weeds, and this
depends on agro-ecological conditions. Weeding can be done manually (hoe and
cutlass), mechanically (using a tractor) or chemically (although
there are no specifically prescribed herbicides for cassava). However,
mechanical
weeding beyond the first 4 weeks after planting can damage the
roots. Therefore, manual or chemical weed control is preferred after this
period.
One should use his local knowledge to decide which weeded material
should be left on the plot or removed and discarded. Generally, small broad-
leaved weeds can be left on the field because they will die from the
heat of the sun and become mulch. Bulky weeds, weeds with rhizomes and
weed species with the capacity to form roots from stem pieces tend
to re-sprout if cut and left on the soil surface, so one should uproot and
dispose
of these types of weeds away from the field. Tall grasses should be
uprooted and removed from the field before they flower in order to prevent
seed
formation and germination, which will further propagate the weed
species.
Processing cassava roots into garri takes several steps, and these
are:
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Freshly harvested cassava roots are covered with soil and dirt and
some may be damaged or rotten. Only healthy roots (without rot or other
damage) should be transported to the factory. At the factory, the
roots are peeled to remove the outer brown skin and inner thick cream layer
and
washed to remove stains and dirt. The water source should be checked
regularly to ensure it is not dirty or contaminated.
Bagged cassava mash can be left on the fermentation rack for one or
more days before de-watering. Alternatively, the bags of cassava mash can be
pressed for the required number of days, during which time the mash
will ferment. At the end of the fermentation period, the mash will become a
firm, wet cake. Fermentation periods of longer than one or two days
will produce very sour products. Consumer tastes and preferences will
therefore determine the length of the fermentation period.
Garri is made by sieving the wet cake into small pieces – known as
grits – and then roasting or frying the grits in a hot frying tray or pan to
form
the final dry and crispy product. Garri is normally white or cream,
but will be yellow when made from yellow cassava roots or when fried with
palm oil. It is important to make sure the taste and smell is
acceptable to local consumers. The product should be free from mould, insects
(dead or
alive), dirt and any other material that could be hazardous to
health.
The following table summarizes all the costs that would be involved
in executing this project.
Fixed Cost #
#
Hoe 1,200
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Cutlass 2,500
Wheel Barrow 7,000
Total Fixed Cost 10,700
10,700
Variable Costs
Cassava Cuttings / hectare 25,000
3 bags of fertilizer 27, 000
Agro-chemicals 10,500
Land clearing 80,000
Ridge making 100,000
Weeding 40,000
Garri processing 60,000
Miscellaneous 15,000
Total Variable Cost 357,500
357,500
TOTAL COSTS
368,200
P.S.: It’s assumed that the investor already has a 2.5 acres of
land i.e. 1 ha.
RETURNS
The type of variety that will be planted will give about 20 tonnes
of cassava (per hectare) after 10 months; which is equivalent to 8 tonnes per
acre.
i.e. dt = C – S
Where dt = depreciation;
C = cost of asset;
S = salvage value.
SALVAGE
USEFUL LIFE DEPRECIATION
ITEM COST (N)
VALUE (N)
(YRS) (N)
Hoe 1,200 500 5
140
Cutlass 2,500 1000 5
300
Wheel barrow 7,000 3000 5
800
Total
1,240
= N 451,260
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While,
= N (810,000– 357,500)
= N 452,500
TFC = N 10,700
Unit VC = N 1191.7
= N 1508.3
TFC / Contribution;
In order words, the cassava farm will break even after the sale of
about 7 baskets of cassava out of the 100 baskets accruable from one hectare.
Therefore, any return accruable from subsequent sales is a profit in
continuum. Hence, signifies the birth of a surplus after paying for the
initial
outlay.
The financial viability was carried out using the Net Present Value
(NPV), Internal Rate of Return (IRR), Return per Capital Invested and Benefit-
Cost ratio.
Net Present Value (NPV) and Internal Rate of Return (IRR) were used
to assess the risk of the farm. The NPV is equal to the present value of
future net cash flows, discounted at the cost of the capital. The
NPV, calculated with 15% discounting rate was positive, implying that the
venture
is feasible. The payback period (expected number of years required
to recover the original investment) is 1 year (Table 3). The quick payback
period implies low risk in the proposed investment.
Table 3: NPV AND IRR OF THE CASSAVA/GARRI ENTERPRISE FOR THE FIRST 5
YEARS
2 810000
3 810000
4 810000
5 810000
NPV= TOTAL PV (for 5 years) – INITIAL
OUTLAY
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= NGN 2,347,045.63
IRR = 219%
The IRR is the discount rate that equates the present value of the
project’s expected cash inflows to the present value of the project’s
cost. The IRR
on a project is its expected rate of return. If the net present
value exceeds the cost of the funds used to finance the project, a surplus
remains after
paying for the capital, and this surplus accrues to the farmer. The
IRR for the 1ha cassava farm is 219% implying that the venture is profitable
to
operate even if the planning horizon is only five years. In fact,
the IRR is about 15 (fifteen) times the discounting rate.
The return per capital invested was found to be 0.44. This means
that for every naira invested in the cassava/garri project, a 44K gain will be
realized.
= N 452,500
= N 1,508
= N 357,500 / 300
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= (1.27) * 100
= 127%
= (2.2) X 100
= 220%
III. Opportunities: The high market demand for and increasing prices
of garri and other derivatives of cassava, leaves a loop hole to exploit and a
goldmine to diligently explore.
IV. Threats: At any season in monocropping, most of “buffer
crops/weeds†are generally absent or limited, hence, exposing a planted sole
crop to
insect pest infestation. To curtail this however, maize would be
planted along side with the cassava which will in turn give a marginal income.
Threat of theft or threat of the herdsmen could rear its ugly head
depending on location. Hence, security in the proposed location should be
adequately evaluated.
6.0 CONCLUSION