Business Plan for Commercial Lime Cultivation

Prepared by: Submitted to:

1) Aashish Shrestha Mr. Thaneshwor Bhandari

2) Aashish Tripathee

3) Aastha Adhikari

4) Abiral Kushwaha

5) Amit Ghimire

Date of submission: 2076/05/05

Contents

1. Executive summary
 2. Applicant profile

3. Production plan

4. Market plan

5. Management plan

6. Financial plan

7. Business development plan

8. Work plan

9. Conclusion

1.Executive summary:
A plus Lime Farm is aimed at commercial production of lime in Rainas-5, Tinpiple, Lamjung, which has suitable
climatic condition, socioeconomic and political feasibility and various physical infrastructures suited for the lime
cultivation. This farm will be motivation for other farmers for the commercial cultivation of lime or any other
similar fruits. Sunkagati 1 variety of lime will be cultivated under 1 hactare of lease land for 15 years of time which
can be prolonged in the future. Total fixed cost at the beginning of the year will be Rs. 21,40,000 and variable cost
of Rs. 5,00,000 on an average. About 800 grafted lime plants will be planted in the geometry of 4m *3m and a farm
house will be constructed for residence, storage, sorting, grading, packaging and other purposes. Fruiting will star
from the third year only so ginger will be intercropped which will generate some fund for overcoming the yearly
variable cost. The marketing of fruits will be primarily be done by Gandaki Marketing Company and in local market
also. The wholesale price will be Rs.50 per kg of fruit. The anuual production will be about 30 tons generating
Rs.10 lakhs, 14 lakhs on third and fourth year and Rs.16 lakhs from fifth years upto 15 years.

The project will have a net present value of Rs. 1,59,042 and the benefit cost raio will be 1.2 with the opportunity
cost of 14%. This indicates the high feasibility for the business with a good profitability. The financial rate of return
will be 22% which higher than the opportunity cost. The payback period of this farm will be only 4.6 years
indicating a good sign of effectiveness of business which will overcome its investment in short run ensuring long
run profitability. That’s why investment on this business will lead to high profitability for sure.

2. Applicant Profile
1. Name of business A Plus Lime Farm

Types of Organization Agri-entrepreneurs

Address Tinpiple Contact Phone No. 064-45748339

Ward no:5 Fax No: 0000
Municipality: Rainas e-mail:xyz111@gmail.com
District: Lamjung
Name of Responsible person Name: Aashish Shrestha
Contact Phone No.9846641475 e-mail:
Shresthaaashish690@gmail.com
VAT/PAN No: 45689756457
Information on Bank Name of Bank: Agriculture Development Bank

Address: Siudibar, Lamjung

Types of account
Current
A/c No
1000648501000023
 Business description

Lamjung district is one of the pocket area for citrus production . The lower and midhills have suitable climate for
successful lime production. A plus Lime farm will be established in Rainas -5, Tinpiple Lamjung. The farm will be
established on poush 2076 B.S. and will be continued for 15 years and end on Mangsir 2091 B.S. The cultivation area can
be continue if possible . The will be under the partnership of 5 members. The entreprise is proposed as a small scale. The
marketing of lime fruit will start from the 3rd year onwards. The targeted markets are Besisahar ,Pokhara and Kathmandu
and local consumption. Upto three years intercropping of ginger will be done ,which generates some fund for operating
cost until third years. In third year intercropping will be discontinued.

3. Production Plan

Total area of 1 ha will be under the lime cultivation on the lowland of Rainas-5, Tinpiple, Lamjung which has
proper loamy soil with high organic matter and regular irrigation facility. The land has been used for the rice
cultivation as well as other crops like maize, mustard etc. according to the season.
Field layout and constriction of a farm building will be started in the month of Poush, Magh and Falgun. Pits will be
dug in the month of Chaitra. The pit size will be 60cm*60cm*60cm spaced in the geometry of 4 m * 3m. Each pit
will be filled with 20 kg of farm yard manure, 40 gm urea, 25 gm of DAP and 25 gm of potash in the month of
Jestha. In the month of Asar, the planting of Sunkagati 1 variety of lime will be done. About 833 plants can be
accommodated on 1 ha of land. Irrigation is done according to soil moisture and plant requirement. During dry
period from Falgun to Jestha, they will be I irrigated in 10-15 days interval.

Training amd prunning will be done according to the need after the harvest. Bordeux paste(1:1:10) will be apllied on
the trunk and mixture (1:1:100) sprayed after prunning, before the new flushing. Upto the second year, of fruits
appear in the plants, they will be avoided to increase the plant health and ensure high productivity in coming years.
About 800 fruits is expected to harvest per plant which have weight of 50 gm per fruit yielding total of 40 kg plant.
The seasonal production will be about 30,000 kg of lime and with some extra fruiting as it goes on fruiting
throughout the year
3.1. Production Plan of ……………cooperative/> 2 groups

Name of Business: A plus lime farm

Production area: 1ha Types of land: Khet
Business Location: Rainas-5, Tinpiple, Lamjung
Number of farmer : 5
Number of participants Contract Ownership of
Production
amount land
area
Name of farmer'group -Ton_
/cooperative and its address
Janajati/
Female Male Total Dalit others Own Lease
Adibasi
A plus Lime Farm
1 4 5 - 1 4 1 ha 30tons - lease
Rainas-5, Tinpiple, Lamjung
3.2 Personal Production Plan
Name of Business: A plus lime farm
Production area: 1ha Types of land: Khet
Business Location: Rainas-5, Tinpiple, Lamjung
Number of farmer: 5

Male/F Executive Ownership of land

emale Dalit/janajati/Adib
Name of farmer committee / Area/no (own/
asi//other
member lease)

Aashish Shrestha M Janjati 4 ropani Lease

Aashish Tripathee M 4 ropani Lease

Aastha Adhikari F 4 ropani Lease

Abiral Kushwaha M 4 ropani Lease

Amit Ghimire M 4 ropani Lease

Total 20 ropani
 Production cost estimate

  Year 1 Year 2 Year 3 Year 4 Year 5

S.N Particular
Unit Qnt Rate (Rs) Amount(Rs) Qnt Rate Amount(Rs.) Amount(Rs.) Amount(Rs.) Amount(Rs.)
Fixed/Working assets
A                    
cost
1 Machinery 1 1 40,000 - - -
40,000 -
Construction of farm
2  1  1  20,00,000 20,00,000     -  -  - -
house
3 Fencing  ropani  20  5,000 1,00,000     -  -  - -
4 Irrigation structures  ropani 20    40,000     -  -  - -
Total - - - 21,40,000
B Variable cost
1 Planting materials  pcs  850  150 1,29,200     20,000    - -
Fertilizers and
2  -  -  -      20,000  25,000 25,000
pesticides 20,000 20,000
3 Fuel and power  -  -  - 15,000     15,000  15,000  20,000 20,000
4 Manintenance cost - - - 5,000 5,000 5,000 5,000 5,000
5 Tools and equipments - - - 12,500 3,000 3,000 3,000 3,000
Transport and
6 - - - 10,000 5,000 5,000 5,000 5,000
communication
  Total       1,73,000     68,000  48,000  68,000 68,000

C Labour              

1 skilled  person  5 1500  3 1500   4500  4500 4500

7500 4,500
2 unskilled  person  60 700   20  700  16000  16000 16000
48,000 14,000
3 Permanent month 2 15,000 1,80,000 1,80,000 1,80,000
1,80,000 1,80,000
Total           1,98,500  2,00,500  2,00,500 2,00,500
2,35,500
d Training, visit cost - 10,000 - -
10,000
Total 10,000 -
10,000
E Other costs
Insurance - - - 40,000 40,000 40,000 40,000
  Farm advertisement           -  10,000  10,000 -
-
Land lease 2,00,000 2,00,000 2,00,000 2,00,000
2,00,000
 Total           40,000  50,000 50,000  40,000
-
Grand Total
        27,58,500     5,06,000  5,08,500  5,18,500 5,08,500
(A+B+C+D)
F Production              
Main Production       -     -  10,00,000  14,00,000 16,00,000
  Byproduct    2000  200 4,00,000  2000  200 4,00,000  -  - -
Cost of production (Rs
G  kg              
/Kg or litre
4. Market Plan

4.1 Sales plan

Sales after this plan

Name of Total
Before Plan 2nd 4th yr 5th year
production amount st
1 yr 3rd yr
yr

80 ton - 0 0 20000kg 28000kg 32000kg

Lime

4 ton - 2000kg 2000kg - - -

Ginger

4.2 Purposed buyer (Forward linkage)

Name of buyer Place Buying capacity Current status (sure or possible)

Gandaki Trading Company Dumre, 100 tons /year Sure

Tanahun

4.3 Selling Process

Name of Selling quantity through
product Farm gate
Collector Whole seller Retailer Exporter
selling (local)
lime 20 ton
5 tons
Ginger 2 tons

4.4 Price determination Plan/ Process

Wholesale price Price determination

Product Retail price
Qnt 1 Qnt 2 Qnt 3 strategy
Rs.4/fruit Rs.2.5 per - -
lime fruit (Rs.50 According to national
per kg) average price and
RS.200/kg - - - neighbouring farms,
Ginger Quality of product,
Demand

4.5 Competitive Strategy

Your selling Your Management What you What is your competitive strategy<
 Quality Sure and
competitor's gap between do to keep Less
product product regular Other
product two products quality price
production supply

Lime Lime Sorting and Safe Quality Less

grading harvest, price
proper
storage and
packaging

Ginger Ginger - GAP - - - -

5. Management Plan

5.1 Staff management structure

Number Role
Position of the staffs
Local Outer Female Male
Manager 1 Male To overlook
overall farm
components

Store keeper 1 1

Keep record of
store

Accountant 1 1

Keeping
financial
record
Sales Incharge 1 1
Manage
marketing of
product

Supervisor
Production
Skilled labours 1 1 2 and
management
Production
Unskilled labours 1 1
works

5.2 Risk Reduction Plan

Impact of Business Nature and intensity Strategies for facing

Risk and assumptions

Maintenance may take little longer

1 Irrigation problem Irrigation canal may be damaged
time
 2

Environmental Impact

 Production time Hamper production Time management

Proper infrastructure and skilled
 Processing time Post harvest activities affected
manpower

 Marketing period - -

Social Impact Claim for return of lease land Securing with a contract
6. Financial Plan

6.1 Profit and Loss Account

Fiscal year 2076/77(first year)

Expense Income
Particular Amount (Rs) Particular Amount (Rs)
Total
income
Total loss transferred from transferred
20,00,000 4,00,000
Business ledger from
Business
Ledger
Other
non-
Salary 23,500 40,000
business
income
Rent 2,00,000 -
Communication cost 10,000 -
Other cost 30,000 1,00,000
Marketing cost 25,000
Net loss
taken
from
Net profit taken from balance
- balance -
sheet or net-worth ledger
sheet or
net-worth
ledger
22,88,500 5,40,000
There should be one business ledger in the organization

6.2 Balance sheet

 Balance sheet preparation
date:2076/10/30

Liabilities Amount (Rs) Asset Amount (Rs)

Capital –Own capital plus

170,000 Cash stock 3,00,000
subsidies

+ net profit/
137,ooo Cash at Bank 5,00,000
-Net loss
Total capital 3,07,000 Machineries and tools 80,000
Bills to be reimburse 1,80,000 Furniture and fixture 3,45,000
Loan 15,00,000 Building 20,00,000
Bank overdraft 1,00,000 Cash to be received -
Equipments 12,500
Advance payments -
Total 20,87,000 Total 32,37,500

6.3: Cash flow Forecasting

Income and
Year 1 Yr 2 Yr-3 Yr 4 Yr 5
expenditure
Income 4,00,000 4,00,000 10,00,000 14,00,000 16,00,000
Sales expenditure 3,65,000 3,90,00 4,35,000 4,35,000 4,35,000
Net profit 35,000 10,000 5,65,000 9,65,000 11,65,000

Advertise promotion - - 10,000 10,000 10,000

account 4,00,000 4,00,000 10,00,000 14,00,000 16,00,000

Bank costs 10,000 10,000 10,000 10,000 10,000

Production cost 3,30,000 3,47,000 2,50,000 3,90,000 4,01,000
Office goods 15.000 23,000 45,000 15,000 4,000
Communication 10,000 10,000 10,000 10,000 10,000
Net Profit 35,000 10,000 5,65,000 9,65,000 11,65,000

6.4 Cash flow statement

Particular Year 1 Yr 2 Yr-3 Yr 4 Yr 5

1. Cash Inflow

- Cash from sale 4,00,000 4,00,000 10,00,000 14,00,000 16,00,000

 - Subsidy support 1,00,000 - 25,000 25,000 25,000
- Loan or
15,00,000 - - - -
borrowings
- Own capital 10,00,000 - - - -

Total 30,00,00 4,00,000 10,25,000 14,25,000 16,25,000

2. Cash Outflow

- Production goods
3,30,000 3,37,000 2,25,000 3,90,000 4,01,000
expenses
- Expenses for
labour
- Loan payments - - 2,00,000 4,00,000 4,00,000
-Interest payments 10,000 10,000 10,000 9500 6000

- expenses in fixed
23,40,000 - 15,000 - 25,000
assets
Total 3,40,000 3,47,000 4,50,000 7,99,500 8,32,000

Cash flow -26,80,000 53,000 5,75,000 9,25,500 7,93,000

6.5 Financial analysis

1. Breakeven point (B/P analysis)
The break-even point is the level of operation (sales rupees or production quantity) at which
a company neither earns a profit nor incurs a loss
· At this level of activity, sales revenue equals expenses, that is, firms break even
· It is the planning device for the small business owner
2. Returns on investment (ROI)
ROI (Return on Investment) measures the gain or loss generated on an investment relative to the amount of money
invested. ROI is usually expressed as a percentage and is typically used for personal financial decisions, to compare
a company's profitability or to compare the efficiency of different investments
3. B/C Ratio
B/C ratio is the oldest method among all discounted measures of project evaluation. It is the ratio of present worth of
benefit stream divided by the present worth of cost stream
4. Net Present Value (NPV) of Net Present Worth (NPW)
NPV of a project is the sum of the present values of all the cash flows-positive as well a negative-that are expected
to occur over the life of the project.
5. FIRR
It is discount rate which makes its NPV equal to zero. In another word, it is the discount rate which equates the
present value of future cash flows with the initial investment. Therefore, in IRR method the interest rate that equates
the present value of the future cash earnings with initial investment outlay is calculated
6. Payback period
It is a frequently used non-discounted measure. Pay Back Period is the length of time form the beginning of the
project until the net value of the incremental production stream reaches the total amount of capital investment. It is
simply the length of time required to recover the initial cash outlay (initial investment) on the project.

NPV B/C ratio IRR PBP BEV

Rs.1,59,042.92 1.2 22% 4.6 years 12,54,787
7. Business Development Plan
7.1 Logical Framework

Narrative summary
Business goal:
Invrease production and
productivity of lime
Area of cultivation will be
Business purpose:
All farmers are economically
benefited
Output
More farmers engagead in
lime cultivation
Area of cultivation increased
Productivity increased
More income of farmers
Activities
Aware about importance and
scope of lime cultivation
Distribution of seedlings
Objectively Verifiable
Means of Verification Risk and assumptions
Indicator (OBI)
Increase productivity of Farmers begin commercial
lime by atleast 50% by DADO report cultication of improved
2030 lime varieties
doubled and processing DADO report and Proper support to the
industry will be observation enterpreneurs
established
Effective Extension
- DADO report
service
Effective Extension
By 2025, Area is doubled DADO report
service
Increase productivity of
Proper trainings and
lime by atleast 50% by DADO report
guidance
2030
Financial repots And CBS Financial supports
Increase in yearly income
data provided

Trainings

Subsidies

Regular field visits

Proper cultural practices

Proper harvest

Sorting and grading

Packaging

Proper marketing

7.2 Production specification

A. Technical aspects/Base
1
Name of variety: Sunkagati 1
2 Plantation distance: 4m*3m
 3 Crop plant number (per ha) 830
4 Fertilizer and manure (gram /plant/plant ) 20kg FYM,
5 Production ( Fruit number /Plant ) : 800-900
B. Financial aspect
1 Production goods (Rs/seedlings ):150
2 Labour rate (Rs/day):700-800
3 Tractor rate ( rs/hr or Rs/day):RS.800/hr
4 FYM or compost manure Rs.100 per 2o kg
5 Manure (Rs /Kg)
Urea (Rs/Kg) 27
DAP (Rs /Kg) 55
MOP (Rs /Kg) 35

6 Pesticides
Pendimethalin ( Rs500/Litre)
Glyphosate RS.260/litre
9 Sales price Rs.50/kg
10 Income Rs.16,00,000 per ha
 7.3 Work Plan

Yr-1 Yr -2 Yr -3
Name of

May

May

May
Aug

Nov

Aug

Nov

Aug

Nov
Mar

Mar

Mar
Dec

Dec

Dec
Apr

Apr

Apr
Feb

Sep

Feb

Sep

Feb

Sep
Oct

Oct

Oct
Jun

Jun

Jun
Jan

Jan

Jan
Jul

Jul

Jul
Activities

Site
selection
Field layout
and field
preparation
Infrastructur
e building
Planting
Cultural
operation
harvest
Sorting
Grading
Packaging
Marketing

8.Conclusion

The project will have a net present value of Rs. 1,59,042 and the benefit cost raio will be 1.2 with the opportunity cost of 14%. This indicates the high feasibility
for the business with a good profitability. The financial rate of return will be 22% which higher than the opportunity cost. The payback period of this farm will be
only 4.6 years indicating a good sign of effectiveness of business which will overcome its investment in short run ensuring long run profitability. That’s why
investment on this business will lead to high profitability for sure.
Activities Baisakh Jestha Asar Shrawn Bhadr Asoj Kartik Mangsi Poush Magh Falgu Chaitra
a r n
Site Selection

Tank or Pond
set-up

Aeriation and
pre-seeding
of beneficial
microbes
Species
selection and
stocking
densities
Monitoring

Harvesting

Marketing