Dagne Daba Debub 500 Hek

Fruit and Vegetable, Crop and Cattle Fatting Production Farms
PROJECT PROPOSAL ON
MIXED FARMS
(IRRIGATION FRUIT AND VEGETABLES, CROP AND
CATTLE FATTING PRODUCTION FARMS
PROJECT LOCATION: - SOUTHERN NATIONS,

NATIONALITIES, AND PEOPLES' REGION WOLAITA ZONE,
OBO DISTRICT, SISORE KEBELE.
PROMOTER: - DAGNE DABA
JUNE, 2021
ADDIS ABABA, ETHIPIA
Promoter’s: - Dagne Daba Page 1

TABLE OF CONTENTS
1. EXECUTIVE SUMMARY 1
2. INTRODUCTION 2
1. BACKGROUND 3
2. THE PROJECT AREA 4
a. Location 4
b. Topography 4
c. Soil type 4
3. THE PROJECT 5
a. Project description 5
b. Objective 5
c. Technology used 6
d. Engineering 6
e. Production capacity 8
4. MARKET PROCESS 10
5. LAND USE PLAN 26
6. ORGANIZATION AND MANAGEMENT 26
a. Organization structure 26
b. Manpower requirement with qualification 27
7. FINANCIAL STUDY 29
a. Fixed cost 29
b. Production cost 31
c. Production capital and financing sources 33
d. Revenue projection 33
e. Financial statements 34
8. SOCIO – ECONOMIC BENEFITS 35
9. ENVIRONMENTAL IMPACT ASSESSMENT 36

Executive Summary
1.Project Name Irrigation Fruit and Vegetable, Crop and Cattle Fatting
Production Farms
2.Project Owners Dange Daba
3.Nationality Ethiopian
4.Project location Wolaita Zone, Obo District, Sisore Kebele
5.Project Composition  Fruit & Vegetable Production Farm

 Crop Farms
 Cereals and Oil Seed Farm
 Cattle Fatting
6.Primeses Required 500 hectar
7. Start up Capital For implementing this project a total of 0 Eth birr is required.
 Total Capital
1.1. Fixed Capital = 10,012,000 birr
1.2. Working Capital = 10,688,000 birr
1.3. Contingency (Lump sum) 10% = 2,300,000 birr
 Source Fund
1.4. Own Equity (30%) = 6,900,000 birr
1.5. Bank loan (70%) = 16,100,000 birr
8.Employment Opportunity The total manpower required for the plant will be 500
employees
1.6. Permanent Worker :- 100

 Skilled and Unskilled
1.7. On Temporary Basic: - 400
 Skilled and Unskilled
9. Market Share 50 % Export Standard 50% for Local market

10. For the region/ country Source of foreign currency
2. Introduction

Until the coming of new economic police, the acute problem of Ethiopia had been food shortage. This
has been the problem faced by all developing countries even though not chronic as ours. In countries
like Ethiopia although drought had affected the agricultural output, the overall discouraging economic
police of the time was also the one, which hindered the economic development of the country. Even
under such a condition, the agricultural sector apparently plays the decisive role in the overall
economy of the country. It accounts for about 50% of GDP 85% of the employment and about 90%
of the export earnings. Despite this agriculture has remained under development because of different
reasons, drought, poor economic base law productivity, poor technology transfer and the like. The
government has embarked on an export diversification program to reduce its dependence on coffee
and to other quality products.
Agriculture is expected to remain the major contributor to economic and growth in the coming
decades. The potential for expanding output is largely through expanded irrigation, improved in puts
supply, strengthened research and extension systems and rehabilitated infrastructure.
In general to do away the problem of food self sufficiency increase foreign currency increase of raw
material for industries efforts should be made towards developing agricultural sector. This needs a
shift from traditional and back ward method of production system that required a coordinated roll of
all factors of production. In this regards it is the private sector that can mobilize huge capital and
skilled man power.
Therefore the involvement of private sector should be pursed and encouraged by the government
through adopting a favorable economic policy that allow the sector to take part in the development
process without putting capital ceiling.
Currently, in order to encourage private investment and to attract capital technology and know-how to
the country comprehensive packages of incentives are granted to investor by the investment
proclamation.

These incentives included (100%) exemption from payment of import customs duties levied on
imported capital goods (machines and equipment’s as well as spare parts up to 15% of the value of
capital exemption from income tax payment for a period market.
Although there are many similarities between fruits and vegetables, there is one important difference
that affects the way that these two types of crop are processed:
Most fruits are more acidic than most vegetables!
This is important because food poisoning bacteria cannot grow in more acidic fruit products. Even if a
processor makes a mistake in processing, fruit products cannot cause food poisoning. If the mistake
allows moulds and yeasts to grow, they produce obvious signs of Spoilage, which stops consumers
eating the food. If a contaminated product is eaten, yeasts
and moulds rarely cause food poisoning.
Vegetables are less acidic than fruits and food poisoning bacteria are able to grow in many
Vegetable products. Some types of bacteria produce poisons in the food without signs of
Spoilage and consumers may be unaware of the contamination and eat the poisoned food.
It is therefore especially important that vegetable processors carefully follow the correct
Processing methods and pay strict attention to hygiene and sanitation to reduce the risk of
harming their customers.

3. Background
This project constitutes fruit and vegetables production, which is the most tests full and the most
appreciated and stable in the domestic market. The market for these productions continues to be strong
due to the increasing demand. These account for the fact that production continues to increase the
demand for the production which pushes the price higher on the world. The total investment capital of
the project will be about 23,000,000 Birr of which 10,012,000 Birr will be for fixed investment capital
and the remaining 10,688,000 will be invested for working capital.
The proposed project will create job opportunities for more than 100 permanent & 400 temporary and
total for 500 citizens and will generate revenue which estimated to 21,918,750 per year when it
operates at full capacity, generate income for the government in the form of land rent and different
taxes payment.
The output of the project will never encounter any marketing problems since the demands for the out
puts of the project are high and ever increasing while the supply is far below the demand. The
promoter has every right to sell his/her production in a free market where he/she could reap the
maximum benefits.
3.1. Characteristics of fruits and vegetables , Crop and cattle fatting

After harvest, micro-organisms and naturally occurring enzymes rapidly change the colour, flavour
and texture of fruits and vegetables. The speed varies with different types of crop, but, compared to
other crops (such as cereals), there is a limited amount of time available before they must be
processed. Other problems that face fruit and vegetable processors include:
 Most fruits and vegetables are seasonal. For a business to operate throughout the year, crops
must be either part-processed for temporary storage, or a succession of crops must be
processed as they come into season
 Raw materials have to be bought during a relatively short harvest period when prices are
lowest. There is therefore the need to have sufficient cash available to buy a year’s supply of
crop.

4 Project area
4.1 Geographical Location
The envisaged project would be located southern nations, nationalities, and peoples' region
wilayat zone, Obo Woreda, Sisore kebele.
Currently the woreda is known for its multi investment development and future establishment of
industrial city. According to the 1994 national census, the town had a population

4.2 Soil and Topography

The location/soil where this project is planned to be executed is very fertile and suitable for fruit
and vegetables production. With respect to topography, the major part of the land has got the
altitude of the area lies in the altitude suitable for mechanized farm in general and the above
products in particular.
4.3 Climate
The project area dominantly characterized by dry weynadega agro-climatic zone. The area has
one rainy season from June to September
4.4 Economic activity

The major economic base of the peoples living around the project area is depending on
traditional mixed farming. They grow crops of different type like maize, barely, haricot bean,
and fruit and vegetables production supplemented with animal rearing.
Water supply
The sources of water for agriculture are rain fall and drip irrigation Gibe system. Irrigation is the
supply of water to agricultural crops by artificial means, designed to permit farming in arid, semi
arid or semi humid regions. Irrigation can prolong the effective growing period in area with dry
seasons, thus permitting multiple cropping (two or three time per year). The process of irrigation
consists of introducing water in to the soil profile those services as the root zone, for the
subsequent use of the crops.
There are various ways in which irrigation water can applied to the fields. The selection of
appropriate irrigation technology for any given combination of physical and socioeconomic
conditions involves numerous considerations. Physical factors involved in system selection
include soils, crop, climate, topographic configuration, water quality & availability, water table
depth, field size and system performance. Human and economic factors involved are labor
availability and requirements, management skills and availability of adequate investment capital.
By taking the above determining factors into consideration the promoter has selected furrow
method surface irrigation (gravity irrigation) for its planned project.

Surface irrigation can be defined as the process of introducing a stream of water at the head of
a field and allowing gravity and hydrostatic pressure to spread the flow over the surface
throughout the field. In furrow irrigation methods, the soil surface is shaded in to a series of
furrow separated by ridge. At each irrigation, water is conveyed in to the furrows, which can be
perceived as narrow basin or borders.
 Fruit and Crop mineral contents

Minerals in squash fruits were evaluated into two groups as major minerals (Na, N, P, K, Ca,
Mg and S) and trace minerals (Fe, Cu, Mn, Zn and B). Irrigation quantities significantly
affected major and trace mineral contents of summer squash fruits (Table 2). While the highest
Na, N, K, Mg and S contents were determined as 0.98, 24.5, 34.5, 4.34 and 3.55 g kg-1 in the
Kcp2 treatment, the highest P and Ca contents were determined as 6.91 and 18.4 g kg-1 in the
Kcp1 treatment. All trace minerals, except Cu, were the highest for the Kcp2 treatment; Cu
content was the highest for the Kcp3 treatment. These changes in the mineral contents of
summer squash fruits could be explained with the available water amount in the soil. Martínez-
Ballesta et al. (2010) reported that one of the environmental stresses affecting mineral content
is drought. Also, the chemistry of the soil can be affected by the water amount in the soil.
Mayer (1997) indicated that the availability to plants of minerals in the soil solution and hence
crop mineral contents can vary with soil chemistry. The results on squash mineral contents of
this research showed differences to the results of other studies. The fruit N, P, K and Mg
contents of summer squash in this study were lower compared to the fruit mineral values of
studies conducted for drip-irrigated zucchini squash by Rouphael and Colla (2005, 2009).


4.5. Production Nature and Technology to be used

The planned project uses the most important technologically produced machineries and
equipment which produce more production with low energy and low cost. These machineries and
equipments are Germany, Japan and China made technology.
4.5.1. WATER EXTRACTION TECHNOLOGIES:
TUBE WELL
Appropriate technologies have been developed for both the sources such asgravity-fed water
supply technologies for surface water and tube-well for groundwater. This write-up is only
dealing with the technologies for extracting ground water, which are tube-well based.
4.5.2. DEFINITIONS
A. Tube-well
A hole drilled in the ground for the purpose of extracting ground water. Some tend to limit the
term to shallow wells, 2 Borehole A deep well/ tube-well; over 50 feet (about 15m) depth.
Although the construction technology is similar to a machine drilled shallow well, the type of
pump is different since water has to be pumped from a deeper level.
B. Shallow Well:
A shallow well/ tube-well; bellow 50 feet depth. This technology is applicable in shallow water
tables, hence often in soft soil/ sandy formations. Due to their shallowness, shallow wells are
prone to pollution from seepage of polluted water and drying up during dry season. However,
with proper sitting, these problems (and those below) can be eliminated. Actually, in some areas,
shallow wells tap into fresh water than deep wells, while the opposite is also true. Their biggest
advantage is their relatively low cost.
C. Machine dug
A shallow well drilled by a mechanized or manually operated machine (drilling rig) with a small
diameter. This is easily protected and fitted with a hand or submersible pump. There is virtually
no collapsing and relatively low chances of pollution with respect to the hand dug shallow well

3.3 TECHNOLOGY CHOICE

The various technologies above have their advantages and disadvantages. Some of the
determinants for choosing the technology to use are as follows;
 Local environment; type and depth of water bearing rocks
 (Aquifers), accessibility of the area (e.g. with big drilling rigs).
 The capacity in acquiring spare parts for maintenance of the well.
 The capital investment available for well installation (cost).
 Availability of materials required to install the pump (including
 Availability of a suitable water pump).
 Water quality in the shallow and deep aquifers.
 Availability of the drilling technologies.
 CONCLUSION
Considering various factors such as; the level of technical services, the usual protracted dry
seasons and even droughts, a gift of a borehole would assure sustainable adequate underground
water supply to a project throughout a year and for many years
BOREHOLE SITE SELECTION
The hole sitting is supported by a private Geophysical Sitting contractor. Using very high
technology, the contractor identifies the site with the highest potential site for getting a wet/
productive borehole. This is a necessity to reduce chances of striking a dry hole, hence wasting a
lot of money.
 BOREHOLE INSTALLATION
With the site selected, a private contractor is engaged to drill the borehole. WV technicians
support the project in supervising the driller. This ensures that the right procedures and materials
are used in the construction of the borehole, as well as the installation of the hand pump and its
sanitation civil/ concrete works. Sometimes, the Drilling Contractor is different from the Civil
Works Contractor as a means of cross checking the data/ information the Driller provided. In
water scarce areas, borehole depths average 50m (150feet). This is often the most expensive
stage, and can take an average of one month to implement.

 BOREHOLE MAINTENANCE, SANITATION AND HYGIENE COMMUNITY

CAPACITY BUILDING
Upon successful borehole installation, the trained professionals maintain in the proper operation
and maintenance of the water supply pump. This is a vital component for sustaining the pump.
On the other hand, in order to ensure sustainability of the water.
 SHALLOW WELLS
Shallow wells are normally the means of accessing ground water of shallow depths (Shallow
ground water table). In this water supply system, skilled people dig into the soft ground
formations (sandy to clay) until they strike the water table. A shallow well is called
“unprotected” when its top is not properly covered (because dirty blown by wind or carried by
surface flowing water or even the pails from the ground it rests on can enter and pollute the well.
before going in the well). When fitted with a proper lid on top, it is called a protected well. In
some cases, a hand-pump is also fitted to increase the protection.
 TECHNOLOGIES
The following two technologies are often used;
Shallow well siting;
A site to dig a shallow well is often identified by its hydrogeological setting; being along low-
lying areas with thick soils and the type of vegetation favoring shallow water table. At times,
traditional devining methods are used (eg a small branch of a special tree which breaks at the
right site). In many cases, they know from history that the area has shallow-water table, and even
the taste of the water (eg areas with or without salty water).
Shallow well digging;
Some communities have appropriate technologies which assist them dig the well faster in the
same soft formations. Many communities use a tripod auger (also called the Vonder Rig). It goes
up to 15meters depth. Its diameter is the borehole size. This process requires an average of ten
people for 2 to three days. If a mechanized drilling machine is used, a maximum of one day
would be required to complete a well.

Performance and Protection of Shallow wells

Shallow wells in clay formation are good for stability of their walls, but recharge is usually slow
if many people draw water from it. The result is a common long queue of people awaiting water
recharge in the well. On the other hand, shallow-wells in sandy formations tend to be hazardous
as they collapse easily, but their recharge is usually fast due to much higher porosity compared to
the clay formations. This problem is usually managed by lining the well’s walls with locally
made materials such as bricks or baskets. A concrete slab is often put on top to prevent pollution.
Where resources allow, a pulley system or better still, a hand-pump is installed to lift the water to
the surface.
 SOME FREQUENTLY ASKED QUESTIONS

What is a shallow well?
A hole which has been dug, bored, driven or drilled into the ground for the purpose of extracting
water is a well. A well is considered to be shallow if it is less than 50 feet deep. The source of a
well is an aquifer. An aquifer is an underground layer of permeable soil (such as sand or gravel)
that contains water and allows the passage of water. Aquifers are replenished as rainfall seeps
down through the soil. Ground water travels through permeable soil on top of hard or
impermeable layers. Shallow wells usually are only deep enough to intercept the uppermost (or
most easily reached) perched water table.
 There are two main types of wells:
1. Water table wells are those that penetrate into aquifers in which the water is not confined by
an overlying impermeable layer. The level at which the soil is saturated is the water table.
Pumping the well lowers the water table near it. These wells are particularly sensitive to seasonal
changes and may dwindle during dry periods.
2. Artesian wells penetrate into ground water having confining layers above and below the
aquifer. Rainfall enters into the aquifer through permeable layers at high elevations causing the
ground water to be under pressure at lower elevations. Because of this pressure, the water level
in the well is higher than the aquifer. A well that yields water by artesian pressure at the ground
surface is a "flowing" artesian well.

How are wells constructed?

Wells can be constructed in a number of ways. The simplest and least expensive of all wells is
the driven well. It is constructed by driving a well-drive point into the ground that is fitted to the
end of a series of pipe sections. A driven well is usually 2 inches in diameter. Most wells,
however, are drilled by cable tool, percussion or hydraulic rotary, creating a 4 - 8 inch diameter
hole. A casing or pipe sleeve is extended into the hole to prevent the sides from caving in. The
annular space outside of the casing is sealed with cement grout or puddling clay. Water can be
pumped to the surface by a variety of methods. Very shallow wells (less than 20 feet) can use a
suction pump at the ground surface. Deeper wells must use a submersible pump to push the
water to the surface. Ground water is allowed to enter the casing by either an openend pipe,
perforated pipe or a well screen, depending on the size of the aquifer soil particles. If the holes in
the pipe or screen are too large, then the well may pump sand with the water. If the holes are too
small, they may become plugged and reduce the overall yield of the well.
 Dug wells
In the past, holes or pits were dug by hand or machines into the ground to tap the water table.
Dug wells are usually 3 to 10 feet in diameter, 10 to 40 feet deep and lined with brick, stone, tile,
wood cribbing or steel rings to prevent the walls from caving in. They depend entirely on the
natural seepage from the penetrated portions of water table aquifers. Dug wells have
disadvantages to driven or drilled wells. They are more difficult to protect from contamination,
and their yields are also very low because they do not penetrate into the reliable, productive
water table aquifer. A dug well can be made much safer and more productive by driving a well
point with a screen into the water-bearing formation, thus converting it into a driven well.

4.5.1. Irrigation scheme layout

 One reservoir whose storage capacity enables to develop 500 hak of irrigable land will
be constructed.
 Distribution box: - the main function of the distribution box is guiding irrigation water to
various unit farms. These boxes are located on main irrigation canals. The box is usually
constructed from masonry, mass concrete. It also serves as check structure to raise water
level in the secondary canals.
5. The project
5.1. The project Description
The country’s agricultural led development strategy, the project under consideration has a
paramount importance of contributing to the supply of food and generates foreign exchange
earnings through export of its product. The project makes use of river water by irrigation and
produces:-
 Avocado
 Potato,
 Onion,
 Tomato,
 Pepper,
 Cabbage,
 Carrot,
 Papaya,
 Banana other related production.
 All Crop production and
 Cattle Fatting
The project is envisaged to develop 500 hectares of land under modern management and
production systems. The project will start its activates by simple clearing the land, farm
road construction, building constructive purpose, guard house, store, bore hole drilling,
procurement of machinery and equipment, vehicles and hiring skilled and semi skilled
employees from local market.

5. 2. The overall objectives and Specific objective

5.2.1 over all objectives
The main objective of the project is to produce different type of fruit and vegetables and crop
production to meet the increasing demand for these types of output and it also important as a
source of raw material for different industries and for the growing demand in local market for
that matter.
In addition to this the overall objective of the project under consideration is to contribute to the
development process in the country by taking part in the agricultural farm with fruit and
vegetables production.
5.2.2 Specific objective
The Specific objective of this project is to generate profit to the promoter over the invested
capital by growing quality products. And other objectives are:-
 To create job appointees specifically for the local people and the citizen
 To generate revenue for the country in the form of taxes
 To change the system of agriculture farming from traditional to modern system of
farming
 Install modern irrigation facilities in order to increase productivity of the land
 It has important demonstration effect in encouraging the peasant to use irrigation to grow
their crops.
5.2.3. Beneficiaries of the project
The highest share of the project benefit accrues to the owner in the form of net profit earned
from its operation. The establishment of this project on the area would also benefit various
groups.
 The workers reap the benefit in the form of wage and salaries rewarded for their labor input.
 the government would also benefits in raising revenue in the form of tax
 The society would be able to get increased supply of fruit and vegetables in the market and
therefore enjoy its availability.
 Generally, the project would add to the welfare of the country in increased domestic
production, income and possibly in helping to earn foreign exchange.

6. Market prospect and assessment

6.1. The input supply
The major inputs that are demanded by the project include seeds, fertilizer, herbicides and
pesticides. The project could easily purchase these inputs from local suppliers and government &
non government seed supplier agency. Therefore, the supply of farm inputs will not be a problem
for the project under consideration.
6.2. Output market
The proposed project is planned to distribute its products 80% for foreign and the remaining for
local market. The country’s dependency on the Export of few primary products like coffee, hides
and skins has resulted in low level export income. In order to change this rate the promoter this
project planned to produce quality fruit and vegetables.
Regarding market, Ethiopian exports large quantities of fresh fruits and vegetables to Djibouti,
Yemen, Saudi Arabia and other Middle East countries. The project under consideration fruits
like papaya and Banana, vegetables like onion, Tomato, pepper, cabbage and carrot which are
highly demanded in the local markets and in the foreign market at large and food crops like
maize and sorghum to meet the increasing demand.
6.3. SWOT analysis Ethiopian Fruit and Vegetable Business

6.3.1. Strengths
 Climate
Ethiopia has a beneficial climate for growing a wide range of fruits and vegetables
throughout the year. The good soil and water conditions are enabling the agricultural
potential further.
 Supportive government policies
Investments are encouraged by the Government of Ethiopia through several incentives
for example through beneficial tax schemes for export investments. Government offices
work according to procedures resulting in a relatively low level of corruption compared to
other African countries.

 Costs of production
Land lease costs are low and labor is cheap.
 Geographic location
Ethiopia has a favorable geographic location as it is close to Djibouti and the Middle
Eastern markets.
 Security
Compared to other countries in the region Ethiopia’s private security and safety situation
is very good.
 Private sector service provision
The rapid growth of the floriculture sector leads to a growing critical mass of service
provision level by private sector parties also relevant to the F&V sector.
 New initiatives
Many new companies have started or are in the process of starting in the F&V sector.
And there is a broad interest from private sector parties, public organisations and NGO’s
for the F&V sector.
 Potentials for irrigation
Potential for irrigated production with improved water-saving techniques (drip-irrigation)
is high.
 Transport
Although landlocked a good domestic, major road network exists between the main F&V
production centres and Addis; airfreight is available and capacity constantly increasing.
 Code of Practice in floriculture sector
Experiences gained in the development of a Code of Practice by the floriculture sector
will benefit the fruits and vegetable sector
6.3.2. Weaknesses
 Constant high quality supply in sufficient quantities
Apart from beans, a fragmented and non-constant supply of F&V with limited quantities and
high variation in quality, leads to a weak position compared to competitors like Kenya; Ethiopia
yet lacks the critical mass and reputation of a high potential source of
F&V.

 Varieties
Limited knowledge and availability of the proper varieties with respect to local climatic
conditions and consumer demand.
 Packaging
Low quality of locally produced packaging material.
 Cold Storage
Limited capacity of appropriate cold storage capacity.
 Technical Know-How
Limited technical know-how for production and handling of high quality F&V for export
markets.
 Research and extension

Limited research and extension programmes focused on the export oriented F&V sector.
 Input supply
Problems in acquiring the appropriate types of fertilisers and pesticides.
 Land Tenure
Insecurity due to lack of land tenure causes constraints for investments.
 Market Information
Information about export markets, especially Middle East, is limited.
 Domestic market
Low consumption rates of fruits and vegetables, which give limited options for selling
non-export grades.
 Banking
The regulation of the banking system is a major constraint. There is no free exchange of
foreign exchange, which hampers international financial transactions.
 Bureaucracy
Government procedures (including customs, repayment of VAT etc.) are sometimes
slow and unclear and require regular follow-up.

 Communication
The mobile phone network is over-stretched and internet connections are relatively slow.
6.3.3. Opportunities
 Demand in Europe and Middle East
In both Europe as in the Middle East there is a high and growing demand for fruits and
vegetables. The objective of importers to diversify sourcing from main suppliers like Kenya,
provides an opportunity for Ethiopia. For European importers Ethiopia is very interesting in
order to have a year round delivery of fruits and vegetables.
 Demand for processed fruits and vegetables
Processed fruits and vegetables have a high demand in the European and Middle Eastern
markets; also import substitution in the domestic market provides good opportunities. Demand
for tomato concentrate in the Middle East and Sudan is increasing.
 Ecological and fair trade production

Demand in the European market for ecological and fair trade products is increasing. Also
major retailers like the UK based TESCO is demanding high social standards of their
Imported products. Ethiopia offers a good scope for ecological and fair trade production.
6.3.4. Threats
 Increased competition in European and Middle East Market
High competition of countries with already a strong position (e.g. Kenya in the European market)
and countries with a growing position (Morocco, Egypt in Europe; Turkey, Jordan in Middle
East). China may also become a competitor for processed products

 The input supply

The major inputs that are demanded by the project include seeds, fertilizer, herbicides and
pesticides. The project could easily purchase these inputs from local suppliers and government &
non government seed supplier agency. Therefore, the supply of farm inputs will not be a problem
for the project under consideration.
 Output market
The proposed project is planned to distribute its products 30% for foreign and the remaining for
local market. The country's dependency on the Export of few primary products like coffee, hides
and skins has resulted in low level export income. In order to change this rate the promoter this
project planned to produce quality fruit and vegetables.
Regarding market, Ethiopian exports large quantities of fresh fruits and vegetables to Djibouti,
Yemen, Saudi Arabia and other Middle East countries. The project under consideration fruits
like papaya and Banana, vegetables like onion, Tomato, pepper, cabbage and carrot which are
highly demanded in the local markets and in the foreign market at large and food crops like
maize and sorghum to meet the increasing demand. With in the country the promoters try’s to
distribute to the capital city of the country and other parts of the countries region

7. Land use plan

S/No Description Area in he
I Fruit and Vegetables Farms 300 hectares
1 Banana, Papaya 50 hectares
2 Avocado, Mango and Zeytun 50 hectares
3 Other Different new fruit and vegetable 200 hectares

product
Total 300 hectares

II Crop and Cereals and Oil Seed 190 hectares
Production Farms
1 All production 190 hectares
Total 190 hectares
III Crop and Cereals and Oil Seed 10 hectares

Production Farms
5 All Fatting 10 hectares
Ground Total 500 hectares
As clearly indicated in the land use plan of the project the all are produced at least three times a
year.

Some production image
8.1 Sales Plan

The Revenue of the Project is assumed to be generated from the sales of the different fruit &
vegetables, Crop and Cattle fatting. Thus, in this project,
Area Qty Unit
S/No Description Unit Yearly
in he produc price
productio Total Price
Vegetables and t Per Quinta
I n
Fruit Hek. l
Quinta
1 Tomato and Onion 50 40 6,000 2500 15,000,000
l
Potato and Quinta
2 50 l
50 7,500 2000 15,000,000
Cabbage
Pepper and Quinta
3 25 l
30 2,250 1500 3,375,000
Strawberry
Quinta
4 Carrot and Zetun 50 25 3,750 2000 7,500,000
l
Banana and Quinta
5 50 l
50 7,500 1500 11,250,000
Papaya
Avocado and Quinta
6 50 l
40 3,000 2000 6,000,000
Mango
Other Different
Quinta
7 new fruit and 25 l
40 3,000 1500 4,500,000
vegetable product
Tota Total 300 62,625,000.00

l
Quinta
II 42,560,000.00
Crop production 190 l 56 21280 2000
Total
III Cattle Fatting 10 no 300 900 20000 18,000,000.00
Total
123,185,000.0
Ground Total 500 0
Remember that at the first cycle of production the project plan is to sale its products to
50,000,000 birrs within the 2rd and 3rd cycle the sales plan is going to be increased to 123,185,000
birr.

9. Organization and Management

9.1 Organization structure
The promoter’s effort is appreciable and it has to be supported by a proper organizational
structure which will enable the planned business enterprise achieve its objectives.
The organization structure presented below is envisaged to have taken the activities fruit and
vegetables production and the manpower requirement of the project is determined based on this
structure.
Project Manager
Production Marketing Administration &

Department Departme finance
Agronom Superviso Administr Accounting

y Purcha
r ation ser Section
9.2 Manpower Requirement

The general manager at the top to manage frequently visits and supervises the farm site. Under
the general manager there will be different department which is assigned for different activities.
Other supporting staffs that have the essential skill relevant for the various support activities of
the project will be employed.

The total manpower requirement for the project outlay, their qualification, wages and
salaries are depicted in the following table below.
Monthly Total
No Work title Qualification Number salary expense
head (Annual)
1 Manager Bsc in plant science 2 4000 96,000
2 Secretary Dep.Sec. science 1 1500 18,000
3 Agronomist BA in Agronomy 2 2,500 60,000
4 Administrator Pup.admnistration. 3 3000 108,000
5 Accountant Accounting 2 2,500 60,000
Purchaser &
6 Purchasing Magt. 2 3,000 72,000
sales man
Irrigation
7 Bsc in agricultural eng. and irrigation 2 3,500 84,000
specialist
General
8 Bsc in agricultural economics 2 3,000 72,000
agriculturalist
9 Cashier Dep. In accounting 3 2000 72,000
10 Store keeper Grade 7 3 2500 90,000
11 Supervisor BA in management 4 4,000 192,000
Teck.Head(chief
12 TVET Level 4 3 1500 54,000
mechanic)
13 Ass. mechanic TVET Level 3 2 2000 48,000
14 Tractor operator Grade 12 2 3000 72,000
Ass. Tractor
15 Grade 10 2 2000 48,000
operator
16 Driver Grade 12+3rd level license 5 2000 120,000
17 Laborers Grade 4-7 5 1500 90,000
18 Electrician TVET Level 4 in electricity 5 2500 150,000
Tire and fuel
19 Grade 10 5 2000 120,000
man
20 Guards Grade 5 5 1500 90,000
21 cleaners Grade 6 5 1500 90,000
Unskilled labor
22 (Irrigation - 435 600 3,132,000
Workers)
Total - 500 - 4,938,000

10. PART FOUR
10.1. FINANCIAL REQUIREMENT

The financial resource is a prime resource for undertaking any activities. Hence for
implementing this project a total of 23,000,000.00 Eth birr is required. From these 30% or
6,900,000 birrs will be owner’s contribution while the rest 70% or, 16,100,000 Eth birr will be
covered by bank loan. Therefore the said amount of finance is needed for undertaking the
following: irrigated
10.1.1. Fixed Cost Estimates
No Description Cost
1 Fixed Investment
1.1 Land, Building and Construction 6,440,000 0.00
1.2 Machines and Equipment’s 2,422,000 0.00
1.3 Vehicles and Motors 690,000 0.00
1.4 Office Furniture and Equipment 460,000 0.00
Total Fixed Investment Cost 10,012,000 0.00
2 Operating Expense 0.00
2.1 Raw Materials Purchase and Products 4,600,000 0.00
2.2 Salary Expense 4,938,000 0.00
2.3 Other Operating Expense 690,000 0.00
2.4 Pre-operating Expense 460,000 0.00
Total Operating Expense 10,688,000 0.00
2,300,000
Contingency (Lump sum) 10%
Total Investment Cost 23,000,000 0.00

i). Land Development, Building, Construction and Site Clean
No Particulars Unit Unit cost Estimated total cost

(Br.) (Br.)
1 Land payment hak 1,320,000 1,320,000

2 Construction of reservoir hak 500,000 500,000
3 Land clearing hak 490,700 490,700
4 Diversification boxes hak 350,000 350,000
5 Drop structure hak 550,000 550,000
6 Pump site preparation hak 390,000 390,000
7 Office building hak 350,000 350,000
8 Toilet and dressing room hak 350,000 350,000
9 Store (in put & output) hak 350,000 350,000
10 Machinery shelter hak 350,000 350,000
11 Show room hak 350,000 350,000
12 Guard house hak 350,000 350,000
13 Generator house hak 390,000 390,000
14 On-farm road hak 350,000 350,000
Total 6,440,700 6,440,700

ii) Machinery and Workshop Equipments cost
Unit cost Total cost

No Item Unit Quantity
(birr) (birr)
I Workshop equipments
1 Welding machine No 2 10,000 20,000
2 Mechanic tool box set 5 20,000 100,000
3 Tyre repairing tools “ 5 50,000 250,000
4 Drilling machine “ 5 60,000 300,000
Total - - - 670,000
Machinery and Equipment
II
cost
1 Tractor No 2 480,000 960,000
2 Agricultural Trailer “ 3 50,000 150,000
3 Disc harrow “ 5 50,000 250,000
4 Water pump with accessories “ 5 30,000 150,000
Hand tools & other equipment

5 (hoe,shovel,rake,fork and Set - 40,000 40,000
other)
6 Planter No 40,000 40,000

7 Furrow “ 40,000 40,000
8 Water tanker “ 40,000 40,000
9 Chemical sprayer (motorized) “ 30,000 30,000
10 Sprayer (manual) “ 5,000 5,000
11 Diesel generator No 47,000 47,000
Total 1,752,000
Ground Total 2,422,000

iv) Vehicles
No Item Unit Quantity Unit cost (birr) Total cost
(birr)
1 Pick up(4WD ) No 1 690,000 690,000
Total - - - 690,000
v). Office furniture and equipment cost
This includes: managerial table, chairs, filing cabinet, type writer disc top computer with printer
laptop, calculator and safety equipment like first-aid kit. It will cost about 460,000 birr.

4.2 Expenses
4.2.1 Raw Material Purchase

Since the production of crops is divided in phases, the estimated and the production yield per
year will be 2/3 time a year since it is through irrigation. Labor cost, selected seeds, chemical
fertilizers and pesticides and any other costs related to the irrigation scheme of the company.
However the land under consideration is very fertile and as such does not consume excessive
chemical fertilizers. Moreover, the company itself will produces its own selected seeds and thus
reduce the cost of selected seeds used in the production. Therefore, the unit cost of production is
as follows.
No Description Hectare Unit cost/ Total cost

hectare (in birr)
1 Different Selected Seeds Fruit and 500 8,000 4,000,000

Vegetables and Chemical fertilizers ,
pesticides and others irrigation schemes
2 Miscellaneous costs 600,000
Total 500 4600000
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 Fruit and
Vegetables 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.

4.2.2 Estimated costs of salary expense

As indicated in part 4.1 (manpower) of this study, the total cost of salary and wages is estimated
to be 4,938,000 Birr for Fruit and Vegetables production for export Farms
N.B. The above salary expense includes the salary of both skilled and unskilled labors.
4.2.3 Other Operating Expenses

No List of Items Qty Unit of Measure Total cost Per annum
1 Computer paper 10 Pack 80,000
2 Staples 10 “ 20,000
3 Pens, pencils, and others 150 Pack 20,000
4 Detergents 500 Pcs 70,000
5 Uniforms 500 Pcs 20,000
6 Water - - 89,000
7 Electricity - - 62,000
8 * Fuel Expense - - 124,000
9 Telephone - - 50,000
10 Repair expense - - 55,000
11 **Lubricants 50,000
11 Miscellaneous Costs - - 50,000
Total 500000
4.2.4 Pre -Service Expense

No Description Cost
1 Project proposal 50,000
2 EIA 100,000
3 Licensing fee and others 100,000
4 Promotion 160,000
5 0thers 50,000
Total 0.00

3.1. Loan Repayment Schedule 80% Bank Loan (2020-2030 G.C)
Principal Interest Total Annual Remaining

Year
Payment (10%) Payment Balance
0 0 0 0 16,100,000
1 1,610,000 1,610,000 3,220,000 14,490,000
2 1,610,000 1,449,000 3,059,000 12,880,000
3 1,610,000 1,288,000 2,898,000 11,270,000
4 1,610,000 1,127,000 2,737,000 9,660,000
5 1,610,000 966,000 2,576,000 8,050,000
6 1,610,000 805,000 2,415,000 6,440,000
7 1,610,000 644,000 2,254,000 4,830,000
8 1,610,000 483,000 2,093,000 3,220,000
9 1,610,000 322,000 1,932,000 1,610,000
10 1,610,000 161,000 1,771,000 0
10.3 Annual depreciation schedule of the fixed asse (000’ birr)
S Original Value Depreciation Depreciation

Description
N In Birr rate in % Per year
Construction and
1 6,440,000 5 322,000
Civil Work
Machines &
2 2,422,000 15 363,300
Equipment’s
3 Vehicles 690,000 20 138,000

4 Office Equipment 460,000 15 69,000
Total 10,012,000 892,300

Balance Sheet
Asset
Current Asset
Cash 3,450,000
Inventory of raw materials and inputs 4,600,000
Total Current Asset 8,050,000
Fixed Asset
Land, Building and Construction 6,440,000
Machineries and Equipment’s 5,060,000
Office Equipment 460,000
Vehicles 690,000
Total fixed Asset 12,650,000
Total Asset
Liability
Account payable 16,100,000
Owners’ Equity 6,900,000
Capital
Total Liability & Owners’ Equity 23,000,000

Income Loss Statement

Revenue Year 1 Year 2 Year 3-10
135,811,46
Sales 123,185,000 129,344,250
3
Sales expenses (5%)* 6,159,250 6,467,213 6,790,573
265,075,09
Purchase of Raw Material 4,600,000 265,075,095
5
-
Gross profit 118,585,000 -135,730,845 129,263,63
3
Expenses
Salary Expense 2,300,000 2,415,000 2,535,750
Operating Expenses 690,000 724,500 760,725
Pre-operating Expense 460,000 483,000 507,150
Deprecation Building 322,000 322,000 322,000
Deprecation machine 363,300 363,300 363,300
Deprecation Vehicles 138,000 138,000 138,000
Deprecation office Equip 69,000 69,000 69,000
Lease Expense 3,000,000 3,000,000 3,000,000
Interest Expense 1,610,000 1,449,000 161,000
Total Expense 8,952,300 8,963,800 7,856,925
135,811,46
Profit Before Tax 123,185,000 129,344,250
3
Tax(30% ) 36,955,500 38,803,275 40,743,439
Net Profit 86,229,500 90,540,975 95,068,024

Cash Flow Statement
Particulars Year0 Year I Year II Year III-XI

A. Cash Inflow 0
· Own equity 6,900,000
· Bank loan 16,100,000
· Depreciation 0 892,300 892,300 892,300
· Net profit 0 86,229,500 90,540,97 95,068,02

5 4
Total inflow 91,433,27 95,960,32
23,000,000 87,121,800 5 4
B. Cash outflow
0
· Fixed capital
12,650,000
· Working capital
8,050,000
. Contingency (Lump sum) 2,300,000
10%
· Loan repayment
1,610,000 1,449,000 161,000
Total outflow
23,000,000 1,610,000 1,449,000 161,000
Net inflow (A-B) 89,984,27 95,799,32
0 85,511,800 5 4
Cumulative balance 89,984,27 95,799,32
0 85,511,800 5 4

11. Financial analysis

11.1 Capital expenditure
Capital expenditures are equivalent to the total financial requirements of the project. In the other
words they are initial investment outlays required to enter operational stages these capital
expenditures are constituted of fixed investment cost and initial working capital.
11.2 Fixed investment capital

Fixed investment costs are expenditures on the required fixed asset. The major components of
fixed cost are constituted of expenditures on machinery and equipment. The rest will go to
construction of civil works and the acquisition of office facilities. According to estimated made
by this project the total fixed cost will be 10 mill. birr.
11.3 Working capital

Working capital is part of annual operating cost and is required to make the project operational.
Expert for some operational costs whose yearly expense were taken as they are some limited
months expenses were taken as forecast the working capital requirement of the project.
According to the forecast made in detail the amount of initial working capital is founded to be
305.5 mill. birr.
11.4 Source of Investment capital

The forecasted investment capital is planned to rise from the owner’s equity/ promoter’s equity
and banks contribution only.
11.5 Project income

The project earns its revenue by selling the proposed output by competitive in the market, the
sales of the projects output are determined in such a way that it does not impose higher price on
ultimate consumers. Accordingly, the project expects total sales revenue of 123,185,000 birr
during the first year and 135 mil when it starts operates at full capacity.

12. Financial viability

As it is a private firm established with the primary objective of generating profit the project
should be financially viable for the promoter. These financial measures for this study are
income statement cash flow analysis.
12. Cash Flow Analysis.

The liquidity position of the project can be seen from the project cash flow statement. According
to this projection the project will be healthy financial position to repay all its debts. This is
because the analysis shows that the project will have positive cash flow throughout the
anticipated life.

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Fruit and Vegetable, Crop and Cattle Fatting Production Farms

PROJECT LOCATION: - SOUTHERN NATIONS,

PROMOTER: - DAGNE DABA

Promoter’s: - Dagne Daba Page 1

Promoter’s: - Dagne Daba Page 2

5.Project Composition  Fruit & Vegetable Production Farm

1.6. Permanent Worker :- 100

9. Market Share 50 % Export Standard 50% for Local market

Promoter’s: - Dagne Daba Page 3

Promoter’s: - Dagne Daba Page 4

Promoter’s: - Dagne Daba Page 5

3.1. Characteristics of fruits and vegetables , Crop and cattle fatting

Promoter’s: - Dagne Daba Page 6

Promoter’s: - Dagne Daba Page 7

4.2 Soil and Topography

4.4 Economic activity

Promoter’s: - Dagne Daba Page 8

 Fruit and Crop mineral contents

Promoter’s: - Dagne Daba Page 9

Promoter’s: - Dagne Daba Page 10

4.5. Production Nature and Technology to be used

Promoter’s: - Dagne Daba Page 11

3.3 TECHNOLOGY CHOICE

Promoter’s: - Dagne Daba Page 12

 BOREHOLE MAINTENANCE, SANITATION AND HYGIENE COMMUNITY

Promoter’s: - Dagne Daba Page 13

Performance and Protection of Shallow wells

 SOME FREQUENTLY ASKED QUESTIONS

Promoter’s: - Dagne Daba Page 14

How are wells constructed?

Promoter’s: - Dagne Daba Page 15

4.5.1. Irrigation scheme layout

Promoter’s: - Dagne Daba Page 16

5. 2. The overall objectives and Specific objective

Promoter’s: - Dagne Daba Page 17

6. Market prospect and assessment

6.3. SWOT analysis Ethiopian Fruit and Vegetable Business

Promoter’s: - Dagne Daba Page 18

Promoter’s: - Dagne Daba Page 19

 Research and extension

Promoter’s: - Dagne Daba Page 20

 Ecological and fair trade production

Promoter’s: - Dagne Daba Page 21

 The input supply

Promoter’s: - Dagne Daba Page 22

7. Land use plan

I Fruit and Vegetables Farms 300 hectares

1 Banana, Papaya 50 hectares

2 Avocado, Mango and Zeytun 50 hectares

3 Other Different new fruit and vegetable 200 hectares

Total 300 hectares

Total 190 hectares

III Crop and Cereals and Oil Seed 10 hectares

Ground Total 500 hectares

Promoter’s: - Dagne Daba Page 23

Some production image

8.1 Sales Plan

Promoter’s: - Dagne Daba Page 24

Tota Total 300 62,625,000.00

Promoter’s: - Dagne Daba Page 25

9. Organization and Management

Production Marketing Administration &

Agronom Superviso Administr Accounting