HAFIZ ZAHID MEHMOOD

2011-ag-3078
Ph.D. AGRICULTURL ECONOMICS

INSTITUTE OF AGRICULTURAL AND RESOURCE

ECONOMICS
UNIVERSITY OF AGRICULTURE, FAISALABAD
 Jam making
 Jam making is a profitable business

 One can initiate the business on a small scale with low capital
investment

 You can produce jam from almost every type of fruit and some
vegetables

 Generally people use jam as the bread spread and as a filling for
some cakes and cookies
 Ingredients
The major raw materials required for the production of fruit jam are different fruits and
vegetables

 The most common and easily available fruits in Pakistan are mango, apple, orange,
guava and banana

The consumables are sugar, citric acid, preservatives, food grade colors, chemicals,
flavors, common salt etc.

Additionally, you will need to procure the packaging consumables

 First of all, you have to pack the product in glass bottle or jars and finally in cartons
 Jam Making Machines & Equipment
For a small scale conventional production unit, you will need to have the following
equipment.
cutters and graters
Cap Sealing Machine
Carton Sealing Machine
weighing scale
glassware
storage racks etc.
 Jam making process
First of all, wash the fruits in water and remove the skins.

After peeling, cut or slice them into small pieces.

Then, boil these pieces with water.

Add an appropriate quantity ( usually equal to quantity of pulp) of sugar with the pulp.

When the temperature is around 60 C; citric acid, color etc. are added.

This mixture is then stirred for a while, cooled and then packed in bottles.

For jam using sugar, you can expect to get about two years of shelf life when stored in a
cool, dry place.
The process flowchart is:

Washing, Peeling and Slicing of Fruits or Vegetables

Boiling

Mixing of Sugar with Pulp

Cooling

Packing
 Economic Sustenance
• The fixed cost for jam production business at small scale is not too much to afford
by a rural family.

• They can get it started by simple committee finance system or micro finance or
taking qarz-e-hasna from Al-khidmat foundation.

• As labor is cheap in rural areas so instead of costly pupler and slicer, labor can be
used to escape from heavy fixed cost.

• Mango and apple are available at nominal prices.

• Carrot can be used in mixed jams which is too cheap in vegetable markets.
 Cost of Equipment
• Here estimated cost for equipment and daily based variable cost estimates are
given for producing jam from 50 kg of fruit using family labor and rural women
labor.

• Estimated gross profit is given by considering a price which is 10 rupees lower

than branded jam per jar.

• By producing 50 kg jam, at least 200 jars of 250 grams can be filled.

• Sugar is required less almost equal or somewhat less than weight of fruit.
 Fixed Cost
Item Price (PRs.) Expenditure (PRs.)

Cutter (one dozen) 30 per piece 360

Grater (one dozen) 40 per piece 480

Cap Sealing Machine 80,000 80,000

weighing scale 1000 1000

Thermometer 400 400

Total Cooking utensils Approximately 5000 5000

Total Fixed cost 87,240

Source: Symbios.pk
Per Day Variable Cost (PRs.) for 50 kg jam production
Glassware 30 per piece 30*200= 6000
Storage Racks Variable Cost
350 per piece 350*8= 2800
Sugar for 50 kg fruit 52 Rupees per kg 52*45= 2340
Lemon 45 per kg 45*1.5= 67.5
Ginger 130 per kg 5*130= 650
Labor cost (for peeling, slicing 400 per women 400*5=2000
etc.) (women labor) 1 woman for washing
3 woman for peeling and slicing, 1
woman for cooking

Electricity and fuel cost 1000+450 (20 kg firewood) 1450

Total variable cost per day 15,307

Source:1.Agriculture marketing information service, Directorate of agriculture, Lahore

2.Pakistan Bureau of Statistics
 Benefit Cost Ratio
Production per day Price per jar (PRs.) Total revenue per day
(PRs.)

200 jars 120 24,000

Gross profit per day 24000-15307= 8,693

(PRs.)

Benefit cost ratio 24000/15307= 1.56

 Social Feasibility
Pakistani population is predominantly poor which can supply cheap labor and raw
fruits for jam making.

Increasing job opportunities at rural areas

Improving nutrition of rural poor people

Income of rural families will increase

value added production of other related products

 Environmental Feasibility

Sufficient quantities of high quality fruit are available throughout the year to fuel
processing of the respective products at a reasonable cost

fruits can be harvested sustainably and without adverse impact on the regenerative
potential of the trees.
 Commercial scaling

This is one of the easiest businesses you can start in the food processing industry.

This business allows several other operations from same unit.

It allows to enhance the profitability by reducing cost of labor used

You can also produce pickles and sauce from your jam making unit as well.
 Market for the Product

A rural producer of jam can sale his/her product at small shop along his/her house
as retailer.

Moreover, one can supply it in whole sale market and retail shops in nearby
town/city.

If self-transport is not available, then auto-rickshaws and other passenger vans can
be used to transport in the beginning of enterprise.
 Market for the Product cont..
Rural Enterprise

(Jam Production)

Supply to other Sale at own Wholesale shop at

shops at nearby retail shop town
villages

Retail shops in nearby Wholesale Market in

City City