off season vegitables farming ( walkin tunnel)

8/10/2019 Off Season Vegitables Farming ( Walkin Tunnel)

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Pre-Feasibility Study

OFF-SEASON VEGETABLES FARMING

(Walk-in Tunnel)

Pakistan Horticulture Development and Export Board

www.phdeb.org.pk

HEAD OFFICE

Waheed Trade Complex, 2nd Floor , 36-Commercial Zone, Phase III, Sector XX, Khayaban-e-Iqbal, DHA Lahore

Tel: (042) 111-111-742, Fax: (042) 5727350

[email protected]

August, 2003


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Pre-Feasibility Study Off-Season Vegetables Farming (Walk-in Tunnel)

2

DISCLAIMER

The purpose and scope of this information memorandum is to introduce the subject

matter and provide a general idea and information on the said area. All the material

included in this document is based on data/information gathered from various

sources and is based on certain assumptions. Although, due care and diligence has

been taken to compile this document, the contained information may vary due to any

change in any of the concerned factors, and the actual results may differ substantially

from the presented information. PHDEB does not assume any liability for any

financial or other loss resulting from this memorandum in consequence of

undertaking this activity. Therefore, the content of this memorandum should not be

relied upon for making any decision, investment or otherwise. The prospective user

of this memorandum is encouraged to carry out his/her own due diligence and gather

any information he/she considers necessary for making an informed decision.

The content of the information memorandum does not bind PHDEB in any legal or

other form.

DOCUMENT CONTROL

Document No.

Revision

Prepared by PHDEB

Approved by CEO

Issue Date August, 2003

Issued by CEO


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3

11

IINNTTRROODDUUCCTTIIOONN

11..11GGeenneerraall

Agriculture sector is the backbone of Pakistans economy. The sector employs 44 %

of the work force and contributes 25% towards National GDP. Nature has blessedour country with fertile land and suitable climate for growing variety of vegetables.The geographical location of the country is ideally suited for a large variety of

agricultural crops, which are used directly for food as well as a raw material forprocessing industry. Vegetables grown in Pakistan are unique in taste, aroma and are

almost organic as very low quantity of chemicals is used in their cultivation.Moreover, most of the vegetables grown are not genetically modified and originalspecies are still cultivated in the country.

Vegetables are rich source of vitamins, carbohydrates, salts and proteins. Withincreased health awareness in the general public and changing dietary patterns,

vegetables are now becoming an integral part of average households daily meals. Inaddition, high population growth rate has also given rise to high demand in basicdietary vegetables. Increased health awareness, high population growth rate,

changing dietary patterns of increasingly affluent middle class and availability ofpackaged vegetables, has therefore generated a year round high demand for

vegetables in the country in general and in major city centers in particular. However,our farmers have yet not been able to encash this opportunity and still followtraditional sowing and picking patterns. This results in highly volatile vegetable

supply market wherein the market is flooded with seasonal vegetables irrespective ofdemand presence on one hand and very high priced vegetables in off-season on the

other. Lack of developed vegetable processing and storage facility robs our farmers

from their due share of profit margins. In natural season local vegetables flood themarkets substantially bringing down the prices.

In the absence of storage infrastructure and vegetable processing industry in thecountry, off-season vegetables farming is the only viable option that can add value to

the farmer produce.

11..22PPrroojjeeccttBB rriieeff

The proposed project is designed as a medium size off-season vegetable farming

unit, spreading over a land area of 15 acres. Off-season vegetables, such as,tomatoes, cucumber, brinjal, hot pepper and squashes will be cultivated using Walk-

in tunnel technology.

The land can be utilized for green farming1 during the idle period to maintain thefertility of soil. Apart from green farming, the land can also be utilized for growing

seasonal vegetables like potato, carrot, onion, garlic and cabbage etc., in the idleperiod, but this may affect the fertility of the land, resulting in reduction of yield of

1Green farming is done to maintain the fertility of the land with the cultivation of any legume crop.

When the crop is matured it is then incorporated in soil with the help of a Rotavator.


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4

off-season vegetables. Therefore it is recommended that only off-season vegetables

should be grown on the proposed land, with a well chalked out sowing pattern.

The estimated yield potential of the farm varies according to the selected type of

vegetable. For this project a mix of five vegetables is proposed and is listed below.For this vegetable mix it is estimated that a 15-acre farm unit will yield a total of

333,000 Kg per annum.

TTaabbllee 11--11::TToottaa llPPrroodduucctt iioonnCCaappaaccii ttyyoonntthhee bbaassiiss ooffWWaallkk--iinnttuunnnneelltteecchhnnoollooggyy

Vegetables Area (Acres) Production Quantity

in (Kgs)/ Acre

Total Production

Quantity

Tomatoes 2.5 25,000 62,500

Cucumber 2.5 25,000 62,500

Brinjal 2.5 24,000 60,000

Hot Pepper 2.5 12,000 30,000

Sweet Pepper 2.5 18,000 45,000

Squashes 2.5 25,000 62,500

11..33OOppppoo rrttuunniittyyRRaattiioonnaallee

There is a huge demand for fresh vegetables in the local as well as internationalmarkets, which includes Europe, Middle East, and Far Eastern markets but due to

their perishable nature it is difficult to export this commodity. The facility ofgrowing off-season vegetables also allows for growing non-conventional varietiesand vegetables, which are in high demand in the international market.

The importance of vegetables cannot be denied due to their nutritional value as theseprovide proteins, carbohydrates & salts that are essential ingredients for the growth

of human body. Vegetables are used in raw form as salad or cooked food accordingto the taste, which provide a balanced diet and keep human being healthy. A largenumber of world population now prefer vegetables in their daily diet due to the

awareness that vegetables provide better source of energy and nourishment to thebody.

The essential nutritional ingredients of some of the vegetables are shown in Table 1-1, below: -

TTaabbllee 11--22::NNuuttrriitt iioonnaalliinnggrreeddiieennttss iinnaawwee iigg hhttooff110000GGrraamm

Vegetable Name CCaalloorriieess Proteins

Gram

Fats

Gram

Carbohydrat

es Gram

Ascorbic

acidPotato 71.6 1.7 0.1 16.0 14.1

Turnip 30.0 0.9 0.2 6.2 24.7

Carrot 39.6 1.1 0.3 8.2 5.3

Cauli Flower 13.9 1.1 0.1 2.2 31.1

Cabbage 19.8 1.0 0.2 3.9 38.1


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Peas 45.4 3.0 0.2 8.0 11.9

Tomato 20.0 0.9 0.3 3.5 20.5

Onion 45.8 0.9 0.2 9.7 8.4

Spinach 23.8 1.0 0.0 60.4 5.1

Brinjal 20.3 1.9 0.2 2.6 48.2

Lettuce 12.6 0.8 0.1 2.0 12.6

Mostly the vegetables grown in the world are local to their land and countrieshowever other varieties and types have also been introduced from across different

continents/countries, which are now grown and consumed in the local diet. Almostall types and varieties of known vegetables are grown in Pakistan.

Vegetables can be cultivated in off-season, with the induction of an artificial

technique like tunnel technology, in which temperature and moisture is controlledfor specific growth of vegetables. The production of vegetables all around the year

enables the growers to fully utilize their resources and supplement income fromvegetable growing as compared to other normal agricultural crops.

As the landholding powers of farmers is decreasing, they need to increase the

productivity of their available land, off-season vegetable farming is a measurethrough which they can attain higher profit margins from the crop.

11..44VViiaabbllee EEccoo nnoo mmiiccFFaarrmmSS iizzee

The proposed project is based on a land holding of 15 acres, however the distance ofthe farm from the market will determine the feasible size of the project. Near large

markets like Lahore, projects with smaller land holdings can be a viable option, butlarge land holdings are recommended for projects that are planned away from large

markets.

11..55PPrroojjeeccttCCoosstt

The proposed project of off-season vegetables farming needs capital investment of

about Rs. 1.06 million. This includes machinery and equipment. The land utilized forcultivation is recommended to be leased. In addition to this, a sum of Rs. 0.17

million is also required as working capital. The total project cost amounts to Rs. 1.22million.


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11..66PPrroocceessss FFlloowwCChhaarrtt

FFiigg uurree 11--11::PPrroodduuccttiioo nnfflloowwooffooffff--sseeaassoonnvveeggeettaabblleess

FIELD BED

PREPARATION

SOIL

FERTILIZING

NURSERY

TRANSPLANTATION

MOISTURE

CONDITIONINGHARVESTING

TOP DRESS

FERTILIZING

PLANT

PROTECTION

POST

HARVESTING

ASPECTS

SHIPMENT/

DESPATCH

NURSERY/

SAPLING

GRADING

11..77PPrroodduucctt iioonnFFlloowwooffooffff--sseeaassoonnvveeggeettaabblleess

The production flow varies slightly for different vegetables. The followingproduction flow is based on the production of tomatoes:i. Sowing of seeds in a separate plot of land for nursery.

ii. Preparation of seed beds in the field for cultivation of vegetables.iii. Using fertilizer in the soil to maintain its fertility.

iv. Transplantation of nursery in the soil or sowing of seeds directly in the soil.v. Maintaining level of moisture in the soil.vi. Protection from the pests, diseases and other wild growths by using

pesticides/sprays of chemicals, and trimming.vii. Using fertilizer of different varieties for the smooth growth of plantation.

viii. Picking/harvesting at various times as per nature/requirement of theplantation.

ix. Grading of crop on the basis of quality and other standards.

x. Application of post harvesting technology for picking/plucking, packing andstoring the vegetables in order to fetch the maximum price.

xi. Transportation to the sale points in local or export markets.


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22

CCUURRRREENNTTIINNDDUUSSTTRRYYSSTTRRUUCCTTUURREE

22..11OOffffsseeaassoonnvveeggeettaabbllee ggrroo wweerrss

At present, the tunnel technology is being used at the following places/farms along

with other small farms:i. Mian Shadi Agri Farm, Mamonkangan, district Faisalabadii. Haji Sons, Chiniot, Jhang

iii. Ayub Agricultural Research Center, Faisalabadiv. National Agriculture Research Center (NARC) Chak Shahzad, Islamabad

v. Mardanvi. University of the Punjab, Lahorevii. Sindhu Farm, Kamalia, district T.T Singh

viii. Sitara Farm, at Sitara Chemicals, Shah Kot, district Faisalabad

22..22PPrreesseennttPPrroodduuccttiioo nnooffVVeeggeettaabblleess

According to Pakistan Statistical yearbook 2003, the production of variousvegetables is shown in Table 2-1 below: -

TTaabbllee 22--11::PPrroo dduuccttiioonnooffvvaa rriioouuss vveeggeettaabblleess dduurriinnggtthhee yyeeaarr22000011--0022

Item Punjab

000

Tons

Sind

000

Tons

NWFP

000

Tons

Balochistan

000

Tons

Pakistan

000

Tons

Tomato 62.2 32.8 146.2 52.8 294.0

Onion 225.0 596.6 183.2 380.2 1385.0

Garlic 21.1 7.3 24.9 3.2 56.5

Chili 13.5 76.6 0.4 2.8 93.3

Turmeric 33.9 - 5.9 - 39.8

Potato 1548.8 3.0 115.6 54.3 1721.7

Peas 20.8 32.8 1.2 2.1 56.9

Vegetables

(excluding potatoand sugar beat)

2082.0 202.1 358.7 230.4 2873.2


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22..33EExx ppoo rrttooffVVeeggeettaabblleess

The export data of some of Pakistans vegetables by destination for years 1999-2000and 2000-01 is shown in the following Table 2-2: -

TTaabbllee 22--22::EExx ppoo rrttbbyyCCoo uunnttrriieess2000-2001 1999-2000

Country Quantity

In Tons

Value

Rs

000

Average

Rate

Rs./Kg.

Quantity

in Tons

Value

Rs 000

Average

Rate

Rs./Kg.

Tomato

Afghanistan 7 39 5.5 13 167 12.5

Cucumber

Afghanistan 175 424 2.4 143 633 4.4

Dubai -- -- 20 120 6India -- -- -- 6 28 4.1

Brinjal

Afghanistan 243 1,079 4.4 94 267 2.8

Dubai 6 60 10.4 -- -- --

In addition to the broad based local market for consumption of vegetables, the

markets of Afghanistan and those of the Central Asian Republics & Middle East canbe effectively and conveniently catered from Pakistan.

22..44CClluusstteerrss ooffooffff--sseeaassoonnvveeggeettaabbllee pprroodduuccttiioonn

As per the information gathered from Agriculture Department, Government ofPunjab, and National Agricultural Research Center, Islamabad, following are someof the areas which could be identified as major existing clusters of off-season

vegetable production in the country:

Mamonkangan, Shah Kot in district Faisalabad, Kamalia in Toba Tek Singh, Chiniot

in district Jhang, Swat, Tarnab, Mardan, Khairabad, and Mirpur Khas.


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33

TTEECCHHNNIICCAALLAANNAALLYYSSIISS

33..11PPllaannttaattiioonn&&GGrroowwtthhEEsssseennttiiaallss

There are 16 essential requirements for healthy growth of a plant. The requirement

and their respective sources are provided in the following table:

TTaabbllee 33--11::PPllaa nnttaatt iioo nnggrroo wwtthheesssseennttiiaallss

SOURCE REQUIREMENT

Air & Water Carbon, Hydrogen, Oxygen, Nitrogen, Phosphorus and Potash

Land Calcium, Magnesium, Sulpher Iron, Copper, Zinc, Boran,Molybidenium, Maganese and Chlorine

33..22FFeerrtt iill iizzeerrss

Using fertilizers containing Nitrogen, Phosphorus and Potash the yield of the cropcan be maximized.

Appropriate quality and quantity of fertilizer plays a great role in the production andquality of vegetables.

33..33SSoowwiinngg&&ppiicckkiinnggppeerriioo ddoo ffooffff--sseeaassoonnvveeggeettaabblleess

Following are sowing and picking periods of selected off-season vegetables in theirrespective normal growing seasons:

TTaabbllee 33--22::SSoowwiinnggaannddppiicckkiinnggppeerriiooddffoorrtthheessee lleecctteeddooffff--sseeaassoonnvveeggeettaabblleess

Vegetables Sowing Period Picking Period

Tomato October (Nursery)

November (transplantation)

February-May

Brinjal October (Nursery)

November (transplantation)

February-May

Squashes End of October to 1stweek ofNovember (direct seeding)

End of December toApril

Cucumber End of October to end ofDecember (direct seeding)

Mid January to May

Sweet pepper/ Hot

pepper

Mid of September to 1st

week of October End of October to 1stweek of

November (Transplantation)

End of January to

September


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33..44OOffff--sseeaassoonnccuullttiivvaatt iioonnmmeetthhooddss

There are number of ways and methods to cultivate vegetables in off-seasons. Someof the methods are explained as under: -

3.4.1

Natural method by selection of appropriate area

The off-season vegetables are grown in the areas where the climatic conditions aremoderate for both normal as well as for off-seasons. Winter vegetables are grown insummer on hilly/semi hilly areas where climatic conditions are favorable for a

particular vegetable. Like wise summer vegetables are grown in winter season in thevalleys and across the sea areas.

The production cost of vegetables under above conditions is very high due totransportation of crop to the markets. Moreover, the transportation of crop over longdistance markets causes post-harvest losses. These drawbacks lead to the adoption of

artificial methods of cultivation in off-season, nearer to markets to tackle heavy

transportation cost and to reduce post-harvest losses.

3.4.2 Artificial Methods

Vegetables can be grown in off-season through artificial methods, the details ofthese methods are given below:

Growing Beneath the Sarkanda 2

This is an old method and is usually adopted near the big cities. The main vegetablesgrown under this method are tomato, chili, cucumber, and bottle gourd. The nursery

of these vegetables is planted in October/November and a wall of Sarkanda isaffixed in the direction of North South, which protect plant from cold winds and

mist. This method of cultivation is not beneficial because the growth of the planttends to be slow, as the plant does not receive required sunshine and desiredhumidity.

Building of Green Houses

Through building green houses, the sunshine intensity is controlled. The vegetablesunder this method are grown mostly in the winter season. Here the temperature,

humidity, carbon dioxide, ventilation of air and irrigation etc. are controlled. Greenhouses can be built of plain glass or of fiberglass material. The main drawback in theusage of this method is heavy capital cost.

Plastic Tunnel

Cultivation by this method is gaining popularity because of low cost and easy usage.Plastic tunnels are transparent which provide required sunshine to the plants, and theplastic also plays a barrier against the cool air in winter.

2Sarkanda (Saccharum spontaneum) is a tall, straight, grass, growing in clamps, having height upto

6 meters.


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In the construction of tunnel the major materials involved are mild steel bars and

plastic sheets. Plastic sheets are used for roof covering of the tunnel shapedconstruction, which is built with steel bars. Bamboo lengths can also be used in some

proportion with the mild steel bars. Plastic sheet is to be spread in such a manner thatit enables the stoppage of cold air from outside.

The tunnel construction offers maximum crop yield, better maintenance of thefertility of land, controlled temperature and humidity, protection from wild animals,insects and better water conservation.

There are three types of tunnels, known as low and walk-in and high tunnels.

1. Low Tunnel

It is cheaper than high tunnel but creates difficulty for soil preparation, spraying and

picking.

The tunnels are suitable for cucumber sown flat bed, melons, watermelons, bitter

gourds, squashes, and snake gourds etc. The crop yield in this type of tunnel is

however low compared to high tunnels.

FFiigg uurree 33--11::LLoo wwPPllaassttiiccTTuunnnnee llss33

3Curtsey: Mian Shadi Agriculture Farms Mamoonkangan, Faisalabad


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2. Walk-in Tunnels

Walk-in tunnels are lower than the high tunnels but they are gaining popularity asthey provide high yield compared to low tunnels. The tunnel is suitable for growing

tomatoes, cucumbers, sweet pepper and hot pepper.

FFiigg uurree 33--22::SSqquuaass hhggrroowwnniinnWWaallkk-- iinnTTuunnnnee ll44

3. High Tunnel

High tunnel facilitates easy access for soil preparation, picking and spraying due toits width and height. The crop yield is maximum in this type of tunnel. The tunnel issuitable for growing tomatoes, cucumbers and sweet peppers.

FFiigg uurree 33--33::PPiiccttuurree ooffHHiigghhTTuunnnnee ll55




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33..55RReeccoommmmeennddeeddTTuunnnnee ll

In this pre-feasibility study, cultivation is recommended with the use of walk-intunnels on the basis of its low construction cost. All the calculations are done on the

basis of walk-in tunnel technology.

The measurements of walk-in tunnel are given in the following table:

TTaabbllee 33--33::DDiimmeennssiioonnss ooffWWaallkk--iinnTTuunnnnee ll

Pipe material Mild steel, zinc galvanized

Thickness Diameter 20 mm

Thickness 1.6 mm

Length 18 ft

Iron Rod Mild steel, round in shape

Diameter 12 mm

Length 2 ft

Material Specification

Plastic 0.06 mm thick and 20 ft wide

Height Center 6 ft, Sides 2.5 ft

Width 12 ft

Length 190 ft

Tunnel Specification

No. of tunnels 13 per acre

The cost of walk-in tunnels amounts to Rs. 32,000 to Rs. 35,000. The tunnel issuitable for growing tomatoes, cucumbers, sweet pepper and hot pepper.

3.5.1 Support Structure

Each tunnel will be 190 feet long, 2.5 feet high and 12 feet wide. The tunnel is builtby pipe material of 20-mm diameter 18 feet length, and round shaped mild steel iron

rods of 12-mm diameter and 2 feet length. Each tunnel structure will then be coveredby 0.06-mm thick and 20 feet wide plastic sheet. Approximately 13 tunnels can beconstructed on an acre of land.


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FFiigg uurree 33--44::SSuuppppoorrttssttrruuccttuurree iinnwwaallkk-- iinnttuunnnnee llss66

33..66SSeeeeddaannddii ttss IImmppoorrttaannccee

For tunnel cultivation, F1 hybrid seed developed for tunnel technology is used,

because they have the ability to resist multiple diseases. These hybrid seeds costmore than the ordinary seeds. The productivity and quality of the crop is ensuredfrom quality of these seeds. Hybrid seeds have above 90% germination capacity as

compared to that of ordinary one. The ordinary seed is produced from the crop itselfwhereas hybrid seed is produced through a special process. For every crop, new

hybrid seed needs to be purchased/sown.

The crop yield achieved from hybrid seeds is 3 to 4 times more than to the ordinaryseeds and is also less prone to diseases.

33..77PPrraaccttiiccaallttiippss ffoo rrooffff--sseeaassoonnvveeggeettaabbllee ffaa rrmmiinngg

Any person who is planning to adopt this technology should have some practical

knowledge about farming. Land that is being utilized for off-season vegetable farming should be tested

which will help in determining the quality of land for agriculture purposes. Farmer should ensure that the plant they are planning to grow must have the

ability to self-pollinate under the plastic sheet.

Selection of the seed is most important factor because this determines theproductivity of the crop.

Vegetables, which are in demand, should be cultivated, this will help in earning

higher profit margins.



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Timing of cultivation of vegetables has to be done accurately. The farmer should

have knowledge about the benefit that the early crop will offer and should gatherdata about the prices of these early crops.

44

LLAANNDDUUTTIILLIIZZAATTIIOONN

A bar chart showing possible utilization of land is given in Table 4-1:

TTaabbllee 44--11::BBaarrcchhaarrttsshhoowwiinnggtthhee ooccccuuppaatt iioo nnooffllaanndd

Description Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug

OFF SEASON

Tomato

Cucumber

Hot & Sweet

Pepper

Squashes

Brinjal

44..11MMooddee ooffLLaannddAAccqquuiiss iittiioonn

Agricultural land can be taken on lease or purchased for the implementation of theproposed project.

44..22MMaatteerriiaallAAvvaa iillaa bbiilliittyy

Tunnel material i.e. mild steel bar, Plastic Sheet, Iron Wire, Bamboo, is available

locally from different suppliers. Mian Shadi Agricultural Material Company, Syngenta Pakistan Ltd. and Haji

Sons are the major suppliers of hybrid seeds.

Fertilizers of all kinds are available locally. Pesticides of different natures are also available locally.

Water is available from canal or can be used from peter engine.

44..33EExx ppeecctteeddPPrroodduucctt iioonnaannddSSaallee pprriiccee

Expected production and sale price of some vegetable is given in Table 4-2, below: -

TTaabbllee 44--22::EExx ppeecctteeddPPrroodduuccttiioo nnaa nnddLLaannddUUttiill iizzaattiioonn

Vegetable Land

Utilization

(Acres)

Production

Quantity (Kgs)/

Acre

Production

Quantity

(Kgs)

Sale Price

Rs./ Kg

Tomatoes 2.5 25,000 62,500 10

Cucumber 2.5 25,000 62,500 10

Brinjal 2.5 24,000 60,000 8

Hot Pepper 2.5 12,000 30,000 15

Sweet Pepper 2.5 18,000 45,000 15

Squashes 2.5 25,000 62,500 8


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The prices of vegetables in normal season are around one-third of the prices of

vegetables grown in off-seasons.

55

MMAACCHHIINNEERRYYRREEQQUUIIRREEMMEENNTT

Following machinery is required for an off-season vegetable farm of 15 acres:

TTaabbllee 55--11::TToooo llss ,,EEqquuiippmmeennttaannddVVeehhiicclleess

Description Number Cost per

Unit (in Rs)

Total Cost

(in Rs)

Rotavator 1 30,000 30,000

Ridger 1 10,000 10,000

Soil Leveler/ Scraper 1 10,000 10,000

Spray Machines & Farm Tools 1 37,500 37,500

Peter Engine 1 20,000 20,000

Total cost of tools & equipment cost 107,500

Tractor & Cultivator 1 350,000 350,000

Total cost of vehicle 350,000

Total cost of tools, equipment & vehicle 457,500

66

HHUUMMAANNRREESSOOUURRCCEERREEQQUUIIRREEMMEENNTT

66..11NNuummbbeerrooffSSttaaffffRReeqquuiirreedd

TTaabbllee 66--11::NNuummbbeerrooffSSttaaffff&&OOffffiicceerrss rreeqquuiirreedd

Description Number Monthly Salary perperson (Rs.)

Annual Salary (Rs)

Farm Manager 1 3,000 36,000

Labor 5 1,800 108,000

Guard 1 1,800 21,600

Total 165,600

Apart from the above mentioned staff requirement part time workers for three month

will be required during the picking season. Following table shows the part time staffrequirement:

TTaabbllee 66--22::PPaarrtt--tt iimmeessttaaffffrreeqquuiirreemmeennttDescription Number Salary (per Day) (Rs) Salary per Month (Rs)

Labor7 4 50 1,500

7Labor requirement per acre


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77

IINNFFRRAASSTTRRUUCCTTUURREERREEQQUUIIRREEMMEENNTT

TTaabbllee 77--11::LLaa nndd&&BB uuiillddiinnggCCoovveerreeddAArreeaa

Description Area (Acre)

Agriculture Land (Acre) 15

TTaabbllee 77--22::CCoonnssttrruuccttiioonnCCoossttffoorrwwaa llkk-- iinnttuunnnnee llppeerrAAccrree

Description (Material) No. of Units

Price PerUnit (in Rs.)

Total Cost(in Rs.)

Misc. pipe length required 3300 RFT 8 26,400

Plastic string 3 Kg 40 120

Iron rods 180 kg 22 3,960

Welding and labor 1 2,000 2,000

TToottaallCCooss ttiinnRRss ..ppeerrAAccrree 32,480

Plastic Cost (Kg/Acre) 117700KKgg 7700 11,900Salvage value of Plastic after a year8 25%

Total 4444,,338800

77..11SSuuiittaabbllee llooccaattiioonnffoorrtthhee pprrooppoosseeddpprroojjeecctt

On the basis of weather conditions and population base, off-season vegetable

farming project can be located near the big cities on fertile land.

Big cities have adequate consumption of various vegetables. As such, the project can

be located near Lahore, Karachi, Islamabad, Faisalabad, Sahiwal, Mardan, andQuetta etc.

77..22UUttii llii ttiieess RReeqquuiirreedd

Electricity

Diesel (for tube well operations)

Water

Telephone/Fax

8The plastic will be resold every year at a salvage value of 25%


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88

PPRROOJJEECCTTEECCOONNOOMMIICCSS

TTaabbllee 88--11::PPrroojjeeccttCCooss tt

DESCRIPTION Cost (in Rs)

Building & Civil works 487,200

Plant & Machinery 107,500

Furniture & Fixture 50,000

Vehicles 350,000

Pre-Operating Cost 62,800

Total Fixed Cost 1,057,500

Cash 41,227

Equipment Spare Parts Inventory 5,000

Up-Front Land Lease 120,000

Total Working Capital 166,227

Total Project Cost 1,223,727

TTaabbllee 88--22::FFiinnaanncciinnggPPllaa nn

Financing Rs.

Equity 50% 611,864

Debt 50% 611,864

TTaabbllee 88--33::PPrroojjeeccttss RReettuurrnn

Project Internal Rate of Return (IRR) 58.70%Net Present Value (NPV) (in Rs) 1,879,500

Payback Period (Years) 2.04


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99

KKEEYYSSUUCCCCEESSSSFFAACCTTOORRSS

The commercial viability of the project depends upon the regular and consistentsupply of good quality hybrid seeds and fertilizers.

The other important aspect is the need for strong linkages with the local market andprogressive vegetable exporters.

99..11GGuuiiddee lliinneess ffoorrssuucccceessssffuullccuullttiivvaattiioo nn

Following principles need to be pursued for the best productivity of vegetables:

1. Use of high quality hybrid seeds.

2. Having and maintaining fertility of land within the tunnel during the period ofcultivation.

3. Selection of profitable vegetables on the basis of best analysis of cost and

revenues for a given season. Cost efficiency through better management.4. Timely control of pests, diseases and exercise of preventive measures.

5.

Maintenance & control of internal temperature & humidity in the tunnel.6. Timely irrigation and fertilization.7. Timely training and grading of plantation.

8. Expansion in customers market.9. Fertilization should be done at the soil bed preparation stage. The second

fertilization, after 3 weeks interval the third after 6 weeks and finally during theharvesting period.

10.Post harvest includes protection from direct sunlight and speedy transport to the

market.11.Proper soil analysis for determining soil nutritional level.

1100

TTHHRREEAATTSSFFOORRTTHHEEBBUUSSIINNEESSSS

Crop failure in any year.

Effect of change in the government regulations.

Absence of crop insurance.

1111

OOPPPPOORRTTUUNNIITTIIEESSFFOORRTTHHEEBBUUSSIINNEESSSS

Hybrid seeds that provide higher yield can lead to lower unit cost.

Off-season cultivation of high value vegetables will fetch better price and

provide continuous supply to the processing industries.

Higher pricescan be obtained by producing the right crops, at the right times and

of better quality. They may also depend on negotiating skills and targeting high

price buyers.


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Pre-Feasib ility Study Off-Season Vegetables Farming (Walk- in Tunnel)

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1122

FFIINNAANNCCIIAALLAANNAALLYYSSIISS

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PROJECTED INCOME STATEMENT in Rs

Year-1 Year-2 Year-3 Year-4 Year-5 Year-6 Year-7 Year-8 Year-9 Year-10

Total Sales Revenue 2,851,750 2,994,338 3,144,054 3,301,257 3,466,320 3,639,636 3,821,618 4,012,699 4,213,334 4,424,000

COST OF GOODS SOLD

Raw Material 408,125 428,531 449,958 472,456 496,078 520,882 546,927 574,273 602,987 633,136

Payroll (Production Staff) 414,000 434,700 456,435 479,257 503,220 528,381 554,800 582,540 611,667 642,250

Machine Maintenance 60,000 63,000 66,150 69,458 72,930 76,577 80,406 84,426 88,647 93,080

Direct Water 30,000 33,000 36,300 39,930 43,923 48,315 53,147 58,462 64,308 70,738

Plastic Cost 178,500 142,800 161,096 166,362 175,377 183,972 193,214 202,864 213,010 223,660

Total 1,090,625 1,102,031 1,169,939 1,227,462 1,291,529 1,358,127 1,428,493 1,502,564 1,580,618 1,662,863

Gross Profit 1,761,125 1,892,306 1,974,115 2,073,795 2,174,791 2,281,509 2,393,125 2,510,135 2,632,716 2,761,137

OPERATING EXPENSE

Payroll (Admin) 21,600 22,680 23,814 25,005 26,255 27,568 28,946 30,393 31,913 33,509

Fixed electricity 36,000 39,600 43,560 47,916 52,708 57,978 63,776 70,154 77,169 84,886

Administrative Overheads 28,518 29,943 31,441 33,013 34,663 36,396 38,216 40,127 42,133 44,240

Amortization (Pre-operational Expenses) 6,280 6,280 6,280 6,280 6,280 6,280 6,280 6,280 6,280 6,280

Transport Cost 322,500 338,625 355,556 373,334 392,001 411,601 432,181 453,790 476,479 500,303

Packing Cost 322,500 338,625 355,556 373,334 392,001 411,601 432,181 453,790 476,479 500,303

Depreciation 75,110 75,110 75,110 75,110 75,110 75,110 75,110 75,110 75,110 75,110Total 812,508 850,863 891,317 933,991 979,017 1,026,534 1,076,690 1,129,644 1,185,564 1,244,632

Operating Profit 948,618 1,041,443 1,082,798 1,139,804 1,195,774 1,254,975 1,316,435 1,380,491 1,447,151 1,516,505

NON-OPERATING EXPENSE

Financial Charges on Long Term Loan 53,476 45,059 35,631 25,072 13,245 0 0 0 0 0

Financial Charges on Running Finance 16,623 0 0 0 0 0 0 0 0 0

Land Lease 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000Total 190,099 165,059 155,631 145,072 133,245 120,000 120,000 120,000 120,000 120,000

PROFIT BEFORE TAX 758,518 876,384 927,167 994,732 1,062,528 1,134,975 1,196,435 1,260,491 1,327,151 1,396,505

Tax 140,481 181,734 199,509 223,156 246,885 272,241 293,752 316,172 339,503 363,777

PROFIT AFTER TAX 618,037 694,650 727,659 771,576 815,643 862,734 902,683 944,319 987,648 1,032,728

Retained Earnings beginning of year 0 618,037 1,312,687 2,040,346 2,811,921 3,627,565 4,490,299 5,392,981 6,337,300 7,324,949

Retained Earnings end of year 618,037 1,312,687 2,040,346 2,811,921 3,627,565 4,490,299 5,392,981 6,337,300 7,324,949 8,357,677


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PROJECTED CASH FLOW STATEMENT in RsYear-0 Year-1 Year-2 Year-3 Year-4 Year-5 Year-6 Year-7 Year-8 Year-9 Year-10

Operating activities

Net profit 618,037 694,650 727,659 771,576 815,643 862,734 902,683 944,319 987,648 1,032,728

Amortization (Pre-operational Expenses) 6,280 6,280 6,280 6,280 6,280 6,280 6,280 6,280 6,280 6,280Depreciation 75,110 75,110 75,110 75,110 75,110 75,110 75,110 75,110 75,110 75,110

Accounts receivable 0 0 0 0 0 0 0 0 0 0

Equipment Spare Parts Inventory (5,000) (250) (263) (276) (289) (304) (319) (335) (352) (369) 7,757

Stocks-RM 0 0 0 0 0 0 0 0 0 0 0

Accounts payable 34,002 1,700 1,785 1,874 1,968 2,066 2,170 2,278 2,392 2,177

Cash provided by operations (5,000) 733,179 777,477 810,558 854,551 898,698 945,871 985,907 1,027,636 1,071,061 1,124,052

Financing activities

Long term debt principal repayment (70,147) (78,565) (87,993) (98,552) (110,378) 0 0 0 0 0Lease Payment (120,000) (120,000) (120,000) (120,000) (120,000) (120,000) (120,000) (120,000) (120,000) (120,000) 0

Lease Expense 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000

Addition to Long Term Debt 445,636

Running Finance Repayment (166,227) 0 0 0 0 0 0 0 0 0

Issuance of share 611,864

Cash provided by/ (used for) financing activities 937,500 (236,375) (78,565) (87,993) (98,552) (110,378) 0 0 0 0 120,000

Total 932,500 496,804 698,912 722,565 755,999 788,319 945,871 985,907 1,027,636 1,071,061 1,244,052

Investing activities

Capital expenditure (1,057,500)

Cash (used for)/ provided by investing activities (1,057,500)Net Cash (125,000) 496,804 698,912 722,565 755,999 788,319 945,871 985,907 1,027,636 1,071,061 1,244,052

Cash balance brought forward 0 41,227 538,031 1,236,943 1,959,509 2,715,507 3,503,826 4,449,698 5,435,605 6,463,240 7,534,302Cash Balance (125,000) 538,031 1,236,943 1,959,509 2,715,507 3,503,826 4,449,698 5,435,605 6,463,240 7,534,302 8,778,354

Running Finance 166,227 0 0 0 0 0 0 0 0 0 0

Cash carried forward 41,227 538,031 1,236,943 1,959,509 2,715,507 3,503,826 4,449,698 5,435,605 6,463,240 7,534,302 8,778,354


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PROJECTED BALANCE SHEET in RsYear-0 Year-1 Year-2 Year-3 Year-4 Year-5 Year-6 Year-7 Year-8 Year-9 Year-10

Current Assets

Cash 41,227 538,031 1,236,943 1,959,509 2,715,507 3,503,826 4,449,698 5,435,605 6,463,240 7,534,302 8,778,354Equipment Spare Parts Inventory 5,000 5,250 5,513 5,788 6,078 6,381 6,700 7,036 7,387 7,757 0

Stocks and Inventory 0 0 0 0 0 0 0 0 0 0 0

Pre-paid Land Lease 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 0

Receivable 0 0 0 0 0 0 0 0 0 0 0

Total 166,227 663,281 1,362,456 2,085,297 2,841,585 3,630,208 4,576,398 5,562,640 6,590,628 7,662,058 8,778,354

Gross Fixed Assets 994,700 994,700 994,700 994,700 994,700 994,700 994,700 994,700 994,700 994,700 994,700

Less: Accumulated depreciation 0 75,110 150,220 225,330 300,440 375,550 450,660 525,770 600,880 675,990 751,100

Net Fixed Assets 994,700 919,590 844,480 769,370 694,260 619,150 544,040 468,930 393,820 318,710 243,600

Intangible Assets

Pre-operational Expenses 62,800 56,520 50,240 43,960 37,680 31,400 25,120 18,840 12,560 6,280 0Total 62,800 56,520 50,240 43,960 37,680 31,400 25,120 18,840 12,560 6,280 0

TOTAL ASSETS 1,223,727 1,639,391 2,257,176 2,898,627 3,573,525 4,280,758 5,145,558 6,050,410 6,997,008 7,987,048 9,021,954

Current Liabilities

Running Finance 166,227 0 0 0 0 0 0 0 0 0 0

Accounts payable 34,002 35,702 37,487 39,361 41,329 43,396 45,566 47,844 50,236 52,413

Total 166,227 34,002 35,702 37,487 39,361 41,329 43,396 45,566 47,844 50,236 52,413

Long Term Liabilities

Long Term Loan 445,636 375,489 296,924 208,931 110,378 0 0 0 0 0 0Total 445,636 375,489 296,924 208,931 110,378 0 0 0 0 0 0

Equity

Paid-up Capital 611,864 611,864 611,864 611,864 611,864 611,864 611,864 611,864 611,864 611,864 611,864

Retained Earnings 0 618,037 1,312,687 2,040,346 2,811,921 3,627,565 4,490,299 5,392,981 6,337,300 7,324,949 8,357,677Total 611,864 1,229,901 1,924,550 2,652,209 3,423,785 4,239,429 5,102,162 6,004,845 6,949,164 7,936,812 8,969,541

TOTAL LIABILITIES AND EQUITY 1,223,727 1,639,391 2,257,176 2,898,627 3,573,525 4,280,758 5,145,558 6,050,410 6,997,008 7,987,048 9,021,954


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Pre-Feasibility Study Off-Season Vegetables Farming (Walk in Tunnel)

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1133

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TTaabbllee 1133--11::CCrrooppAAssssuummppttiioonnss

Crop

Assumptions

Cost per

Seed in Rs.

Average

SeedRequirement

in unit/ Acre

Av. Seed

Price/Acre

Crop Yield

per Acre inKgs

Sale Price

of Crop perKg

Tomato 2.5 15,000 6,750 25,000 10

Brinjal 2.5 15,000 6,750 25,000 10

Cucumber 2.5 15,000 20,250 24,000 8

Hot Pepper 2.5 15,000 7,500 12,000 15

Sweet Pepper 2.5 15,000 22,500 18,000 15

Squashes 2.5 7,000 7,000 25,000 8

Sale Price Growth Rate 5%

TTaabbllee 1133--22::EEccoonnoommyyrreellaatteeddAAssssuummppttiioonnss

Electricity Growth Rate 10%

Water price growth rate 10%

Wage Growth Rate 5%

TTaabbllee 1133--33::EExx ppeennsseess AAssssuummppttiioonnss

CropWastage 15%

Raw Material price growth rate 5%

Administrative Overhead (%of Total Revenue) 1.0%Water cost per Irrigation per Acre (Rs.) 200

Irrigation (No. of Months) 5

No. of times land irrigated (per month) 2

Fixed Electricity per Month 3,000

Transport Cost per Kg (in Rs) 1.00

Packing Cost per Kg (Rs) 1.00

Maintenance Cost of Tunnel Structure 1,000

Machine Maintenance (machine/month) 1,000

Machine Maintenance Growth Rate 5%Pesticide Requirement per Acre per Year (Rs) 7,500

Fertilizer Cost per Acre per Year (Rs.) 7,500

Field preparation cost per acre 3,500


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Pre-Feasibility Study Off-Season Vegetables Farming (Walk in Tunnel)

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TTaabbllee 1133--44::CCaasshhFFlloowwAAssssuummpptt iioonnss

Accounts Payable cycle (in days) 15

Equipment & Spare Part Inventory (in months) 1

TTaabbllee 1133--55::FFiinnaa nncciiaa llAAssssuummppttiioonnss

Project Life (years) 10

Debt Ratio 50%

Equity Ratio 50%

Interest Rate on Long Term Loan 12%

Interest Rate on Short Term Loan 10%

Discount Rate 20%

Debt Tenure (Years) 5

Payments in a Year 1

off season vegitables farming ( walkin tunnel)

Documents