MINISTRY OF AGRICULTURE GROSS MARGIN FOR FRUIT TREES IN SWAZILAND

Transcription

1 MINISTRY OF AGRICULTURE GROSS MARGIN FOR FRUIT TREES IN SWAZILAND August

2 Gross Margin for Conventional vegetables in Swaziland Introduction Gross Margin (GM) refers to the difference between the gross income and the total variable costs calculated as per hectare for one production cycle, fixed costs are not included. When calculated and considered properly, the GM provides farmers and prospective farmers with options of what to produce, how to control input costs, and increase profitability and sustainability of farming enterprise. Total variable costs (TVC) include those associated with crop production operations and harvesting. Gross margins do not include overhead costs such as insurance, living costs and interest that must be met regardless of whether or not a crop is grown. For this reason gross margins are a guide for measuring profit of a particular enterprise. When estimating whole farm profit it is necessary to consider these overhead costs in addition to enterprise gross margins. A gross margin changes as input prices changes. Break Even Price (BEP) is the amount that a farmer can charge for a particular commodity in order to cover all production costs. For the farmer to realise profits, it is important to charge a price above the BEP. Break Even Yield (BEY) is the amount of produce a farmer if expected to produce per hectare in order to cover all the production costs. It is important for the farmer to target yields above the BEY in order to realise profits. The farmer is advised to seek further assistance from technical staff and continuously update input prices as per availability. Gross Margin Analysis for Green Beans Total Area 1 Ha Units Units/ha E/unit E/ha 0.5 ha Income T/ha Variable costs 2

3 Item Unit Quantity Cost/Unit Total Cost Seeds 1Kg Land Preparation Ploughing Hrs Discing Hrs Ridging Hrs Fertilizer -2:3:4(38) 50kg Lime 50Kg LAN 50Kg V12 1L Chemicals Bravo 500ml Decis 1L GF 120 1L One time 1L In cap 1L Irrigation (fuel) 1L Labour Fertilizer Application M/day Planting M/day Weeding M/day Side dressing M/day Irrigation Pest and disease control Transport (Inputs) E/km Harvesting M/day Total Variable costs Gross margin BEP (E/ton) BEY (Tons/ha) Production Viability for Green Beans in Swaziland The production of green beans is very viable. The returns are lucrative under Good Agricultural Practices, as indicated by the gross margins. The gross margins indicate that under green beans production a farmer can earn E12, per hectare. In order to break even the farmer must produce a minimum of 4.88 tons per hectare, and sell at least at E8, per tonne. 3

4 It is worth noting that green beans are labour intensive and good management contributes to early maturity as well as optimal yields. Market Opportunity The demand for green beans internationally and locally is way too high than the supply so far hence the need for local producers to increase the area under production while conforming to the set quality standards. Gross Margins for Baby Marrow Total Area 1 Ha Units Units/ha E/unit E/ha 0,5 Ha Income T/ha Variable costs Item Unit Quantity Cost/Unit Total Cost 4

5 Seeds Land preparation 5hrs Fertilizer;(2:3:4 (38) 50kg Lime 50Kg LAN 50kg V12 1L Irrigation (fuel) 1L Chemicals Decis 1L Bravo 500ml One time (Bacteria/fungi) 1L GF 120 1L Instinct ( Pests control) 1L In cap (Sticker) 1L Labour Fertilizer Application M/day Planting M/day Weeding M/day Side dressing M/day Irrigation M/day Irrigation Maintenance 3 hrs M/day Pest and disease control M/day Total Operating Costs Harvesting M/day Transport (Inputs) E/km Total Variable Costs Gross margin BEP (E/ton) BEY (Tons/Ha) Production Viability for baby Marrow in Swaziland The Gross Margin indicates that Baby Marrow production in Swaziland is viable since a farmer can earn a profit of E per hectare. To break even a farmer must produce 2.88 tones. The breakeven price is E5275 per tone. Baby marrow production is very manageable and good as a starter course for a farmer who wishes to venture into baby vegetables production. It is worth noting that baby vegetables are labour intensive (especially harvesting) and good management contributes to early maturity as well as the highest yields. 5

6 Market Opportunity The international market demand for baby marrow is very high. Given that the demand is high, there is a need to increase the hectares under production and conform to the set quality standards. Gross Margin Analysis for Patty Pans Total Area 1 Ha Units Units/ha E/unit E/ha 0,5 Ha Income T/ha Variable costs Item Unit Quantity Cost/Unit Total Cost 6

7 Seeds Land preparation 5hrs Fertilizer;(2:3:4 (38) 50kg Lime 50Kg LAN 50kg V12 1L Irrigation (fuel) 1L Chemicals Decis 1L Bravo 500ml One time (Bacteria/fungi) 1L GF 120 1L Instinct ( Pests control) 1L In cap (Sticker) 1L Labour Fertilizer Application M/day Planting M/day Weeding M/day Side dressing M/day Irrigation M/day Irrigation Maintenance 3 hrs M/day Pest and disease control M/day Transport (Inputs) E/Km Harvesting M/day Total Variable Costs Gross margin BEP (E/ton) BEY (Tons/Ha) Production Viability for patty pans in Swaziland The Gross Margin indicates that patty pans production is viable in Swaziland since a farmer can earn profit of E29, To break even the farmer must produce 3.31 tones and sell at least at E6, 064 per ton. A farmer is supposed to produce good quality and high yield. It is worth noting that patty pans are sensitive to rain and higher temperatures. Market Opportunity 7

8 Both local and international market demand is very high. Given that the demand is high, there is a need to increase the hectares under production and conform to the set quality standards. Gross Margin Analysis for Baby Gem Total Area 1 Ha Units Units/ha E/unit E/ha 0.5 ha Income T/ha Variable costs Item Unit Quantity Cost/Unit Total Cost 8

9 Seeds Land Preparation Ploughing Hrs Discing Hrs Ridging Hrs Fertilizer -2:3:4(38) 50kg Lime 50Kg LAN 50Kg V12 1L Chemicals Bravo 500ml Decis 1L GF 120 1L One time 1L In cap 1L Irrigation (fuel) 1L Labour Fertilizer Application M/day Planting M/day Weeding M/day Side dressing M/day Irrigation M/day Pest and disease control M/day Transport (Inputs) E/Km Harvesting M/day Total Variable costs Gross margin BEP (E/ton) BEY (Tons/ha) Production Viability for Baby Gem in Swaziland The Gross Margin indicates that Baby Gem production in Swaziland is viable since a farmer can earn a profit of E44, The break even yield for this vegetable is 1.94 tones, and in order to cover all the production costs the farmer must sell at least at E3, per tonne. Market Opportunity 9

10 Both local and international market demand is very high. Given that the demand is high, there is a need to increase the hectares under production and conform to the set quality standards. Gross Margin Analysis for Baby Cabbage (red, green & savoy) Units Units/ha E/unit E/ha 0.5 Ha Income T/ha Variable costs Item Unit Quantity Cost/Unit Total Cost Seedlings

11 Land preparation Hrs Fertilizer -2:3:4(38) 50Kg LAN 50Kg Dolomitic Lime 50Kg Irrigation (fuel) 1L Chemicals Decis 1L Cypermetrin 1L Labour Land preparation M/day Planting M/day Weeding M/day Side dressing M/day Irrigation M/day Irrigation Maintenance 3 Hrs M/day Pest and disease control M/day Harvesting M/day Transport (Inputs) E/Km Total Variable costs Gross margin BEP (E/ton) BEY (Tons/ha) Production Viability for Baby Cabbage in Swaziland The gross margin shows that baby cabbage production is profitable. The gross margin for this baby vegetable is E and to cover all production costs a yield of 4.06 tonnes per hectare is required. The breakeven price is E per tonne. Market Opportunity 11

12 Baby cabbage is highly marketable as they can be sold to local retail shops, regional, and international markets. Regional markets include South Africa and international markets include countries like France and Germany. Gross Margins for Baby Corn Units Units/ha E/unit E/ha 0.5 Ha Income T/ha Variable costs Item Unit Quantity Cost/Unit Total Cost/Ha 0.5Ha Seeds 5Kg

13 Land preparation Ploughing Hrs Ridging Hrs Discing Hrs Fertilizer -2:3:4(38) 50Kg LAN 50Kg Lime 50Kg Irrigation (fuel) 1L Chemicals Cypermetrin 1L Cruiser 60ml Labour Fertilizer Application M/day Planting M/day Weeding M/day Side dressing M/day Irrigation M/day Irrigation Maintenance M/day Pest and disease control M/day Harvesting M/day Transport (Inputs) E/Km Total Variable costs Gross margin BEP (E/ton) BEY (Tons/ha) Production Viability for baby corn in Swaziland The gross margin indicates that baby corn production is a viable venture. A profit of E can be made on this baby vegetable. In order to cover all production costs, a yield of 1.60 tonnes is required. The breakeven is price E

14 Market Opportunity Baby corn can be sold to local, regional, and international markets. Regional markets include countries in Sothern Africa whilst international markets consist of European countries. Gross margins sugar snap peas Units Units/ha E/unit E/ha 0.5 Ha Income T/ha Variable costs 14

15 Item Unit Quantity Cost/Unit Total Cost Seeds 1 Kg Land preparation Ploughing Hrs Ridging Hrs Discing Hrs Trellising poles poles Trellising rope rolls Fertilizer -2:3:4(38) 50Kg V12 1L LAN 50Kg Lime 50Kg Irrigation (fuel) 1L Chemicals Bravo 500ml Decis 1L GF 120 1L One time 1L Instinct 1L In cap 1L Labour Fertilizer Application M/day Planting M/day Weeding M/day Side dressing M/day Irrigation M/day Irrigation Maintenance M/day Pest and disease control M/day Harvesting M/day Trellising M/day Transport (Inputs) E/Km Total Variable costs Gross margin BEP (E/ton) BEY (Tons/ha) Production Viability for Sugar Snap Peas in Swaziland The gross margin shows that sugar snap pea s production is profitable. The gross margin for this baby vegetable is E22, and to cover all production costs a yield of 2.02 tonnes per hectare is required. The breakeven price is E per tonne. 15

16 Market Opportunity Sugar snap peas are highly marketable as they can be sold to local retail shops, regional, and international markets. Regional markets include South Africa and international markets include countries like France and Germany. Gross Margins for Baby Broccoli Units Units/ha E/unit E/ha 0.5Ha Income T/ha Variable costs 16

17 Item Unit Quantity Cost/Unit Total Cost Seedlings 1000 Seedlings Land preparation Ploughing Hrs Ridging Hrs Discing Hrs Fertilizer -2:3:4(38) 50Kg LAN 50Kg Dolomatic Lime 50Kg Irrigation (fuel) 1L Chemicals Bravo 500ml Decis 1L Labour Fertilizer Application M/day Planting M/day Weeding M/day Side dressing M/day Irrigation M/day Irrigation Maintenance M/day Pest and disease control M/day Transport (Inputs) E/Km Harvesting M/day Total Variable costs Gross margin BEP (E/ton) BEY (Tons/ha) Production Viability for Baby Broccoli in Swaziland The Gross Margin indicates that Baby broccoli production in Swaziland is viable since a farmer can earn a profit of E33, The break even yield for this vegetable is 3.72 tones, and in order to cover all the production costs the farmer must sell at least at E3, per tonne. 17

18 Market Opportunity Both local and international market demand is very high. Given that the demand is high, there is a need to increase the hectares under production and conform to the set quality standards. Gross Margins for Baby Cauliflower Units Units/ha E/unit E/ha 0.5Ha Income T/ha

19 Operational costs Item Unit Quantity Cost/Unit Total Cost Seedlings 1000 Seedlings Land preparation Ploughing Hrs Ridging Hrs Discing Hrs Fertilizer -2:3:2(37) 50Kg LAN 50Kg Dolomatic Lime 50Kg Irrigation (fuel) 1L Chemicals Bravo 500ml Decis 1L Labour Fertilizer Application M/day Planting M/day Weeding M/day Side dressing M/day Irrigation M/day Irrigation Maintenance M/day Pest and disease control M/day Transport (Inputs) E/Km Harvesting M/day Total Variable Costs Gross margin BEP (E/ton) BEY (Tons/ha) Production Viability for Baby Cauliflower in Swaziland The Gross Margin indicates that baby cauliflower production is viable in Swaziland since a farmer can earn profit of E12, To break even the farmer must produce 2.01 tones and sell at least at E3, per ton. A farmer is supposed to produce good quality and high yield. 19

20 Market Opportunity Both local and international market demand is very high. Given that the demand is high, there is a need to increase the hectares under production and conform to the set quality standards. Gross Margins for Mangetout Peas Units Units/ha E/unit E/ha 0.5 Ha Income T/ha Variable costs Item Unit Quantity Cost/Unit Total 20

21 Cost Seeds 1 Kg Land preparation Ploughing Hrs Ridging Hrs Discing Hrs Trellising poles poles Trellising rope rolls Fertilizer -2:3:4(38) 50Kg LAN 50Kg V12 1L Lime 50Kg Irrigation (fuel) 1L Chemicals Bravo 500ml Decis 1L GF 120 1L One time 1L Instinct 1L In cap 1L Labour Fertilizer Application M/day Planting M/day Weeding M/day Side dressing M/day Irrigation M/day Irrigation Maintenance M/day Pest and disease control M/day Harvesting M/day Trellising M/day Transport (Inputs) E/Km Total Variable costs Gross margin BEP (E/ton) BEY (Tons/ha) Production Viability for mangetout peas in Swaziland The gross margin shows that mangetout production is profitable. The gross margin for this baby vegetable is E21, and to cover all production costs a yield of 1.98 tonnes per hectare is required. The breakeven price is E7, per tonne. 21

22 Market Opportunity Mangetout are highly marketable as they can be sold to local retail shops, regional, and international markets. Regional markets include South Africa and international markets include countries like France and Germany. Gross Margin for Sweet Corn Units Units/ha E/unit E/ha 0.5 Ha Income T/ha Variable costs Item Unit Quantity Cost/Unit Total 0.5Ha 22

23 Cost/Ha Seeds 5Kg Land preparation Ploughing Hrs Ridging Hrs Discing Hrs Fertilizer -2:3:4(38) 50Kg LAN 50Kg Lime 50Kg Irrigation (fuel) 1L Chemicals Cypermetrin 1L Cruiser 60ml Labour Fertilizer Application M/day Planting M/day Weeding M/day Side dressing M/day Irrigation M/day Irrigation Maintenance M/day Pest and disease control M/day Harvesting M/day Transport (Inputs) E/Km Total Variable costs Gross margin BEP (E/ton) BEY (Tons/ha) Production Viability for sweet corn in Swaziland The Gross Margin indicates that sweet corn in Swaziland is viable since a farmer can earn a profit of E44, 819. The break even yield for this vegetable is 2.02 tones, and in order to cover all the production costs the farmer must sell at least at E2, per tonne. 23

24 Market Opportunity Both local and international market demand is very high. Given that the demand is high, there is a need to increase the hectares under production and conform to the set quality standards. 24