LUWEMIMO FARMS ENTERPRISES BUSINESS PROPOSAL FOR CASSAVA FARM

Transcription

1 LUWEMIMO FARMS ENTERPRISES BUSINESS PROPOSAL FOR CASSAVA FARM 1

2 TABLE OF CONTENTS TITLE PAGE INTRODUCTION 3 VISION AND MISSION 4 OUR MISSION 4 VISION 4 BACKGROUND INFORMATION 5 ECONOMIC IMPORTANCE OF CASSAVA PRODUCTION IN NIGERIA 5 IMPROVED CASSAVA VARIETIES TO BOOST PRODUCTIVITY 6 CASSAVA PRODUCTION PROFILE IN NIGERIA 8 DEMAND ESTIMATES OF CASSAVA SUPPLY IN NIGERIA 9 COST ESTIMATE FOR PROPOSAL OF CASSAVA FARM 11 2

3 INTRODUCTION Luwemimo Farms Enterprises is an Agri-Business, a registered company under the laws of the Federal Government of Nigeria. The current members of the company are Mr. Oguntona Adeoye (Proprietor), Mr. Opeyemi Akano (Assistant), Mr. Oluwadamilare Laniyan (Supervisor), Mr. Adeolu Okungbowa (Accountant 1), Miss Oluwatobi Oguntona (Accountant 2), Mr. Lanre Olatunde (Agriculturist./Adviser), Adegbenro and Co. is our legal adviser and secretary. The proprietor is a graduate with Bachelor s degree in Pure and Applied Chemistry, University of Lagos. He has passion for entrepreneurial endeavors, he has some experiences in business activities and he also working on bridging the gap between the fields of the physical sciences and that of the Agricultural sector. Indeed, what in the world is not Chemistry? 3

4 VISION AND MISSION VISION To grow our business into a system that can run on its own. Provide healthy carbohydrate and starch sources to our customers at affordable prices. To earn customers loyalty through timely delivery of quality fresh farm produce. OUR MISSION Our Mission is to supply as many as possible with our farm products and to ensure customers satisfaction. 4

5 BACKGROUND INFORMATION Economic Importance of Cassava Production in Nigeria. Cassava (Manihot Esculenta) is a popular crop grown in tropical regions. Cassava production in Nigeria is largely by subsistence farming and Nigeria is currently the largest producer of cassava in the world. It is the most extensively cultivated crop in the southern part of the country; it contributes largely to the country s Gross Domestic Production (GDP) and a major source of income to rural farmers. It is used in some industries for production of bio-degradable products, production of feeds for livestock, it could reduce unemployment rate and it is also a rich source of carbohydrates. Although, majority of farmers wish to cultivate cassava but initial capital and land has been a major challenge to farmers, only few farmers have access to rural credits and lands. Despite Nigeria been the largest producer of cassava, there is still need to increase the production of cassava for export purpose. The United Nation s Food and Agriculture Organization gave credence to this where it estimated that cassava production in Nigeria is above 34 million tones. Comparing the output of various crops in Nigeria, the FAO ranked cassava production first, followed by Yam, Sorghum, Millet and Rice production. Expansion of cassava production has been relatively steady since 1980 with an additional push between 1988 till date owing to the improved research by the International Institute for Tropical Agriculture (IITA). Since IITA s intervention, cassava production in Cross River, Akwa Ibom, Rivers and Delta have dominated others states in the South-South region. Similarly, Ogun, Ondo and Oyo states dominated in the South West, while Enugu and Imo dominated production in the South east. For the North West, Kaduna is the only state producing cassava on a large scale. Indeed, experts say, cassava enthusiasts are in for an exciting time in Nigeria and across Africa owing to its huge demand. They argue that since African Heads of State and Governments have agreed to make agriculture a top priority by raising budgeting allocations by 10 percent to the sector 5

6 within the next five years, huge opportunities abound for investors in the sector. However, they say that the initiative for achieving this should be based on a transformation strategy that emphasize market penetration, collective action, private sector participation, and research. In Nigeria, cassava is one of the staple foods and since it takes longer time to mature, it is not normally grown alone. It is grown with other crops such as maize and melon. For instance, it is profitably grown in the Southern part of the country between the month of June and August. IMPROVED CASSAVA VARIETIES TO BOOST PRODUCTIVITY Nigeria has released two improved cassava varieties in an effort to maintain its lead as the world s largest producer of the root crop and improve incomes of farmers. The varieties were developed through a collaborative effort between the International Institute of Tropical Agriculture (IITA) and the Nigerian Root Crops Research Institute (NRCRI), Umudike. These two varieties are originally recognized as IITA- developed gentoypes: IITA-TMS (Tropical Manioc Selection) and IITA TMS (Tropical Manioc Selection) Both varieties perform well in different cassava production regions of Nigeria with high yield, high dry matter, and good disease resistance. The roots of these varieties are yellow and contain moderate levels of pro-vitamin A. The potential maximum yield of the two varieties is between 49 and 53 tons per hectare, according to pre-varietal release trials that were conducted between 2008 and Local varieties produce less than 10 tons per hectare. The varieties are also resistant to major pests and diseases that affect Cassava in the country including Cassava mosaic disease, Cassava bacterial blight, Cassava anthracnose, Cassava mealybug, and Cassava green mite. The varieties have the following distinct qualities: Good for high quality cassava flour (a sought-after) trait by researchers for the cassava transformation agenda in Nigeria. 6

7 High dry matter which is positively, related to starch and crucial for cassava chain development. High leaf retention which is positively related to drought tolerance and is crucial for cassava production in the drier regions and in mitigating the impact of climate change, and Moderate levels of beta-carotene for enhancing nutrition. Over the years, cassava has been transformed from being a poor man s crops to lucrative and an industrial crop, as it is now processed to products such as starch, flour, glucose, and ethanol. This transition has increased the demand for this root crop. Research say developing new improved varieties is one way of boosting the steady supply of cassava roots for value chain development and for industry. Another type of cassava specie is the TME (Tropical Manihot esculenta) 419 specie which also gives a higher tonnage and higher starch contents. The weight of its cassava tubers double that of the traditional cassava and the cassava stem has had tremendous success in terms quality and quantity against all other varieties of cassava given to farmers in Nigeria. Pictorial Diagrams of Cassava 7

8 Cassava Production Profile in Nigeria Nigeria grows more cassava than any other country in the world. The production of cassava is concentrated in the hands of numerous small holder farmers located primarily in the south and central regions of Nigeria. A significant population of cassava growers in Nigeria has made the transition from traditional production systems to the use of highyielding varieties and mechanization of processing. Table 1: Levels of Cassava Production from (tons) YEAR NIGERIA ,043, ,004, ,184, ,128, ,005, ,404, ,050, ,695, ,698, ,070, ,810, ,586, ,476, ,379,000 Source: FAO (2004) 8

9 FAO (2004) provides statistics of cassava production for the period of 1990 to 2003 (Table 1). The data shows that cassava production witnessed increase, this data was subjected to graphical analysis to further demonstrate production trend. Nigeria s immense potential for cassava production is further shown by the high positive intercept, which suggests high productivity levels. (MILLION) Cassava Production Trend in Nigeria DEMAND ESTIMATES OF CASSAVA SUPPLY IN NIGERIA The tolerance of cassava to extreme stress conditions, its low production resource requirements, its biological efficiency in the production of food energy, its availability throughout the year and its stability for farming systems, has made Cassava products gain more popularity in Nigeria. Projections show that Cassava will have better yield and quality improved varieties, cultural practices and processing technology. The data below shows the estimate potential demand for cassava in Nigeria. 9

10 Table 2: Estimate of Potential/Demand for Cassava (tons) in Nigeria Sector Food for Urban Market 14,157,438 Food for rural market 4,378,788 Food for export 1,825,000 Food for flour 1,170,055 Livestock 675,000 Starch 335,000 Ethanol 139,347 TOTAL 22,680,628 Source: Kormawa (2003) 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 Red 0 Sectors KEY Food for urban market Food for rural market Food for export Food as flour Livestock Starch Ethanol 10

11 COST ESTIMATE FOR PROPOSAL OF CASSAVA FARM At Luwemimo Farms Enterprises our cost estimate for the proposal of cassava farm is given below; COST ESTIMATE OF PURCHASE OF 10 (TEN) ACRES OF FARMLAND AND LEGAL PROCESSES FEE 10 acres of Land N7,000,000 COST ESTIMATE FOR LAND PREPARATION START UP Operations 10acres Clearing of Forest N200,000 Workmanship for cutting of Trees N80,000 Fueling of Cutting Machine N38,000 Farm Clearing operation N140,000 (Evacuation of generation waste) Securing of Farm (Fencing) TOTAL N2,000,000 N2,458,000 COST ESTIMATE FOR CASSAVA PLANTING Operations 10 acres (Costs) Procurement of cassava stems N64,000 Making ridges N100,000 Planting of cassava N30,000 Farm Operation Supervision N50,000 Feeding during Ridge Making N150,000 Cost of Fumigation N100,000 TOTAL N494,000 11

12 COST OF MACHINERY AND EQUIPMENT FOR FARM OPERATION Equipment Prices 1. Pumping machine N30, Spraying Nap Sack (6pcs) N17, Cutlass (2 Dozens) N31, Files (2 Dozens) N6, Safety Boot N3, Chainsaw for Cutting Tree N90, First Aid Box N10, Hoes N28,000 MACHINERY Two Grass Cutters N250,000 TOTAL N465,200 Cost of Farm Vehicle Web design Salary for farm Manager (1 Year) N15,000,000 N1,000,000 N1,200,000 Personal Accommodation Needs N472,200 GRAND TOTAL = N28,089,400 equivalent to $77, The amount we need to execute the cassava farm is N28,089, equivalent to $77, (Twenty-eight million, eighty-nine thousand, four hundred naira only). That is, (Seventy-seven thousand, four hundred and eighty-eight Dollars only). 12