MINISTRY OF AGRICULTURE GROSS MARGIN FOR FRUIT TREES IN SWAZILAND August 2017 1
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 6 11000 66000 33000 Variable costs 2
Item Unit Quantity Cost/Unit Total Cost Seeds 1Kg 210 202.3 42483 21241.5 Land Preparation Ploughing Hrs 2.5 400 1000 500 Discing Hrs 1.5 400 600 300 Ridging Hrs 1 400 400 200 Fertilizer -2:3:4(38) 50kg 3 410 1230 615 Lime 50Kg 20 60 1200 600 LAN 50Kg 1 280 280 140 V12 1L 1 140 140 70 Chemicals Bravo 500ml 1 176.1 176.1 88.05 Decis 1L 1 764.1 764.1 382.05 GF 120 1L 1 120 120 60 One time 1L 1 117.5 117.5 58.75 In cap 1L 1 117.5 117.5 58.75 Irrigation (fuel) 1L 150 12.45 1867.5 933.75 Labour Fertilizer Application M/day 3 65 195 97.5 Planting M/day 6 65 390 195 Weeding M/day 6 65 390 195 Side dressing M/day 3 65 195 97.5 Irrigation 5 65 325 162.5 Pest and disease control 3 65 195 97.5 Transport (Inputs) E/km 100 5 500 250 Harvesting M/day 15 65 975 487.5 Total Variable costs 53660.7 26830.35 Gross margin 12339.3 6169.65 BEP (E/ton) 8943.45 4471.7 BEY (Tons/ha) 4.88 2.4 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, 339.30 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, 943.45 per tonne. 3
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 6 11000 66000 33000 Variable costs Item Unit Quantity Cost/Unit Total Cost 4
Seeds 1000 17.5 1110 19425 9712.5 Land preparation 5hrs 5 400.00 2000 1000 Fertilizer;(2:3:4 (38) 50kg 6 410.00 2460 1230 Lime 50Kg 20 60.00 1200 600 LAN 50kg 2 280.00 560 280 V12 1L 1 140.00 140 70 Irrigation (fuel) 1L 150 12.45 1867.5 933.75 Chemicals Decis 1L 1 764.1 764.1 382.05 Bravo 500ml 1 176.1 176.1 88.05 One time (Bacteria/fungi) 1L 1 117.5 117.5 58.75 GF 120 1L 1 120 120 60 Instinct ( Pests control) 1L 1 122.9 122.9 61.45 In cap (Sticker) 1L 1 117.5 117.5 58.75 Labour Fertilizer Application M/day 3 65 195 97.5 Planting M/day 6 65 390 195 Weeding M/day 5 65 325 162.5 Side dressing M/day 3 65 195 97.5 Irrigation M/day 5 65 325 162.5 Irrigation Maintenance 3 hrs M/day 1 65 65 32.5 Pest and disease control M/day 3 65 195 97.5 Total Operating Costs Harvesting M/day 6 65 390 195 Transport (Inputs) E/km 100 5 500 250 Total Variable Costs 31650.6 15825.3 Gross margin 34349.4 17174.7 BEP (E/ton) 5275.10 2637.55 BEY (Tons/Ha) 2.88 1.44 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 E34 349.40 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
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 6 11000 66000 33000 Variable costs Item Unit Quantity Cost/Unit Total Cost 6
Seeds 2500 7 3460.4 24222.8 12111.4 Land preparation 5hrs 5 400.00 2000 1000 Fertilizer;(2:3:4 (38) 50kg 6 400.00 2400 1200 Lime 50Kg 20 60.00 1200 600 LAN 50kg 2 280.00 560 280 V12 1L 1 140.00 140 70 Irrigation (fuel) 1L 150 12.45 1867.5 933.75 Chemicals Decis 1L 1 764.1 764.1 382.05 Bravo 500ml 1 176.1 176.1 88.05 One time (Bacteria/fungi) 1L 1 117.5 117.5 58.75 GF 120 1L 1 120 120 60 Instinct ( Pests control) 1L 1 122.9 122.9 61.45 In cap (Sticker) 1L 1 117.5 117.5 58.75 Labour Fertilizer Application M/day 3 65 195 97.5 Planting M/day 6 65 390 195 Weeding M/day 5 65 325 162.5 Side dressing M/day 3 65 195 97.5 Irrigation M/day 5 65 325 162.5 Irrigation Maintenance 3 hrs M/day 1 65 65 32.5 Pest and disease control M/day 3 65 195 97.5 Transport (Inputs) E/Km 100 5 500 250 Harvesting M/day 6 65 390 195 Total Variable Costs 36388.4 18194.2 Gross margin 29611.6 14805.8 BEP (E/ton) 6064.73 3032.37 BEY (Tons/Ha) 3.31 1.65 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, 611.60. 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
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 6 11000 66000 33000 Variable costs Item Unit Quantity Cost/Unit Total Cost 8
Seeds 3000 5 2035.7 10178.5 5089.25 Land Preparation Ploughing Hrs 2.5 400 1000 500 Discing Hrs 1.5 400 600 300 Ridging Hrs 1 400 400 200 Fertilizer -2:3:4(38) 50kg 3 400 1200 600 Lime 50Kg 20 60 1200 600 LAN 50Kg 1 280 280 140 V12 1L 1 140 140 70 Chemicals Bravo 500ml 1 176.1 176.1 88.05 Decis 1L 1 764.1 764.1 382.05 GF 120 1L 1 120 120 60 One time 1L 1 117.5 117.5 58.75 In cap 1L 1 117.5 117.5 58.75 Irrigation (fuel) 1L 150 12.45 1867.5 933.75 Labour Fertilizer Application M/day 3 65 195 97.5 Planting M/day 6 65 390 195 Weeding M/day 6 65 390 195 Side dressing M/day 3 65 195 97.5 Irrigation M/day 5 65 325 162.5 Pest and disease control M/day 3 65 195 97.5 Transport (Inputs) E/Km 100 5 500 250 Harvesting M/day 15 65 975 487.5 Total Variable costs 21326.2 10663.1 Gross margin 44673.8 22336.9 BEP (E/ton) 3554.37 1777.2 BEY (Tons/ha) 1.94 1.0 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, 673.80. 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, 554.37 per tonne. Market Opportunity 9
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 6 10000 60000 30000 Variable costs Item Unit Quantity Cost/Unit Total Cost Seedlings 1000 80 376.20 30096 15048 10
Land preparation Hrs 5 400.00 2000 1000 Fertilizer -2:3:4(38) 50Kg 5 410.00 2050 1025 -LAN 50Kg 2 280.00 560 280 Dolomitic Lime 50Kg 20 60.00 1200 600 Irrigation (fuel) 1L 150 12.45 1867.5 933.75 Chemicals Decis 1L 1 764.1 764.1 382.05 Cypermetrin 1L 1 12.3 12.3 6.15 Labour Land preparation M/day 3 65 195 97.5 Planting M/day 6 65 390 195 Weeding M/day 5 65 325 162.5 Side dressing M/day 3 65 195 97.5 Irrigation M/day 5 65 325 162.5 Irrigation Maintenance 3 Hrs M/day 1 65 65 32.5 Pest and disease control M/day 3 65 195 97.5 Harvesting M/day 6 65 390 195 Transport (Inputs) E/Km 100 5 500 250 Total Variable costs 40629.9 20314.95 Gross margin 19370.1 9685.1 BEP (E/ton) 6771.65 3385.8 BEY (Tons/ha) 4.06 2.0 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 E19370.10 and to cover all production costs a yield of 4.06 tonnes per hectare is required. The breakeven price is E6771.65 per tonne. Market Opportunity 11
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 2 11000 22000 11000 Variable costs Item Unit Quantity Cost/Unit Total Cost/Ha 0.5Ha Seeds 5Kg 18 245.7 4422.6 2211.3 12
Land preparation Ploughing Hrs 2.5 400 1000 500 Ridging Hrs 1 400 400 200 Discing Hrs 1.5 400 600 300 Fertilizer -2:3:4(38) 50Kg 6 410 2460 1230 -LAN 50Kg 4 280 1120 560 Lime 50Kg 20 60 1200 600 Irrigation (fuel) 1L 150 12.45 1867.5 933.75 Chemicals Cypermetrin 1L 2 124 248 124 Cruiser 60ml 12 182.25 2187 1093.5 Labour Fertilizer Application M/day 3 65 195 97.5 Planting M/day 6 65 390 195 Weeding M/day 5 65 325 162.5 Side dressing M/day 3 65 195 97.5 Irrigation M/day 5 65 325 162.5 Irrigation Maintenance M/day 1 65 65 32.5 Pest and disease control M/day 3 65 195 97.5 Harvesting M/day 6 65 390 195 Transport (Inputs) E/Km 100 5 500 250 Total Variable costs 17585.1 8792.55 Gross margin 4414.9 2207.45 BEP (E/ton) 8792.55 4396.28 BEY (Tons/ha) 1.60 0.80 Production Viability for baby corn in Swaziland The gross margin indicates that baby corn production is a viable venture. A profit of E4414.9 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 E8792.55. 13
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 6 11000 66000 33000 Variable costs 14
Item Unit Quantity Cost/Unit Total Cost Seeds 1 Kg 210 96.5 20265 10132.5 Land preparation Ploughing Hrs 2.5 400 1000 500 Ridging Hrs 1 400 400 200 Discing Hrs 1.5 400 600 300 Trellising poles poles 6500 1.5 9750 4875 Trellising rope rolls 1 450 450 225 Fertilizer -2:3:4(38) 50Kg 6 410 2460 1230 V12 1L 1 140 140 70 -LAN 50Kg 2 280 560 280 Lime 50Kg 20 60 1200 600 Irrigation (fuel) 1L 150 12.45 1867.5 933.75 Chemicals Bravo 500ml 2 176.1 352.2 176.1 Decis 1L 1 764.1 764.1 382.05 GF 120 1L 1 120 120 60 One time 1L 1 117.5 117.5 58.75 Instinct 1L 1 122.9 122.9 61.45 In cap 1L 1 117.5 117.5 58.75 Labour Fertilizer Application M/day 3 65 195 97.5 Planting M/day 6 65 390 195 Weeding M/day 15 65 975 487.5 Side dressing M/day 3 65 195 97.5 Irrigation M/day 5 65 325 162.5 Irrigation Maintenance M/day 1 65 65 32.5 Pest and disease control M/day 3 65 195 97.5 Harvesting M/day 6 65 390 195 Trellising M/day 12 65 780 390 Transport (Inputs) E/Km 100 5 500 250 Total Variable costs 43796.7 21898.35 Gross margin 22203.3 11101.65 BEP (E/ton) 7299.45 3649.7 BEY (Tons/ha) 2.02 1.0 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, 203.30 and to cover all production costs a yield of 2.02 tonnes per hectare is required. The breakeven price is E7299.45 per tonne. 15
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 6 9000 54000 27000 Variable costs 16
Item Unit Quantity Cost/Unit Total Cost Seedlings 1000 Seedlings 33 250.8 8276.4 4138.2 Land preparation Ploughing Hrs 2.5 400 1000 500 Ridging Hrs 1 400 400 200 Discing Hrs 1.5 400 600 300 Fertilizer -2:3:4(38) 50Kg 6 410 2460 1230 -LAN 50Kg 2 280 560 280 Dolomatic Lime 50Kg 20 60 1200 600 Irrigation (fuel) 1L 150 12.45 1867.5 933.75 Chemicals Bravo 500ml 1 176.1 176.1 88.05 Decis 1L 1 764.1 764.1 382.05 Labour Fertilizer Application M/day 3 65 195 97.5 Planting M/day 6 65 390 195 Weeding M/day 15 65 975 487.5 Side dressing M/day 3 65 195 97.5 Irrigation M/day 5 65 325 162.5 Irrigation Maintenance M/day 1 65 65 32.5 Pest and disease control M/day 3 65 195 97.5 Transport (Inputs) E/Km 100 5 500 250 Harvesting M/day 6 65 390 195 Total Variable costs 20534.1 10267.05 Gross margin 33465.9 16732.95 BEP (E/ton) 3422.35 1711.18 BEY (Tons/ha) 3.72 1.86 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, 465.9. 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, 422.35 per tonne. 17
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 6 6000 36000 18000 18
Operational costs Item Unit Quantity Cost/Unit Total Cost Seedlings 1000 Seedlings 33 353.4 11662.2 5831.1 Land preparation Ploughing Hrs 2.5 400 1000 500 Ridging Hrs 1 400 400 200 Discing Hrs 1.5 400 600 300 Fertilizer -2:3:2(37) 50Kg 6 410 2460 1230 -LAN 50Kg 2 280 560 280 Dolomatic Lime 50Kg 20 60 1200 600 Irrigation (fuel) 1L 150 12.45 1867.5 933.75 Chemicals Bravo 500ml 1 176.1 176.1 88.05 Decis 1L 1 764.1 764.1 382.05 Labour Fertilizer Application M/day 3 65 195 97.5 Planting M/day 6 65 390 195 Weeding M/day 15 65 975 487.5 Side dressing M/day 3 65 195 97.5 Irrigation M/day 5 65 325 162.5 Irrigation Maintenance M/day 1 65 65 32.5 Pest and disease control M/day 3 65 195 97.5 Transport (Inputs) E/Km 100 5 500 250 Harvesting M/day 6 65 390 195 Total Variable Costs 23919.9 11959.95 Gross margin 12080.1 6040.05 BEP (E/ton) 3986.65 1993.33 BEY (Tons/ha) 2.01 1.01 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, 080.10. To break even the farmer must produce 2.01 tones and sell at least at E3, 986.65 per ton. A farmer is supposed to produce good quality and high yield. 19
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 6 11000 66000 33000 Variable costs Item Unit Quantity Cost/Unit Total 20
Cost Seeds 1 Kg 210 99.3 20853 10426.5 Land preparation Ploughing Hrs 2.5 400 1000 500 Ridging Hrs 1 400 400 200 Discing Hrs 1.5 400 600 300 Trellising poles poles 6500 1.5 9750 4875 Trellising rope rolls 1 450 450 225 Fertilizer -2:3:4(38) 50Kg 6 410 2460 1230 -LAN 50Kg 2 280 560 280 V12 1L 1 140 140 70 Lime 50Kg 20 60 1200 600 Irrigation (fuel) 1L 150 12.45 1867.5 933.75 Chemicals Bravo 500ml 1 176.1 176.1 88.05 Decis 1L 1 764.1 764.1 382.05 GF 120 1L 1 120 120 60 One time 1L 1 117.5 117.5 58.75 Instinct 1L 1 122.9 122.9 61.45 In cap 1L 1 117.5 117.5 58.75 Labour Fertilizer Application M/day 3 65 195 97.5 Planting M/day 6 65 390 195 Weeding M/day 15 65 975 487.5 Side dressing M/day 3 65 195 97.5 Irrigation M/day 5 65 325 162.5 Irrigation Maintenance M/day 1 65 65 32.5 Pest and disease control M/day 3 65 195 97.5 Harvesting M/day 6 65 390 195 Trellising M/day 12 65 780 390 Transport (Inputs) E/Km 100 5 500 250 Total Variable costs 44208.6 22104.3 Gross margin 21791.4 10895.7 BEP (E/ton) 7368.10 3684.1 BEY (Tons/ha) 1.98 1.0 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, 791.4 and to cover all production costs a yield of 1.98 tonnes per hectare is required. The breakeven price is E7, 368.10 per tonne. 21
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 7 9000 63000 31500 Variable costs Item Unit Quantity Cost/Unit Total 0.5Ha 22
Cost/Ha Seeds 5Kg 5 1003.7 5018.5 2509.25 Land preparation Ploughing Hrs 2.5 400 1000 500 Ridging Hrs 1 400 400 200 Discing Hrs 1.5 400 600 300 Fertilizer -2:3:4(38) 50Kg 6 410 2460 1230 -LAN 50Kg 4 280 1120 560 Lime 50Kg 20 60 1200 600 Irrigation (fuel) 1L 150 12.45 1867.5 933.75 Chemicals Cypermetrin 1L 2 124 248 124 Cruiser 60ml 12 182.25 2187 1093.5 Labour Fertilizer Application M/day 3 65 195 97.5 Planting M/day 6 65 390 195 Weeding M/day 5 65 325 162.5 Side dressing M/day 3 65 195 97.5 Irrigation M/day 5 65 325 162.5 Irrigation Maintenance M/day 1 65 65 32.5 Pest and disease control M/day 3 65 195 97.5 Harvesting M/day 6 65 390 195 Transport (Inputs) E/Km 100 5 500 250 Total Variable costs 18181 9090.50 Gross margin 44819 22409.50 BEP (E/ton) 2597.29 1298.64 BEY (Tons/ha) 2.02 1.01 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, 597.29 per tonne. 23
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