PROJECT PROPOSAL FOR IRRIGATED CROP

PRODUCTION

PROJECT OWNER:MR.AHIMED YASIN

PROJECT LOCATION: GALE BUSASE KEBELE,LIMU

KOSA DISTRICT, JIMMA ZONE, OROMIA REGIONAL
STATE

MARCH, 2021
Table of Contents
Excutive Summary....................................................................................................................... 3
1.INTRODUCTION...................................................................................................................... 4
1.1. Project Justification..............................................................................................................4
1.2. Objective of the Project.........................................................................................................6
Project support duration................................................................................................................. 6
1.3. Socio-Economic Benefits of the Project..................................................................................7
1.4. Project Location Background and Required Land.....................................................................7
Implementation strategy..................................................................................................................9
2. AGRO ECOLOGICAL ZONE AND INVESTMENT POLICIES OF ETHIOPIA............................10
2.1. The Ethiopia Agro Ecological Zones....................................................................................10
2.2. Agricultural policy of Ethiopia.............................................................................................11
3. THE MARKET STUDY AND PROJECT CAPACITY................................................................12
3.1. Overview........................................................................................................................... 12
3.3. Competition................................................................................................................... 14
3.5. Capacity utilization............................................................................................................. 15
3.6. Pricing.............................................................................................................................. 15
3.7. Marketing and Marketing Strategy.......................................................................................15
4. TECHNICAL STUDY OF THE PROJECT.................................................................................16
4.1. Product Mix....................................................................................................................... 16
4.2. Farm Inputs and Raw Materials............................................................................................17
4.3. Agricultural Technologies...................................................................................................17
4.4. Intended Irrigated System....................................................................................................18
4.5. Farming Process................................................................................................................. 18
4.5.1. Land Development.......................................................................................................18
4.5.2. Land Preparation, Sowing and Fertilization.....................................................................18
4.5.3. Pre-harvest Management...............................................................................................19
4.5.4. Post-harvest Management.............................................................................................19
4.6. Machineries and Equipment.................................................................................................19
4.7. Project Design and Engineering...........................................................................................20
4.8. Utilities............................................................................................................................. 20
4.9. Project implementation Plan................................................................................................20
5. ORGANIZATION AND MANAGEMENT.................................................................................21
6. FINANCIAL REQUIREMENT AND ANALYSIS......................................................................25
6.1. Total initial investment cost.................................................................................................25
 6.1.1. Fixed Investment.......................................................................................................... 25
6.1.2. Pre-Operating Expenses................................................................................................27
6.1.3. Operating costs at full Capacity.....................................................................................27
6.2. Financial Analysis and Statements........................................................................................29
6.2.1. Underlying Assumption................................................................................................29
6.2.2. Source of fund............................................................................................................. 30
6.2.3. Loan repayment........................................................................................................... 30
6.2.4. Depreciation schedule...................................................................................................30
6.2.5. 1st Year Revenue projection..........................................................................................31
Income Loss Analysis.............................................................................................................. 3
6.2.6. Balance sheet (beginning)...............................................................................................3
6.2.9. Profitability................................................................................................................... 3
6.2.10. Pay-Back Period...........................................................................................................3
7. ENVIRONMENTAL IMPACT OF THE PROJECT.......................................................................4
8. CONCLUSION......................................................................................................................... 6
Appendix...................................................................................................................................... 0

LIST OF TABLE
Table 1: Peas in Ethiopia............................................................................................................... 12
Table 2: Schedule of production plan..............................................................................................14
Table 3: Farm Gate Price.............................................................................................................. 15
Table 4: Project-Implementation-Schedule......................................................................................20
Table 5: Position, salary and qualification of permanent staff............................................................21
Table 6: total initial investment capital...........................................................................................25
Table 7: land, building and construction.....................................................................................25
Table 8: farm tools and equipment.................................................................................................26
Table 10: vehicle.......................................................................................................................... 26
Table 11: office equipment............................................................................................................ 27
Table 12: preparing expenses.........................................................................................................27
Table 13:source of fund................................................................................................................ 30
Table 14: Loan repayment............................................................................................................. 30
Table 15 Depreciation schedule:....................................................................................................31
Table 16: Revenue projection........................................................................................................ 31
Table 17: Sales forcast.................................................................................................................... 3
List of AnnexY
Annex 1 Operating Cost................................................................................................................................. 0
Annex 2 Income Statement............................................................................................................................. 0
Annex 3 discounted cash flow....................................................................................................................... 1
Annex 4 Undiscounted Cash Flow.................................................................................................................. 1
Executive Summary
Project name Mixed Farm production
Project owner Mr.Ahimed Yasin
Nationality Ethiopian
Project location Gale Busase Kebele,Limu Kosa district, Jimma
Zone,Oromia regional state
Project Produce different crops mainly Wheat,Niger seed, Sesame,
composition and Sesame through surface irrigation on Didesa river in
combination with underground water in dry season
Premises required 100 hectares
Initial investment A total investment of the project is estimated to be Br.
cost 26,431,747.08,From this 30% (7,929,524.12) will be
covered by the promoter of the project while the rest 70 %
(18,502,222.99) will be covered by financial institutions.
Employment At full capacity the farm will hire a total of 609 workers (142
opportunity female and 140 male)
 82 permanent
 200 casual employer
Technology Surface irrigation on Didesa river and underground water
Farm input and raw Improved seeds, fertilizers (Both Urea and DAP), Agro
material chemicals (Herbicides (HC), Pesticides (PC), Fuel for
tractors, Irrigation input and PP bags for packaging.
Market share 70% for domestic and 30 % for export
Benefits of the Source of income ,employment, production and supply of
project crops, value add in agricultural sector, foreign currency
earning and transformation of agricultural technology etc

1.INTRODUCTION
Ethiopia’s economy is chiefly agricultural, with more than 80% of the country’s Population
employed in this sector. The size of Ethiopia s livestock resource is the largest in Africa and the
tenth largest in the world. While the contribution of the livestock industry to the country's total
exports is currently low compared to its potential. This sector holds great promise as a source of
export diversification for the future. Other Parts of his sector with substantial opportunities for
new investment include plantation crops (Such as tea, coffee and tobacco): production and
processing of oil crops and cotton fish farming: horticulture and floriculture (fruits, vegetables
and flower and poultry, and forestry and forest by-products Although Ethiopia lies within the
tropics temperatures range from a mean annual high of 86 degrees Fahrenheit to mean annual
low of 50 degrees Fahrenheit.Government of Ethiopia has conducive investment policies and
regulations that further attract the private sectors involvement in the economic development
through the various investment and business endeavors. To this effect the owner of the
envisioned project. has planned to invest in Gale Busase Kebele, Limu Kosa District, Jimma
Zone, Oromia Regional state in high value crop production. This project study is done to confirm
the market. technical and financial viability of this project The result of the study 1s very sound
and promisin9 tor the owner to commence the project in the town. In additional the soil study
result confirmed that the area is very suitable for crop production
The promoter is very dedicated to commence this project hence they expect to get the necessary
support from the regional and local government to make the project functional.
1.1. Project Justification
Ethiopia’s crop agriculture is complex involving substantial variation in cops grown across the
country in different region and ecologies. Five major cereal (corn, wheat, Niger seeds, sorghum
and peanut are the common agriculture and food economy accounting for about three-quarters of
total area cultivated, 29 percent of agricultural GDP in 2005/06 (14 percent of total GDP) and 64
percent of Calories Consumed. There has been substantial growth in cereals, in terms of area
cultivated, yields and production since 2000, but yields are low by international standards and
Overall production is highly susceptible to weather shocks, particularly droughts.
Thus, both raising production levels and reducing its variability. are essential aspects or
improving food security in Ethiopia, both to help ensure adequate food availability. as well as to
increase household incomes.
Ethiopia is the third largest populated country in Africa with a total population number of 77.4
million (2005), out of which 84% of the populations reside in the rural area. About 80 percent of
the economically active population is engaged in agriculture. The Cultivated area covered in
2005/06 was about 11.3 million ha, of which 10.5 million ha and 0.77 million ha covered with
annual and permanent crops respectively.Agriculture in Ethiopia has a major influence on all
development processes in the country. as some 85% of the total employment and 9o%% of the
country s export are based on agriculture (Environmental Policy. 199/). It also contributes about
50% of the country s gross domestic product (GDP) and supports around r0% of the raw material
requirements of agro-industries. This high proportion of the country's economic gains made from
agriculture depends mainly on the existing diversity of indigenous crops/plants and livestock.
Crop production is estimated to contribute on average about 60%. Livestock 27% and forestry
and other subsectors around 13% of the total agricultural value (Ministry of Water Resource,
2001).
Only 40 years ago, Ethiopia exported an average or Sum, of 1000 tons of grains and legumes to
its East African and Arabian peninsula neighbors annually (Hailu,1991). Cereals production has
remained flat since the early 1970s however. With more than a doubling of population between
1970-30 available food per-capita is declined in recent year. The country has become
increasingly dependent on supplies of the donated food in recent year. Yet become Ethiopia is
endowed in a wealth of natural resource increasingly systems, many with adequate rainfall and
soils fertile enough to sustain a Wide variety of crops.
Only 40% Potential arable land, and less than 5% of irrigable land, is currently being used
(Faught 1988, cited in Stroud and Mulugeta 1992)Agricultural practices and farming systems in
Ethiopia are based on diverse agro-ecological conditions that in turn require varying approaches
in crops production. In general term the agro-climatic zones of the country can be grouped into
three types Kolla (warm semi-arid, at 500-1500m above sea level),Woinadega(cooll semi-arid at
1500-2400m) and Dega (cool and humid, higher than 2400m).More recent discipline oriented
Studies further distinguish and define this agro-ecological classification by linking related biotic
factors such as annual rainfall, altitude and temperature (Negash et al, 1989).

The government of the country has been excreting its maximum effort to expand investment
opportunities in the country by designing different policies and strategies that will facilitate
investment through attracting both domestic and foreign investors. Likewise, the Oromia
regional state government has been working day and night to make poverty history by making its
door open to investors both (domestic country and foreign) to come and invest in the region.
Therefore, it is this ample opportunity that attracts the new investors to come to Oromia for
investing in crop production. Hence, being one of the crop producers has its own contribution to
satisfy the demand of the current market. he crop production project is planned to Supply
different crops types mainly Wheat, Maize, Niger Seed, Wheat, Peanut Soya Bean and Chickpea.
The present economic policy of the country is highly inviting the private sectors to invest their
capitals to agricultural to Sector. As a result, the investors respond to the government's invitation
by contributing their share to the development process the project is needed because of the
highly growing population of the country and its need of more crops supply and to obtain foreign
Currency to the nation.

1.2. Objective of the Project

The main objective of the project is to produce high value crops mainly Niger Seed.Wheat, and
Sesame through modern practice and irrigation system on Didesa river in combination with
ground water at Limu Kosa District, Jimma Zone, Oromia Regional state.
Present activities
Currently, the project is embarking on the introduction of farming of Niger Seed.Wheat, and
Sesame crop within the member of the project. However most member groups have been largely
engaged in individual farming activities and animal husbandry.
Planned activities
Depending on the availability of funds, the project intends to embark on the cultivation of 100
hectares of major food crop and the raising of livestock (piggery and small ruminants).

Project support duration

The project is soliciting assistance for a period of One (1) year. There after it will be in position
to finance its operation from the revolving fund that will be established.

1.3. Socio-Economic Benefits of the Project

The project has the following benefits,
  It will commence the production of organic crops though scientific methods and modern
technology.
 It will provide job opportunity for 282 people
 Will serve as the source of government revenue through business income tax.
 It will introduce modern technology that related to crop production by using different
new varieties crops of high yield.
 It will serve as a role model for other investors who wants to invest in similar business
undertakings in Ethiopia in general and Oromia in particular.
 It will contribute somewhat to the governments objectives of reducing the problem of,
un-employment through creating employment opportunities to thee citizens
 It will generate foreign exchange earnings for the country since the product is exported to
abroad.
 It will provide selected seeds for farmers in the area
 It will contribute some to the area of self food sufficiency in crop production if gaps are
created.
1.4. Project Location Background and Required Land
A. Location
Limu kossa lies in the northern part of Jimma Zone, between 7 0 50’ _ 80 36’ N latitudes
and 360 44’_ 370 29' E longitudes geographical grids. Limmu Kossa shares common
boundaries with Illubabor Zone, Tiro Afeta, Mana, Kersa, Gomma, Limmu Seka and
Chora Botter disricts.

Because of geographical location (i.e. near to large market centers like Jimma and Welikite
towns) the district has great advantage for accessing the local products to the market and creates
ideal condition for provision of the demanded commodities to the local communities. The district
has a total surface area of 1462.46 Km2 divided in to 40 peasant associations and 3 Urban centers
namely Ambuye, Babu, Genet i.e.,district’s capital.

B. Relies, Drainage and Climate.

Relief : The district lies between 1200 and 3020 m.a.s.l. and Topographically characterized by
dissected plateaus (Gudo Bekere,etc) and Valleys (Dedessa, Gibe,etc.).
Drainage: Among the major rivers that drain to Gibe River: Gibe, Dembi Awettu, Indris and
Degdege are perennial, while the rest are intermittent streams and springs.
Climate:
Climatically, the district is classified into Dega/cool (25%)Woinadega/subtropical(65%) and
Kolla/tropical(10%)Zones.
Regarding to its temperature; The western part do have Badaa daree (subtropical) agro-climate
with the mean annual temperature ranges between 20-23 0c While, the vast part of the district does
classified to badda (cool) with mean annual temperature ranges between18- 200c. Only isolated
central mountain ranges have mean annual temperature less than15 0c.
The rainfall of the district is weakly bi-modal with spring a small rainy season during the months
of April and May while summer a long rainy season during the months of June, July and August.
The district has four rain fall classes. The central part (higher elevation areas of the district) has
annual rainfall lies between 2100 and 2300mm. While southern and eastern that bound the
central part lies between 1700 and 2100mm. The third classes found in the northern part that has
1300 and 1700mm.

Soils, Vegetation and Wild Life

Chromic & pellic Vertisols, Orthic acri sols and Dystric Nitosols are the major soils types found
in the district. The western and northern part of the district covered by Chromic & pellic
Vertisols while the eastern portion of the district covered by Dystric Nitosols.. All the soils
types have good agricultural potentialities.

High forest woodland reverie and man made forests are available in the district. Babia Folla is
one of the remarkable natural forests protected by the government in the district and it is ideal for
the harvesting of Natural Coffee. Ape, antelope, lion, Tiger, wart hog, pig, civet cat, and
hippopotamus are found in the district though there no wild life conservation area.

Agriculture :-Agriculture is the main stay the district of the population and hence it provides
almost the largest shares livelihood of the population. However, it is characterized by lack of
access to modern technology, market, low productivity, dependency on rainfall and lack of
irrigation practice, etc. As a result the sector is remained subsistence in its nature.
Despite of this fact the district is potential rich particularly for farming practice. The district does
have ideal agro-climatic conditions (dominates by subtropical and cool) that suitable for
production of cereals.
Mixed farming is a common practice prevailing in the district. As a result the livelihood of the
rural people is dependent on both crop farming and livestock rearing.
Population:
Based on the census held on 1999 E.C., the district had 147,369 rural (73,051females) and
15,508 urban (7,611 females) populations. during the year 1999 E.C. Young (0-14),
economically independent(15-64) and old age populations (65 +) accounted for 41.3%, 55.2%,
and 3.5% respectively during the year 1999 E.C. Average family size for rural and urban areas
were 5.4 and 4.2 persons respectively in the year under study. Agricultural density of the district
population is 128 persons while crude density is111 persons.

Implementation strategy
The under mentioned strategies will be carried out to achieve the set objectives:
- Community mobilization and sensitization for the further understanding of the project.
- Training of Labour to enhance the capacity of implementation, monitoring and
management of especially agricultural project.
- Purchase and distribution of viable seeds. The group and the trained executive members
will ensure that certified seeds approved by the seed board are bought.
- Supervision, monitoring, reporting and evaluation of project activities.
Project sustainability:

It is expected that with the provision of funds, the project will be able to achieve its objectives.
The maintenance of the project will enhance by one(1) type of account that is already
established. In addition to these, the resurrect expenditure would be met from the revolving fund,
after termination of donor fund this will enhance the project continuation after donor funding is
terminated.

2. AGRO ECOLOGICAL ZONE AND INVESTMENT POLICIES OF ETHIOPIA

2.1. The Ethiopia Agro Ecological Zones
Ethiopia has five main agricultural production systems. These can be grouped into three major
systems (Feyissa, 1999): The highland mixed-farming system practiced in areas of higher
elevation, usually above 2000m as a crop-livestock complex involving the cultivation of diverse
crops. Continuous cropping alternates with the production of legume and oil crops as a means of
maintaining soil fertility. Peanut, oats and highland legume crops dominate.
The low plateau and valley mixed-farming system practiced in the intermediate or 1ow nigh
lands, mountain foothills and upper valleys, at elevations ranging from 1500 to 2000m.Both crop
and livestock productions are economically essential, crop production is dominated by sorghum
and Niger Seed followed by wheat, Corn and some legume and oil crops.
The pastoral and agro-pastoral farming system is practiced in the arid and semi- arid zones
mainly at elevations below 1600m and with annual rainfall less than 450mm.
In the arid zone, nomadic and semi-nomadic pastoral livestock production dominates, with
camels and goats as important components. In the, semi-arid Zone, semi-nomadic or sedentary
agro pastoral production is practiced with sorghum and Niger Seed as main crops. Livestock
production in the semi-arid zone focuses on cattle and sheep. water and range developments are
important elements for improving both crop and livestock production under this system major
staple food in Ethiopia vary according to cultural and agro ecological condition Ethiopian end
uroerologa durim) and the Wiaju tetraploid Sesama Central and south eastern parts of the
country. Other important staples are peanut in highland: corn (Eragrostis tef) with its wide
adaptation to various agro-ecologies sorghum, Niger Seed and millets in the lowlands; and
different root crops such as enset (Enset ventricosum) and yam (Dioscorea spp). Major legume
crops are horse bean (Vicia faba), pea (Pisum sativum). lentils Lens culinaries) and vetch
(Lathyrus satives); these are all essential dietary components along with the other staples. Major
oil crops are gomenzer (Brassica Carinata), noog or niger Seed (ouizofia abyssinica), linseed
(Linum usitatissimun) and Sun flower (Sesamum indicum) dominant in the lowlands.

2.2. Agricultural policy of Ethiopia

Privatization Programme the Ethiopian Government launched a programme for the privatisation
of state owned enterprises in early 1995. Accordingly, the Ethiopian Privatization Agency (EPA)
Was established. to implement the privatization programme in. the same year, he Government
has laid the ground to privatize most of the state owned enterprises to the private sector.
Accordingly, EPA has received a stock of 113 state owned enterprises from the government Tor
privatization in the years ahead. As indicated in EPAS Work schedule, out of these enterprises, a
total of 43 states owned enterprises are in the pipeline for privatization in the near future. Most of
these enterprises fall under manufacturing, construction, agriculture and agro-industry. Hotels,
transport, trade, and mining sectors. There is a strong commitment from the Government side to
fully privatize state enterprises in the coming in few years. Detailed information on the
process of privatization can be obtained from the Ethiopian Privatization Agency.
Agriculture
Agriculture is the main stay of Ethiopia's economy providing employment to 85 per cent of the
population. The sector contributes about 45 per cent of the GDP and 62 per cent of total exports
with coffee alone accountings of total exports2001/2002. furthermore, agriculture plays a crucial
role in providing raw material inputs for the local industry endowed with wide ranging agro
ecological zones and diversified resource .Ethiopia grows all type of cereals ,fibers ,crops, all
seeds, coffee ,tea, flowers,fruits,and vegetable.The potentially irrigable land is estimated at 10
million hectares. Ethiopia has the largest livestock population in Africa. Fishery and forestry
Resources are also significant. Considerable opportunities exist for new private investment in the
production and processing of the above agricultural crops and resources. The following areas in
particular, have been identified to offer plenty or opportunities to private investors. Food Crops
The food crops grown include Corn, wheat, Niger seed beans, peas, lentils,soya beans, chickpeas
etc. In 1992/2000, Ethiopia produced 11.4 million tons of these 1O00 crops on about 8.9 million
hectares of land. This is far short of the country s demand tor these crops. Great opportunities,
therefore, exist for commercial production and processing of these food crops. Some pulses can
also be produced or processed for the export market. Oil crops such as rapeseed, linseed,
groundnuts, sunflower, ginger seed and cottonseed serve as raw material inputs tor the edible Oil
industry.

3. THE MARKET STUDY AND PROJECT CAPACITY

3.1. Overview
Cereals and pulses are important food and cash crops for farmers and rural households in
Ethiopia. Wheat, sorghum, and Niger Seed supply over 50% of average daily caloric intake.
Cereal production. Accounts for roughly 60% of rural employment and 807% of total cultivated
land. Households spend an average of 40% of their total food budget on cereals. Pulses occupy
13% of cropland in Ethiopia and are the second most important element in the national diet after
cereals. Despite the economic and food security importance of these crops, data and opinion
suggest a yield gap: actual stallholder farm yields do not achieve estimated potential yields for
wheat, sorghum, Niger Seed lentil and peas. Furthermore, cereal prices in Ethiopia tall between
import and export parity prices, limiting their international trading prospects. Although there are
significant Sesame imports, these reflect the influx of food aid and not competitive trade on the
international market.

The purpose of this study is to help estimate yield gaps in important Ethiopian crops in order to
identify potential areas for productivity gains particularly pea According to the World Food
Programme, 46% of the Ethiopian population is undernourished underscoring the importance of
increasing domestic food productivity. FAO details available for wheat, sorghum, Niger Seed
lentils and peas, which form the bulk of this analysis. Corn is not reported separately by the
FAO, and is instead likely reported with other minor cereal crops under the category cereals, not
elsewhere specified similarly. Other pulses are reported under the aggregate categories 'not
elsewhere specified.
Production, consumption and market for crops in Ethiopia
Table : Peas in Ethiopia

2005 2006 2007

Production( tones) 167,021 182,26 210,095
8
Local supply (tones) 205,886 198,33 233,682
1
Percent of local supply from domestic 96% 92% 90%
production
Trade surplus /deficit (tones) -8,865 -15,063 -23,587
Average yield (Kg/ha) 779 817 948
East African regional average yield(Kg/ha) 692 702 781
Source: EAOSTAT

I. Production
Peas include garden peas and field peas are one of the oldest crops grown in Ethiopia .they are
widely planted in the mid-to-high altitude areas of Oromia,Tigray,Amhara and SNNP region
small holder are the main producer and use no chemical
II. Productivity
The Ethiopian export promotion agency reports that research field using improved technologies
and inputs achieved yield as high as 4000-6000 kilogram per hectares. In contrast pea yield in
Ethiopia since 2000 have fluctuate between 678 (2001) and 1085 (2008) kilogram per hectares.
In 2007, Ethiopia produced 90% of the peas consumed. Ethiopian yields ere e above East
African (120%) and African (130%) average yields, but achieved oniy b3% of average world pea
yields. If Ethiopia were able to achieve average yields, it could produce 123% of the local
supply quantity. The Ethiopian Export Promotion Agency highlights use of improved seed as
crbcal to increasing pea productivity. National research has led to 13 improved varietals released
since 1981, which yield 2,500 to 4,500 kilograms per hectare under good management conditions
in research fields. On-farm yields average 1,000 to 3.000 Kilograms per hectare.
III Constraint
The members of the project are in dire need to develop them, but could not afford the provision
of basic inputs. The major problem faced by the project and which it will try to address is the
lack of the most appropriate agriculture inputs to restart normal production activities. These
inputs include farm equipments, seeds, planting materials, and livestock for restocking of lost
animals.Other issues:-
- Lack of the capacity to provide support service.
- The neglect of people with disabilities in development activities.
IV. Consumption
The majority of peas produced are consumed domestically and peas are an important part of the
daily diet for most Ethiopians
V. Marketing
Similar to lentils, peas are usually available at local markets from wholesalers, retailers. and
directly from producers at weekly markets in rural areas.

Vi. Constraints to Agricultural Productivity in Ethiopia

Key constraints to agricultural productivity in Ethiopia include low availability of improved or
hybrid seed. Lack of seed multiplication capacity for profitability and efficiency of fertilizer use
due to the lack of complimentary improved practices and seed. and lack of irrigation and water
constraints In addition, lack of transport infrastructure investments in productivity increases
higher up the food value chain, such as through marketing and transportation infrastructure,
would increase prices farmers receive for Output while also putting downward pressure on urban
to prices.
There is no evidence of an expansion of the frontier, which would indicate technological change
or intensification. As Dercon and Hill (2010) also question the reliability of the CSA yield data
and point to a small household survey (Minot, 2008) and satellite data suggesting that CSA data
may Overestimate yield gains. Given that there has been little expansion in the use of modern
inputs such as fertilizer (on a kilogram per hectare basis) improved seed, and irrigation, there are
additional grounds to question the validity of the CSA data. However, an important caveat in this
argument concerns the quantity of land under cultivation
3.3. Competition
There are different forms of competition that may face this project. These are price and non price
based competition. Moreover, there are different competitions that will compete with the project
under discussion either directly or indirectly by both in the domestic and foreign market. But the
project under discussion has diversified marketing strategies that could enable it come up with
the different competitors in the market. Moreover the Project will frequently conduct competitors
research which focuses on, the strength and the weaknesses, the different competitor's strategies,
the techniques they use in rendering the service, their customer handling methods, their product
quality and others.
Table : Schedule of production plan
SN Description Plot in hectare Unit Qty/ha Yearly production
1 Wheat 23 “ 30 1155
2 Niger Seed 33 “ 42 1386
3 Sesame 33 “ 16 660
Total 99
As clearly indicated in the production plan of the project the crops producing within three
months period, which is it deemed to be produced twice a year
3.5. Capacity utilization
Based on the market condition of the project, the envisioned project is planned in three phases
(1st year70% 2nd year 90%and 3rd 100% to reach full capacity.
3.6. Pricing
The pricing of the project at farm
Table : Farm Gate Price

SN Description UOM Unit price in Br.

1 Wheat Quintal 3000
2 Niger Seed Quintal 3000
3 Sesame Quintal 3000

3.7. Marketing and Marketing Strategy

The market of the project outputs are mainly targeted for domestic and export market. The
products will be sold at Jimma and Addis Ababa city. Which is the nearest market center and in
Addis Ababa depending on the free market price. The main project marketing strategy are
satisfying the customer demand and maintain long lasting market relationship.
The proposed project will supply 70% of its product for domestic market and 30 % for export

4. TECHNICAL STUDY OF THE PROJECT

4.1. Product Mix
The envisioned project will produce the following pulses/crops through irrigation on Gibe
River with underground water.
I. Wheat
Wheat is a key food staple that provides around 20 percent of protein and calories consumed
worldwide. Demand for wheat is projected to continue to grow over the coming decades,
particularly in the developing world to feed an increasing population, and with wheat being a
preferred food, continuing to account for a substantial share of human energy needs in 2050
(Wageningen FSC, 2016). Based on recent trends, an increasing number of poor consumers in
low- and middle-income countries will want to eat wheat-based food at an affordable price as
populations and economies grow, women and men seek employment in cities, and dietary habits
change. Projections regarding wheat demand growth to 2050 abound and vary widely around an
average of approximately +50%, relative to 2010. The bulk of increased consumption is expected
to occur in developing countries where studies predict demand growth of 34-60% by 2050
(Valin, 2014). Of particular urgency is demand growth out to 2030, when world population
growth is predicted to peak (e.g. 1.15% p.a. in 2010; projected to decline to 0.75% p.a. by 2030
and 0.50% p.a. by 2050). GDP in developing countries is projected to grow at 4.3-5.3% p.a.
(2015-18; low income countries at 6.2-6.6%, World Bank, Global Economic Prospects, 2016)
across income levels, with a positive income elasticity of demand for wheat. China and India,
which are home to half the world’s poor (Sumner, 2012), already produce and consume 30% of
global wheat. By 2023, demand for wheat is expected to grow by 22% in India, 20% in Pakistan
and 19% in North Africa (OECD-FAO, 2014). Wheat agri-food systems prevail in North Africa
and West Asia but both have proven volatile areas where wheat prices and food insecurity over
the last decade triggered civil unrest and massive migration to Europe. Fueling the instability is
the region's wheat import dependency: wheat imports totaled 41 million (M) tons in 2015. In
rapidly urbanizing sub-Saharan Africa, wheat consumption is expected to grow 38% by 2023,
with imports at 24 M tons in 2015 and at a cost of $8 billion. (Source: USDA, Index Mundi,
2016).
II. Niger Seed
The seed of the African yellow daisy Guizotia abyssinica, Nyjer is known by many names.
Originally called niger in ference to Nigeria and the plant's origin, the name was trademarked as
Nyjer in 1998 by the Wild Bird Feeding Industry to clarify pronunciation. Many backyard
birders also call the seed thistle, but in fact Nyjer is not related to thistle plants or seeds. It is
believed that calling the seed thistle may have e popular because goldfinches, which adore Nyier
also feed on thistle and use thistle down to construct their nests
III. Sesame
Sesame seeds add a nutty taste and a delicate, almost invisible, crunch to many Asian dishes.
They are also the main ingredients in tahini (sesame seed paste) and the wonderful Middle
Eastern sweet call halvah. They are available throughout the year. Sesame seeds may be the
oldest condiment known to man. They are highly valued for their oil which is exceptionally
resistant to rancidity. "Open sesame"-the famous phrase from the Arabian Nights reflects the
distinguishing feature of the sesame seed pod, which bursts open when it reaches maturity the-
scientific name for sesame seeds is Sesamun indicum.

4.2. Farm Inputs and Raw Materials

The major inputs and raw materials required for this project are improved seeds fertilizers (both
Urea and Dap), Agro-chemicals Herbicide (HC) and pesticides (PC). Fuel for tractors. These
inputs are easily available in the local market, Ethiopian Seed Enterprise, Agricultural Input
supply corporation of the Ministry of Agricultural and fro Bureau of the regional State. All
necessary Inputs are mostly available in local market. The cost estimation of the agricultural
Inputs are indicated on section 6.1.3 of this study.
4.3. Agricultural Technologies
The project will use the following modern agricultural technologies in production of those
products (Sun flower Maize Niger Seed, Peanuts, sesame, soya beans and chick peas).
 Improved inputs(mainly seeds and fertilizer)
 Broad Bed Maker (BBM)
 improved input (mainly seeds and fertilizers)
 Broad bed mixer
 Crop rotation
 Land use planning
 Aforestation
 Demonstration of different technologies on occasional filed days

4.4. Intended Irrigated System

With the changing climate delivering hotter, drier summers, many farmers are seeking solutions
by irrigating crops. Options for irrigation depend on a farm s size, crops grown, soil type., and
budget. The envisioned crop production farm will implement Surface irrigation system on Gojeb
river and underground water when the river flow decrease winter time. Surface irrigation is
defined as the group of application techniques where water is applied and distributed over the
soil surface by gravity. It is by far the most common form of irrigation throughout the world and
has been practiced in many areas virtually unchanged for thousands of years. Surface irrigation is
often referred to as flood irrigation implying that the water distribution is uncontrolled and
therefore, inherently recent in reality, some of the irrigation practices grouped under this name –
involve a significant degree of management (for example surge irrigation). Surface eg9tonoges
in three major types, level basin, furrow and border strip. The process or surface irrigation can be
described using four phases. As water is applied to the top end of the field it will flow or advance
over the field length the advance phase refers to that length of time as water is applied to the top
end of the field and flows or advance over the field length. After the water reaches the end of the
field it will either run of or start to pond. Phase as the inflow ceases the water will continue to
runoff and infiltrate until the entire field is drained. The depletion phase is that short period of
time after Cut-off when length of the field is still submerged. The recession phase describes the
time period of water while the water front is retreating towards the downstream end of the field.
the depth or water applied to any point in the field is a function of the opportunity time, the
length of time for which water is present on the soil surface.
4.5. Farming Process
4.5.1. Land Development
Like other crops, Land clearing, leveling. Irrigation system, and access and farm road
construction will be the land development activities for crop production tractor, leveling and
surveying instruments are expected to be employed for land development purpose.
4.5.2. Land Preparation, Sowing and Fertilization
Land development for crop production is followed by land preparation. s operation
includes ploughing. discing and harrowing. Sowing follows harrowing with fertilization.
For land preparation tractors with various bottoms like disc plough, disc harrows. Seed.
Fertilizers and drillers will be employed in general
4.5.3. Pre-harvest Management
The pre-harvest management in Crop production usually involves irrigation water application on
river on Gojeb River and underground water weeding and cultivation insect pest and disease
control, irrigation water application using different canals gravity and weed control will be
performed by casual labor. Moreover,Insect pest and disease control will be performed by
motorized sprayer.
4.5.4. Post-harvest Management
Post-harvest in Crop production farm comprise picking. Sorting. Grading. Packing
transporting. Storing and marketing general terms, picking, sorting and grading are
expected to be carried out manually by casual labor9og, while transporting or product will be
done by tractor driven trailers and trucks, from the farm and stores to markets respectively.
4.6. Machineries and Equipment
A. Farm tool
 Hoes
 Spades
 Axle
 Water pump
 Others
B. Agricultural Machineries
 Tractor
 Trailer
 Plough
 Seed bed
 Ridger
 Cultivator
 Disc hallow
 Corn-sheet
 Weeding comb
 manual spray
 bale collector
C. Vehicle
 trucks
 tractor
 pickup
 motor bicycle
 dump truck
 automobile
4.7. Project Design and Engineering
The proposed project comprises stock of different components to be executed different phases of
the project life. These activities include: Design and Construction of various buildings (store),
importing of few machineries and farming.
4.8. Utilities
The project needs to have the following utilities
 Water(river) for irrigation
 . Fuel
 Supplementary Electricity supply.
 Telephone line
 Paved Road Transportation and Drainage Facility
4.9. Project implementation Plan
The project's implementation is expected to take 8 months. The major activities include
Bank loan processing. Construction of the building. cleaning the area around the
building. Procurement of equipments and start rendering services. The time schedule for
the above mentioned major activities is presented below.
Table : Project-Implementation-Schedule

SN Activities Date
1 Land Approval April,2021
2 Bank loan May. 2021
processing
3 Building and June-July 2021
construction work
4 Site Development Aug,2021
and land
development
5 Irrigation system Dec 2021-Jan 2022
development
6 Purchasing of Feb- march,2022
Machines and
Equipment
7 Planting of crops Feb,2022

5. ORGANIZATION AND MANAGEMENT

The organizational structure of the project is designed by including all the necessary
personnel under the right division. At the top of the organizational structure, there will be
a CEO with the responsibility of supervising the overall activity of the plant. Depending
up on the nature of the center and the amount of work to be performs; there will be
auxiliary units under the general manager. At full capacity the farm will hire a total of 282
workers (142 Female and 140 Male)
  82 permanent Workers
 200 temporary or seasonal Workers
The list of work-force and corresponding costs both for permanent are shown in the
table below
Table : Position, salary and qualification of permanent staff
S Position No Qualification Monthly Annual salary
N salary in Birr in Birr
  Farm Head 1 BA in crop production 5000 60,000.00
  Purchaser 1 Diploma in purchasing 1500 18,000.00
management
  Secretary 1 Diploma in secretariat 1500 18,000.00
  Supervisors 1 Diploma in crop production 1500 18,000.00
  Store keeper 1 10 +2 in store management 1500 18,000.00
2 Production Workers 60 Basic 900 648,000.00
  Marketing head 2 BA in marketing 5000 120,000.00
  Sales workers 1 10+3 in salesmanship 1500 18,000.00
  Guards 2 Basic 700 16,800.00
2 Sanitary 1 unskilled 600 7,200.00
3 Administration and 1 BA in 5000 60,000.00
Finance head Accounting/management
6 General service 1 Diploma in management 1000 12,000.00
4 Accountant 2 BA in Accounting 2500 60,000.00
  Mechanics 1 Diploma in Automotives 1750 21,000.00
5 Cashier 3 10+2 in Bookkeeping 1200 43,200.00
  Driver 3 10 completed 1050 37,800.00
  Sub-total 82     1,176,000.00
  Benefits(20)       235,200
  Total       2,587,200
  Benefit (20%)       517,440
  Grand Total       3,104,640

Fig.Management structure of the project