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LUWEMIMO FARMS ENTERPRISES

BUSINESS PROPOSAL

FOR CASSAVA FARM

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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

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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?

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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.

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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

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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) – 1011206 and IITA – TMS (Tropical Manioc Selection) –

1982132. 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 2010.

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.

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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

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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 high-

yielding varieties and mechanization of processing.

Table 1: Levels of Cassava Production from 1990 – 2003 (tons)

YEAR NIGERIA

1990 19,043,008

1991 26,004,000

1992 29,184,000

1993 30,128,000

1994 31,005,000

1995 31,404,000

1996 32,050,000

1997 32,695,000

1998 32,698,000

1999 32,070,000

2000 32,810,000

2001 32,586,000

2002 34,476,000

2003 33,379,000

Source: FAO (2004)

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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)

35

30

25

20

15

10

5

0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

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.

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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)

KEY

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

Food for urban market

Food for rural market

Food for export

Food as flour

Livestock

Starch

Ethanol

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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) N2,000,000

TOTAL 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

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COST OF MACHINERY AND EQUIPMENT FOR FARM OPERATION

Equipment Prices

1. Pumping machine N30,000

2. Spraying Nap Sack (6pcs) N17,000

3. Cutlass (2 Dozens) N31,200

4. Files (2 Dozens) N6,000

5. Safety Boot N3,000

6. Chainsaw for Cutting Tree N90,000

7. First Aid Box N10,000

8. Hoes N28,000

MACHINERY

Two Grass Cutters N250,000

TOTAL N465,200

Cost of Farm Vehicle N15,000,000

Web design N1,000,000

Salary for farm Manager (1 Year) N1,200,000

Personal Accommodation Needs N472,200

GRAND TOTAL = N28,089,400 equivalent to $77,488.00

The amount we need to execute the cassava farm is N28,089,400.00 equivalent to

$77,488.00. (Twenty-eight million, eighty-nine thousand, four hundred naira

only). That is, (Seventy-seven thousand, four hundred and eighty-eight Dollars

only) .