ENTREPRENEURSHIP REPORT 2012 CHAPTER ONE 1.

0 INTRODUCTION Background

1.1

Experts are of the conviction that the agricultural industry is one of the major important sectors of any nations economy because it makes available products for immediate and future consumption to feed its populace and other countries of the world, for the production of other goods through its produce and by-products, and for revenue generation both internal and external. It is an established (long aged) working system right from the evolution of mankind, although recent agricultural farming practice combines technology and administration for the production of quality and reliable goods needed for mans welfare. Following the recent drought, soaring prices of food, and the downward trend of agricultural export production globally attention has drawn to the need for a vigorous and intensive participation of individuals and cooperate bodies in the agricultural sector. In Nigeria, following the increase in price of food, unemployment, non-performing agricultural export production etc have drawn attention to the need for the Nigerian government to sensitize and encourage mechanized agricultural practice be it small-scale, medium-scale and/or largescale rice, cassava, corn, cocoa farming. Thus Nigeria has the potential of feeding one-fifth of the countries of the world or one-fifth of the worlds population in equivalent (CNN, 2011) following the recent food crisis rocking the globe.

ENTREPRENEURSHIP REPORT 2012

1.2

Project Objectives

The need for the resuscitation of the agricultural sector in Nigeria (being the most populous black race in the world) cannot be overemphasized as this will help to reduce unemployment of troop of graduates being pumped out the universities every year into this harsh and extremely challenging and corrupt world of ours, reduce the high rate of social vices in the country ranging from terrorism to kidnapping to armed robbery and prostitution, also to reduce the high rate of starvation of the masses who cant afford to buy the very expensive staple foods they are used to buying for survival. Also gross involvement and expansion of mechanized agricultural farming for local and export production will ensure adequate feeding of its populace thereby reducing drought and also ensure more foreign exchange earnings thereby reducing our total dependence on crude oil for foreign exchange earnings respectively. Meanwhile increased food output will reduce food prices to reasonable levels from the law of demand and supply which states that when demand is high and supply is low the price(s) of commodities tend to increase but when it is vice versa the price(s) of commodities tend to reduce. This project is aimed at assessing the feasibility and viability of a small-scale and/or medium-scale agricultural enterprise conducted and/or studied in some selected states and/or regions of the federation and the findings of this study is obviously believed would do well to give both existing and potential entrepreneurs direction in the course of consultation or practice.

ENTREPRENEURSHIP REPORT 2012

1.3

Scope Of Work

In Mechanized agricultural farming which is better than the crude method of farming some major constraints observed from the study survey reveals that the machineries and equipments used are very sophisticated and complex to operate and maintain, as such these machines require the appropriate personnel to handle their operation and maintenance so that their efficiency and efficacy can be harnessed when harvesting the farm produce thereby ensuring the quality of the farm produce and these machine(s) and equipment(s) is/are expensive to be procured by a beginner. Therefore, in every project where there is a fair gain, there also exist an equal and opposite possibility for losses, thus, I do not assume a total possibility of successes and gains, but also of turned down proposals may exist at the long run.

1.4

Methodology

For the purpose of this project, technical and economic feasibility studies were carried out and professional advice and consultations were sought to analyze and evaluate the success of the enterprise. Assumptions and conclusions were made based on the feasibility studies carried out.

ENTREPRENEURSHIP REPORT 2012 CHAPTER TWO

2.0 2.1

LITERATURE REVIEW Rice

Rice has been a major food staple and a mainstay for the rural and urban populace of the nation and their food security. It can be cultivated by small and big farmers in holdings of less than 1 hectare. Rice is also a wage commodity for workers in the cash crop or nonagricultural sectors. Rice is vital for the nutrition of much of the population in Asia, as well as in Latin America and the Caribbean and in Africa also; it is central to the food security of over half the world population. Developing countries account for 95 percent of the total production, with China and India alone responsible for nearly half of the world output but with Nigerian government investing, encouraging and facilitating its production he country is sure going to be on the list of the worlds highest producer of rice. World production of rice has risen steadily from about 200 million tonnes of paddy rice in 1960 to over 678 million tonnes in 2009. The most productive farms for rice, in 2009, were in China producing 6.59 tonnes per hectare. The three largest producers of rice in 2009 were China (197 million tonnes), India (131 Mt), and Indonesia (64 Mt). At 44 million hectares, India had the largest farm area under rice production in 2009. The rice farm productivity in India were about 45% of the rice farm productivity in China, and about 60% of the rice farm productivity in Indonesia. If Nigeria could adopt the farming knowledge and technology in use in China, India and Indonesia, Nigeria could produce an estimate of 100 million tonnes of rice, enough staple food for about 400 million people every year, and US$50 billion in additional annual income to its rice farmers (adjusted to 2010 dollars and global rice prices per tonne).

ENTREPRENEURSHIP REPORT 2012 2.2 Maize

Most of the work done on maize prior to 1950 can be described as agronomic. Research on methods of cultivating maize was to a large extent secondary since the designing of efficient farming system was given priority. Maize was used merely as a test crop for soil fertility to determine the influence of green manners and various sequences of crops in the rotation. Most of this work was done at Moor Plantation in Ibadan, Ogba near Benin City and Umudike near Umuahia. Maize has been in the diet of Nigerians for centuries. It started as a subsistence crop and has gradually become more important crop it has now risen to a commercial crop on which many agro-based industries depend on as raw materials. The first attempt at Agricultural research in Nigeria was made in 1899 (Fakorede et al., 1993). Initial Agricultural research work in Nigeria was directed at promoting the development of various cash crops including cocoa, oil palm, cotton, groundnut for export purposes. The advent of a very destructive rust disease known as the American rust incited by Puccinia polestar, which entered West Africa in 1950, called attention to the importance of maize as food crop. The absence of resistance or tolerance in the local maize varieties to the American rust shaped the first approach towards an improvement of the maize crop and introduction of maize materials from all over the world. Subsequently, organized approach towards a systematic study of the crop was established at the Federal Department of Agricultural Research (FDAR) Moor Plantation, Ibadan in 1956. This initial approach was to breed for disease resistance the screening of local and introduced varieties was the first step towards the recognition of promising maize materials. This first step was followed immediately by selection work, which served to improve the adaptability and the suitability of the new varieties. The idea of breeding for resistance to multiple diseases was initiated from the early years of maize breeding in Nigeria. Varieties having multiple disease resistance became available with time; for example NCBRbU (Nigeria composite B) with combined resistance to rust (R) and blight

ENTREPRENEURSHIP REPORT 2012 (B) and an upright leaf orientation (U) (Fakorede et al., 1993). In 1961, some maize varieties were artificially inoculated to test for their quantitative reaction to the Polestar rust under field conditions (Craig, 1962). A total Of 137 maize cultivars were screened over a period of three years for resistance to polestar rust, maize blight, Curvularia leaf spot, streak virus and brown leaf spot (Fajemisin, 1978). All the entries exposed to streak had 70% disease incidence. Next to streak, rust appeared to be the most destructive of the diseases, followed by Curvularia leaf spot. The important diseases have changed with time. Steak virus that was relatively unimportant up to about 1970 is now easily the most devastating disease of maize nationwide. Downy mildew that was unknown in the early stages of maize improvement came on the stage in 1975 in some specific zones and is now the most deadly constraint to maize production in the endemic zones. Resistance to both downy mildew and streak had been bred into maize (DMRSR Varieties) through the effort of research institutions in Nigeria. These varieties produced more than 3t/ha under severe downy mildew pressure during which susceptible varieties gave very low yield of about one tonne per hectare (Fakorede et al., 1993). Cocoa Early attempt to introduce cocoa one of the most important tree crop into parts of parts of the eastern states, particularly bonny and Onitsha, in the late nineteenth century failed (Ayorinde, 1966). Similar efforts made by successive government, missionaries and the educated elite on the Lagos interior were more successful. This was due in the main to the enthusiasm of a section of the wealthy class in Lagos. Who had taken up large pieces of land for the cultivation of food crops, coffee, and cocoa in the Agege area. Further impetus to the cultivation of cocoa in the area was provided by missionaries and Christian converts, who advocated a better life through religious worship and the achievement of prosperity (Webster, 1962 and 1963; Berry 1968). In addition, the government provided the necessary

ENTREPRENEURSHIP REPORT 2012 encouragement by distributing seeds from the Ebute-Metta botanical gardens from 1887 onwards, and by providing advice on the crops cultivation through the Agricultural Department, which was established early in the nineteenth century. Notable places to which cocoa spread early in the nineteenth century were Ibadan and Ondo. While missionaries played an important role in introducing cocoa into the Ibadan area, the influence of the then Agege plantations on the returning labourers, especially there financial successes, encouraged farmers to cultivate the crop in the Ondo area. However, neither the scale of production nor the technical expertise shown in the production of the crop at the then agege was repeated in these interior locations (Berry, 1968). This was due to the fact that while the agege farmers had abundant resources of purchased lands, capital to employ labour, and an intimate knowledge of quality standards in the export trades, the interior farmers lacked these resources and, being illiterate, did not assimilate the technical details required in the production of the crop. The introduction and spread of cocoa of cocoa into western Nigeria had some initial spatial, social, and economic implications. Widespread cultivation of cocoa at first appeared to be related to distance from Lagos. The then Agege area had the locational advantage of nearness to Lagos, a factor which facilitated the purchase of land by the wealthy class for agricultural development. Many cocoa farms were already established in the Agege area by the 1890s, and by 1910 the crop was already in production (Webster, 1962). The extension of the railway to Ibadan in 1901 and the presence of large numbers of traders from Lagos encouraged rapid cocoa development in the area. By 1905, hundreds of farmers were moving into land south of Ibadan for this purpose and the first fruits were probably reaped before 1920. In contrast, cocoa was not grown in the Ondo area until after 1910, and it was not widely accepted until the mid-1920s. The advantages of areas which started the cultivation of the crop early were still in evident in production figures of different provinces well into the 1940s.

ENTREPRENEURSHIP REPORT 2012 An important social implication of the acceptance of cocoa cultivation in western Nigeria is the modification of tenure arrangement from communal forms towards those of individual property rights adjustable through purchase and sale. This is mainly due to the fact that cocoa is a permanent crop; the methods of acquiring rights to land, of obtaining credit, and of mobilizing and employing labour service were all modified according to the requirement of the cocoa farmer. In addition, farmers employed labour for a whole growing season and paid for services at the end of the period. The economic impact of cocoa cultivation was initially demonstrated by the prosperity which existed among cocoa farmers. For instance cocoa producer incomes rose from 264,000 NGN in 1914 to 4,600,000 NGN inn 1928, before the slump in world trade had adverse effect on the production. The more prosperous growers invested their savings in the transport trade and houses, and pressure was brought to bear on government to speed up rural road developments. As a result of these trends, Berry argues justifiably that the rapid expansion of cocoa exports involved not only the employment of hitherto idle land and labour . . . but also reallocation and recombination of available resources (Berry, 1970). Despite the initial developments in cocoa production in the agege area, the general response of farmers to the cultivation of the crop was slow at first. Only 5018 tonnes of cocoa were exported from Nigeria in 1914, although export trade in the crop started almost two decades earlier (Helleiner, 1966). After the First World War, the world supplies of cocoa were doubled, Nigeria increased her production more than twelvefold and accounted for about 10% of the total world output by 1930, this further increased to 18.5% in 1941 when production reached a peak of 106355.9 tonnes (Galletti et al . , 1956). Nigeria cocoa industry survived both the slump in world trade during the 1930s, and the low prices paid for production during the Second World War.

ENTREPRENEURSHIP REPORT 2012

Nigerias position in the worlds cocoa producing countries

ENTREPRENEURSHIP REPORT 2012 CHAPTER THREE PRODUCT SPECIFICATION, TECHNICAL AND ECONOMIC FEASIBILITY STUDIES The species of the agricultural products in view are Rice (oryza sativa), Maize (zea mays), and cocoa (theobroma cacao), these agricultural product are preferred because of their respective nutritional values to man, economic advantages and their healthcare applications for the overall benefit of the society. 3.1 Technical feasibility studies

3.1.1 Location of Facility Location of an industry, facility or farm is the establishment of an industry in any place or region or zone (onwuka, 2001). The farm site will be located in an area that have good access route and away from residential areas to curb pollution and good soil composition since the success of the farm business majorly depends on the fertility of the soil, soil texture, nearness to market amongst others. Market here implies the corporate buyers and users and the exporting agencies. Also the site or location will be located in areas where less developmental works and industrial projects are going on so as to ensure preservation of soil fertility and avoid soil contamination from industrial waste. Moreover the site will be located where there is proximity to source of raw material supply, Finally skilled labour requirement is also considered. These considerations are necessary so as to reduce cost of production (Etebu, 2011). 3.1.2 Labour Labor, a significant factor in agricultural production, is supplied by farm operators, their families, and regular and seasonal employees. Regular farm employees are those who work 150 days or more at one farm job, their importance cannot be overemphasized because due to

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ENTREPRENEURSHIP REPORT 2012 the nature of their duty they tend to develop a special skill which helps to boost productivity while the seasonal farm employees are hired for short time periods ( less than 150 days) to meet large labor requirement should in case need arise 3.1.3 Staff Requirement, Recruitment, Training And Development

Staffing is an important aspect of the organisational function. by staffing, organisational positions are manned by people that can ensure the accomplishment of the organisational goals. This is done through the recruitment and selection, placement, traning and development of personnel that occupy organisational positions and perform the associated roles created in the organisation. Recruitment and Selection

Farm managers recruiting must communicate two main points: (1) farm jobs are competitive with nonfarm jobs in salary, fringe benefits, and working condition and (2) good labor management tends to make farm employment desirable. Thus this involves stating the least qualification an applicant must have before he can apply for the administrative and technical department of the farm as skilled personnel are required in this departments of the company but for the other sectors of the company. Requiremennts are put down in writtings. Notifications are made on flyers and boards for intrested applicants. The natives of the area will be employed more say 60% of our workforce so as to ensure engagement and good relationship with our host for sustainable development of the area and success of the enterprise. Training and Developmment

Training and development are very important tools of preperation for both new and old employee of the organisation. The aim is to equip the workforce with the desired skills and knowledge to attained the companys requirement, goals and targets.

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ENTREPRENEURSHIP REPORT 2012 3.1.4 Resources

Land - land is a complex resource with many characteristics to be identified: soil types (slope, texture, and depth), current fertility and acidity levels, surface and subsoil drainage, soil conservation structures and so on. The evaluation of the land resource starts with a good field map of the farm showing field sizes, fences, drainage ways and so on. Capital every enterprise need the basic requirement which is capital to startup because without capital one cannot takes a leap of step not to talk of a bold step to venture into the enterprise Buildings - buildings are an important consideration for agricultural product storage since some enterprise require costly, specialized structures. Buildings and other facilities, such as feedlots, should be identified by size, capacity, and potential uses Transportation - Another success of any business is the strategized transportation planning, directing, organizing, controlling and coordinating of its product to the market while reducing cost and other constraints to meet market and consumer demands. We as engineers intend to apply our engineering management skills to organize a good transportation network of product delivery 3.1.5 Technology

Machinery and Equipment - the number, size, and capacity of available machinery and equipment is also one of our major technology that we decided to identify to make our product very different so as to win the market because only he that has a quality product different from the existing ones wins the market so therefore we intend to use our engineering and technology skills to win the market. Management although managing some enterprises is relatively easy to learn, managing others is more complex and requires greater knowledge. Since the enterprise is a structure, we intend to use combined skills of the board of directors ranging from managerial

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ENTREPRENEURSHIP REPORT 2012 skills, experience, strength, and weaknesses. Also plans will be made for training and educational programs for better management of the enterprise. Here we intend to use our engineering management skill which was derived from industrial engineering to manage the enterprise as engineers for optimum output. Linear programming since linear programming is used for a variety of problems, as engineers we intend to use it as a mathematical technique that finds the combination of alternative enterprises that maximizes the return above variable costs within the resource and other constraints limiting production. Considering the type of farm involved since we are dealing with more than one crop linear programming is the best tool to use for both solving problems that may arise during the cause of operation and for optimization of the available resources in the enterprise to maximize profit and reduce cost i.e. expenses A linear programming analysis of enterprise in this case is used as a substitute for, or a supplement to budgeting. Although it requires the same data as budgeting it is more systematic than budgeting because it guarantees the profit of any enterprise. As engineers we intend to use our linear programming skills to carry out budgeting on the enterprise. Constant Power Supply - Adequate and constant power supply is necessary in the farm to ensure preservation of farm produce, proper functioning of storage facilities, preservation of perishable and non-perishable farm products and to ensure quick product and service delivery. Alternative source of power supply is therefore very important for the adequate functioning of the facility. A generator set is therefore obtained as part of the company properties. Constant Water Supply - Water they say Is the source of life therefore a borehole will be built close to the farm to supply constant and adequate water supply, because aside rain which is unreliable a reliable source of water supply is needed to make the crops grow at the right time and healthy so as to ensure appropriate harvesting time.

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ENTREPRENEURSHIP REPORT 2012

3.2

Economic feasibility studies

3.2.1 Rice Rice (Oryza sativa, L.) is the staple food of over half the world's population. It is the predominant dietary energy source for 17 countries in Asia and the pacific, 9 countries in North and South America and 8 countries in Africa (Nigeria included). Rice provides 20 percent of the worlds dietary energy supply, while wheat supplies 19 percent and maize 5 percent. In Nigeria considering the recent economic hardship facing the country rice which has now become the common food is becoming too expensive because supply is low while demand is quite high, proper investment into rice production with mechanized farming will further help to expand the rice production thereby reducing the soaring cost of the product for the common to be able to afford for survival. Research has in that Nigeria imports one million tonnes of rice, valued at $700m or aboutN106 billion. An average Nigerian now consumes 24.8 kg of rice per year, representing 9% of total caloric intake (Rice Web, 2001). As at 2003, demand for rice was put at 5million metric tonnes. Rice is now staple food to over 60% of Nigerian homes; External demand for Nigerian Rice is estimated at 7 to 10 million metric, Nigeria has a population of over 150 million people: A viable market. Profitability

On 1 hectare, all things being equal, a farmer can harvest close to 3-5 tonnes of rice depending on the variety which is about 100bags (25kg). A 25kg of rice is about N3, 500. So about N350, 000 can be realized from 1 hectare of land. An investment on 100 hectares will yield N35, 000,000 per harvest and rice can be grown twice a year if it is mechanised. 3.2.2 Maize Maize (Zea mays, L.) is one of the main cereal crops of West Africa, and the most important cereal food crops in Nigeria. It comes after wheat and rice in terms of world importance.

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ENTREPRENEURSHIP REPORT 2012 Maize is not only a major cereal crop in the present day world but it was also one of the basic foods in America before the arrival of Christopher Columbus at the end of the 15th Century, and among the Indians in Mexico and Guatemala, and also among the Incus in Peru, Bolivia and Equator (Rouannent, 1987). Maize (just as Rice) is becoming the miracle seed for Nigerias agricultural and economic development. It has established itself as a very significant component of the farming system and determines the cropping pattern of the predominantly peasant farmers. Its consumption is also very vast because in most part of Nigeria the application and consumption of maize is enormous; to the low class citizens it is consumed in the form of pap popularly known as akamu, tuwo, etc; to the middle and first class citizens it is also consumed as akamu, tuwo, cornflakes, golden morn, etc. It has established itself in the power generation industry with its application as an alternative resource called feed maize which is increasingly used as a feedstock for the production of ethanol for power generation. With all these several applications maize is sure an agricultural product to invest in. Profitability

On 1 hectare, all things being equal, a farmer can harvest close to 3-4 tonnes of maize depending on the variety which is about 100bags (25kg). A 25kg of maize is about N3, 000. So about N300, 000 can be realized from 1 hectare of land. An investment on 100 hectares will yield N30, 000,000 per harvest The profitability of maize production is welcoming cause from our technical and economic analysis we discovered that maize is a profitable crop to invest in whose output is un measurable because of its nature its harvesting processing is also a very important part of production process.

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ENTREPRENEURSHIP REPORT 2012 3.2.3 Cocoa Cocoa (Theobroma cacao, L.) , which is the main crop for the production of chocolate which the world enjoys more of all the confectionary products is sure another source of revenue income generation for both individuals and government. Over the years cocoa has always proved to be a profitable agricultural product because in the nineteenth century, the then western region of Nigeria was built from revenues generated from cocoa production, it was from this agricultural product that the elite and literate westerners made their wealth from. And this has not changed because with the recent development from research on other applications of cocoa the worlds yearning for adequate supply of cocoa is increasing thereby making the demand for cocoa high and also creating the avenue for cocoa production to thrive and soar high. However, it is not only used for chocolate production alone, research carried out over the years has proved that it also has some application in health care, animal husbandry etc which will be discussed in the next chapter of this report. With these several applications cocoa is sure another agricultural product with enormous economic importance and is a blessing to mankind just as the name implies, cacao-food of the gods. Profitability

On 1 hectare, all things being equal, a farmer can harvest close to 2-3 tonnes of cocoa depending on the variety which is about 100bags (25kg). A 50kg of cocoa is about N6, 000. So about N600, 000 can be realized from 1 hectare of land. An investment on 100 hectares will yield N60, 000,000 per harvest. The profitability of cocoa spreads beyond consumption alone because profit is also derived from the its application in healthcare so therefore cocoa proves itself as a worthy crop and as the food of the gods indeed

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ENTREPRENEURSHIP REPORT 2012 CHAPTER FOUR 4.0 4.1 THE PRODUCT-CENTRED FUNCTION Research and developments

4.1.1 Cocoa Cocoa (Theobroma cacao, L.) contains a high level of flavonoids, specifically epicatechin, which may have beneficial cardiovascular effects on health. Prolonged intake of flavanol-rich cocoa has been linked to cardiovascular health benefits, though it should be noted that this refers to raw cocoa and to a lesser extent, dark chocolate, since flavonoids degrade during cooking and alkalizing process Studies have found short term benefits in LDL cholesterol levels from dark chocolate consumption. The addition of whole milk to milk chocolate reduces the overall cocoa content per ounce while increasing saturated fat levels, possibly negating some of cocoa's heart-healthy potential benefits. Although one study has concluded that milk impairs the absorption of polyphenolic flavonoids, e.g. (-) epicatechin, a followup failed to find the effect. Researchers found that humans who drink cocoa had significantly lower rates of heart disease and cancer compared to those who do not drink cocoa. It is believed that the improved blood flow after consumption of flavanol-rich cocoa may help to achieve health benefits in hearts and other organs. In particular, the benefits may extend to the brain and have important implications for learning and memory Foods rich in cocoa appear to reduce blood pressure but drinking green and black tea may not, according to an analysis of previously published research in the April 9, 2007 issue of Archives of Internal Medicine, one of the JAMA/Archives journals. In June 2009, Mars Botanicals, a division of Mars Inc., the candymaker and food company, launched Cirku, a cocoa extract high in flavanols. A 15-year study of elderly men published in the Archives of Internal Medicine in 2006 found a 50 percent reduction in cardiovascular mortality and a 47

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ENTREPRENEURSHIP REPORT 2012 percent reduction in all-cause mortality for the men regularly consuming the most cocoa, compared to those consuming the least cocoa from all sources Animal consumption of cocoa

Chocolate is a food product with appeal not only to the human population, but to many different animals as well. However, chocolate and cocoa contain a high level of xanthines, specifically theobromine and to a much lesser extent caffeine, that are detrimental to the health of many animals, including dogs and cats. While these compounds have desirable effects in humans, they cannot be efficiently metabolized in many animals and can lead to cardiac and nervous system problems, and if consumed in high quantities, even lead to death. However, since the beginning of the 21st century, some cocoa derivatives with a low concentration of xanthines have been designed by specialized industry to be suitable for pet consumption, enabling the pet food industry to offer animal-safe chocolate and cocoa flavored products. It results in products with a high concentration of fiber and proteins, while maintaining low concentrations of sugar and other carbohydrates, thus enabling it to be used to create healthy functional cocoa pet products. 4.1.2 Rice An illustrative comparison between white and brown rice of protein quality, mineral and vitamin quality, carbohydrate and fat quality suggests that neither is complete nutrition source. Between the two, there is a significant difference in fiber content and minor differences in other nutrients. Brilliantly colored rice strains such as the purple rice derives its color from anthocyanins and tocols. Scientific studies suggest that these color pigments have antioxidant properties that may be useful to human health. In purple rice bran, hydrophilic antioxidants are in greater quantity and have higher free radical scavenging activity than lipophilic antioxidants.

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ENTREPRENEURSHIP REPORT 2012 Anthocyanins and -tocols in purple rice are largely located in the inner portion of purple rice bran. Comparative nutrition studies on red, black and white varieties of rice suggest that pigments in red and black rice varieties may offer nutrition benefits. Red or black rice consumption were found to reduce or retard the progression of atherosclerotic plaque development, induced by dietary cholesterol, in mammals. White rice consumption offered no similar benefits, and the study claims this to be due to absent antioxidants of red and black varieties of rice. 4.1.3 Maize Maize is increasingly used as a feedstock for the production of ethanol fuel Ethanol is mixed with gasoline to decrease the amount of pollutants emitted when used to fuel motor vehicles. High fuel prices in mid-2007 led to higher demand for ethanol, which in turn lead to higher prices paid to farmers for maize. This led to the 2007 harvest being one of the most profitable maize crops in modern history for farmers. Because of the relationship between fuel and maize, prices paid for the crop now tend to track the price of oil. The price of food is affected to a certain degree by the use of maize for biofuel production. Higher energy costs affect these costs, especially transportation. The increase in food prices the consumer has been seeing is mainly due to the higher energy cost. The effect of biofuel production on other food crop prices is indirect. Use of maize for biofuel production increases the demand, and therefore price of maize Wikipedia (2006), reported that maize is hydrolyzed and enzymatically treated to produce syrups, particularly high fructose corn syrup, a sweetener and in some cases fermented and distilled to produce grain alcohol which is traditionally the source of bourbon whisky. Sweet corn is a genetic variation that is high in sugars and low in starch that is served like a vegetable. is one of the most abundant food crops in Nigeria. About 80% is consumed by

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ENTREPRENEURSHIP REPORT 2012 man and animals while 20% is utilized in variety of industries processes for production of starch, oil high fructose, corn sweetener, ethanol, cereal and alkaline. Maize consists of 71% starch, 9% protein and 4% oil on a dry weight basis. Despite the economic importance of maize to the teeming populace in Nigeria, it has not been produced to meet food and industrial needs of the country. This could be attributed to low productivity from maize farms or that farmers have not adopted improved technologies for maize production. 4.2 Production

4.2.1 Rice Land preparation and Soil Tillage since upland rice is the type of rice we intend to grow the type of soil favourable for it is fertile, loose loamy soil which is the predominant in the southern part of Nigeria. Therefore clearing all trees is the first stage after soil determination after clearing, soil tillage by ploughing using mechanical plougher and harrowing using Planting materials upland rice is planted with seeds (grains) at the rate of two to three seeds per hole at a spacing of about 0.2m x 0.2m. The seedlings could be raised in the nursery and transplanted into the field at the same spacing at four to five leaf stage. The seeds is to be dressed with insecticides such as fernasan D prior to sowing to prevent insect encroachment. Planting date upland rice for early planting, it is planted March/ April to be harvested in august and for late planting, it is planted in August to be harvested in November / December both of which favours the market because with the first harvest in august and second harvest in November/December it provides enough rice for sale because of the encroachment of the festive season and enough for storage with the presence of modern storage facilities. Planting depth 3cm to 4cm deep when planting at stake and also bury seedlings to soilmark when transplanting. PostPlanting operations supplying vacant stands within one week of germination or transplanting. Weed control is controlled with selective herbicides, thinning and detillering is

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ENTREPRENEURSHIP REPORT 2012 carried out as necessary to attain optimum plant density depending on the carrying capacity of the soil. Pest such as birds, rodents, bugs, and stemborers are controlled by scaring with scarecrow, trapping and fencing the farm, and crop rotation respectively. Diseases such as blast (Piricularia oryzae), smut (Tilletia horrida), black spots (Nigrosporea oryzae), false smut and so on are controlled by avoiding excessive nitrogen fertilizer, treating seeds with formalin before planting, uprooting and burning attacked plants and crop rotation respectively. Application of manures and fertilizers are done by pre-planting and the fertilizers to be used is/are Maturity rice flowers three and half to four months after planting while it matures in four to six and half months. Harvesting rice can be harvested in two ways but we intend to adopt the following method whereby the pinnacle is cut with s strong knife (the sickle), collected (i.e harvested), dried, and threshed. From threshing it is then parboiled before it is been milled to remove all the unwanted part to make it look fresh and clean ready for sale. 4.2.2 Maize Planting time: Sowing date is an essential component of crop management. Yields decline with lateness of planting after an optimum time, usually the start of the rains. Response of varieties to other inputs is dependent upon planting time. Optimum planting in each of the major agro-ecological zones of Nigeria falls with these following ranges: 1. Forest zone Mid April 2nd week in May 2. Forest Savanna transition 3rd week in April 3rd week in May 3. South Guinea Savanna Last week in April 3rd week in May. 4. Northern Guinea Savanna last week in May 1st week in June 5. Sudan Savanna First 2 weeks in June

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ENTREPRENEURSHIP REPORT 2012 Plant population: An optimum plant population is essential for maximum yield in maize. Farmers grow maize at very irregular and wide spacing, due to the fact that most farmers inter-crop maize with other crops. A direct relationship between plant population and final yield to some extent, is obvious because total grain yield is positively and significantly correlated with the number of ears and hence with the number of harvestable plants. A plant population of 53,333 plants/ha is recommended. This is obtainable with 75 cm x 50 cm spacing at 2 plants per hill or a 75 cm x 25 cm spacing at 1 plant per hill we will prefer wide spacing so as to afford easy movement for weeding and other operations. Plant nutrients and Fertilizer applications: For good growth and high yield, the maize plant must be supplied with adequate nutrients particularly nitrogen, phosphorus and potassium. The quantity required of these nutrients particularly nitrogen depends on the pre clearing vegetation, organic matter content, tillage method and light intensity (Kang, 1981). The most important of these micronutrients for maize growth are sulphur, zinc and magnesium particularly in the savanna and under continuous cropping of maize in the Forest ecology. The nutrient requirement is satisfied by the application of the right form of fertilizer containing the requisite combination of the element. 4.2.3 Cocoa The production of cocoa is quite different because it is a delicate and special produce so its process is quite a big task and must be handled with care from the harvesting stage to the storage stage. Upon harvesting, using special techniques and tool fermentation follows suit which involves turning the beans for (seven days) to allow air enter it to prevent beans from growing mould or developing bad smell which it is prone to. After this process comes the drying which takes place immediately after fermentation, then follows the proper packaging and storage for present and future purpose.

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ENTREPRENEURSHIP REPORT 2012 4.2.4 Recommended Fertilizers the popular chemical fertilizer NPK (nitrogen, phosphorus, potassium), organic manures (bulky organic manure, green manure), biofertilizers or bio inoculants, recyclable wastes. 4.2.5 Storage facilities owing to the fact that we intend to win the market with our marketing strategies the need to store and preserve our agricultural produce cannot be over emphasized therefore we will make available the following storage facilities with necessary chemicals (such as pesticides, insecticides, etc) to prevent them from diseases, pest and insects: Modernized silos for the rice storage and preservation Modernized weatherproof and un damped building with proper ventilation should be built for the cocoa for cocoa storage and preservation Modernized silos should be built for the maize proper storage and preservation 4.3 Marketing

Marketing is the performance of all business activities involved in flow of goods and services from the point of initial agriculture production until they are in the hands of the ultimate consumer (Richard kohls, 1984). Since marketing is another important part of any business we intend to use efficient marketing system such as: Ensure proper availability of consumer products Ensure proper price spread Ensuring adequate marketable surplus Assembling Grading and standardization processing Transportation Storage

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ENTREPRENEURSHIP REPORT 2012 Packaging Distributing Financing Market intelligence Risk bearing

Marketing channels we intend to market our produce are: Under cover Open auction system Sales by private agreement Co-operative societies Close tender system: here tenders are from the buyers and the tender with the highest amount is accepted and the commodity will be given to the individual. Dara sales: here the agricultural produce of different qualities will be sold at a flat rate. 4.4 Securing Financial Assistance

The dormant partners will generate most of the capital required for the start up of the and maintenance of the enterprise. Loan also will be obtained from bank(s) with asset of the dormant partners as collateral 4.5 Secure Fixed Assets

For the initial start up of the enterprise buildings such has administrative building, storage facilities, warehouse to keep machines and equipment will be built for the operation of the enterprise. The warehouse and admin block will be partitioned such that it partitioned will form its own department. The farm will be sited in a location that has good access route to market and good power supply.

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ENTREPRENEURSHIP REPORT 2012 CHAPTER FIVE 5.0 5.1 ESTABLISHMENT AND OPERATION OF THE ENTERPRISE Structure of the Enterprise

The structure of the enterprise is partnership because research has it that most successful farm businesses are partnership due to the huge amount needed to establish a mechanized modern farming system. The organogram for the enterprise is thus shown below:

BOARD OF DIRECTORS

GM, FARM SITE

GM, ADMIN.

SAFETY DEPT.

OPERATION DEPT.

MAINTENANCE DEPT.

ACCOUNTING DEPT.

SALES & MARKETING

DISTRIBUTOR DRIVERS

SITE MANAGER

EQUIP. STORE KEEPER

MARKETERS

MIS

FARMERS

PRODUCT STORE KEEPER

FERTILIZER MANAGER

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ENTREPRENEURSHIP REPORT 2012 5.2 Legal status

The legal status for mechanized farming is recommended to be partnership or cooperative as the business require quite a huge amount of investment. Therefore as stated before in chapter the structure of this proposed enterprise is partnership. Specifically a four man partnership with all partners active. Benefits of registering the enterprise as a partnership business: 5.3 Less legal requirement for registration Lower tax rates as compared to private or public limited company. Enterprise Registration

The partners will enroll the services of a lawyer after paying the required retainer fees. The lawyer would apply for the registration of the enterprise at the Corporate Affairs Commission. The application would only be approved after it is confirmed that the chosen name is unique to only the proposed enterprise. The barrister prepares the memorandum of association and relevant legal documents, only then will the enterprise be registered and given a registration number. i. ii. iii. iv. v. vi. The memorandum of association specifies the following Name and address of business Name and address of directors Purpose of business engaged in Amount and kind of shares to be issued Amount of capital authorized Statement of limited liability

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ENTREPRENEURSHIP REPORT 2012 5.4 Proposed farm Capacity and Rationale

The proposed enterprise has a capacity of producing 1500 bags (50 kg) of rice, 2000 bags (50 kg) of maize and a reasonable 900 bags (50 kg) of cocoa respectively upon the first year of operation and with our marketing strategy our production is going to increase over a long period such that the option of exporting will be put into considerations. The attainment of the project capacity will depend on the following factors: i. ii. iii. Availability of resources needed for the enterprise Machinery and equipment Involvement of management to facilitate production, marketing and quality of the produce. iv. 5.5 The skills and motivation of the labor force involved in the enterprise Methods of maintaining competitiveness

To maintain efficiency and competitiveness as a producer and management practices, effectiveness marketing, progressive industrial relations, quality assurance and production improvement, proper financial control are some of the mandatory practices that can help achieve it. Trainings programs will be held for each employee of the enterprise on how to improve the quality of the farm produce, research will be made on how to improve and step up the standard of our produce in terms of quality and packaging. 5.5.1 Sound management practices Every organization has to adhere strictly to set objectives for it to grow and maintain competitiveness. Since our company is profit-oriented, practice that will yield maximum profit while offering our services to client and to public should be adopted. The process of achieving this desired result through efficient utilization of human and material resources for effective competitiveness follow a set of defined functions. These functions include: Planning, organizing, directing and controlling.

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ENTREPRENEURSHIP REPORT 2012

Planning: this involves establishing of the framework or boundaries within which decisions are made or carried out to influence present and future actions. Organizing: it entails dividing company objectives into jobs, grouping similar jobs into departments and assuming human, material and financial resources needed for the work unit. Directing: it involves guiding and influences the action of our workers towards the achievement of our organizational goals. Controlling: this is a means through which we monitor or check current operations and compare results, goals and other standard of performance establishment during the planning stage and make correction where necessary. 5.5.2 Effective Marketing The process of planning and executing the concepting pricing, promotion and distribution of ideas, good and services to create exchanges that satisfy consumer, as well as our organizational goals cannot be over emphasized. The ability to get finished product and services to consumers requires people with adequate structure, functions and after-sale maintenance. The following marketing strategies were adopted to improve our profit and get our products and services to: a. Building a market orientation program. b. Creating an efficient advertisement c. Designing a powerful sales promotion d. Selecting the right marketing communication e. Evaluating sales representatives

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ENTREPRENEURSHIP REPORT 2012 5.5.3 Progressive industrial relations A strong and well motivated personnel department is one of the key ways of maintaining competitiveness since an organization is as good as the people in it, it is essential for the personnel to have the right frame of mind to enable them carry out their duties efficiently and effectively. One of the ways of achieving this is through good employer-employee relationship. In a bid to ensure that personnel department is in line with the objectives of the company, strategies to motivate staff were employed. Strategies such as: a. Payment of good salaries and allowance benefits b. Scholarships for children of staffs c. Promotion as at when due d. Job security e. Provision of recreational activities f. Housing facilities of staff as well as transport facilities. 5.5.4 Quality control For a company to retain its costumers and gain new ones, products and services must be up to or exceeding expected standards and quality. The minimum quality requirement may be specified by the standard organization or other statutory bodies vested with the responsibility of ensuring that the products from out plant are not inferior. Meanwhile controlling of activities involves the evaluation of performance and the possible application of both preventive and corrective measures to ensure that performance is in line with a pre-conceived plan. In order to improve services control methods are either by manual inspection or by automated means of inspection. The manual means involves human testing of products and services using human shields or testers from the public and cross-referencing their responses with the desired responses while the automated testing machines and performances testing computer programs.

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ENTREPRENEURSHIP REPORT 2012 5.6 Financial Accounting

Accounting records detailed financial transaction of a business and information derived from various financial statements. Strategies are employed to ensure financial control in our organization. Internal auditing is a means of achieving such a control internal auditors are employed to audit financial records of the company on regular basis and report findings to management. This enables management to employ checks and balances in controlling the financial resources of the enterprise and also to properly utilize resources to achieve set goals. Production over head comprises all production expenses except direct materials, direct labor, and direct expenses, incurred in the process of converting the basic raw materials into finished products. To arrive at the cost of raw material consumed, requires adding the cost of raw material currently purchased to the cost of opening raw materials and deduction of the cost of closing or ending raw material from the aggregate of two (Schiff, 1990). 5.6.1 Financial Analysis 5.6.2 Expenses a) Startup Expenses Class of Fund Asset ( Property and Equipment) Other Expenses Total A breakdown of these expenses is as follows: Amount 5,000,000 500,000 N5,500,00

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ENTREPRENEURSHIP REPORT 2012 b) Property and Equipment with respect to Cost Estimate Asset classification Vehicles (purchased) Maintenance of Machineries per month Power Generating plant (300KVA) Computer Equipments Furnitures and Fixtures (administrative building) Total N 4,050,000 Amount 2,400,000 300,000 1,000,000 250,000 100,000

Property and Equipment with respect to Cost Estimate Startup Expenses Total

N 4,050,000

N 5,500,00 N 4,600,000

c) Other Expenses Cost of Research and Development N 150,000 Advertisement Cost - N 100,000 Miscellaneous Expenses N 50,000 5.6.3 Salary structure Projected salary per month for a five year span Personnel Board Directors Year 1 of 50,000 Year 2 55,000 Year 3 65,000 Year 4 85,000 Year 5 100,000

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ENTREPRENEURSHIP REPORT 2012 General managers Operations manager Safety manager Maintenance manager 1 30,000 32,000 35,000 40,000 45,000 25,000 27,000 30,000 35,000 40,000 30,000 32,000 35,000 40,000 45,000 35,000 37,000 40,000 45,000 50,000

(mechanical) Maintenance manager (electrical) Accountant 20,000 22,000 32,000 25,000 35,000 30,000 40,000 35,000 45,000 2 30,000 32,000 35,000 40,000 45,000

Head of sales 30,000 and marketing Site manager Management Information system Equipment store keeper Drivers 20,000 20,000 30,000 30,000

32,000 32,000

35,000 35,000

40,000 40,000

45,000 45,000

22,000

25,000

30,000

35,000

22,000 25,000

25,000 28,000

30,000 33,000

35,000 38,000

Product store 23,000

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ENTREPRENEURSHIP REPORT 2012 keeper Labourers 15,000 17,000 20,000 25,000 30,000

5.6.4 Projected Revenue The projected revenue for five years is given as follows: Revenue Income for five years Year 1 Rice Maize Cocoa 4,000,000 3,000,000 1,500,000 Year 2 Year 3 Year 4 Year 5 Total

5,000,000 6,000,000 8,000,000 4,000,000 5,000,000 7,000,000 2,500,000 4,000,000 6,000,000

10,000,000 N33,000,000 9,000,000 N28,000,000

15,000,000 N29,000,000

Expenditure for building and maintain storage facilities Rice Maize Cocoa 250000 200000 300000 60000 60000 100000 55,000 55,000 80,000 50,000 50,000 80,000 50,000 50,000 70,000 N465,000 N415,000 N630,000

Expenditure for Machinery and Equipment Maintenance Tractor Thresher Milling machine Maize combine Pod machine Plougher Shelling Machine 150,000 180,000 40,000 40,000 40,000 50,000 40,000 40,000 40,000 45,000 N310,000 N355,000 500,000 200,000 200,000 150,000 100,000 50,000 50,000 40,000 40,000 100,000 50,000 50,000 40,000 40,000 70,000 50,000 50,000 40,000 40,000 50,000 50,000 50,000 40,000 40,000 N820,000 N400,000 N400,000 N310,000 N310,000

breaking 150,000

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ENTREPRENEURSHIP REPORT 2012

5.7

Planning for the growth of the enterprise

All managers irrespective of their organization or managerial position perform the same management function of planning. It is regarded as the most fundamental of all management function. In essence, planning consist of anticipating opportunities for growth or threat to survival, establishing objectives based on the perceived opportunities or threats, and selecting the best action to accomplish the set objectives. In performance of our managerial function of planning for the growth of the company, we carried out a lot of activities which we are in phase. These phases are as follows: Phase one: Establishing Objectives Our enterprise operates in a dynamic environment which affects our daily operations. Developments in our environment create opportunities for our company to grow or threats to our existence. Objectives are set to help us make efficient use of opportunities while reducing threats. The objectives are set based on present and anticipated future events. Our primary objective for organizational growth is the production of agricultural produce to meet consumer and customer needs and satisfaction. Phase two: Development premises This includes monitoring developments in the environment that are likely to influence the accomplishment of the objectives established in phase one. To be able to get the required information and facts, managers have to carry out a total scan of the environment. This is to enhance the premises to fit production activities and customer and consumer accessibility. Phase three: Decision making Decision making is the managements inherent function. But in planning function, our enterprise takes decision in selecting the best alternatives and practices to accomplish our set objectives. Four essential steps are taken to ensure proper decision making.

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ENTREPRENEURSHIP REPORT 2012 They are: 1. Identification of feasible alternative causes of action 2. Evaluation of alternative causes of action 3. Selection of the criteria for judging which alternative cause of action is the best. 4. Selecting of the best cause of action Phase four: Implementing a source cause of action Since planning is a mental activity, we have to translate the plans into actual performance by initiating action. Phase five: Evaluating results This step involves checking current operations, enterprise actual results to expected results, and then making connection when necessary. 5.8 Planning for eventual closure of the enterprise

Our enterprise having been created by legal processes, i.e by registration can only be brought to an end by a legal process too. It follows therefore that the life of our enterprise can be brought to an end in various under law. The following are ways of dissolving an enterprise under the act. 1) The first of such methods is by winding up or liquidation. The winding of an enterprise may be effected 2) By the court The commencement of winding up by the court Before presentation of petition for winding up of the company by the court, the enterprise must have come to a resolution for voluntary winding up of the enterprise. All proceedings taken in the winding up is deemed to have been valid, unless the court directs otherwise on grounds of mistake or fraud being proven. When winding up is completed, the enterprise is then dissolved and stroked off the register as a registered enterprise.

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ENTREPRENEURSHIP REPORT 2012 CHAPTER SIX 6.1 CONCLUSION AND RECOMMENDATION

From the feasibility studies conducted for this project, it can be seen that mechanized agricultural farming is technically feasible provided every adequate measures, from the feasibility studies it is observed that investing in the agricultural sector of Nigerias economy has shown to be cost effective if proper measures are taken and it is for sure environmentally friendly compared all other type of enterprise. For the success of the enterprise measures should be taken to raise sufficient capital and the strategies developed here for the effective growth and development of the enterprise adopted

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ENTREPRENEURSHIP REPORT 2012 REFERENCES David, T.J. (1990): The Business of Farming (A Guide to Farm Business Management in the Tropics. 2nd edition, Macmillan publication. Panda, S.C. (2007): Farm Management and Agricultural Marketing. 1st edition, Kalyani Publications Gary, C.J. and et al (2007): Ecologically Based Integrated Pest Management. CAB International. pp. 315366.

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ENTREPRENEURSHIP REPORT 2012 Appendix A

Maize plantation

Varieties of maize

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ENTREPRENEURSHIP REPORT 2012

APPENDIX B

A cocoa produce ready to be harvested

Cocoa in its pod

Sets of Mechanical Cocoa milling Machine

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ENTREPRENEURSHIP REPORT 2012 APPENDIX C

Uncooked polished White Rice

Varieties of Rice

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ENTREPRENEURSHIP REPORT 2012 APPENDIX D

FARM MACHINERIES

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