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The Sun Barter

Business Plan

Combining existing solutions results in one greater solution.

Alalade Oluwaseyi

Amador Marisol

Plataroti Lavinia

Ponte Camilla

Wageningen © 2015 The Sun Barter. All rights reserved.

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Table of content

1 Executive Summary ..................................................................................................................... 4

2 Product Idea .................................................................................................................................. 5

2.1 The problem .......................................................................................................................... 5

2.2 The solution ........................................................................................................................... 5

3 Management team ....................................................................................................................... 6

4 Market definition ........................................................................................................................... 7

4.1 Strengths and Opportunities ............................................................................................... 7

4.2 Competitors and substitutes ............................................................................................... 7

4.3 Target group .......................................................................................................................... 7

4.4 Market size ............................................................................................................................ 8

4.5 Pricing .................................................................................................................................... 8

4.6 Distribution............................................................................................................................. 9

4.7 Promotion & communication ............................................................................................... 9

5 Business system and organization .......................................................................................... 10

5.1 Business System ................................................................................................................ 10

5.2 Organization ........................................................................................................................ 10

5.3 Partners and suppliers ....................................................................................................... 11

5.4 Standards & Values ........................................................................................................... 11

6 Realisation schedule .................................................................................................................. 12

6.1 Planning and milestones ................................................................................................... 12

6.1.1 Phase 1 ........................................................................................................................ 12

6.1.2 Phase 2 ........................................................................................................................ 13

6.1.3 Phase 3 ........................................................................................................................ 13

7 Risk analysis ............................................................................................................................... 15

7.1 Target groups ...................................................................................................................... 15

7.2 Financing ............................................................................................................................. 15

7.3 Theft and Vandalism .......................................................................................................... 15

7.4 Sustainability ....................................................................................................................... 15

8 Financing ..................................................................................................................................... 16

8.1 Revenues/income generation ........................................................................................... 16

8.2 Start-up costs ...................................................................................................................... 17

8.3 Profit and loss Forecast for the first year ........................................................................ 18

8.4 Breakeven analysis ............................................................................................................ 19

9 References .................................................................................................................................. 20

10 Appendix 1............................................................................................................................... 21

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10.1 Drying Technology ............................................................................................................. 21

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1 Executive Summary

In agriculture, the postharvest stage must be managed carefully in order to have the

minimum amount of losses from the production and to deliver the greater amount of

product for consumption. This stage will determine the profitability of a farmer’s work of

the past months and the efficiency in the use of resources such as land, water and soil

fertility. Since agriculture alone is responsible for 14% of global greenhouse gases

(GHGs) emissions, and world food losses produce each year 3.3 gigatons of GHGs, better

post-harvest practices would also help alleviate global warming (FAO 2013)

The improvement of post-harvest practices, however, faces several challenges, including

inadequate transportation, lack of cooling systems, poor storage and difficulties in

accessing markets. These problems are greater and more difficult to tackle for

smallholders in developing countries. In countries like Nigeria, where losses at the storage

level are not quantified and the losses after transport to the selling point are on average

14% of the load, feasible solutions are required (Idah P.A. 2007 ).

The Sun Barter project aims to provide rural communities in tropical and sub-tropical

countries with low cost solar dryers, managed by farmer associations or similar

community ‘hubbs’. Farmers are encouraged to process the surplus of seasonally

abundant fruits and vegetables into dried products and to trade the product by barter

or sell it through an interactive SMS service. The SMS-based rather than app-based

network circumvents dependence on internet service and smartphones. The solar driers

model was selected to tolerate different sorts of available construction materials, and to

respond to the climatic characteristics of the regions selected for the project. We target

areas where infrastructure and the preservation system of fruits and vegetables are poor,

and because of the mentioned reasons, at the seasonal peak. Our focus is to impact lives

by empowering them both economically, socially and intellectually.

Drying fruits and vegetables, together with the barter system through a mobile phone

platform, has the potential to prevent food loss, create a value added product in the

place of waste, connect smallholders and positively impact seasonal food insecurity while

meeting local food preferences. An exchange between groups potentially improves

economic status of the homes. Combining an existing solution like drying with ICT can

result in one greater solution.

Our target is to create pilot projects, to assert the actual impact and feasibility of the idea

across selected locations. Upon success, we scale up the reach of the project to cover

the individual countries. Currently we focus on Guatemala and Nigeria, which are

developing countries and countries of origin of two members of the team. This enables

an easy monitoring and implementation of the project. In addition, the population of

Nigeria gives the project a large scale of significance in Africa if successful.

The project will be accomplished in four phases, beginning in Nigeria first. Phase 1

comprises of a feasibility study cum onset of a pilot scale in two states within the country.

Phase 2 is composed of two simultaneous activities in the two countries (Scale up in

Nigeria and feasibility in Guatemala). While phase 3 comprises the scale up of the project

in both countries.

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2 Product Idea

2.1 The problem

One third of all food produced every year on the planet is estimated to be lost before it

reaches the consumers, or wasted at the end of the supply chain (HLPE 2014.). By

weight, 44% of this food which is lost or wasted is fruits and vegetables (Lipinski, et al.

2013). This entails missed opportunities to feed a population with nutritious food for

healthier and more fulfilling lives. When food that is intended for human consumption goes

spoiled, not only food itself but also natural resources involved to produce it are wasted:

land, water and biodiversity are utilized and pollution occurs (Tielens and Candel June

2014.). Also, agriculture alone produces 14% of global GHG emissions around the Earth

(FAO 2013). Thus, food loss and waste prevention benefits not only human lives but also

the environment.

Food waste in developing countries happens mostly at the post-harvest and distribution

phase due to poor storage and cooling facilities and inadequate transport infrastructures.

In these regions, poor harvest scheduling and timing, and rough, careless handling of the

product, are both major contributors to food loss (HLPE 2014.). Another factor enhancing

damages and losses in fresh fruits and vegetables is the lack of information and access

to markets or retail chain where the produce can be sold on time (Abimbola 2014).

Preventing food loss that takes place at the post-harvest and transport level is of

primary importance in countries like Nigeria, where losses at the storage level are

not quantified and the losses after transport to the selling point are in average 14% of the

load (Idah P.A. 2007 ). Even though much fruit and vegetables are not consumed due to

spoilage, many smallholder farmers and inhabitants of rural areas live on the margin of

food insecurity. They rely on seasonal availability of fruits for a nutritious diet, and

consume staple food in the remaining months. There is need to reduce food losses so

that these lost calories can reach people and create health and economic opportunities.

2.2 The solution

The Sun Barter project combines the drying of fruits and vegetables together with the

barter/cash trade system to offer a solution to postharvest losses of fruits and vegetables.

Sun drying partly preserves the nutritional quality of fresh products, especially minerals

and fibres, while tackling seasonal scarcity of fresh fruits and vegetables and meeting

some of the local food preferences. While the interactive SMS system gives farmers direct

access to markets, excluding middlemen.

To achieve this, driers made with locally sourced materials (see appendix I, technologies)

are distributed per groups of farmers in the region (e.g. farmers’ cooperatives or similar

institutions). The farmer processes excess fruits, vegetables and those not viable for

transport into dried products making use of mixed solar driers. The dried products are

packaged in plastic sealable bags for storage and transport. The prototype will provide

other components such as solar panels to charge the cell phones and plug hand sealing

machines.

The products are then exchanged via an interactive SMS system. The SMS system

comprises the farmers’/buyers’ contacts, location and a translational service to bridge

language and literacy barriers.

With this, products are exchanged between farmer - buyer (cash trade) and farmer -

farmer (trade by barter in the long run).

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3 Management team

Oluwaseyi Alalade (OA), (https://nl.linkedin.com/pub/oluwaseyi-alalade/a5/59b/97b)

Creative, inquisitive, dynamic and supportive

Camilla Ponte (CP), (https://nl.linkedin.com/pub/camilla-ponte/38/803/745/en)

Creative, and keen

Marisol Amador (MA), (https://nl.linkedin.com/pub/marisol-amador/a1/222/98/en)

Hands-on, reliable, eager to learn and resourceful

Lavinia Plataroti (LP),

Analytical, dedicated and critical

The group gathered in the summer of 2014 to begin the development of the idea which

went on to win the battle of ideas competition organized by NWO - Nederlandse

Organisatie voor Wetenschappelijk Onderzoek in the Fall of the same year. All team

members share the same enthusiasm and dedication; while on the other hand, each

member has different individual skills and interests. This multidisciplinary aspect of the

team is what makes the team successful.

Oluwaseyi Alalade (25) has a BSc. Biochemistry and is an MSc graduate Biotechnology

(Wageningen University). Experience in process engineering makes evaluation of food

chain processes (energy and mass balances) from producer to consumer possible. The

quality of products can be ensured with knowledge obtained as a quality control intern

during undergraduate years. As a native of one of the countries of interest (Nigeria), first-

hand experience on major issues – whether policies, lack of elements for technology

implementation or attitude of the people related to food loss within the country is known.

Camilla Ponte (25) studies anthropology of development, focusing on the social and

technical dimensions of technology transfer (Wageningen University). Her major interest

is on agricultural innovation as a means toward global food security and sustainability.

While in Tanzania for an internship, she got in touch with a few initiatives regarding the

use of fruits drying methods: these inspired the group to use similar techniques transferred

in a new context, for the current project. She also brings into the project her MSc thesis

experience with the evaluation of sustainability interventions among an oil palm farmers

community.

Marisol Amador (25) has a background in Local Environmental Management with a

bachelor’s thesis focused on low cost techniques that could help smallholders of coffee

plantations to reduce wastewater. This knowledge helps ensure environmental standards

are met. With a MSc. in Geoinformation Science and Earth Observation, and the main

field of study in Geoinformatics (University of Twente), the knowledge and experience to

design systems and tools for the acquisition, analysis and distribution of data can be

applied for the current project.

Lavinia Plataroti (27) is currently an intern at Global Center for Food Systems Innovation

at Wageningen University. Has a background in sociology and economics of development

with focus on impact evaluation of food security interventions. Experience in qualitative

and quantitative data collection on the field, provides this project with insights on

Monitoring & Evaluation techniques, as well as the production and coordination of surveys

and economic assessments.

https://nl.linkedin.com/pub/oluwaseyi-alalade/a5/59b/97bhttps://nl.linkedin.com/pub/camilla-ponte/38/803/745/enhttps://nl.linkedin.com/pub/marisol-amador/a1/222/98/en

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4 Market definition

We offer a versatile idea, with opportunities for implementation in most developing

countries within the tropical or subtropical zones, at various scales and with various target

markets.

4.1 Strengths and Opportunities

1. The Technology: We would rather connect and strengthen existing technological

solutions, rather than introducing new ones. Firstly, drying is not an idea new or

unknown to people in sub-tropical zones. Therefore, the concept of sun-drying

preservation is easy to introduce. Though the mixed drying mechanism (see appendix

I, page 21 ) is different from the usual methods used, it is still highly efficient (energy

from the sun = 0 energy input) and follows an easy to understand principle. This makes

it usable by ordinary persons without requiring specialised training. The materials used

to construct the driers are easily accessible to farmers in rural areas (mainly wood).

Secondly, the use of the interactive SMS system (similar to M-Farm Kenya) bridges

gaps between the main producers and the customers expanding the network of

farmers.

2. The Product: Dry fruits and vegetables reduce food losses at the post-harvest level,

and during transportation (transportation efficiency increases due to water content

reduction). With networks established across different geographic areas, dried

products improve the diet of both producers and consumers, even when seasonal

availability of fruits and vegetables would push many rural households to consume

mainly staple foods. In addition, food industries have ready to use materials without

having to involve extra processing of fruits or vegetables.

3. The Market: The Sun Barter idea removes the dependence on middlemen allowing the

farmers to dictate the prices of their product. There are different quality standards to

aim for according to the target consumers: rural areas within the country, urban areas

within the country and export. Each of these sets of consumers offers different

opportunities creating a wide reach and scale for the farmers to make profit. Therefore,

the farmers have a diversified means of income which is constant even when the fresh

products are out of season. Therefore, this leads to an improved standard of living.

4.2 Competitors and substitutes

1. From a consumer’s perspective, the competitors are the fresh fruits in season at

whatever time in the year and drinking of juices made from concentrates. For instance

in Nigeria, CHI Limited products are a range of fruit juices made from concentrates

(CHI 2015). In addition, some food and snack companies exist such as Reel Fruit,

which produces and packages dried pineapple and mangoes (Reel 2015).

2. From a farmer’s perspective, the substitute is middlemen who bear the risk of losses

during transport. This also reduces the extra effort put in by farmers to preserve.

However, middlemen earn much more than the farmers leaving the farmers still in

poverty.

4.3 Target group

There are four target groups within the concept of this project.

a) Farmers: This comprises small/medium scale rural farmers engaging in fruit and

vegetable farming and largely made up of women. They have a daily income below or

at the poverty line ($1.90) and they have access to a simple mobile phone with SMS

facilities. These farmers are contacted through the help of farmer cooperatives. After

which, interested farmers are selected and worked with individually.

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b) Local consumers: These are made up of individuals comprising of men, women and

children of all ages and works of life. They range from low income to high income

people. They eat the dried fruits as snacks while the vegetables are used for making

food. The consumers are not connected directly to the SMS platform but the retailers

are. Therefore through the retailers, the local consumers can access the product.

These retailers include roadside shops, supermarkets in rural and urban areas; and

restaurants and eateries

c) Industries: They comprise of food and snack making companies. These are connected

via the SMS platforms. However, in the early stages of the project, the retailers are of

main focus to establish a local market. Then, when a steady bulk supply of dried

products is achieved, the industries can be involved.

d) International consumers: These are made up of retailers as well as industries. They

are connected to farmers via the team. Nevertheless, this aspect comes to play in the

long run.

Figure 1 below illustrates all market opportunities for the project at the different scales.

Figure 1: Overview of the target groups and categories they fall into

4.4 Market size

Taking Nigeria one of our case study, it has a population of about 180 million people

(annual growth 2.8 % World Bank, 2014) with two third of the population in the agricultural

sector. The final target market size is the whole population because both farmers and

consumers alike are the target group. This does not take into consideration of the

international market or other developing countries where the technology can be applied.

Therefore the market is enormous.

However, the project begins in two states (Kaduna and Osun = ≥ 9 million people).

Therefore, 5% of this population is taken as the market size after scale up in these states

(phase 2). This figure is set as a safe figure.

4.5 Pricing

Pricing determined by the cost of processing the products per kilogram (labour and

energy) and the transportation costs. Since the fruits and vegetables have seasons, the

price of the dried products increases when the fruits and vegetables are out of season.

Nevertheless, the price of the dried fruits and vegetables is higher than fresh products

and do not fluctuate like the fresh products.

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A model for the prices will be created by market analysis of fresh fruits and vegetables

in the Netherlands compared to its dried counterpart. The factor difference between the

two will be used to calculate profits theoretically. However, after the feasibility studies,

this model will be adjusted to suite the local market of the developing countries.

4.6 Distribution

At the initial stage (pilot scale), the farmers are not a centralised trade centre, therefore

we will be responsible for creating collection points for the goods and its transportation.

This will continue till we have enough farmer groups, which can coordinate this

activities. The transaction is conducted via the SMS system and then the goods are

transported in vans or trucks to the desired destination.

The final goal of distribution of the dried products will be done by centralized trade

centres (made up of farmer groups) in each zone of the country via the interactive SMS

system.

4.7 Promotion & communication

The project counts on a website, http://thesunbarter.nl/, in which it is possible to include

a news section to describe the progress on the project and provide feedback to general

public. The project will use social media such as Facebook and twitter to provide

information about the project and the activities that are being done to achieve the goal;

here we could show pictures and news about the implementation of the prototype in

Nigeria. Also, this acts as an avenue to promote the idea, get conversations going, attract

potential investors and raise funds for the project.

Within the Netherlands, the team has already communication with and NWO -

Nederlandse Organisatie voor Wetenschappelijk Onderzoek- and the Food and Business

Knowledge Platform which could be possible links to inform a more professional audience

about the project. This communication stage is continuous throughout the project.

Within Nigeria, awareness rallies will be organized at the rural stage to educate the

farmers about the benefits of this project. While in urban areas, messages will be spread

via TV and Radio commercials in order to reach target groups (consumer inclined). This

begins in the pilot phase of the project

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5 Business system and organization

5.1 Business System

5.2 Organization

As a start-up, The Sun Barter has a flexible organisation in the first two phases of the

project. The major functions for each team member are identified below.

Awareness campaign and recruitment of

farmers

•No participants =stop

installation of technology

test phase/Farmer

trials

•Bad hygiene OR short shelf life under local condition = stop

Adoption of technology

•≤50% adoption = stop

Survey on return on investment

and tackling food loss

•≤70% reduction in food waste= stop OR not profitable = stop

Consumer acceptance/mar

ketting

Distribution

Team Leader & Client Contact

Oluwaseyi Alalade

Design of Technologies

Marisol Amador

Project Planning & Publicity

Camilla Ponte

Survey & Financial Assessments

Lavinia Plataroti

Interest from

farmers = go

≥ 50% adopt

technology = go

≥ 70% of estimated

waste is dried = go

OR profitable = go

Good hygiene OR long

shelf life under local

condition = go

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5.3 Partners and suppliers

Presently, partners are been sort to take part in this project. These partners can be

NGOs, private/public sectors or individuals. Partnering is not only in funds but also in

providing services. Figure 2 gives an overview of the roles of partners in

funding.

Figure 2: Sources of fund for the project and possible roles of partners in the project.

5.4 Standards & Values

The focus of The Sun Barter is to impact lives as regard to empowerment both

economically, socially and intellectually. By empowering, we equip the people to take

initiative and make a better life for themselves. We believe in the combination of

technology together with social innovation. Our standard will be valued based on

accountability, teamwork and achievement of results.

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6 Realisation schedule

6.1 Planning and milestones

The Sun Barter project will be achieved in phases. The end of every phase marks a major

milestone in the project. The focus of the drying will be on mangoes, tomatoes, bananas

and leafy vegetables. Figure is an overview of the whole planning. However the duration

of the scale up is dependent on the results obtained after the test phase.

6.1.1 Phase 1

This is the feasibility study and test phase of the project which entails field work and

installation of the technology (1 year). Within this phase, baseline data collection; creation

of the SMS system and installation of solar driers according to the farmer groups within

the focus area are the minor milestones. The major milestone is the conclusion of the test

phase for the use of the drying and SMS technology. This study is carried out in two states

within Nigeria. One in the North - Kaduna State, and the other in the West - Osun State.

The reason for picking the regions is because of the climatic difference which influences

the type of fruits and vegetables obtained. The testing will be done with two farmer groups

consisting of 20 farmers in total. The main fruits and vegetables for trials are mangoes

and banana in Osun and tomatoes and leafy vegetables in Kaduna.

Table 1: One year plan for the feasibility part of the project

Month Activity Deliverables

1 2 3 4

Further literature review and communication with organizations to find partners and 2 specific farmer groups to work with

Partner organizations * Two farmer groups (one on each region) willing to work on the project.

5 6 7

Development of the SMS system

SMS system created

8 9

Organization for the trip to Nigeria. (Establish and divide tasks for each of us) Communication with farmer groups. Contact enumerators.

Document on the strategy for data collection

10 Travel to Nigeria Socialization of the project. Workshops with communities to teach the SMS and solar driers technology. Install the technology

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Write the results of the visit and conclusions of the prototype

Report of the feasibility of the project. Update and refine project based on findings. Re-evaluate identified risks and proffer risk mitigation strategies or risk reduction plan

*The partner organization must have the following characteristics:

● It is an NGO or private sector organization

● Works in Nigeria

● Is already working with groups of farmers

● Works in the topic of agriculture and post-harvest losses

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● May have worked with drying systems

6.1.2 Phase 2

This includes the scale-up of the project within Nigeria and feasibility study in Guatemala

(2 - 5 years). Before this stage begins, improvements of the whole system based on the

evaluation of the pilot phase will be instituted.

In the scale up, the number of farmers in the states will be increased to 100 farmers in

each state. The milestones in this phase are the production of the dried products in bulk;

creation of a transportation link between the two regions (Osun and Kaduna); obtaining

outlets (retailers) for the products; evaluation of the whole process and obtaining

regulatory approval. As the years go by, the technology is expanded to include other

states in the country. As the stability between farmers and retailers are established, the

inclusion of food industries into the market will be included. Lastly is the exporting of the

products abroad.

The same process used in Phase 1 will be adopted in the feasibility study in Guatemala.

The regions studied In Guatemala are Champerico (West Coast), Chimaltenango (Central

area) and Livingston/ P. Barrios (East coast). This stage begins 1 year into the pilot scale

in Nigeria.

6.1.3 Phase 3

This is the Scale Up phase of the project within Guatemala (2 - 5 years). This is started

after the feasibility and pilot scale in Guatemala. The milestones are similar to those

targeted in Nigeria.

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Figure 3: Gantt chart for the realisation schedule. These steps are used in both Nigeria and Guatemala

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7 Risk analysis

7.1 Target groups

Based on the target group’s insights, the receptivity of the target group to the products is

crucial (whether the technology or the final product). Dried fruits are gaining ground in

Nigeria (https://www.youtube.com/watch?v=oS5PzdPm3tM). However, the acceptance by

the farmers to employ this technology which entails more effort on their part, is important

for the innovation to succeed.

7.2 Financing

The source of funds for the phase 1 is through crowdfunding and the award from the battle

of ideas. However the outcome of this phase can either be successful or a failure.

Notwithstanding, it is of great importance to get the engine going for the other upcoming

phases.

7.3 Theft and Vandalism

The attitude of people to misuse or be careless about a property which is not personally

theirs can pose a risk. However, since the solar driers would be acquired over time by

paying for it, the risk of theft and vandalism will be reduced since it will be considered a

personal property by the farmers.

7.4 Sustainability

Funds obtained from investors and also from acquiring the driers, exporting products and

accessing the SMS database would be channelled towards driving other project phases.

This would be used to sustain the project on a long run.

https://www.youtube.com/watch?v=oS5PzdPm3tM

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8 Financing

The current phase (feasibility/baseline study) is planned to be financed by the award

obtained from the Battle of Ideas, crowd funding and possible grants. For the start-up of

phase 2, other funds will be sourced from grants/funding whether in government sectors

or private sectors.

The assumptions and calculations used to come about the values for the financial

estimates are as follows:

1. Using FAO stats and HLPE (2014), 7.34 ton ha-1yr-1 is produced yearly and 1 3⁄ is

lost yearly (2.45 ton ha-1yr-1). The lost product is what is dried.

2. Taking the prices obtained from market research in the Netherlands, 1kg of fresh

mango is $3 while the dried mango costs $3 for 250g ($12 for 1 kg).

3. Dried mangoes are produced between February and July (6 months). The 1x1m

mixed mode driers take about 72h to dry 10kg mangoes from a moisture content of 80%

to 15%.

4. Farmers are given a 50% subsidy for the drying set (weighing scale, solar dryer,

solar panel and hand sealer) and it is shared among 5 farmers. While each farmer pays

$150 for SMS access and transportation costs in a year. Each farmer has an investment

cost of $190.

5. Since solar drying does not incur energy costs, the cost for producing 1 kg dry

product is minimal including transportation because it is done in bulk. This cost can be

attributed to consumables used during production. Therefore, the cost is $2

1 kg fresh mango = 350g dry mango total weight containing 15% moisture

10 fresh mango = 3.5kg dry mangoes in 3 days

30days = 100kg fresh mangoes = 35kg dried mangoes

Table 2: Duration to dry estimated mangoes lost in a year and comparison between the price of dried and fresh mango.

Starting weight (kg wet weight)

Dried weight (kg wet weight)

Duration (days)

Average cost of fresh

product ($)

Average price of dried

produce ($)

Single batch 10 3.5 3 20 42

Batch of total lost mangoes in a year

2450 857.5 735* 4900 10290

This is the number of days if drying is with only 1 dryer. Using 5 dryers at the same time will take 147

days which is within the 6 months intended to be used for drying in a year.

8.1 Revenues/income generation

The revenue generation of the project will be based on three aspects. The SMS platform,

exports and the solar drying set. However, at the earlier phases, not much revenue will

be generated because the innovation is still in the proof of concept phase.

In order to access the SMS platform by either farmers or the final retailers, they will have

to pay an access fee per month after an incentive of free access for the first 3 months.

The solar driers come in a combination of the drier itself, hand sealer, solar panel and a

weighing scale. This is not an immediate revenue source but overtime the group of

farmers can pay back the cost of this set. While the revenue obtained from exports will

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be split between the farmers and the team. Figure 3 gives a

representation how revenue is generated.

Figure 3: Revenue generation of the project

8.2 Start-up costs

Included in Table 3 are the estimated for the feasibility/pilot stage of the project. Since it

is a phase to proof the concept and thereby obtain acceptance by the farmers and

retailers, more investments are put in.

Table 3: Estimated Start-up costs for first year.

Item Amount Unitary Cost Total Cost

Registrations

Vehicle registration 2 $150.00 $300.00

Business name and Licenses - $1500.00 $1500.00

Domain name - $30.00 $30.00

Utilities

Phone connection 4 $10.00 $40.00

Internet connection - $1000.00 $1000.00

Electricity, gas and water - $1200.00 $1200.00

Others

Radio Campaigns in the cities 1 x 2 States $300.00 $600.00

Accounting & Solicitor fees - $500.00 $500.00

Rental costs - $7500.00 $7500.00

Printing - $150.00 $150.00

Stationery and office supplies - $200.00 $200.00

Packaging bags in rolls (0.14 -0.2 mm) 100 $3.00 $300.00

Repairs & maintenance - $150.00 $150.00

Insurance - $500.00 $500.00

Travel Costs

Airplane ticket to Nigeria 4 people $800.00 $3200.00

Accommodation per day 4 people x 31 days $10.00 $1240.00

Feeding cost for us 4 people x 31days $10.00 $1240.00

Transportation costs for us in Nigeria 4 people $300.00 $1200.00

Wages 4 people $1500.00 $6000.00

Vaccinations for 3 3 people $80.00 $240.00

Data Collection

Transportation costs for enumerators (Transporters + Fuel consumption)

2 cars x 6days $20.00 $240.00

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Cost per day for enumerators including feeding 10 people x 6days $20.00 $1200.00

Workshop material 2 $50.00 $100.00

Contingency - $1000.00 $1000.00

Creation of SMS platform

IT Engineer 1 $1000.00 $1000.00

Plant & Equipment (2 states)

Solar dryers 10 (5 for each group) $100.00 $1000.00

Weighing scale (max 10kg) 1 x 10driers $10.00 $100.00

Hand sealing machines 4 $50.00 $100.00

Solar panels/Solar phone chargers 2 $250.00 $500.00

Printer 1 $150.00 $150.00

Vehicles 2 $3000.00 $6000.00

Total $38,480.00

8.3 Profit and loss Forecast for the first year

Sales $10,290.00

Total expenditure $18,953.00

Loss* $8663.00

Fixed costs $

Wages 1500.00

Insurance 500.00

Accounting & solicitor fees 500.00

Rental cost 7500.00

Business name and licenses 1500.00

Domain name 30.00

Phone & internet connection 1010.00

Electricity, gas and water 1200.00

IT engineer 1000.00

Repairs and maintenance 150.00

Vehicle registration 150.00

Total 15,040.00 15,040.00

Variable costs $

Solar driers 100.00

Weighing scales 10.00

Vehicles 3000.00

Sales, marketing and campaigns

300.00

Solar panel 250.00

Stationery and office supplies 200.00

Packaging bags 3.00

Hand sealing machines 50.00

Total 3,913.00 3,913.00

Total costs 18,953.00

*A loss is accrued because the total sales is based on only mango sales. However, both fixed and variable costs are for production of mangoes and other fruits and vegetables such as, tomatoes and bananas.

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8.4 Breakeven analysis

Figure 4: Cost benefit of a farmer in producing 1kg of dried mangoes.

Table 4: Break even analysis for a farmer

Time frame (1 year)

Average price of selling 1kg dried product $12.00

Average cost of making 1kg dried product $2.00

Fixed cost for the year $190.00

Percentage of price that is profit 83%

Total sales needed to break-even ($) 228

Number of units (kg) sold needed to break-even 19

Table 5: Break even analysis for the project

Time frame (1 year)

Average price of selling 1kg dried product $12.00

Average cost of making 1kg dried product $2.00

Fixed cost for the year $15,040.00

Percentage of price that is profit 83%

Total sales needed to break-even ($) 18048

Number of units (kg) sold needed to break-even 1504

Therefore in a day, the drying activity generates $14.00 and the farmer gains $11.14

after deducting the daily cost price for drying plus the fixed cost for the year. This means

per day, the farmer has $9.24 above the $1.90/day poverty line.

While for the project the breakeven point takes 1289 days (this is using only one dryer,

the more dryers used the lesser the duration)

12

-2

3

10

-4

-2

0

2

4

6

8

10

12

14

Average price of driedproduce

Average cost ofproducng dried

produce

Average price of freshproduce

Average profit

USD

per

Kg

of

pro

du

ce

20

9 References

Abimbola, O.A. 2014. “Post-harvest losses and welfare of tomato farmers in Ogbomosho,

Osun State, Nigeria.” Journal of Stored Products and Post harvest Research 5(2): 8-

13.

CHI, Limited. 2015. CHI brands. 2 09. http://www.clicktgi.net/chilimited.

FAO. 2013. Food wastage footprint. Impacts on natural resources.

http://www.fao.org/docrep/018/i3347e/i3347e.pdf.

HLPE. 2014. “A report by the High Level Panel of Experts on Food Security and Nutrition of

the Committee on World Food Security, .” Food losses and waste in the context of

sustainable food systems. Rome.

Idah P.A., Ajisegiri E.S.A. and Yisa M.G. 2007 . “Fruits and Vegetables Handling and

Transportation in Nigeria.” AU Journal of technology 10(3): 175-183.

Lipinski, Brian, Craig Hanson, James Lomax, Lisa Kitinoja, Richard Waite , and Tim

Searchinger. 2013. “Installment 2 of “Creating a Sustainable Food Future”. Reducing

Food Loss and Waste.” World Resources Institute. Working Paper.

Reel, Fruit. 2015. 2 09. http://www.reelfruit.com/.

Tielens, and Candel. June 2014. “Reducing food wastage, improving food security? An

inventory study on stakeholders’ perspectives and the current state of knowledge on

the relationship between reducing food wastage and improving food security.”

F&BKP.

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10 Appendix 1

10.1 Drying Technology

Mixed Solar dryer Air goes into the system through a small opening at the bottom of the solar collector. It is

also passive because the air flows naturally into the wood cabin. The solar collector heats

the air through the glass by using the black metal to absorb the solar radiation. The solar

collector must be well insulated, and this could use a storage material to maintain the heat.

The storage material reduces the drying process, therefore in the system, we aim to

include a cheap and available storage material such as the sand, silica gel. The air flows

up through an opening between the solar collector and the drying chamber, drying the

products in the metal trays. The air goes out of the system at the top of the wood cabinet.

The system must be able to move from one place to another to find the optimum position

for the solar radiation all year long.

Materials:

A. Trays - Mesh with aluminum or wood frame

B. Solar collector - Glass cover, Sand, Copper sheet, Black paint

C. Drying chamber

D. Wheels

SMS system

The system starts when a group has available dried products or require dry products. A

simple SMS is sent to require or offer a product. This message goes through a computer

that uses internet and it is stored on a database. The database allows to gather information

about the consumption and production of dried products. This database translates the

messages to other languages in the case of multilingual countries. Afterwards, the

message sent is received by other groups who answer back. This procedure allows to

generate an efficient market and promotes a better communication in the trade.

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By using a simple SMS to communicate it can be assured that the process will be available

for any type of mobile phone!

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