Degree

Master of Business Administration Executive

Faculty / School

School of Business Studies (SBS)

Year of Award

2023

Advisor/Supervisor

Dr. Ashraf Khan, Assistant Professor, Department of Finance

Project Type

MBA Executive Research Project

Access Type

Restricted Access

Executive Summary

This project is about assessing our agriculture sector which is operating in a traditional way and how technology and other advanced techniques can change their way of operations and increase farmer’s crop yield / income. Manual harvesting results in massive reduction in yield due to loss of grain in the field. The goal for conducting this business is to create win win situation for both farmers and investors who are putting money into machines to advance the farming mechanism. The business has potential of higher IRR and estimates were assessed on 8 years cash flows. The region for research targeted was South Sindh where two season Rabi for Wheat and Kharif for Rice were considered. Advance machinery for land preparation considered was Laser Leveler, for Sowing ZT & DSR Drills and for harvesting Combine Harvesters. In South Sindh most of the Agri land is not leveled and crops like rice require standing water to avoid weed growth. For this Laser leveling of land intervention results in saving of irrigation cost for farmer. At pre sowing stage farmer use tractor along with Hal Suhaga, Planker and cultivator for land preparation whereas through ZT Drill these all activities will not be required and farmer can directly sow seed through this mechanization results in saving of land preparation cost. On the other hand, at harvesting stage farmer need labor at the peak time of wheat harvesting and labor gets short in villages, whereas combine harvester can do this activity within few hours and same machine thresh the seed from paddy and make it in saleable condition. The methodology used for this project is to find answers to the research questions. The research design used would be of Review. The project is based on Business Feasibility so its main framework for research data collection is based on secondary data where there will be multiple data points collected from literature and other multiple sources. At the same time due to the non-availability of machine rental pricing, few interviews are conducted with agronomists. On the other hand, interviews were conducted with the business experts / investors to assess the confidence investor has on the investment plan. All personnel considered for the interview are a mix of Agriculture and Finance. Further to this farmer (customer) interview is also conducted. The major indicator used for this proposal would be the Internal Rate of Return (IRR) of business. The findings of this research show there are certain limitations of farm mechanization in Sindh region i.e., Farm machines are not readily available in the region, poor infrastructure, and scarcity of water. Aarthi is the biggest threat as he provides the service by lending to the farmer and gets the amount adjusted when the crop is harvested, therefore farmer is essentially provided all services on credit basis. Secondly, serving in South Sindh may lead to several threats i.e., there is prevalent extortion and Hari culture. This culture pushes landowners i.e., farmers to use manual labor i.e., Hari and encourages them to resist adoption of mechanization in sowing and harvesting. Considering the mechanization business assessment this business is viable and there is huge potential to grow this business. Snippets mentioned in the project clearly show the return of this business. Implementation of this project will be a challenge since Pakistan is in verge of economic default and most of the machinery procurement is import oriented and State Bank of Pakistan is not providing slot to conduct dollar payment to procure any item internationally. This mechanization will result in addressing the food security issue in Pakistan. There is multiple crop cycle required which is only possible if farm operations are completed in limited time which is only possible with the help of mechanization. Furthermore, there are several benefits of adopting Farm Mechanization i.e., Increase in yield, reduction in manual labor, increase in productivity of land, timeliness of operations, increase in wealth of farmer. It is recommended that most of the farmers in the region are inclined towards mechanization after discussion of farmer economics with them, which gives incremental return of 38% as discussed later. The challenge that one could face is the awareness session and strong marketing campaigns to give push to the farmers towards Farm mechanization. Sajawal and Badin are ideal clusters for this investment.

Pages

47

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