Chili Pepper Production - Millennium Challenge Corporation
Chili Pepper Production - Millennium Challenge Corporation
Chili Pepper Production - Millennium Challenge Corporation
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ANNEX II: COST STRUCTURE<br />
Costs<br />
The initial capital investment to start up a 250 acre of nucleus farm is expected to cost around $1.72 million.<br />
Initial Capital Investment<br />
Unit Price<br />
GHC USD<br />
Quantity<br />
GHC<br />
Total<br />
USD<br />
Land clearance 30 21 250 7,500 5,357<br />
Road preparating/maintenance 70,000 50,000 1 70,000 50,000<br />
Office building 70,000 50,000 1 70,000 50,000<br />
Generators 70,000 50,000 1 70,000 50,000<br />
Storage 14,000 10,000 1 14,000 10,000<br />
Irrigation System 1,001,000 715,000 1 1,001,000 715,000<br />
Trucks 84,000 60,000 7 588,000 420,000<br />
Tractors 252,000 180,000 2 504,000 360,000<br />
Vehicles 42,000 30,000 2 84,000 60,000<br />
Total variable costs for annual operation and export per acre is estimated to be $31,211 (including airfreight<br />
costs), which makes per box variable cost $8.11 and per kg variable cost $1.44. The costs for chili peppers to<br />
be purchased from outgrowers totaling 100 acres are included in the sections for packaging and transportation<br />
costs and overhead costs.<br />
Page 13<br />
Total CAPEX 2,408,500 1,720,357<br />
Variable Costs<br />
Farm Operation Costs<br />
Per Acre/Year<br />
GHS USD<br />
Per Box<br />
GHS USD GHS<br />
Per kg<br />
USD<br />
Land Rental 35 25 0.01 0.01 0.0015 0.0011<br />
Land Preparation/Maintenance 1,380 986 0.36 0.26 0.06 0.04<br />
Depreciation of Farm Equipment 992 709 0.26 0.18 0.04 0.03<br />
Input 1,173 838 0.30 0.22 0.05 0.04<br />
Labor 996 711 0.26 0.18 0.04 0.03<br />
Sub-total 4,576 3,269 1.19 0.85 0.20 0.14<br />
Packaging and Transportation Costs<br />
Packaging 3,080 2,200 0.80 0.57 0.13 0.10<br />
Ground Transportation<br />
including vehicle depreciation<br />
1,358 970 0.35 0.25 0.06 0.04<br />
Airfreight costs to UK 32,610 23,293 8.47 6.05 1.41 1.10<br />
Sub-total 37,048 26,463 9.62 6.87 1.60 1.24<br />
Overhead Costs<br />
Personnel Costs 573 409 0.15 0.11 0.02 0.02<br />
Financial Costs 840 600 0.22 0.16 0.04 0.03<br />
Depreciation 59 42 0.02 0.01 0.0025 0.0018<br />
Sub-total 2,082 1,487 0.54 0.39 0.09 0.06<br />
Total Farm Operation<br />
Variable Costs 43,706 $31,219 11.35 $8.11 1.89 $1.44<br />
Variable Costs<br />
Per Box<br />
Per kg<br />
from Out-growers<br />
GHS USD GHS USD<br />
Purchase price from out-growers 5 $3 0.78 $0.56
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