Agroindustrial project analysi

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78 AGROINDUSTRIAL PROJECT ANALYSISBoth calculations favor the yield-improvement alternative, a conclusionthat is the opposite of the calculations made without theuncertainty factor.Probability estimates are a rudimentary method of handling uncertaintyfactors in supply. More sophisticated analyses can bedone with Bayesian probability theory and econometric modelingtechniques. Demand forecasting techniques (discussed in chapter 2)are, to a great extent, applicable to supply forecasting. Regardlessof the technique used, the analyst should consider the uncertaintiessurrounding supply procurement and include them in the analysis.Failure to extract judgments about uncertainty is common in agroindustrialproject analysis; such failure means that these uncertaintieseither remain hidden or are treated unsystematically in theanalysis or that they are simply forgotten. Neither of these alternativesis desirable if the quality of project analysis is to be improved.Increasing the area planted and the yields are not, of course, mutuallyexclusive options. Supply sensitivity analysis should assessthe combined effects of changes along both dimensions, a combinationillustrated in figure 7. In examining projections of increasedproduction, the analyst should ascertain the likely responsefrom both because the feasibility of these two paths can vary dramatically.For example, land might be in abundance and traditionalfarmers might be resistant to new agronomic technologies. Underthese conditions, the desirable strategy would be to increase supplyby increasing crop acreage. If land were scarce, the analyst mightchoose the alternate method of increasing yields.It is not feasible for those agroindustries that depend on otherindustries for raw materials to increase their raw material supplyby the methods described above. Examples of such agroindustriesare leather processors and shoe manufacturers that purchase hidesfrom slaughterhouses or vegetable-oil processors that obtain cottonseedfrom gins. In these, the raw material supply is not influencedby the leather or oil processors but responds to the marketdemand of the primary products, beef and cotton. Consequently,the supply sensitivity analysis must focus on the productive capacityand market trends of the primary products. A deterioratingprimary market often lowers production and the by-product processorhas a short supply because of factors beyond its control. Theprocessor should anticipate shortages and consider substitute rawmaterials or external sources.
THE PROCUREMENT FACTOR 79Figure 7. Combined Effect on Ouitput of IncreasedPlantings and YieldsE F GB - - - - - -H-dA D IAreaABCD, Original output; AEGI, new increased output; BEFC,portion of increase from vield improvement; DCHI, portionof increase from larger plantings; C'FGH, portion of increasefrom combined effect of imprcved yields and largerplantings.Competing uses of raw materialAfter an examination of production determinants, the secondstep in analyzing the supply of raw material is to estimate theamount that will be available for the project's use. The analyst'stask is to identify and qualify the relative uses of the crop to estimatethe net quantity available to the proposed processing plant.Net availability is computed as follows:Gross production- On-farm consumption- Fresh consumption- Animal consumption
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AgroindustrialProjectAnalysis James
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AgroindustrialProject AnalysisJames
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ContentsForeword by Ajit MozoomdarP
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ForewordAGROINDUSTRY-that is, indus
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XPREFACEThe following colleagues ga
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IAn OverviewTHE PURPOSE OF THIS BOO
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AN OVERVIEW 5ing factory must conte
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AN OVERVIEW 7trialization occurs ca
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AN OVERVIEW 9Table 1-2. Contributio
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AN OVERVIEW 11cent; this far exceed
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AN OVERVIEW 13By broadening its agr
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AN OVERVIEW 15agroindustries from i
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AN OVERVIEW 17focus than indicated
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AN OVERVIEW 19be interested in cost
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AN OVERVIEW 21that warrant further
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AN OVERVIEW 23prises of different s
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AN OVERVIEW 25an interactive proces
Page 39 and 40: 2The Marketing FactorTHE VIABILITY
Page 41 and 42: THE MARKETING FACTOR 29testing cons
Page 43 and 44: THE MARKETING FACTOR 31product to t
Page 45 and 46: Figure 4. Illustrative Segmentation
Page 47 and 48: THE MARKETING FACTOR 35ucts are pur
Page 49 and 50: THE MARKETING FACTOR 37decisionmaki
Page 51 and 52: THE MARKETING FACTOR 39gional, nati
Page 53 and 54: Figure 5. Product Life Cycle (PLC)M
Page 55 and 56: THE MARKETING FACTOR 43Institutiona
Page 57 and 58: THE MARKETING FACTOR 45How do insti
Page 59 and 60: THE MARKETING FACTOR 47ssl's may ne
Page 61 and 62: THE MARKETING FACTOR 49the governme
Page 63 and 64: THE MARKETING FACTOR 51consciousnes
Page 65 and 66: THE MARKETING FACTOR 53FUNCTIONS. M
Page 67 and 68: THE MARKETING FACTOR 55the processo
Page 69 and 70: THE MARKETING FACTOR 57Responses by
Page 71 and 72: THE MARKETING FACTOR 59* Likely com
Page 73 and 74: THE MARKETING FACTOR 61Table 2-3. T
Page 75 and 76: THE MARKETING FACTOR 63TIME-SERIES
Page 77 and 78: THE MARKETING FACTOR 65ence of appr
Page 79 and 80: THE MARKETING FACTOR 67Are the data
Page 81 and 82: THE MARKETING FACTOR 69ect's market
Page 83 and 84: THE PROCUREMENT FACTOR 71* Cost. Th
Page 85 and 86: THE PROCUREMENT FACTOR 73the declin
Page 87 and 88: TIIE PROCUREMENT FACTOR 75termine t
Page 89: THE PROCUREMENT FACTOR 77C- cost pe
Page 93 and 94: TBE PROCUREMENT FACTOR8itomato crop
Page 95 and 96: THE PROCUREMENT FACTOR 83Storage an
Page 97 and 98: THE PROCUREMENT FACTOR 85Is there c
Page 99 and 100: THE PROCUREMENT FACTOR 87desired re
Page 101 and 102: THE PROCUREMENT FACTOR 89of the qua
Page 103 and 104: THE PROCUREMENT FACTOR 91Even with
Page 105 and 106: THE PROCUREMENT FACTOR 93The firm s
Page 107 and 108: THE PROCUREMENT FACTOR 95A crop's a
Page 109 and 110: THE PROCUREMENT FACTOR 97Table 3-4.
Page 111 and 112: THE PROCUREMENT FACTOR 99the transp
Page 113 and 114: THE PROCUREMENT FACTOR 101credit or
Page 115 and 116: THE PROCUREMENT FACTOR 103firm's pr
Page 117 and 118: THE PROCUREMENT FACTOR 105Are multi
Page 119 and 120: THE PROCUREMENT FACTOR 107Seeds and
Page 121 and 122: THE PROCUREMENT FACTOR 109tion. Inc
Page 123 and 124: THE PROCUREMENT FACTOR 111size; emp
Page 125 and 126: THE PROCUREMENT FACTOR 113Salient p
Page 127 and 128: THE PROCUREMENT FACTOR 115storage a
Page 129 and 130: 4The Processing FactorTHis STUDY HA
Page 131 and 132: THE PROCESSING FACTOR 119In milling
Page 133 and 134: THE PROCESSING FACTOR 121tion that
Page 135 and 136: n.a., Not applicable.Source: C. Pet
Page 137 and 138: THE PROCESSING FACTOR 125labor perm
Page 139 and 140: THE PROCESSING FACTOR 127tions have
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THE PROCESSING FACTOR 129season. Fi
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THE PROCESSING FACTOR 131sensitive
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THE PROCESSING FACTOR 133Table 4-4.
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THE PROCESSING FACTOR 135soluble nu
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THE PROCESSING FACTOR 137Food Produ
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THE PROCESSING FACTOR 139* Fragile
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THE PROCESSING FACTOR 141* Availabi
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THE PROCESSING FACTOR 143the cost o
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THE PROCESSING FACTOR 145cessor in
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THE PROCESSING FACTOR 14715 percent
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THE PROCESSING FACTOR 149and A. The
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THE PROCESSING FACTOR 151example, i
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THE PROCESSING FACTOR 153primary in
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THE PROCESSING FACTOR 155For more c
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THE PROCESSING FACTOR 157farmer's a
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THE PROCESSING FACTOR 159failed to
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THE PROCESSING FACTOR 16rbecause of
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COSTS OF ALTERNATIVE TECHNOLOGY 163
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COSTS OF ALTERNATIVE TECHNOLOGY 165
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can process almost any eration); $0
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Pneumatic Batch or continuous $120,
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of previously driedproducts; best f
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Fluidized Continuous operation $372
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Plate Batch operation for $372,000
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system cookers (probably simi- to t
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CHECKLIST OF CRITICAL QUESTIONS 179
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CHECKLIST OF CRITICAL QUESTIONS 18I
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BibliographyTHE FOLLOWING WORKS AUG
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BiBLIOGRAPHY 201Scott, M., J. D. Ma
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BIBLIOGRAPHY 203Forecasting methods
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BIBLIOGRAPHY 205UNIDO. UNIDO Guides
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BIBLIOGRAPHY 207tional Affairs, no.
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IndexAdvertising, 42, 128; promotio
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INDEX 211development planning and,
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INDEX 213Social costs and benefits:
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The World BankEconomic Development
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