Cashew farming is unarguably a profitable venture any farmer or investor can participate in. To engage in cashew farming, you need to write a business plan and forecast your expected cost and profit.
Do not rush into the business of growing cashew without knowing the financial numbers and accounting data. Knowing the financial plan will enable you to formulate a clear budget and strategy.
Cost, Revenue and Profit Analysis of a One Hectare Cashew farm (₦)
| Year 1 | Year 1 |
| Cost of Land Acquisition | 100,000.00 |
| Cost of Cashew Seedlings | 150,000.00 |
| Fertilisers | 50,000.00 |
| Manure | 10,000.00 |
| Pesticides | 10,000.00 |
| Cost of Transplanting | 10,000.00 |
| Labour Cost | 50,000.00 |
| Herbicides | 15,000.00 |
| Farm Tools and Machines | 20,000.00 |
| Farmland Preparation | 50,000.00 |
| Total Cost | 465,000.00 |
| Year 2 | Year 2 |
| Fertilisers | 60,000.00 |
| Manure | 5,000.00 |
| Pesticides | 10,000.00 |
| Labour Cost | 50,000.00 |
| Herbicides | 15,000.00 |
| Farm Tools and Machines | 25,000.00 |
| Total Cost | 165,000.00 |
| Year 3 | Year 3 |
| Fertilisers | 65,000.00 |
| Manure | 5,000.00 |
| Pesticides | 10,000.00 |
| Labour Cost | 50,000.00 |
| Herbicides | 15,000.00 |
| Farm Tools and Machines | 25,000.00 |
| Cost of Harvesting | 20,000.00 |
| Total Cost | 190,000.00 |
| Revenue Analysis (Cashew Nuts) | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | Year 8 | Year 9 |
| Yield of Cashew Nuts (tons) | 0.3 | 0.5 | 1 | 1.5 | 2 | 2 | 2 |
| Price of Cashew Nuts/ton | 750,000.00 | 750,000.00 | 750,000.00 | 750,000.00 | 750,000.00 | 750,000.00 | 750,000.00 |
| Total Revenue | 225,000.00 | 375,000.00 | 750,000.00 | 1,125,000.00 | 1,500,000.00 | 1,500,000.00 | 1,500,000.00 |
| Profit Analysis | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | Year 8 | Year 9 |
| Total Revenue | 225,000.00 | 375,000.00 | 750,000.00 | 1,125,000.00 | 1,500,000.00 | 1,500,000.00 | 1,500,000.00 |
| Total Cost | 190,000.00 | 190,000.00 | 190,000.00 | 190,000.00 | 190,000.00 | 190,000.00 | 190,000.00 |
| Profit | 35,000.00 | 185,000.00 | 560,000.00 | 935,000.00 | 1,310,000.00 | 1,310,000.00 | 1,310,000.00 |
Assumptions of the Business Plan for a One Hectare Cashew Farm
In year I of planting the cashew crop, ₦465,000 is expected to be spent. This includes ₦100,000 for cost of farmland acquisition, ₦150,000 for cost of buying hybrid cashew seedlings, ₦50,000 for fertilizers, ₦10,000 for manure, ₦10,000 for pesticides, ₦10,000 for cost of transplanting seedlings, ₦50,000 for labour cost, ₦15,000 for herbicides, ₦20,000 for farm tools and machines and ₦50,000 for farmland preparation.
In year 2, the total cost expected to be spent on the one hectare cashew farm is ₦165,000. This cost includes ₦60,000 for fertilizers, ₦5,000 for manure, ₦10,000 for pesticides, ₦50,000 for labour cost, ₦15,000 for herbicides and ₦25,000 for buying of machines and tools.
In year 3, the total cost expected to be spent on the cashew farm is ₦190,000. This cost includes ₦65,000 for fertilizers, ₦5,000 for manure, ₦10,000 for pesticides, ₦50,000 for labour cost, ₦15,000 for herbicides, ₦25,000 for buying of machines and tools and ₦20,000 for harvesting.
The cost to be incurred on the farm in year 4 till the end of the life of the cashew trees will be similar to the cost incurred in year 3, but these costs need to be adjusted for inflation.
In year 3, the one hectare cashew farm is expected to have a yield of 0.3 tons, revenue of ₦225,000 and a profit of ₦35,000.
From the profit analysis, the cashew farm will make a profit from the first year of harvest (year 3) till the end of the life of the cashew farm. A cashew tree can fruit for over 40 years.
Please note that this is not a financial advice, the onus is on you to do your own research before venturing into the business of growing of cashew.
If you need a business plan or feasibility study about cashew farming in Nigeria, you can contact us on sales@veggieconcept.ng.
