Watermelon farming is a lucrative farming venture anyone can engage in. The cultivation of this type of vegetable can be very profitable if done in the right way.
To engage in watermelon farming, a business plan has to be developed. This post explains the business plan of a typical one hectare farm of watermelon in Nigeria.
Business Financial Plan (in Naira ₦)
FARM SET-UP FOR ONE HECTARE OF WATERMELON FARMING VENTURE
| Cost of Drip Irrigation | 450,000.00 |
| Installation of Drip Irrigation System | |
| On Site Training of staff in precision farming | |
| Soil and Water Analysis | |
| 450,000.00 | |
| Fertilisers: | |
| NPK (15 bags) | 90,000.00 |
| Potassium Nitrate (5 bags) | 75,000.00 |
| Camag (3 bags) | 30,000.00 |
| Potassium Humate | 5,000.00 |
| 200,000.00 | |
| Pesticides: | |
| Insecticides (15 bottles) | 30,000.00 |
| Fungicides | 30,000.00 |
| Nematicides | 10,000.00 |
| 60,000.00 |
PROFIT ANALYSIS
SCENARIO 1
| Revenue: | |
| 30000 watermelon balls @ N250 | 7,500,000.00 |
| Cost: | |
| Rent of one hectare of farmland | 25,000.00 |
| Fertiliser | 200,000.00 |
| Manure | 50,000.00 |
| Pesticides | 70,000.00 |
| Hybrid Seeds | 120,000.00 |
| Labour for 6 months | 240,000.00 |
| Knapsack Sprayer | 10,000.00 |
| Farm Tools | 20,000.00 |
| 735,000.00 | |
| Profit | 6,765,000.00 |
SCENARIO 2
| Revenue: | |
| 30000 watermelon balls @ N150 | 4,500,000.00 |
| Cost: | |
| Rent of one hectare of farmland | 25,000.00 |
| Fertiliser | 200,000.00 |
| Manure | 50,000.00 |
| Pesticides | 70,000.00 |
| Hybrid Seeds | 120,000.00 |
| Labour for 6 months | 240,000.00 |
| Knapsack Sprayer | 10,000.00 |
| Farm Tools | 20,000.00 |
| 735,000.00 | |
| Profit | 3,765,000.00 |
SCENARIO 3
| Revenue: | |
| 30000 watermelon balls @ N50 | 1,500,000.00 |
| Cost: | |
| Rent of one hectare of farmland | 25,000.00 |
| Fertiliser | 200,000.00 |
| Manure | 50,000.00 |
| Pesticides | 70,000.00 |
| Hybrid Seeds | 120,000.00 |
| Labour for 6 months | 240,000.00 |
| Knapsack Sprayer | 10,000.00 |
| Farm Tools | 20,000.00 |
| 735,000.00 | |
| Profit | 765,000.00 |
NOTES/ASSUMPTIONS
The profit analyses above were done using three scenarios (best case, mid case and worst case).
Drip Irrigation: This model assumes that the cost of drip irrigation for one hectare of watermelon farm is N450,000.
Fertilisers: In this computation, it is expected that N200,000 will be spent on the purchase of fertilizers. Please note that the exact quantity of fertilizers needed can only be rightly estimated after a complete soil analysis.
Also, the types of fertilizers to be used can only be known after a complete soil analysis. A soil rich in nutrients will not need a lot of fertilizers.
Pesticides: The expected cost to be incurred on pesticides is N60,000. Pesticides include insecticides, fungicicides, nematicides and all other types of pesticides.
Cheap sub-standard pesticides should be avoided.
Sales Revenue: We have assumed that a one hectare farmland of watermelon will yield 30,000 watermelons (watermelon balls). At the peak season, one of the watermelon ball can be sold for N250 each, this will give a sales revenue if N7.5 million.
The base case scenario assumes that 30,000 watermelon balls will be sold at N150 each, making a sales revenue of N4.5 million.
When there is glut in the market, the 30,000 watermelon balls are expected to be sold at N50 each, making a sales revenue of N1.5 million.
Please note that the sales figures used here are assumptions.
Manure: This computation assumes that N50,000 will be spent on the purchase of chicken manure or compost. Chicken manure is very potent and its one of the best types of manures to use for the cultivation of vegetables and other crops.
The chicken manure should be cured or treated before it is used.
Hybrid Seeds: The cost of hybrid seeds per hectare of watermelon is assumed to be N120,000. Please note that the cost of hybrid watermelon seeds varies. There are seeds that are far more expensive than the assumed N120,000.
Cost of Labour: The cost of labour to cultivate one hectare of watermelon farm is expected to be N240,000.
This cost may be higher or lower depending on your circumstances.
Knapsack Sprayer: N10,000 is expected to be used to buy a knapsack sprayer. One knapsack sprayer is expected to be adequate for a one hectare farmland of watermelon.
Farm Tools: N20,000 is expected to be spent on small farm tools that will be used to cultivate a one hectare farmland of watermelon.
Business Description of Watermelon Cultivation
As explained earlier, watermelon farming is one of the most profitable farming businesses in Nigeria. Watermelon farming is also one of the most profitable three months crops in Nigeria.
Watermelon farming as a business does not involve only the planting and harvesting of watermelon fruits. It also involves the process of marketing and selling the watermelon balls to people in the market place.
A watermelon plant can produce a lot of watermelon fruits.
Market Analysis
Market Trend: Nigeria is a highly populated country. It is the most populated country in Africa. Nigeria has over 200 million people.
The large population of Nigeria presents a huge advantage for watermelon farming as a business. With the huge population of Nigeria, more people will buy and consume watermelons.
Watermelon is eaten as fruits and food in Nigeria. Watermelons are also used for the manufacturing of processed fruits and other processed foods.
Watermelon has a good demand all year round in Nigeria, however, there are times of the year or season when the demand for this crop peak.
During the Muslims fasting period, the demand for watermelons is usually very high. Other times of peak demands in Nigeria are the festive seasons of Easter, Christmas, New Year and other Muslims’ celebrations.
About 80% of the watermelons produced in Nigeria come from the northern part of Nigeria especially from the states of Gombe, Bauchi, Sokoto and Kebbi.
Target Market: The state with the biggest consumption number for watermelons in Nigeria is Lagos State. Mile 12 market in Lagos is also the largest market for watermelons in Nigeria.
Several trucks from the northern part of Nigeria offload freshly harvested watermelons in Mile 12 market in Lagos every day.
There are other markets in all cities and towns in Nigeria where watermelons are sold. The good thing about watermelon is that it is eaten by almost all Nigerians.
Large hotels, supermarkets and juice processors also consume a lot of watermelons.
Competitive Analysis: The truth is that there are a lot of watermelon farmers in Nigeria but a lot of these farmers are illiterates who do not implement sound farming practices. The lack of sound farming practices lead to low yields and profits.
Most of the watermelon farmers in Nigeria cultivate the crop during a particular season; this often leads to glut and depressed prices.
To be competitive in watermelon farming, a watermelon farmer should use smart farming technologies so that he can maximize its yield and profit and also boost his efficiency.
Some of these smart farming technologies include drip irrigation, motorized farm machines and tools and plastic mulch. Drip irrigation for instance uses less water for irrigating crops; it also allows farmers to cultivate their crops all year round.
Sales and Marketing Strategy
To make money and earn good profit from watermelon farming in Nigeria, a farmer must implement sound sales and marketing strategies and tactics.
Most farmers in Nigeria think that farming business stops at the harvesting of their crops. This is a big mistake. Marketing is a key component of farming as a business in Nigeria.
You should never cultivate any crop if you have not sorted out the sales and marketing issues.
Most watermelon farmers still sell their watermelons in big markets in cities and towns across Nigeria. To sell watermelons in these markets, you will need to go through agents in most cases.
You should familiarize yourself with the terms and conditions of these selling agents. These agents charge a commission of 5 – 10%. You should also devise a way to monitor these agents so that you will not be cheated.
For farmers who want to sell their watermelons to supermarkets, hotels and other organized channels, they need to visit these places and ask for their terms and conditions.
Most of the organized channels will ask to see the samples of the watermelons. You may also be asked to sign an agreement.
Do you need a business plan or feasibility study about watermelon farming in Nigeria? If yes, please contact us on 08025141924 or sales@veggieconcept.ng.
Interesting and insightful write up