AVOCADO PRODUCTION

BUSINESS PLAN

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 1. Introduction
The avocado (Perseaamericana) is a tree native to Mexico and Central America, classified in the flowering
plant family Lauraceae along with cinnamon, camphor and bay laurel. Avocado or alligator pear also refers to
the fruit, botanically a large berry that contains a single seed.

Avocados are commercially valuable and are cultivated in tropical and Mediterranean climates throughout the
world. They have a green-skinned, fleshy body that may be pear-shaped, egg-shaped, or spherical.
Commercially, they ripen after harvesting. Trees are partially self-pollinating and often are propagated through
grafting to maintain a predictable quality and quantity of the fruit.

Avocados contain from 5 to 40% oil, the percentage varying with the variety, growing area and seasonal
conditions. Only ripe olives have higher oil content. The therapeutic value of avocado oil is related to its fatty
acid composition. Hass fruit contain up to 83% mono and poly unsaturated fatty acids (Agfacts, 2003).
Avocados contain many vitamins, particularly the B complex and vitamins A and E, as well as folic acid and
iron and they contain no cholesterol. There are many ways to eat avocados, most people have probably tasted
avocado in a guacamole dip. They can be served halved with vinaigrette dressing as part of a salad, with
seafood or an acid fruit such as citrus, in sandwiches, soups, salad dressings, ice creams and milk shakes.
Avocados are also used in high-quality cooking oils and in the manufacture of cosmetics.

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 Hass avocado tree

1.1. Site selection for planting Avocados

The selection of a suitable site is of the utmost importance. Avocados are extremely susceptible to the root rot
fungus Phytophthoracinnamomi. No avocado rootstock is completely resistant to this disease. Surface and
subsoil drainage must be excellent. Sloping ground with a porous top soil structure may be unsuitable if clay
bands or hard pans prevent the free flow of water through the soil. Checking the profile with soil pits to a depth
of about 2 meters is a pre-requisite.

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 avocado nursery

1.2. Planting young trees

The farmer must be sure to use good avocado trees because poorly raised trees can lead to disaster. It is
recommended that the farmer use trees from a known and approved Avocado Nursery and should use trees that
have been grafted to a recommended variety. Seedling avocado trees have irregular cropping habits with
unpredictable fruit quality and tree size. When planting, a farmer should dig holes of o1 meter width and 1
meter depth which will be larger enough to take the root system comfortably, very large holes are unnecessary.
For a good soil without hard pans a farmer should grow have a spacing 7 meter to 7 meter from one avocado to
another and for soils with hard pans the spacing should be 6 meters to 6 meters from one avocado to another.
This spacing is large enough to ensure that the avocado have space to grow and expand. Farmer should use 40
kg to 80 kg manure for planting, this manure should be well dried to avoid burning of sensitive roots from
occurring. Also the farmer should place the trees in the hole so that the potting mix mark is slightly higher than
ground level. This allows for some sinkage. Then he/she should half fill the hole with soil and press it gently
towards the root ball. Fill the hole with water and allow to drain before completing filling the hole with soil.
Make a basin around the tree so hand watering can is done if irrigation is not installed.

1.3. Flowering
Avocado flowers carry both male and female reproductive organs. Each flower opens twice over a two-day
period, the first day as a female and the second day as a male. This enables the classification of varieties as
either an A or a B type flower. Air temperature regulates the opening and closing of flowers.

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In summary, there are three requirements for a successful fruit set:

1. An overlapping of the flowering stages

2. Significant insect activity, including bees
3. Temperatures above 10oC during flowering and for the three days following.

Flowering normally lasts for three to four weeks, longer in cooler growing areas. In adverse weather conditions
fruits can form without pollination. Such fruits are small and cigar-shaped and are known as ‘cukes’ or
‘cocktails’. In some growing areas the application of a plant growth regulator at flowering has produced less
‘necky’ and larger sized fruit.

1.4. Mulching
Avocados have a shallow rooting system so it is desirable to maintain a depth of mulch around trees. This
should be loose, 10 to 15cm deep and extend beyond the tree’s drip line. It should not accumulate against the
trunk. Finely cut softer material, for example sawdust is undesirable as it may pack down and become soggy,
inducing root rot. Mulch provides organic matter, a valuable source of tree nutrients and food for beneficial soil
microorganisms, as well as improving the physical characteristics of maintaining soil moisture and temperature
levels and checking weed growth. Hot sun beating directly onto bare ground can damage the shallow root
system of avocados. Chipping of avocado limbs and leaves following heavy pruning is practised by many
growers. Since woody prunings have a carbon to nitrogen ratio of around 100:1, extra nitrogen should be
applied to trees to avoid nitrogen draw-down.

An example of mulched Avocado tree

1.5. Harvesting of Avocados

The avocado is unique in the way it ripens. It matures on the trees but does not ripen until the fruit is picked.
The characteristic has an advantage in that the crop will hold on the trees and harvesting time is not critical.
Experience is the best guide to judging maturity of avocado, but some varietal characteristics help to determine
when to harvest, such as:

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 • A change of color from green to purple (eg Hass).
• Fruit stem becomes yellow (egFuerte).
• A dull green shade may replace a shiny green appearance.

If in doubt a sample can be picked and placed indoors. If the fruit ripens in a reasonable time, (7 – 10 days)
without wilting, and shows all desirable characteristics of the variety, harvesting can start Avocados are best
clipped from the trees, rather than plucked, leaving a short portion of the corky stems. This helps prevent mould
infection during ripening. Additional time and care spent in grading and packing this luxury fruit will be well
rewarded on the market.

The Yield of Hass Avocado Tree

1.6. Policies governing avocado production

Tanzania's climatic growing conditions can accommodate the production of a wide range of fruits, vegetables
and flowers. The most important fruits include pineapples, passion fruits, citrus fruits, mangoes, avocado,
peaches, pears and bananas. Vegetables include tomatoes, spinach cabbages, okra etc. Flowers include many
tropical varieties and some temperate types. While some of them can be produced throughout the year, the
majority of these products are highly seasonal. Most of them are consumed at farm level, leaving the domestic
market with gluts and severe scarcity during on and off seasons respectively.

Government policies that govern fruits production in Tanzania are as follows

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 1. To enhance production of high yielding and disease resistant varieties of these items, the Government
will give high priority to the strengthening of research, extension and small scale irrigation;
2. The Government will assist the private sector to organize domestic as well as export markets for these
crops. Government responsibilities will be in the areas of quality control, advocating for acquisition by
the private sector of capital for storage, packaging and transport facilities, transportation networks and
providing market information services.
3. For export of fresh fruits, vegetables and flowers, the Government will support a Programme of
breeding, distribution and production jointly between the private sector and Government, of varieties,
which are popular on the external markets.
4. The Government will continue to streamline export procedures in order to encourage the private sector
to export greater quantities of the popular varieties to overseas markets.
5. The Government will facilitate negotiations with both regional and overseas airlines for increased cargo
space to accommodate Tanzania's produce.

Table1: initial investment expenses per acre

ACTIVITY units/acre COSTS/UNIT TOTAL
COSTS/ACRE
farm preparation 1 500,000 500,000
digging holes 121 1000 121,000
buying manure / 1 lorry 1 100,000 100,000
transport manure 1 trip 1 100,000 100,000
mixing manure with soil in the 121 1000 121,000
holes
buying seedlings 121 5,000 605,000
transporting seedlings/1 trip 1 100,000 100,000
planting of seedlings 121 1000 121,000
weeding / twice 2 60,000 120,000
Mulching 1 100,000 100,000
Shading 1 60,000 60,000
irrigation for 6 months/twice a 121 2000 242,000
month
TOTAL COSTS/ACRE 2,290,000

Table2: Below shows the expected prices and revenues to be accrued in the avocado farm in the first year
of production.
No. avocado fruits Price/fruit revenue/tree revenue/acre revenue/hectare

15 150 2,250 272,250 680,625

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 1.1. Estimated revenues in 10 years
Since it is estimated that in the first year one avocado tree will produce at least 15 fruits and consequently 2000
and 3600 fruits in the seventh and tenth years respectively, then arithmetically it may be approximated that one
tree will be able to produce additional 330 fruits annually. In this analysis the average of 300 additional fruits
annually will be used.

Table 3 shows that even at minimal approximations of outputs and prices, the farmer will be able to return all
the costs of investment in the fourth year of his/her project equivalent to the second year of production of the
avocado trees (pay back period).

Table 3: Revenues in 10 years period

No. of revenue/tree revenue/acre revenue/hectare
YEAR fruits/tree (TZS) (TZS) (TZS)
1 0 0 0 0
2 0 0 0 0
3 15 2,250 272,250 680,625
4 315 47,250 5,717,250 14,293,125
5 615 92,250 11,162,250 27,905,625
6 915 137,250 16,607,250 41,518,125
7 1215 182,250 22,052,250 55,130,625
8 1515 227,250 27,497,250 68,743,125
9 1815 272,250 32,942,250 82,355,625
10 2115 317,250 38,387,250 95,968,125

Profit is the difference between costs and revenues. Avocadoes start producing fruits after 18 months under
irrigation arrangement. However if the farmer waits for rainfall then he/she will have the first harvest after 24
months. This analysis assumes that the farmer will not use irrigation system in his/her avocado farm.

Therefore the farmer will realize no profit in the first and second years as the avocadoes grow. The profits will
start being realized from the third year since planting as shown in table 4. More profit will be collected as the
number of avocadoes increase per tree.

Table 4: Expected profits in 10 years

year No of Output/ Total fruits Price/Fr costs (TZS) revenue/acr Profit (TZS)
trees tree per acre uit (TZS) e (TZS)

1 120 0 - 150 2,290,000 0 -2,290,000

2 120 0 - 150 500,000 0 -500,000

3 120 15 1,800 150 500,000 270,000 -230,000

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 4 120 315 37,800 150 500,000 5,670,000 5,170,000

5 120 615 73,800 150 500,000 11,070,000 10,570,000

6 120 915 109,800 150 500,000 16,470,000 15,970,000

7 120 1215 145,800 150 500,000 21,870,000 21,370,000

8 120 1515 181,800 150 500,000 27,270,000 26,770,000

9 120 1815 217,800 150 500,000 32,670,000 32,170,000

10 120 2115 253,800 150 500,000 38,070,000 37,570,000

The table 4 shows that the farmer will realize negative profit in the first two years of the investment (loss). The
profits will be positive from the third year onwards. Also the table shows constant costs from the second year of
the project (TZS 500 000). The cost is estimated to cover all the unforeseen expenses that are likely to be
incurred in the course of managing an avocado farm every year.

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