Barqah Ag

There is food crisis that affects the vulnerable populations in Libya due to local political instability and the Russia and Ukraine war which impacted the import of grains. Libya is heavily dependent on imports from Russia and Ukraine (88%) for its grain needs, and Libya's compensation system has been at an all-time low since 2011, causing tension with producers, affecting its operations, and making prices susceptible to economic fluctuations. As a result of this conflict, in November 2022, the price of cereals such as flour has increased by 19%, bread +34%, couscous +76%, and pasta +50%. Along with the impact of the pandemic and global food supply concerns, the purchasing power of vulnerable households affected their ability to afford nutritious foods and food staples raising concerns on the overall food security situation, leading some to adopting negative coping strategies, including reducing food consumption to a limited number of meals per day and relying on lesser quality food items. Stabilizing food security is a significant challenge, as local farmers have limited access to agricultural production inputs and support for animal health care due to years of conflict around main agricultural areas and disruption of agricultural extension services due to instability and increased prices of fertilizers and agricultural tools.

Agriculture plays a prominent role in the economic growth of Libya. While food insecurity remains a problem in Libya, supporting the farmers and privet sectors to use the most advanced technologies to plant more lands and increase the grain production may help in develop food security conditions and reduce hunger in Libya. Barqah (east Libya) swims on top of the Nubian aquifer which has water storage to provide the sustainably withdrawing groundwater for the entire region. In a study published in 2021 by University of Texas at Austin and in collaboration with NASA/Goddard Space Flight Center titled “Linkages between GRACE water storage, hydrologic extremes, and climate teleconnections in major African aquifers” mentioned there is an abundance of groundwater in Africa with annual groundwater recharge being comparable to the volume of water that flows through the Congo, Nile, Niger, and Zambezi rivers each year combined. Nubian aquifer is one of the largest aquifers in Africa, containing only ancient trapped water. It covers about 2 million km2 of groundwater which is more water than the Nile River discharges in 500 years. Libya has started the Great Man-Mad River project to pipe water hundreds of kilometers from the Nubian sandstone to the cost. The Nubian aquifer could be utilized to support agricultural production and economic development in Barqah.  

Introducing the new methods for irrigation is an advantageous way to utilize this water storage. The center pivot system has a very important role in agriculture and water conservancy. Furthermore, pivot systems have a high degree of automation, which can save a lot of labor. There is no need to level the land, saving a lot of money and reducing environmental damage. The main advantage to the center pivot system is the service life of 20 years, and the investment per unit area is low. Our solution is to tap into the Nubian aquifer and use the center pivot systems to utilize more croplands. The Pivot system helps in applying the right amount of water to the crops which is essential for producing high yields at low operating and maintenance costs. Also, it eases the application of fertilizers and the control of pests and diseases to make this technology the ideal solution for providing optimal irrigation with precision application to maximizing yields and profits. Accurate control of the depth of water application is another benefit of the center pivots.

 

 

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Using the most advanced techniques in agriculture and irrigation systems to utilize the underground water to transform more lands to become croplands would help in developing food security in Libya. 

The project aims to utilize a piece of land with an area of 1544 acres (625 hectares) to build nine center pivot systems and each one of those systems will maintain the irrigation for an area of 126 acres (51 hectares). The main crops will be wheat and barley due to the high demand in the local markets. This business will be caried out on several phases as follow:
  > Phase 1:

The first phase will consist of building the infrastructure and establishing the water and electricity connection. During this phase we will be working with contractors to drill the wells and complete the electricity connection to the grid and building the actual buildings with numbers of equipment and grain storages. In phase 1, we are going to start with only two center pivot systems in addition to developing the infrastructure. Two center pivot systems are going to give us the actual experience of any future unplanned event or issue. When we start the business with two irrigation systems, we can analyze and assess the completion of the project based on the feedback and the knowledge that accumulates while working on small scale of two systems. 

The required fund for phase 1 is as follows:
  | Stage | Item | Purpose/Benefits | Cost
| Power connection | Electricity | Connect the cropland to the grid and distribute the power lines to the first two pivot systems. Each pivot system needs electric power to operate two water pumps [submersible pump + inline pressure pump] and the pivot system itself.  | $98,750.00

| Well drillings | Pumps + pipes  | Connection of the wells with the irrigation systems.  | $59,300.00

| Farm infrastructure | Business building, grain, and equipment storages.  | To conduct business activities and store grains and protect farm equipment from environmental effects.  | $65,800.00

| Digital Farming Professionals  | Service sector  | The use of modern farming practices supported by technology will result in significant improvements compared to traditional practices. | $83,500.00

| Farm equipment and machinery | Farming tools | Help in conducting the farming activities and monitor the process with high precision and cost effectiveness tools. | $250,500.00

| Center Pivot irrigation systems  | Irrigation systems | High advance technology system to apply water and fertilizers to the crops (two center pivot systems) | $155,000.00

| Soil Application | Sustainable soil fertility (chemicals)  | ·         Improve plant vigor.   ·         Improve soil bio microbial activity. ·         Establishment of soil biological balance and species diversity ·         Addresses microbial challenges related to cut-out or leveled-ground infertility.    | $48,500.00

| Foliar application (all stages) | Fertilizers + Pesticides  | ·         Treating foliar nutrient deficiencies ·         Gives energy needed to push uniformly. ·         Accelerates the emergence of fruiting buds. ·         Increases foliar growth at emergence. ·         Provides energy needed to promote uniform flowering. ·         Improves uniformity of fruit size.    ·         Promotes maturity and viability in crops. ·         Improve quality, shippability and shelf life of product. | $36,400.00

| Post Harvest | Fertilizers | ·         Aids in the decomposition of organic residues in soils. ·         Increases recycling of nutrients tied up in organic matter. ·         Aids in improving soil condition. | $26,225.00

| Labor | Workers | ·         Workers to do the daily farming activities.  | $176,025.00

| Total fund requested | $1,000,000.00


>Phase 2

Phase 2 of this business plan is going to work on the completion of the nine pivot systems in the distinguished land with the potential to expand the project to include more croplands. There is a potential to buy more land and use more than nine pivot systems, but that decision will be under investigation and analysis as the business owners and stockholders go through the development of the first and second phases. The budget for this budget will be conducted in future time. The time frame for the completion of phase two is expected to be after three years of the completion of phase 1.  

As mentioned in many reports, Libya currently faces several food security challenges, including economic challenges and high unemployment rates. The lack in agricultural production can lead to dependence on few key crops, making the food system vulnerable to disruption. From here, the idea of building food production industry to enhance domestic food production and expanding agricultural diversity would be feasible. Start new businesses in the food production industry can generate employment opportunities, stimulate economic growth, and contribute to overall food security improvements. Flour milling business and tomato products manufacturing business are both feasible and in much need in Libya do to the fact the country imported most of those products from other countries. Open flour milling business or tomato products manufacturing will generate employment opportunities and profit as these food industries will accelerate economic growth. Finishing phase 1 and phase 2 will be essential to considering start phase 3 as the raw materials will be coming from those croplands. 

This business model will have a direct sales revenue model where will support the strategy of getting our product directly to the consumers. The direct sales revenue model is the best way to get our product directly to consumers instead of selling the products to resellers such as department stores or third-party companies. 

There are two ways to reach consumers:

>Inside Sales: where the customers come to the business location or call to place the order for the product.

>Outside Sales: where the business representative goes to meet with the customers using face-to-face sales transactions. 

The charge for the product will be based on one time fee as the customers buy the products. The price of the products is going to be fixed price based on the marked price at the selling time. 

There is huge demand for the grain and grain products, where in 2021, the amount of grain imported into Libya by the government and privet sectors increased by 26% compared with the imported value in the previous year. The grain consumption increased in the past decade and the market value increased at an average annual rate of +2.3%. The Center for Collective Learning (CCL) published a study that showed that, in 2021, Libya imported $778M in cereals to be the 48th largest importer of cereals in the world. The cereal was the 5th most imported product in Libya in that year.

Primitive farming methods are still applied by most Libyan farmers, and the resulting system of subsistence agriculture annually produces basic crops which fall short of national needs. Consequently, large quantities of agricultural products must be imported yearly. There is a large proportion of the population involved in farming in Barqah currently face serious challenges in continuing their operations. Many farmers were obliged to discontinue agricultural production. 
Stakeholders in Libya face many obstacles to continuing farming operation 
1) lack of knowledge and the experience with the new farming technologies; 
2) lack of or high prices of agricultural inputs (i.e., seeds, fertilizers and pesticides), lack of income available to purchase required agricultural inputs, equipment, and machinery, 
3) Absence of extension services and inoperability of farmer’s associations; 
4) inconsistent exchange rate between the United States Dollar (USD) and Libyan Dinar (LYD), due to the depreciation of the national currency and lack of bank liquidity for accessing loans and financial services. 
5) Fluctuations in electricity and power outages in some areas created problems for irrigation and for the storage and conservation of harvested crops. 
6) After the start of the civil war in 2011, many irrigation networks as well as private agricultural productive assets have been vandalized and/or stolen, resulting in major losses for farming communities. 
7) the cost of new equipment and machinery is very high, which most of the population cannot afford. 8) access to good quality seeds, fertilizers and pesticides is not always possible. Therefore, it is very rare for those farmers to find improved seed varieties on the market. 

On the other hand, our small business, Barqah AG, will have access to precision equipment and good quality agriculture inputs (seeds, fertilizers, and pesticides). As Dr. Emshadi has the expertise and the knowledge of modern farming, Barqah AG will be using digital agriculture technology which allows for the optimization of farming practices that have been inconceivable until now. Digital agriculture technology provides the specific needs for each cropland. It uses international cutting-edge technology and data management to develop optimal farming practices in the areas of crop screening, irrigation practices, crop disease predictive surveillance, predictive weather systems, real-time pest and locust monitoring and general best practices for the specific crop and location. By using this technology, Barqah AG will utilize this type of farm management services to reduce water and fertilizer needs, early detection and treatment of crop diseases, overall cost reduction, increased yield, and healthier soil through the use of techniques that continuously contribute to its nutritional value. Professional data collection and reporting will allow for the documentation of all techniques and results.

The project will start with two center pivots (126 acres each), then each year will be adding another two center pivots. By the end of the 4th year, the total of nine center pivot systems will be fully operational. The grain production estimated for this project in full capacity is to be 3,600 t (400 t each system) in addition to hay as animal food. The project will provide job opportunities and training for at least 20 local families. Also, there are some universities and research centers that showed interest in establishing collaboration in terms of creating a center for research and development targeting local types of wheat and barley. This Ag center will support the local academic institutions to do more research and publish scientific papers. Furthermore, making part of the project as a research center will provide more technical support for local farmers and could be used to give training and advice to the local farmers to achieve their goals. This project will be using the most advanced farming technologies to achieve high yield and it could be a good example for other farmers to adopt and gain knowledge of.   


The requested fund is $1,000,000.00 and based on the recent market values and the costs, the profit by the end of the 5th year will be $5,692,986.00. This means the Return on Investment (ROI) will be 469.30% over an investment length of 5.0 years with an Annualized ROI of 41.60%. 

Team:
The CEO and the founder is Dr. Khalid Emshadi https://www.linkedin.com/in/khalid-emshadi
The Head PM is Mahmoud Salih