Chapter 1

INTRODUCTION
Seed has been an important agricultural commodity since the first crop plant
was domesticated by pre-historic man. For thousand of years, man cleaned
seed of his food crops by winnowing. This is still an important process, but it is
no longer adequate to supply the kind of seed needed by farmer.
Seed processing is a ital part of the seed production needed to moe the
improed genetic materials of the plant breeder into commercial channels for
feeding the rapidly e!panding world population. The farmer must get the
quality seed that is free from all undesired materials because farmer"s entire
crop depends on it.
Seed can seldom be planted in the condition in which it comes from the
growers. #n fact, many seed lots contain weed or crop seed or inert material
that make them unfit for sale without processing. Crop seed also frequently
hae stems, awns, clusters or other structures, which preent from flowing
through the drill freely.
Seed processing is that segment of the seed industry responsible for
upgrading seed $Fig. 1%, improing planting condition of seed, and applying
chemical protectants to the seed.
&dantages of seed processing'
1. (ake possible more uniform planting rates by proper si)ing
*. #mproe seed marketing by improing seed quality
+. ,reent spread of weed seed
-. ,reent crops from disease by applying chemical protectants
.. /educes seed losses by drying
0. Facilitate uniform marketing by proiding storage from harest time until
the seed is needed for planting.
&n important factor to consider is the moisture content of the seed prior to
processing. Seed with moisture content aboe 1.1 are sub2ect to e!cessie
damage in the processing line. #n this case natural or artificial drying may be
necessary.
,hysical characteristics used to separate seed include si)e, length, weight,
shape, surface te!ture, colour, affinity for liquids and electrical conductiity.
Seed processing can broadly be diided into arious steps $Fig. *%. &s the
seed is receied into the processing plant, it goes either directly into the
/aw seed
#nert material Common weed seed
3o!ious weed
seed
4ther crop seed
5eteriorated seed
4ther ariety seed
5amaged seed 4ff si)e seed
Cleaned, 6raded, Treated,
,acked, Tested seed
Fig. 1. 7ndesirable materials remoed during processing of seed
cleaning process or into storage to await processing. 5rying may be
necessary. &s processing begins, the first phase $conditioning and pre-
cleaning% consists of scalping, debearding, shelling or any other operation
necessary to make the seed flow easily. The second phase $cleaning and
grading% includes the remoal of inert materials, weed seed, other crop seed,
and broken seed that are larger or smaller than the crop seed and obtain the
seed mass in the uniform si)e range of perforations of top and bottom screen.
&fter the desired purity is obtained, seed enters the final processing phase of
separation based on specific characteristics like length, weight etc and
treating and packaging. ,rocessed seed is stored for later sale.
Rationale
#ndia is one of the ma2or rice growing areas in the world and it is consumed by
more than half of its population. The increase in rough rice production in the
last few years is mainly due to the 6reen reolution and the introduction of
high yielding arieties.
4rissa is ma2or paddy growing state. The area under production is -.88888
ha with production of 91-:-88 tonnes and yield in the state is 1.:; kg<ha.
The paddy yield in the state is ery low as compared ,un2ab and Tamilnadu
/eceiing
Conditioning =
pre-cleaning
Cleaning
Separating
and upgrading
Treating and bagging
Storage
>ulk storage
Fig. 2. >asic flow and essential steps in seed
processing
where the yield is ++-0 and +.9; kg<ha, respectiely. The non-aailability of
good quality seed is one of the main reasons of it. The sowing and haresting
time of paddy in the state is gien in Table1.
Table 1. Sowing and haresting time of paddy
/abi ?harif
Sowing @aresting Sowing @aresting
Aan. (ay-Aune Aune-Auly 4ct-3o.

#ndia"s certified<quality seeds production<distribution of last fie years is gien
in Table *, which indicates that the requirement of certified seed is increasing
year after year.
Table 2. ,roduction<distribution of certified<quality seeds in the country
Type of seed ,roduction $lakhs quintals%
1;;0-;9 1;;9-;: 1;;:-;; 1;;;-81 *881-8*
>reeder seed 8.-08*0 8.-01+- 8.+:;;- 8..89;: 8.-;:.8
Foundation seed ..90 0.: 0.9. ..08 9.88
Certified seed 9+.*9 9:.9; :+.88 ;1.88 188.88
$Source' Bconomic surey of #ndia, *888-*881%
The production of paddy in the year 1;;0-;9 was :1.+8 (T. The target fi!ed
for year *811-*81* is 1*:.1* (T. For achieing this target, the gap $Table +%
between demand and supply of certified<quality paddy seed should be
minimi)ed by creating seed production and processing facilities in the state
inoling priate sector at larger scale.
Table 3. 6ap between requirement and production of certified seed of paddy
Cear Cropped
area
$( ha%
Seed
requirement
$Thousand
tonnes%
Seed production
$Thousand
tonnes%
6ap
$Thousand
tonnes%
1;:0-:9 -8.: +80 1+* 19-
1;:9-:: +:.: *;1 1+: 1.+
1;::-:; -1.: +1+ 100 1.9
Objective of Project
The State 6oernment has accorded high priority to the upliftment of rural
economy through the deelopment of agricultural sector. Seed being ital
input to agriculture, continuous efforts are being made to ensure aailability of
quality seeds to farmers in order to sustain the agricultural deelopment.
#n the present situation the demand of quality seeds is so high that the
4.S.S.C. or any goernment agency alone can not meet the demand of
quality seeds, which would be required to fill by the priate seed pro2ects.
#n iew of aboe, the pro2ect has been formulated with the ob2ectie to
produce quality seed of paddy through scientific methods and adopting
appropriate processing through establishment of seed processing plant.
Chapter *
Logistics
& brief description of entrepreneurship capability of the proprietor, site
location, seed production plan, requirements for setting up a seed
company is gien in this chapter.
2.1 ntre!rene"rs#i!
The seed processing unit will be under the proprietorship of Sri (. Denkat
/ao, &ge about *9 years, son of Sri (. ?andal /ao, &t.- ,adhanpali, ,.4.-
,atkulunda, ,.S. ->arpali, 5ist.->argarh and his brothers. Sri /ao completed
graduation in Science, 5C& from 7tkal 7niersity, >hubaneshwar and also
attended S#(&, $Small #ndustries (anagement &pplication ,rogramme% from
4smania 7niersity, @yderabad. This S#(&, course was sponsored by S#5>#
$Small #ndustries 5eelopment >ank of #ndia%. Sri /ao belongs to farmer"s
family. @is father (r. (. ?. /ao worked as a contract grower under the banner
of 4rissa State Seeds Corporation for 1. years. @is brother (. Srinibas /ao
is a member of 4rissa State Seed Corporation. #n the company of his father
and brother, (r (. Denkat /ao has the requisite e!perience about this
business and can easily manage the unit.
2.2 Location
The proposed unit will be located at illage ,adhanpali, ,.4. ,atkulunda, ,.S.
>arpali, 5ist. >argarh $shown in Fig. +%. The location is well connected with
road and is situated at a distance of 18 km from railhead. The network of
canal in the locality proides assured irrigation needed for success of seed
programme. #t is surrounded by area where intensie cultiation of paddy is
undertaken by farmers in two seasons. Farmers in the locality are highly
motiated and hae already worked in seed production for decades with
4SSC.
The aforesaid consideration renders the identified location an ideal one for
setting up a seed processing plant.
/aipur 3@0 $Chhatisgarh /oad%
(ain canal from @irakud dam
(ain canal
State @ighway /oad
4rissa State Seeds Corp., >argarh
>argarh
** km
,atkulunda
,ost 4ffice
S
o
n
e
p
u
r
>arpali /ailway Station
Sikirdi chowk
/esam
illage
Tulandi illage
,roposed plant site
,roposer"s @ome
(arket yard
Tentuli Tikira
,ond
(arket yard >uromunda
,lot
T
u
l
a
n
d
i

(
i
n
o
r

C
a
n
a
l
,odhanpali
>alitikira
Satlma
Towards Sambalpur /oad
S 3
B
E
Distances$
Sambalpur to >argarh' .8 km
>argarh $5istt% to >arpali' ** km
>arpali to ,roposed ,lant site' 1* km
Towards Di)ag
Fig. 3 Focation of proposed plant site
2.3 %ee& Pro&"ction b' Private %ector
Seed production by priate sectors starts from the procurement of breeder
seed from State &gricultural 7niersities and #C&/ #nstitutions. Then the seed
is cultiated by priate sector or by contract growers with proper superision
of 4rissa State Seed Certification &gency personals which is a third party
certification agency of the state department of agriculture. The seed after
haresting is cleaned and graded. #f germination of seed is acceptable as per
seed certification standards, the 4SSC& certifies the same for sale seed as
certified seed.
The multiplication of seed chain starts from nucleus seed. This is then
successiely multiplied to breeders, foundation and certified seed, truthfully
leelled seed with later being sown to produce commercial crops. #n all this
stages the quality control is paramount importance, as it is essential that
trueness to type of ariety be maintained. The company plans to procure
foundation seeds from &gricultural 7niersities<3SC<SSC to support its
certified seed production programme. Seeds of this stage are aailable from
these agencies on placement of indent in adance.
2.( Pro&"ction !lan
>hula!mi seed is a company dealing mainly in paddy seeds. They hae
already undertaken paddy seed production during the year *88--8. and
response has been ery encouraging from priate sector and also some
quantity has been supplied to reputed organi)ation like 3SC. Company plans
to e!pand and speciali)e in paddy seed production basically and later on add
other crop and arieties in the product range slowly with the increase in
demand.
,roduction plan of paddy seed is gien in Table -.
Table (. Cear wise seed production plan
Rabi season
%.
N
o
.
)ariet' *"antit'+ ,"intals
2--./-0 2--0/-1 2--1/-2 2--2/-3 2--3/1-
1. (T7 1881 1088 1988 1:88 1;88 *888
* (T7 1818 *88 *.8 +88 +.8 -88
+ #/ 0- 188 1*. 1.8 1:8 *88
- ?handagiri *88 **8 *.8 *9. +88
. Falat *88 *1. *+8 *.8 *:8
0 Surendra 188 1*. 1.8 19. *88
9 #/ +0 *88 *1. *+8 *.8 +88
Total 20-- 22.- 311- 332- 322-
4#arif season
1. (T7 1881 1888 1188 1*88 1+88 1.88
*. (T7 1818 *88 *.8 +88 +.8 -88
+. (T7 98*; 1*.8 1+88 1-88 1.88 1088
-. #/ 0- 188 1*. 1.8 1:8 *88
.. ,oo2a *88 *1. *+8 *.8 *:8
0. Falat .8 08 98 :8 188
9. (ahanadi .8 08 98 :8 188
:. Surendra .8 08 98 :8 188
;. ?handagiri .8 08 98 :8 188
18. Sarathi .8 08 98 :8 188
11. #/ +0 .8 08 98 :8 188
Total 3-.- 33.- 31-- (-0- (.2-
5ran& Total
6Rabi 7
4#arif8
.0.- 02-- 021- 1((- 220-
2.. ssential Re,"ire9ents for s"ccess of %ee& Co9!an'
Following are essential requirements for setting up and successful operation
of a seed company'
#. Farm
##. ,rocessing plant
###. Blectricity
#D. >uildings
D. /aw materials
D#. (an power
D##. (arketing
2...1 Far9
Farm is needed for undertaking production of certified seeds. #n #ndian
conditions, contract growing of seed has become fairly acceptable and
enture being profitable, farmers are coming forward to undertake seed
production for reliable companies.
&s has already been preiously indicated, the proposed locality is haing
e!cellent irrigation facility and farmers are already aware of seed production
programmes of 4SSC, there is no problem in identifying e!perienced and
progressie farmers willing to undertake seed production for the company. #n
the initial year, response has been ery encouraging.
4wners of the company hae their own farm, which would e!clusiely support
production of foundation seed from breeder seed, if intended or planned at
later date.
2...2 Processing !lant
Seed processing plant will be equipped with all the machines needed for
successful cleaning, grading operations. Similarly, seed storage is needed to
store the seed during the period from receipt of seed at the plant till it is
supplied to the dealer<farmer for sale.
Cleaner is the basic machine in a seed processing plant. Capacity of plant is
accordingly known by the capacity of cleaners. The capacity of seed cleaners
is specified in terms of wheat seed. Ehile handling paddy, the capacity of
machine reduces to half and hence the company would plan to establish a
plant with sufficient capacity to process double the quantity of planned paddy
production within the aailable processing period.
Considering the seed production plan, the company requires seed processing
plant of * ton per hour capacity to handle present requirements as well as to
handle future processing needs.
2...3 lectricit'
Blectricity is aailable from 4rissa state electricity board. @oweer, standby
56 set would also be installed to take care of processing need in the eent of
power failure.
2...( :"il&ings
Seed processing plant building, seed stores, re2ect store and office
accommodation is needed to perform the processing and storage works
successfully.
2.... Ra; 9aterial
/aw material for the certified seed production programme is foundation seed,
which would be aailable from ?D?s<7niersity<SSC<3SC without any
problem.
4ther raw materials, like certification and packing material is aailable in the
market, which would be purchased with printing in the name of the company.
2...0 <an!o;er
&dequate labour force is aailable around the area to work on the processing
plant. This would rather be an opportunity for employment to rural youth in this
backward rural area. B!pert support will be aailable from 4SSC& and other
state agencies. Company also plans to employ agricultural graduate for
internal quality checks.
2...1 <ar=eting
Company is using its own outlet for sale. B!periences of preious year
indicate that company was able to sale about -81 of produce through own
sale counter. Subsequent queries from farmers are encouraging. /est of the
material was sold through dealer or to 3SC. Company plans to increase its
dealer"s network throughout the locality and also hae suitable tie-ups with
state<central agencies for sale of seed and anticipates that there would be no
problem with sale of seeds.
Chapter +
%ee& Processing Plant an& :"il&ings
Seed, as a component of the production phase in the grain industry can be
considered as a mini industry that requires integration of production
processingG storage, and marketing. &lthough only a small part of the total
system, the seed has a strong influence on the iability of the industry,
because as the most basic input, the seed sets the upper limits of productiity,
product quality, and price.
Seed processing plant is designed based on the characteristics of seed grain
and the impurities present in it, which need to be separated. Capacity of plant
is known by the capacity of the seed cleaner which is the basic machine in the
seed processing plant. 4ther machines, which work on the principle of
separating the material, based on difference in characteristics of good seed
and impurities are included in the plant. Capacity of such machines are kept
matching with that of cleaner to hae effectie utili)ation.
3.1 Processing <ac#ines
>rief descriptions of the processing machines used in a seed processing plant
are gien hereunder.
3.1.1 %cal!er
,addy seed contains contaminants of arious kinds as it comes into the
processing plant especially if it has not been harested and threshed
mechanically. To get the seed into condition to flow easily through the
processing operations, to improe capacity and separating precision during
processing, and to preent loss of quality, seed is usually prepared for
processing by sending them through one or more special machines or
processes. & scalper can be used to rough clean seed when trash content is
high.
The scalper basically consists of a ibrating or rotating screen or siee. The
screen perforations are large enough to allow the rough seed to pass through
readily while large inert material is scalped off and remoed from the seed lot.
3.1.2 >ir screen cleaner
The air screen cleaner is the basic machine in almost all seed processing
plants. The air screen cleaner uses three cleaning principles i) aspiration,
scalping and grading. & common air screen cleaner for processing seed uses
two air blasts and two screens. The first air system remoes dust and light
chaff before the seed reaches the first screen. The first screen allows the
good seed to drop onto the second screen. The large foreign material rides
oer the first screen and is discarded. The second screen is a grading screen.
3.1.3 %!ecific gravit' se!arator
Seed of same si)e and general shape can often be separated because they
differ in specific graity. This difference is ery useful in remoing light
immature seed or heay sand and rocks to improe the purity and germination
of crop seed.
3.1.( In&ente& c'lin&er
Seed of the same width and thickness can sometimes be separated by taking
adantages of difference of length. #ndented cylinder can do ery precise
separation by using length difference. The indented cylinder separator is a
rotating almost hori)ontal cylinder with a moable hori)ontal separating trough
mounted inside it. Thousand of half round indents line the inside surface of
cylinder.
3.1.. levator
Single leg bucket eleator consisting of receiing hopper, boot, bucket, belt,
boot pulley, leg, head pulley, motor, drie and discharge spout will be used for
coneying seed from one machine to another machine. #t will lift the seed from
the ground ertically upward and discharge it from top to the different
machines. This type of eleating machines requires less power and floor area.
3.2 Design Criteria of Processing <ac#ines
6enerally the manufacturers specify capacities of processing equipments in
terms of wheat only. Capacity of seed processing equipment and machinery in
terms of paddy has been assumed to be .81 as compared to wheat. Eorking
efficiency of processing equipment has been assumed to be :81 of the rated
through put capacity.
Seed processing is a seasonal work. Seed requires drying, cleaning and
packaging in an accelerated and continuous manner so as to complete
processing load within the limited period aailable to enable seed maintaining
its iability. (oisture content of the harest at the time of receipt is usually ; to
1*1 $wb% during both rabi and kharif seasons and hence will not require
drying facilities.
(a!imum seed olume to be handled at the proposed seed processing
comple! during the rabi will be +1*8 quintals whereas during kharif season
will be of the order of +0:8 quintal as per proposed production plan gien in
Table -. @ence, the cleaning cum grading capacity of the processing plant will
be determined on the basis of +0:8 quintals load. This amount of seed is to
be processed during the period of *8 days. Seed processing during both the
seasons will be conducted in * shifts per day basis with processing plant
operating 10 hours a day.
>ased on aboe assumptions, processing load and period aailable for
processing, aerage seed cleaning-grading capacity $on paddy basis% works
out to be * tonnes per hour. The details of arious processing machines
required in the pro2ect are gien in Table ..
Blectrical energy will be made aailable by state electricity board. 4ne
standby diesel generating set of -. kD& rating has been proposed for meeting
e!igencies in the eent of power shedding<failure. The estimated cost is gien
in Table 0.
Table .. ,rocessing machines required in the seed processing plant
%.
No.
Na9e of 9ac#ines Ca!acit' *t'. Rate?
Unit+ Rs
in la=#s
>9o"nt+
Rs in
la=#s
1. ,re-cleaner * T,@ 1 3o. *.88 1..8
+. Seed Cleaner * T,@ 1 3o. *.18 1.08
-. #ndent Cylinder * T,@ 1 3o. 1.+8 1.+8
.. Specific graity separator * T,@ 1 3o. 8..8 1..8
0. Bleator up to . m height * T,@ - 3o. 8.-8 1.08
:. Dacuum cleaner 1 3o. 8.18 8.18
;. Blectronic moisture meter
$Eet type%
- 1 3o. 8.*8 8.*8
18. >ag closer heay duty 3il * 3o. 8.8- 8.8:
11. Eeighing machine 188 kg
+88 kg
1 3o.
1 3o.
8.-8
8..8
8.-8
8..8
1*. 5iesel generating set -. ?D& 1 3o. *..8 *..8
Total 6@8 11.22
1+. Spares parts for + Cears H
.1 of amount $I%
8..0-
1-. #nstallation, testing,
commissioning of
(achines H 181 of
amount $@%
1.1*:
1.. Faboratory equipments like
germinator, hot air oen,
weighing balance, diider
etc
1.9.
10. Sum of S. 3o. 1 to 1. 1-.9**
19. Contingencies H +1 8.--
5ran& Total A 1..102 1..2-
Table 0. Bstimated power requirement for the seed processing comple!
%. No. <ac#ine Po;er re,"ire9ent+ =B
1. ,re-cleaner ..8
*. Cleaner cum grader ..8
+. #ndented cylinder *.8
-. Specific graity separator ..8
.. Bleators :.8
0. >ag closer 8.*
9. Fighting load +.8
Total 22.2
3.3 La'o"t an& Process Flo; O!erations
,rocess flow operation enables processing of seed through suitable
machines. Bleators are proided with bypassing arrangements to bypass
certain machines, if use of any machine is not needed in subsequent
operation in particular seed lot. For e!ample, all the lots may not need use of
indented cylinder grader or specific graity separator and hence in such case
the eleator direct the seed to the ne!t process by bypassing these units.
Fayout of the plant will be made in a way to ensure minimum trael both
ertical and hori)ontal to aoid in2ury to seed. Fayout plan and process flow
chart are gien in Figs - and ..
&s shown in Fig. -, raw seed will be fed to the pre-cleaner by eleator $B1%.
This machine will remoe large si)e undesired materials from the seed. The
partially cleaned seed will be fed to the cleaner cum grader with eleator $B*%.
Fig. ( Fayout of seed processing machines
,re-cleaner 6rader #ndented
cylinder
Specific
6raity
Separator
/aw
seed
Eeighing,
bagging and
packing
B1
B+ B-
B*
B1, B*, B+, B- are eleators
@ere, the small undersi)ed materials including undersi)ed seeds will be
separated on the basis of si)e difference and weight difference. The cleaned
and si)ed seed will be fed to the indented cylinder by eleator $B+% whereby
the broken and short seeds will be separated. The graded seed will be fed to
the specific graity separator by eleator $B-% for remoing light seed. #f it is
not required then it will be bypassed. The processed seed will be packed,
weighed and stitched with the help of weighing and stitching machine.
3.( Pac=aging
&fter processing, the seed is packed. >agging is usually the slowest and most
costly operation in a seed processing plant. >agging requires filling the bag to
an e!act weight, closing and labelling the bag. These operations are done
either with hand or with manually operated machines, like weighing scale and
bag closer.
Small impurities like
chaff, dust
/aw seed
,re-cleaner
Seed cleaner
#ndented cylinder
,ackaging and Storage of graded seed
Farge impurities
>roken grain
Fig. . ,rocess flow chart of paddy seed processing
Specific graity
separator
>agger-weighers are simple machines and are ery accurate, easy to ad2ust
and can fill . to 0 or more bags per minute. >ag-sewing machines are
precision, high-speed machines.
The label is attached to the seed bag, or it is printed directly on to the
container or bag. The label contains all-important information about the seed.
Complete processing records need to be maintained to trace the seed from
the time it is receied at the plant until it is sold with full details of operations. &
processing plant record system include following records'
i. /eceiing
ii. 5rying<storage
iii. ,rocessing, treating and packaging
i. Testing
. Storage
i. #nentory
ii. Sale
3.. %ee& storage
6ood seed storage is an important phase of processing and is essential to
successful seed marketing. ,roper storage preseres seed iability, from
harest to sale, and protects the producer, the processor and the user.
The storage is proided for seed from the time of harest until planting time.
Storage is proided for seed that may be carried oer until the planting
season in the ne!t or a subsequent year.
The rate of deterioration of crop seed in storage increases as seed moisture
content increases. (ature seeds are hygroscopic and hence their moisture
contents ary with the relatie humidity of the atmosphere. (oisture
absorption or desorption of seed is a relatiely slow process. (oisture content
and temperature are important factors in seed storage. 5ry cool conditions
are best for seed storage.
3.0 %ee& Processing Plant :"il&ing La'o"t
Seed processing plant building will comprise of following components'
1. /eceiing-cum-drying platform
*. ,rocessing area
+. &u!iliary building
3.0.1 Receiving/c"9/&r'ing !latfor9
&n open platform of si)e 18m ! 18m will be proided. The platform will be
haing a plinth of 8.; m aboe the ground leel. This area will be utili)ed to
receie the raw seed and to sun dry small lots of crop seeds. This area can
also be utili)ed for storage of seeds on wooden palettes. The platform will be
connected to processing shed through a rolling shutter.
3.0.2 Processing area
The processing area will be situated between the shed and entilated storage
building. The hall will be connected to entilated flat stores through a coered
gallery for easy moement of processed and packaged seed to seed stores.
The hall will hae a big rolling shutter of si)e +m ! +m in the processing plant
to permit entry of seed processing equipment into the hall for installation.
The processing hall will be of si)e *8 m ! 18 m ! 0.. m. @eight will be kept to
facilitate installation of the seed processing equipment and machinery. &
sequence of processing machines to be installed is shown in Fig. 0. Floor of
the processing hall will be 8.; m aboe the ground leel. /oof will be of
tubular trusses coered with asbestos sheet.
The shed will hae sufficient proision for natural as well as forced entilation
in order to maintain congenial atmosphere inside the shed. The shed will
accommodate seed scalping, seed processing and packaging equipment and
will hae sufficient space for weighing and packaging.
3.0.3 >"Ciliar' b"il&ing
#n addition to building discussed aboe, a proision will also be made for
generator room. The plinth area and cost estimate is indicated in Table ..
Sufficient length of road will be proided to connect arious functional
buildings with each other and main highway. #nternal road will be +.0 m wide.
>oundary wall will be proided all around the comple! for security reasons.
4ne tube well is aailable at the site, which will be used for construction works
and drinking as well.
The site is outside the municipal limits and as such no sewage system e!ists.
& septic tank with soakage pit will be proided for disposal of effluents. Bntire
comple! will hae a good drainage system.
,roision for fire fighting equipment such as e!tinguishers, water buckets,
sand buckets etc will be made to fight minor fire ha)ards. The purchase of
these items will be made through contingency grant.
The processing plant building will be constructed as per C,E5<,E5 norms.
#t will hae tubular trusses, &C sheets pitched hole roof, cement concrete
,re-
cleaner
Cleaner
cum
grader
#ndented
cylinder
Eeighing,
packing
*8 m
1
8

m
Fig. 0 Sequence of processing machines to be installed in processing hall
Specific
6raity
separato
r
flooring finished with water-proofing cement paint, aerated, entilated, rat
proof and bird protection. Sealed doors will be proided in these buildings.
>uildings will be suitably planned to hae interconnection for moement of
seeds and materials. 5etails of requirement of building comple! and their cost
estimate are gien in Table 9. Tentatie layout plan is gien in Fig. 9.
Table 1. >uilding structure of the seed processing plant
%.
No.
Descri!tion >rea Rate?Unit
6in Rs.8
>9o"nt
6Rs. in
la=#s8
1. Threshing<drying platform with
8.;8 m plinth height
188 m
*
9.8<m
*
8.9.
*.
$a%
,lant building for temporary
store of raw seeds, processing
machines as per layout plant
*88 m
*
+.88<m
*
9.88
$b% /oom for 56 set -. ?D& *. m
*
+888<m
*
8.9.
$c% /oom space for ,lant #ncharge,
certification packing material,
chemicals, workshop for storing
of spare parts, tools, processing
screens and toilet etc.
.8 m
*
+.88<m
*
1.9.
+. Seed storage, *.8-+88 tonnes *88 m
*
-888<m
*
:.88
-. >oundary wall $*88 m% ;88<m 1.:8
.. Cement concrete /oad $1*. m !
- m%, *. cm thick
.88 m
*
.88<m
*
*..8
0. Site deelopment like drainage,
security etc H 181 total
e!penditure gien aboe
*.*8
%U: TOT>L 2(.2.
Contingency H +1 8.9+
5R>ND TOT>L A *-.;: 2. la=#s $/s twenty fie lakhs%

Fig. 1 >uilding layout plan
4ffice,
miscellaneous
store
.8 m
*
,lant building
18 m ! *8 m
/eceiing cum drying platform
18 m ! 18 m
6enerator room
*. m
*
Seed store
18 m ! *8 m
/oad
Faboratory
Chapter -
Financial >nal'sis
Total capital inestment for this pro2ect is estimated to be around -8.*8 lakhs,
which includes the cost of ciil work, equipment and machinery $Table :% but
e!cluding the cost of land, which belongs to the entrepreneur and will be
aailable for this pro2ect. &ny other cost inoled in consultancy, office
furnishing etc could be managed within the contingency. This pro2ect has been
planned to implement immediately and site is ready for work to be started 2ust
with the approal of loan by financing institution.
Schedule of ciil work, purchase of equipment and machinery shall be
synchroni)ed to ensure that the plant is ready for processing the produce in
3oember-5ecember to make aailable paddy seed for Aanuary sowing.
>alance ciil work would be completed by (arch i.e., within the financial year
*88.-80.
Table 2. Summary of pro2ect cost
%. No. Partic"lars Cost+ Rs in la=#s
1. ,lant machinery and equipment 1..*8
*. >uilding and ciil works *..88
+. Cost of Fand 4wn
Total (-.2-
(.1 F"n&ing of t#e !roject
4ut of estimated cost of -8.*8 lakhs, /s 18 lakhs would come, as subsidy
from 6oernment of #ndia under the scheme of 64# for boosting the seed
production in priate sector and /s *0 Fakhs is proposed to be taken as Fong
Term Foan from the bank. &s the subsidy is back-ended, eligible amount of
subsidy *.1 i.e. /s 18 Fakhs would initially be taken as term loan from the
bank to be ad2usted from the subsidy that would be made aailable by 64#.
&rrangement of working capital would be separately made for undertaking the
business. The entrepreneur shall contribute balance amount of /s -.*8 lakhs
plus the land required for the pro2ect
(.2 %c#e&"le of I9!le9entation
#mplementation schedule of establishment of the seed processing comple! is
gien in Table ;. ,rocessing plant building, boundary wall, front road,
generator room, drying platform, laboratory and office shall be completed
immediately within *-+ months after approal of loan. Simultaneously,
processing machinery shall be purchased and installed and plant
commissioned to undertake processing in the first season. 4ther buildings
and ancillary works like road, seed store, drainage system etc shall be started
by 3oember *88. and would be completed by (arch *880.
Table 3. ,ro2ect implementation schedule
%.
No.
>ctivities Co9!letion sc#e&"le+
9ont#
1 * + - . 0 9
1. Site selection Completed
*. &pproal of pro2ect To be completed before
start of pro2ect
+. Tendering award of contract and
construction of 1
st
phase of ciil work
-. ,urchase of processing machinery,
deliery and installation
.. *
nd
phase construction work, outside
electrification, etc.
(.3 %c#e&"le of Pro&"ction
Bntrepreneurs are already in business since last year. ?harif crops of *88.-80
are in the field which would be harested during 4ct-3o. and rabi sowing
shall be undertaken during 3o-5ec. ,art of kharif production is sold in 3o-
5ec for rabi sowing and balance is carried for Aune sowing. Similarly, part of
rabi produce is sold for kharif sowing in Aune-Auly and balance is carried for
3o. sowing. Ehile working out capital requirement, it is presumed that 981
would be sold immediately and +81 would be carried forward. Ehile +81 of
kharif production is sold in ne!t financial year, whole of rabi produce is sold in
the same financial year in which it is produced<purchased.
(.( )ariable Pro&"ction Cost
Schedule of operational e!penses is gien in &nne!ure #.
(.(.1 Cost of ra; see&
,addy seed shall be grown by the farmers on contract basis. ,roduce shall be
receied at the processing plant after moderate cleaning by farmer and would
be purchased with ad2ustment of weight on 1*1 $wb% moisture content.
#t has been obsered that generally good seed recoery after processing is
possible to the e!tent of ;81 after processing. 4ut of the remaining 181,
almost *1 of material is waste and alueless while another :1 can be sold as
grain at reduced price for milling and consumption. The cost of raw seed has
been taken at a rate of /s 0.8 per quintal.
(.(.2 %ee& certification an& !ac=ing cost
Certification and packing material cost includes the cost of bags, labels,
leaflets, tags, lead seals etc. Cost of these materials has been worked out,
taking into consideration the present cost and worked out on per quintal basis
as gien in Table 18.
Table 1-. Seed certification and packing cost
%.
No.
Ite9 Rs?,"intal Re9ar=s
1. >ags +9..8 Seed will be packed in 2ute
canas bags costing /s 1. per
bag
*. Certification materials
like labels, leaflets,
tags, lead seals,
thread etc.
*..8 Fabels H /s 198 per 1888.
Feaflet H /s *.8 per 1888.
Tags H /s 198 per 1888.
Fead seals H /s +8 per kg.
Thread H /s -8 per 1888 m.
Total A
(-.--
For the purpose of financial calculations cost of certification and packing has
been taken at the rate of /s -8 per quintal on processed seed quality.
(.(.3 %ee& !rocessing cost
Seed processing mainly inoles e!penditure on electricity and diesel and
labour inoled in processing operations. Total power required for operation of
the plant is *1 kE. The entire machines will not operate all the time.
,resuming 8.:81 of ma!imum power demand in processing plant, it is
estimated that energy consumption in a shift of 9 hours would be
appro!imately 11* kEh, which will cost about /s .88 per shift. Similarly, .
labourers engaged in a shift will inole e!penditure of /s .88. &ssuming that
:8 quintals of paddy would be processed and packed in a shift, the cost on
this component would be appro!imately /s 1*..8 per quintal, which has been
considered in calculations. Separate proision for diesel has not been made.
#t is presumed that when electricity is not aailable, the saing in the cost of
electricity will support the e!penditure on diesel for running the generator set.
(.(.( Trans!ort cost
Seed production is proposed to be organised in the nearby areas of
processing plant. (aterial shall be deliered by the growers at the processing
plant at their own cost. Similarly, dealer<farmer will lift the material from the
godown and hence no proision for transportation has been made.
(.(.. Re!air an& 9aintenance
,rocessing machineries shall be purchased with enough spares to support +
years of requirement. & proision has been made for repair and maintenance
to the tune of 11 of the cost of plant machinery and buildings.
(.. %e9i )ariables an& FiCe& Cost
(...1 %alaries
& manager shall be appointed by the company at a salary of /s .888 per
month. ,roision for 0 months salary has been made in the first year i.e.
*88.-80. &nother staff $an &ccountant% shall be appointed at a salary of /s
+888 per month from the year *889-8:. ,roisions hae been made
accordingly.
(...2 >&9inistrative an& general over#ea&
& proision at the rate of 11 of turn oer has been made towards this
oerhead from the year *880-89 onwards.
(...3 %elling an& !ro9otional over#ea&
This will be mainly to popularise the seed. ,roision of 11 of turnoer has
accordingly been included in the pro2ect from *880-89 onwards.
(...( Ins"rance
,roision of insurance has been made at the rate of 8..1 of capital cost from
*880-89 onwards.
(.0 T"rnover
Seed produced by the company would be sold at a net rate of /s 1188 per
quintal. This rate would be for ;81 of the material purchased, :1 of the
material would be sold at /s .88 per quintal. The remaining *1 may fetch
some income but has not been considered as income for calculation purpose.
Schedule on purchase and sale of seed and e!penditure and recoery
inoled therein is gien in &nne!ure ##.
(.1 Ot#er Financial Cost
(.1.1 De!reciation
5epreciation is taken at the rate of .1 for building and 181 for plant
machinery. For the first year, no proision shall be made on account of
depreciation, as the plant would be completely ready by the end of *88.-80.
Cear wise depreciation as gien in Table 11 has been included in financial
calculations.
Table 11. Cear wise depreciation on machinery and building
6Rs in la=#s8
Dear <ac#iner' :"il&ing Total
*88.-80 - - -
*880-89 1..8 1.*. *.9.
*889-8: 1.+9 1.1. *..*
*88:-8; 1.*+ 1.1+ *.+0
*88;-18 1.11 1.89 *.1:
*818-11 1.18 1.8* *.1*
*811-1* 8.;; 8.;9 1.;0
*81*-1+ 8.;8 8.;* 1.:*
*81+-1- 8.:8 8.:: 1.0:
(.1.2 Interest on long/ter9 loan
,roision of interest on loan of 1881 inestment has been made at a rate of
11.9. 1 on long term loan and 11.*. 1 on short term borrowing $limit% and
interest thereon during the first year i.e. till (arch *880 shall be capitali)ed
and proision for payment of loan has been made from the year *880-89.
@oweer, as per proision of the scheme interest on subsidy amount shall not
be charged and it is kept separately. Subsidy is ad2usted as last instalment of
term loan and interest shall be credit of entrepreneurs. Similarly, proision of
11.*. 1 interest is made on the limit fi!ed $:.8 lakhs% by the bank for the
period of 0 months in first - years.
(.1.3 TaC
,roision for ta! at a rate of +81 and 181 surcharge on ta! amount, on net
profit after interest liability and depreciation, has been made after the
company start making cumulatie profit from the year *88;-18.
(.2 <argin <one'
Bntrepreneurs proposes to place :.8 lakhs required working capital for first -
years. 4nly needed amount of working capital< limit shall be drawn to meet
operational needs such as purchase of seed, processing cost etc.
(.3 Profitabilit' an& cono9ics
,rofitability of the pro2ect is gien in Table 1*. #t may be seen that the pro2ect
would start earning profit from the year *880-89 itself. Trend of profitability
oer the years can also be seen from the Table.
(.1- Rate of Ret"rn
Financial rate of return works out to be more than *81 before payment of
interest on long-term loan and ta!es. The pro2ect is therefore sound enough
for financing.
(.11 :rea= ven >nal'sis
The break een point indicates the leel of sales at which the semi ariable
and fi!ed e!penses of the pro2ect are absorbed. #n the proposed pro2ect, the
break een point is reached when a turn oer of /s -8.*. lakhs is obtained or
0..; quintals of seed is handled amounting to ++ 1 of business at maturity.
(.12 Cas# Flo;
Cash flow analysis for a period up to the year *81+-1- is gien in Table 1+
(.13 Pa' bac= !erio&
&nalysis on cash flow and repayment gien in Table 1+ indicate that total loan
$long term% drawn in establishment of the pro2ect is returned by the year *81*-
1+ in the year wise break-up gien in Table 1-.
Table 1( Fong-term loan repayment schedule.
D>R PRINCIP>L RP>D<NT
30 la=#s
INTR%T 6Rs in La=#s8
*880-89 *.88 0.1*$4n *0 lakhs%
*889-8: *.88 *.:*
*88:-8; *.88 *..;
*88;-18 +.88 *.+.
*818-11 +.88 *.88
*811-1* -.88 1.0.
*81*-1+ ..88 1.1:
*81+-1- ..88 8..;
*81+-1- 18.88 $64# Subsidy% -
Total +0.88 1;.+
Thus, total principal amount returned J +0.88 lakhs $18.8 lakhs by 64# = *0
lakhs by entrepreneur% and #nterest paidJ 1;.+ lakhs$on long term loan%.The
repayment schedule will be drawn on the loan amount $including subsidy% that
the total subsidy amount is ad2usted after the full bank loan component and no
interest is charged on subsidy amount. The subsidy released by 6oernment
of #ndia will be kept in a separate borrower-wise account.
(.1( Concl"sions
Kuality seed is one of the most important input for enhancing crop production
and productiity. The gap between the aailability and the requirement of
quality seed is quite high in the country and therefore needs proper attention.
@ence, the efforts of central goernment to encourage the
farmers<entrepreneurs for quality seed production and processing by
proiding subsidy is time drien and would proe to be a worthy e!ercise in
meeting the country"s need in the agricultural sector.
The pro2ect has been proposed with the aim to establish a * tonne per hour
capacity seed processing plant. &s is eident from the financial analysis that
the pro2ect is sound and estimated results are encouraging and hence the
pro2ect may be considered for financing under the scheme of 64# for boosting
seed production in priate sector.