Fodder crop re-allocation sustainability and risk efficiency

Agricultural and Food Economics

Table 3 Cost of production per year of Rhodes Grass for three farm locations (RO)

Item	Salalah	Hanfeet	Dawkah	Difference
	Coastal area	New location at Najed		Hanfeet-Salalah
Cultivated area/ha	878	878	770	0
Capital cost	4 791 524	7 596 000	7 430 000	2 804 476
Revenue	2 502 300	2 502 300	1 975 050	0
Raw material cost	378 418	506 167	443 905	127 749
Land rent	18 000	50 400	43 200	32 400
Utilities cost	131 700	173 844	152 460	42 144
Vehicle running cost	31 608	40 388	35 420	8 780
Overhead cost	70 240	140 480	123 200	70 240
Labour cost	93 132	93 132	93 132	0
Misc expenses	30 730	30 730	26 950	0
Total variables cost	753 828	1 035 141	918 267	281 313
Administration Salary	140 166	202 566	93 366	62 400
Administration cost	65 850	65 850	57 750	0
Depreciation cost	369 787	572 000	495 600	202 2013
Finance cost	240 000	87 120	85 200	−152 880
Tax	137 120	71 609	45 608	−65 511
Total Overhead cost	952 923	999 145	777 524	46 222
Net profit	795 549	468 014	279 259	−327 535
NPV	2 878 601	−2 895 923	−3 793 210	17 322
IRR	18 %	3 %	−1 %	−15 %