Chapter 3:  Functions Within an Agri-City

3.1  Farming

Most of the farming will be done on the 50,500 fields of Size 2 (25 x 80 meters = 2,000 sq. meters).  Each field has water available for irrigation.  The goal is to promote labor-intensive raising of cash crops, that maximize the cash income that a family can earn by farming on their field.

The produce raised will be primarily garden vegetables (lettuce, cabbage, cauliflower, Brussels sprouts, carrots, radishes, onions, tomatoes, paprika, beans, peas, artichokes, cucumbers, spices, etc.).  Less labor-intensive products can also be grown, particularly when members of the family have other jobs requiring much time.  As an example, fruit trees could be considered (oranges, limes, grapefruit, bananas, avocados, mangoes, pears, plums, cherries, apples) as well as grapes and flowers.

As shown in Figure 2-1 above, such a field can typically be planted with 140 rows that are 22-meters long and separated by 50 cm.  If small plants are planted, requiring a separation of 20 cm. each within a row, this would allow 15,540 plants at one time.

As a first preliminary estimate, we will assume that 3 kilograms of vegetables as produce can be raised per meter in each of these 140 rows.  The total yield would therefore be 140 rows x 22 meters x 3 kg/m = 9,240 kilograms per crop.  With 4 crops per year of 90 days each, the total yearly production would be about 9,240 kilograms x 4 = 36,960 kilograms / year.

If the Tenant can achieve a net profit of 10 cents per kilogram (wholesale price to a distributor minus seeds, fertilizer, insecticides, and irrigation water as well as amortization on tools), this would give the family of the Tenant a net income of about 3,696 USD per year.  Even if they only earn 5 cents per kilogram produced, this would still give them a net income of 1,848 USD per year.

Nearly all of the Tenants moving into an Agri-City will have current incomes of substantially less than 50 USD per month, i.e. less than 600 USD per year.  Including the substantial side benefit of being able to feed their family free from their own production, this is a major improvement in their well being.  Even with a net profit of only 1 cent per kilogram produced, they would be better off than before (but would not be able to pay their rent).

There should be a substantial margin between net profits per month and year over their previous status, in order to provide strong incentives for working hard with high productivity.  Part of this margin will be required to

• pay rent for the field and their half of a Double House,

• pay for utilities and services, including water for irrigation,

• make installment payments for furniture, equipment, and clothing,

• repay for food advanced for them to get started, until they harvest their first crops, and

• saving towards buying their field and house or for starting another small business.

For the Agri-City as a whole, production of about 37 metric tons per year x 50,500 fields when the Agri-City is completely implemented, this would amount to a total yearly production from the Agri-City of about 37 metric tons per field x 50,500 fields = 1,868,500 metric tons per year.  Divided by 165 days/year, this would amount to an average of about 5,120 metric tons per day.

Probably no more than 10% of this production could be sold in nearby cities, implying that about 90% of this production would need to be exported.  If it is exported in refrigerated 40-foot containers, with a maximum of less than 50 metric tons per container, this would involve shipping an average of nearly 100 such containers per day from the Agri-City for export.

There is a strong market for such agricultural products in the region, that can accept such production from several Agri-Cities in parallel at attractive prices.  These nearby countries include:  Egypt, Jordan, Saudi Arabia, Yemen, Oman, United Arab Emirates, Kuwait, Iraq, Iran, Pakistan, and Kenya (mainly for tourists on the coast).  An average of substantially more than 10 containers per day to each of these 11 countries should be very realistic.

The logistical problem will be transporting refrigerated 40-foot containers to ports quickly and efficiently.  Technically, this is only feasible with a modern railroad system.  It must have the international standard gage of 1.435 meters for loads of 23.5 tons per axle at maximum speeds in the order of 170 km/hour -- enabling shipment overnight from the Agri-City for loading on REEFER ships the next morning at a port.  The existing railroads

• in Ethiopia and Djibouti, with 781 km. from Addis Ababa to Djibouti with its 1-meter gage track ,and

• in Eritrea, with 306 km. from Akordat to Massawa with it 0.95-meter gage track,

are generally not adequate.

Ethiopia and Djibouti have been upgrading their railroad from maximum axle loads of 13.7 tons per axle to 17.2 tons per axle and to extend the maximum speed from about 30 km/hour to about 70 km/hour.  They are also upgrading the strength of the rails, from the old mixture of 20, 25, or 30 kilograms/meter to 36 kilograms/meter -- still far less than the standard 64.5 kilograms/meter used in Europe for heavy traffic at high speeds on 1.435-meter gage railways.

A freight train traveling 781 km from Addis Ababa to Djibouti at a peak speed of 70 km/hour, but average speed of 45 km/hour, will require over 17 hours.  If it could travel at a peak speed of 170 km/hour, but average speed of 140 km/hour, it would only require 6 hours.  The last several hundred kilometers are through a very-hot desert, which would tax the cooling capabilities of any standard refrigerator units during the daytime.  This one of several reasons why higher speeds for overnight shipments are essential for heavy traffic in the long term.  However, this railroad can be used initially for at least a low volume of traffic.

One or several large Agri-Cities will need to be developed gradually, as the transportation infrastructure is developed in parallel to support such levels of exporting.  A steadily-growing market for high-quality transportation services should generate the necessary economic incentives for developing this infrastructure as it is needed.

Initially, each Agri-City will market its daily production of fresh vegetables to local cities and communities within less than 100-kilometers distance by road, using trucks for transport.  When this local market is saturated, it will be necessary to have at least a local airport or runway for air-freight cargo shipments nearby.  This will enable marketing for export to begin gradually, with smaller profit margins due to the costs for air-freight transport, in preparation for larger-scale exports via refrigerated 40-foot containers by rail and sea later.

Some traditional grains can be produced in each Agri-City on a small scale on larger farms.  They could potentially supply local demand for such products within the Agri-City.  However, they will probably be more important for feeding poultry, sheep, goats, and cows for locally producing meat, eggs, and milk for local consumption within the Agri-City.  Whenever feasible, the Agri-City should be used as a local market for meat, eggs, and milk produced by indigenous farmers and nomads, rather than trying to become completely self-sufficient by itself.  This will improve the general economy in the region around the Agri-City.

3.2  Manufacturing and Services

Local residents should be encouraged as entrepreneurs to engage in local manufacturing operations for producing products that will be consumed locally, such as:

• concrete building blocks,

• door frames, doors, window frames, and windows,

• metal gates,

• pre-fab concrete walls and roofs for buildings,

• standard agricultural tools,

• crates for packing and shipping local vegetables and fruits,

• standard furniture used in local houses and apartments,

• mattresses,

• clothing, and

• custom-made cable-TV tuners for local educational use.

They should be encouraged to offer part-time jobs, with on-the-job training, paid on the basis of actual productivity rather than just time spent.  This would encourage the emphasis upon an entrepreneurial spirit with self-responsibility among all residents of the Agri-City.  This experience would prepare them for obtaining full-time jobs later after leaving the Agri-City.  These enterprises could hire external professionals and experts for such training and initial supervision of such manufacturing operations.

Likewise, local residents should be encouraged to take the initiative as entrepreneurs in offering services to residents of an Agri-City, such as

• to buy, transport, distribute, and re-sell the vegetables and fruits produced in the Agri-City at other regional markets,

• to plant seeds and raise plants until they are ready for transplantation by other residents, such as for citrus-fruit trees and tomato plants, and

• to perform simple accounting and word-processing services for other residents.

3.3  A Variety of Educational Opportunities

A variety of educational opportunities will be available, with a focus upon individuals educating themselves at their own pace, rather than formal schools with grade levels.  The cable-TV station will provide the local official TV program, possibly a few entertainment programs, possibly news and entertainment in a variety of languages to promote learning other languages, but mainly educational programs.  These TV-video educational programs will include

• teaching how to read and write in several different languages and a several different levels in parallel on different channels and times of day,

• teaching core academic subject areas, such as mathematics, science, and history;

• teaching special subjects related to the project, such as practical aspects of tilling the ground, planting different kinds of seeds, use of fertilizers and irrigation, caring for plants, insecticides, harvesting, preparation of foods for eating, simple accounting for family business operations, etc.; and

• teaching vocational subjects to qualify for getting other kinds of jobs, such as construction skills, office skills, using computers, etc.

Approximately 30 to 40 different channels of programming should be available during the daytime and evenings.  It may be technically and economically feasible to offer these channels in 2x the resolution of standard PAL TV, i.e. with 1280 x 1024 pixels instead of only 640 x 512 pixels, for better quality of multi-media educational programs.  This would make it easy for students to read more than 80 characters of text per line.  It would require the custom design of a TV tuner that could handle both standard PAL channels and 2x-resolution multi-media channels.  These TV tuners could then be manufactured, assembled, tested, and sold locally in the Agri-Cities -- providing residents with valuable part-time work experience in producing high-tech products.  This would qualify them later for obtaining similar full-time jobs at good pay when they are ready to leave the Agri-City.

Approximately 10 or more standard PAL channels should be made available by re-transmitting from international satellite broadcasts, to include:

• the main local TV programs,

• at least 1 news program in each of the main foreign languages (English, Arabic, French, and Italian), and

• a few standard programs showing films in these languages.

The goals in showing such programs include,

• providing general education on news events around the world,

• providing invaluable practice in learning foreign languages, and

• some entertainment after hard manual labor during the day.

School classrooms will also be available for use during the daytime primarily for children and during evenings primarily for adults.  Formal training and testing progress under the guidance of teachers will complement and control independent education by TV and reading independently at home.  These small "schools" can be distributed geographically throughout an Agri-City in the spaces between adjacent villages, possibly for each local school to support 4 neighboring villages, i.e. for 4 x 320 = 1280 families.

3.4  A Variety of Job Opportunities

A variety of jobs will be available within the project, in addition to and complementing the opportunities for working full-time or part-time on the plot of land assigned to each family.  These jobs include:

• a large amount of construction work building new apartments, houses, other buildings, and infrastructure as the project expands and

• services such as teaching, medical treatment, maintenance work, and administration.

• Other entrepreneurial activities will be available than just farming, to include

• operating small local shops buying and selling a variety of products;

• marketing companies that buy local products, transport them to regional markets, and sell them;

• manufacturing products used locally, such as furniture and farm tools;

• providing services locally, such as nursery services in raising plants ready for transplantation; and

• computer programmers can even use the ISDN telephone options for developing computer software in teams while in constant communication via telephone, fax, modems, and Internet with distant clients (the same applies for accountants, translators, etc.).

These jobs should provide on-the-job training and provide practical experience that will assist local residents in obtaining well-paid jobs in these fields when they leave the Agri-City.

Chapter 4:  Models for Creating and Operating an Agri-City

4.1  Models for Construction

The whole project will be broken down into at least a dozen phases for developing less than 10% of the total real estate in each phase.  These phases will be spread out over at least six years.

The following sub-phases are required for each phase of construction:

• a design phase for developing architectural plans,

• a surveying phase for placing land markers for streets, paths, and plots of land,

• laying underground pipe and wiring under future paths and streets for water, sewage, electricity, telephone, and cable TV,

• building streets and paths,

• laying foundations for houses, apartment buildings, and other buildings,

• constructing buildings on these foundations,

• constructing fences around plots of land, and

• furnishing buildings.

The first housing built will be used to temporarily house construction workers.  The first poor people to be resettled will initially receive training and jobs doing construction work.  Some skilled people will also be required for training unskilled workers and supervising construction work.

Houses will have a standard blueprint.  Re-usable forms will be made for casting the standard foundations for each Double House on an "assembly-line" basis, moving from one house to the next in a row.  It may be appropriate to locally manufacture concrete blocks for building walls as well as windows, window frames, doors, and door frames.  The walls could be constructed using simple masonry techniques with pre-fabricated concrete blocks and cement, inserting window frames and door frames as appropriate, and inserting conduits for pipes and wires.  Or, complete walls can be pre-fabricated centrally.

The roof should create a double layer with air circulating between the two layers -- for thermal insulation to keep the house from heating too much during the day.  It should also extend over a patio on the rear side of each house.  The choice of materials will depend upon local availability and costs.  Gutters for rainwater are not required initially but can be added later.

Floors should be of simple durable terrazzo.  After the plumbing and wiring has been completed, the walls can be covered with plaster inside and an appropriate masonry sealer or stucco on the outside.  The walls of the bathroom and at least part of one wall in the kitchen will be covered with low-cost ceramic tiles.

Each house should be surrounded by a chain-link fence with a key-lock on the entrance door on the path.  Each half of the plot of land with a double house will be divided by a chain-link fence in the middle.  There could be an optional door connecting the two yards in back.

Each of the Size 2 plots of land for farming should be surrounded by a chain-link fence.  Three water faucets, with adapters for connecting hoses, should be installed for irrigation purposes, one every 20 meters along the fence next to one neighboring plot of land.  There should be a door opening onto the street, that can be secured by a simple padlock.  There should be a simple shed in a corner on the street side for storing basic tools, fertilizer, etc., that also can be locked.

4.2  Model for Recruiting and Training Construction Workers

Skilled technicians will be recruited for working several years at the site.  They will train unskilled workers and supervise teams of unskilled workers for the actual construction work.

Some unemployed poor people will be recruited for working several years on construction work at the site.  They may be single or have families.  They will need appropriate housing.  Their wages can increase as they learn skills and become more productive in their work.

Some unemployed poor people with families, who want to have a farm, will also be recruited for low-level construction work for a period of several months when they first move to the site with their families.  After they have planted their fields and have spare time, they can also continue to work part-time on construction work.

4.3  Model for Recruiting and Training Farmers

Poor families will be recruited mainly from the slums of cities, seeking primarily families that are unable to find sufficient work for survival in a city environment.  The major goal of this project is to offer them opportunity to become self sufficient at a reasonable level of prosperity by working diligently as farmers.

"Families" can be defined flexibly as groups of 5 or 6 people living and working together.  A "family" may be a married couple with children, two or three married couples without children, a married couple plus children and elder relatives, 4 or 5 single non-related men living together, 4 or 5 single non-related women living together, etc.  They may work exclusively on their plot of land, exclusively in other jobs available in the complex, or in a mixture of the two.

If a family has no prior experience with farming, they may be settled first in an apartment, be given simple construction work to get started with some income, and a small plot of land of Size 1 to get started with farming.  Video programs will be offered on TV in several languages starting at elementary levels and explaining the fundamentals of farming.  They can practice these fundamentals on their small plots of land.  Agricultural trainers can visit them, assist them in getting started, and correct their errors.

After these beginners have demonstrated sufficient proficiency in the fundamentals, they can move to a half of a Double House with their family and receive a plot of land of Size 2 to farm.  Again, they will receive additional training from TV videos and agricultural trainers will visit them to assist them.  In addition, one experienced farmer, who is successfully farming a plot of land of Size 2, can be assigned as "sponsor" for each novice.  The novice can spend a half a day working with the experienced farmer on his plot of land and then the experienced farmer can spend a half a day working with the novice on his plot of land.

A poor family with prior farming experience may be able to start with a Size 2 plot of land.

A farmer who is successfully farming his Size 2 plot of land will qualify technically for moving on to a much-larger Size 3 plot of land.  He will also need to have earned and saved enough profits from farming his Size 2 plot of land to make a nominal down payment for purchasing the Size 3 plot of land plus house.

Additional training will be offered by videos on TV for both improving skills at farming as well as learning other professions.  Those families who do not want to remain farmers for the rest of their lives can use this phase to learn skills that will enable them to support themselves in other professions.

The whole project will be operated on an

• easy in,

• easy advancement, and

• easy out

policy basis.  Families will be able to enter the project at any time and any level, depending upon their pre-qualifications and an appropriate combination of housing and land available to accept them.  Families will be able to advance from stage to stage, as they qualify themselves to do so and appropriate housing and land are available.  Families will be able to leave at any time when they feel that they have better opportunities elsewhere.  Families will be free to stay permanently and to buy their own house and land if they so desire.

4.4  Model for Farming Operations

A family with half a Double House and a Size 2 plot of land will be required to pay an appropriate rent for each.  They will also be required to pay an appropriate "tax" to cover their share of communal operating expenses.  To get started farming their plot of land, they will need tools, fertilizer, seeds, water for irrigation -- and some time before they can harvest their first small crops.  They will be given an appropriate line-of-credit for buying such tools, fertilizer, seeds, etc. as well as for their rent and their bills for utilities.  This will also allow them to buy food and work clothes for this start-up phase.

After the family is producing enough food for its own consumption, it will start selling its excess production of food for cash.

Two or more competing private entrepreneurs will be assisted in establishing operations as wholesale merchants of food produced in the complex.  They will buy surplus food from the farmers, transport it to other cities and markets in the region, and either sell it wholesale or retail there for the best possible prices.

The complex will have one or more privately-owned banks where individual families of farmers may have bank accounts.  Most financial transactions will be paperless through these accounts, rather than with cash.  One reason is to avoid the risks of theft.  Farming families will be able to buy tools, buy groceries, pay rent, pay taxes, pay for utilities, etc. from their bank accounts and will receive their income from sales of foods deposited to their bank accounts. These banks will be computerized to make such operations safe and efficient.  Each merchant or provider of services will be able to receive payments by direct bank transfer.  They will have computers of their own, interconnected in a local intranet within the complex for this purpose.

All farming families will be encouraged to systematically save part of their earning from selling their excess production of food.  After they have accumulated sufficient savings, they will have an option for buying the house and plot of land that they are farming.  They will then no longer need to pay rent for either.  They will be free to re-sell this property at any time at any price they can get for it.

When progressing from a plot of land of Size 2 to a much-larger plot of land of Size 3, a farming family will be required to make a nominal down payment for the purchase of this property.  This requirement assures that they have proven their ability to earn and save income from their smaller plot of Size 2 before the larger and more valuable resources of a larger house and plot of Size 3 is entrusted to them.

4.5  Model for Complementary Urban Renewal Projects

One difficulty in clearing a slum in a city and re-developing this property is that it is necessary to first relocated all of the poor people currently living in the slum.  This project, for resettling poor people from urban slums onto rural farms, solves this problem.  Once a slum is identified for clearing, the current residents of the slum can be given first priority for receiving half of a Double House plus a plot of land of Size 2 for farming in the complex.  For those who insist upon staying in the city, poor people in other slums can be given slots in this complex and the poor people from the first slum who want to stay in the city can move to their homes in the second slum.

In this way, slums can be cleared systematically, starting in the inner cores of cities.  In the center of the cities, these slums can be replaced with office buildings, factories, and medium-class apartment buildings.  Outside the inner cores of cities, cleared slums can be replaced with medium-class duplex and single houses.

After poor people have succeeded in becoming economically self-sufficient on their small farms, and have improved their education and skills sufficiently that they can obtain good jobs in a city, they can return to a city.  They can then move into a medium-class home in the former slum area where they lived without a job before.

For these reasons, it may be appropriate to define complementary projects for urban renewal to proceed in parallel with resettlement of poor people onto rural farms.

4.6  Model for Flow of Human Resources

The flow of poor people from urban slums through the opportunities of an Agri-City is illustrated in Figure 4-1 below.

Figure 4-1:  Flow of Human Resources

These poor people establish economic self-sufficiency early while living in the complex.  They can then afford educational opportunities via cable TV, evening courses in schools, and on-the-job experience in at least some other professions.  They can progress from small to larger farms, if they become sufficiently proficient as farmers, work hard enough to earn and save enough money to do so, and they want to do so.  Otherwise, they can return to urban life, with more education and skills than when they left a city, with a better chance for obtaining a semi-skilled or skilled job at a level that allows them to support their families at a reasonable standard of living.

This is a recycling process.  Instead of trying to train unskilled non-educated people in place in their slums, they are transferred to a rural environment where they can achieve economic self-sufficiency quicker.  They can start earning and saving money to use in establishing themselves as entrepreneurs in a city later -- if that is what they want to do.  At the end of this cycle, they have the option for returning to the the same city they left, or a different city if they prefer, but at a higher level of economic self-sufficiency than when they left.

Chapter 5:  Budgeting

5.1  Costs of Construction

The costs of construction include the following phases for houses, apartments, and Fields of Sizes 1 and 2:

• design and blueprints,

• clearing and grading land,

• surveying and marking plots of land,

• constructing underground conduits

• installing pipes and wiring in these conduits,

• surfacing roads and paths,

• laying foundations for houses and apartment buildings,

• constructing houses,

• installing plumbing and wiring,

• finishing walls and floors,

• constructing fences, and

• furnishing houses and apartment buildings with appliances.

The construction of houses, apartment buildings, fencing plots of land, and completion of streets and paths will be implemented in phases, one after the other, whereby each phase will represent less than 10% of the total construction foreseen for the whole Agri-City.

A similar set of phases will be required for constructing the Center of the Agri-City.

Separate construction sub-projects will be required for

• the Water-Purification Facilities,

• the Sewage-Treatment Facilities, and

• interfacing with the environment, such as inter-connections for electrical power, telephone, local road network, etc.

The first two facilities will have about 16 identical modules each, whereby one module will be installed after the other as additional capacity is required.  The costs will be broken down as

• costs for preparing the sites of these two facilities plus

• costs for installing each module at each facility.

5.2  Costs of Furnishings

The following furnishings are foreseen for each half of a Double House.  Price estimates will need to be obtained later when funding is available for this work.

• Master Bedroom

  • 1 x double bed

  • 2 x simple mattresses and pillows

  • 1 x set of double bed linen

  • 1 x double blanket

  • 1 x clothes cabinet

  • 1 x writing desk

  • 1 x ceiling lamp

  • Children's Bedroom

  • 2 x double-deck beds -- children's bedroom

  • 4 x simple mattresses and pillows

  • 4 x sets of single bed linen

  • 4 x single blankets

  • 1 x clothes cabinet -- children's bedroom

  • 1 x writing desk -- children's bedroom

  • 1 x ceiling lamp

• Living Room

  • 1 x coffee/dining table -- living room

  • 8 x simple chairs

  • 1 x book shelf

  • 1 x stand for TV and telephone

  • 1 x ceiling lamp

• Kitchen

  • 1 x electric refrigerator with small freezer compartment

  • 1 x electric stove, 4 x plates & oven

  • 1 x double washbasin

  • 1 x shelves for dishes, pots, & utensils

  • 1 x set of dishes, pots, & utensils

  • 1 x table

  • 4 x simple chairs

  • 1 x ceiling lamp

  • 3 x dish towels

  • 1 x broom

  • 1 x mop

• Bathroom

  • 1 x fixtures for shower

  • 1 x single-bowl washbasin

  • 1 x flush toilet with low water consumption

  • 1 x mirror

  • 1 x set of shelves

  • 1 x ceiling lamp

  • 6 x towels

• Patio

  • 1 x table

  • 1 x outside lamp

• Farm Plot

  • 1 x water hose

  • 2 x water buckets with sprinklers

  • 2 x forks, shovels, hoes, trowels, pails

  • 1 x pick ax

  • 1 x wheel barrow

  • 1 x set of sticks with string

  • 1 x shed with padlock on door

  • 1 x work table

  • 2 x simple folding chairs

• High-Tech Appliances and Equipment

  • 1 x analog telephone

  • 1 x 15"-monitor for HR TV and/or TV, 1280 x 1024 pixels

  • 1 x special TV-cable tuner for PAL & HR TV & FM/AM

  • 1 x pair of HiFi boxes

  • 1 x pair headphones

5.3  Projected Revenues for the Agri-City

The revenues from this project will consist of:

• fees for infrastructure and overhead costs,

• installment payments or rent for houses, apartments, plots of land,

• installment payments for furniture, appliances, and furnishings,

• sale of electricity, telephone services, and water.

For the Double Houses, we will initially assume costs

• for infrastructure of 2,000 USD for each half,

• for construction of 4,500 USD for each half, and

• for acquisition and/or construction of furniture, appliances, and furnishings of 1,250 USD.

For infrastructure, a fee of 2,000 USD / 20 years = 100 USD / year will be charged.  An additional fee of 20 USD / year will be charged for overhead costs, allowing a Tenant to live within the Agri-City.  The total fee will be 120 USD / year = 10 USD / month.  The first payment can be deferred for 6 months.

For the half of a Double House and the Field of Size 2, the Tenant will be given options for either

• purchasing them outright,

• purchasing them with installment payments over 12 years, or

• renting them indefinitely.

The sales prices to Tenants for an outright purchase can be:

Since the Agri-City will expect to receive the land free from the local governments for this project, it will make an interesting profit by developing and selling this land -- which will assist in making the project profitable, which is essential for financing the whole project.

The payments for Tenants buying on installments over 12 years can be:

The monthly payments for Tenants renting (indefinitely) can be

When a Tenant who has bought property outright or on installments leaves, the Tenant would have options for selling the fraction of ownership, already paid for, back to the Agri-City at a preset price or to a private party at a free-market price.  The Tenant could then treat this sales price as savings available for making a new entrepreneurial investment elsewhere.  It could be desirable to exclude the third option, of only renting, to force Tenants to save and accumulate wealth in the form of property ownership while living and working in an Agri-City.

The first installment payments or rental payments for both half a Double House and for a Field of Size 2 can be deferred by 6 months.  Alternatively, it might be reasonable to charge rent starting at the end of the 3rd month and start charging installment payments at the end of 6 months.

The furniture, appliances, and furnishings available from the Agri-City, can be sold to the Tenant either

• with a reasonable mark-up of 15% over its own costs or

• on an installment purchase plan.

The Tenant would have the choice of how much the Tenant wants to buy from the Agri-City and will be free to buy such items from other sources on the free-market economy as an option.

If we assume that a Tenant will take advantage of this opportunity for equipping and furnishing his house and field with an average amount costing 1,200 USD.

• the outright sales price would be 1,380 USD and

• the 48 monthly installment payments spread over 4 years could be 32 USD / month = 384 USD / year.

The first of the 24 monthly installments could be deferred by 6 months, to give them the chance to earn their first income from selling produce from their field.

Likewise, utility bills for the first 4 months can be deferred and be spread over the following 4 months to ease start-up operations.

The Agri-City could also make a loan of up to 200 USD to each new Tenant, to buy food and clothing until they earn their first income.  This loan can be repaid in 3 equal installments of 80 USD each starting 3 months later.

A typical Tenant would need to pay to the Agri-City:

The maximum size of payments from a Tenant to the Agri-City is for 1,304 USD / year = 1,304 USD / 12 = 109 USD / month.  This is for the 4-year period while the Tenant is making installment payments for furniture, appliances, and furnishings for his house.

In Section 3.1 above, estimates were made for a Tenant being able to produce 36,960 kilograms of vegetable products per year for selling from a Field of Size 2.  Assuming a net profit of only 5 US Cents per kilogram, this should yield a Tenant a net income of 1,848 USD per year.  If these figures turn out to be realistic, such an income should be more than sufficient for meeting yearly payments of 1,304 USD / year.  This is particularly true when considering the fact that the costs for housing and food are already included <197> and most of these families are typically earning less than 600 USD / year, from which they must still pay for housing and food.

In order to realistically evaluate the feasibility of this project, it will be necessary to develop more-precise estimates for all costs and revenues expected.

5.4  Cash-Flow Model for One Tenant of the Agri-City

During all following half years, the Tenant would only need to pay 60 USD per half year to the Agri-City, because the Tenant will have already bought both the house and the field.

The monthly fees for utilities, based upon usage, should be set to cover monthly operating expenses.  They will not include capital costs for making these services available.

The projected break-even point on the cash-flow model above occurs in the beginning of the 8'th year.  At this projected point in time, the Agri-City will have received the same amount of cash back that it originally spent for one Tenant.  This would enable it to re-invest this sum for a second Tenant.

The projected profit for the Agri-City after 12 years is 4,533.50 USD.  Compared with the estimated investment costs of 7,950 USD, this yields a rate of profit of 4,993.50 USD / 7,950 USD = 57%.  This is not very-high for a 12-year investment.  However, once feasibility and profitability have been demonstrated, this should facilitate obtaining low-interest development loans for international agencies.  Financing most of the project with such loans would provide leverage for the smaller amount of private equity capital invested.

Both the projected break-even point and profit are highly-sensitive upon the actual costs and revenues that can be achieved.  Therefore, it will be essential to quickly perform a more-detailed project study to obtain more-precise data for both costs and revenues.  This more-precise data will be essential for determining the feasibility of this project as a whole.

5.5  Projected Costs for Creating One Complete Agri-City

The current projected costs for creating one complete Agri-City, with one half of a Double House, a Field of Size 2, and the complete infrastructure for each of 50,000 Tenants is roughly estimated at 8,000 USD x 50,000 units = 400 million USD.  With an average of 6 people in the family of each Tenant, this would support approximately 6 x 50,000 = 300,000 residents.  With more-detailed planning and careful design, it is hoped that the actual costs can be brought down to the order of 300 million USD, i.e. about 1,000 USD per person settled in a decent home with all of the ingredients for making successful entrepreneurs out of the family with a substantially higher standard of living than before.  This will also be in an environment conducive for self study and advancing to more-skilled occupations later, either as entrepreneurs or employees in jobs.

Chapter 6:  The Next Steps

The two key next steps will consist of

• developing a more-detailed project proposal with more-precise estimates for the key parameters and

• performing some small experiments with pilot projects to evaluate how the concepts proposed here will actually work in practice.

Prior to the availability of funding for such work, it is not feasible to create a more-detailed project proposal than already presented above in preliminary form.  It already provides a structure and framework for a more-detailed study.

It would not be difficult or expensive to conduct several small pilot projects to evaluate the effectiveness of the various concepts proposed here:

1. It would not be difficult or expensive to buy a tract of land at a potential site for an Agri-City and to mark this land off in fields 25 meters x 80 meters each, as proposed for fields of Size 2.  These fields could be tilled, planted with different potential plants for an Agri-City, and irrigated.  All costs, materials expended, manpower invested, times required, production levels achieved, and revenues obtained from produce can be carefully documented.  This information would provide a sound basis of data for evaluating the general operating concepts proposed as well as for determining whether a size of 2,000 sq. meters is actually optimal for achieving the desired goals.

2. It would not be difficult or expensive to actually build one or a few Double Houses, as proposed above.  Construction would use traditional bricks and mortar instead of the proposed pre-fab concrete slabs for the walls -- because of the costs of generating the capabilities for manufacturing pre-fabricated houses on a very-small quantity.  One could evaluate the costs and functionality of such buildings, to determine whether design changes could reduce costs while increasing functionality.  This would also provide useful estimates for costs as well as times required for construction.  From this basis, it should be possible to project the differences that can be achieved on a larger scale using pre-fabrication methods.

3. One could build several Double Houses, using bricks and mortar for the walls, next to a matching set of fields of the same size and shape as proposed.  One could then recruit test families to move into these houses and to farm these fields as proposed.  It would not be practical to create all of the multi-media educational materials planned for an Agri-City, because of the small number of individuals to be trained.  Therefore, more expensive individual training and counseling from professionals would be necessary.  It will also cost extra for carefully documenting such an experiment, to obtain maximum useful information from it.  This would evaluate the feasibility of taking unskilled persons with different backgrounds, placing them in such a new environment, and training them to perform efficiently and productively as projected.

4. One could even consider a larger pilot project, such as constructing one complete Village as proposed -- with 160 Double Houses and 320 Fields of Size 2 exactly as proposed.  The preliminary estimates of capital expenditures from Section 5.4 and 5.5 above are for 8,000 USD being required as an investment per single half of a Double House plus one Field of Size 2 and infrastructure.  They yield a first estimate of 8,000 USD x 320 families = 2,560,000 USD.  Due to the relatively small scale involved and the large overhead of managing and documenting the experiment, it would probably be somewhat more expensive.  This would provide a more-complete evaluation for the overall concepts and estimated parameters.  It could also be done at a smaller level, such as for implementing only 1/4 of a Village, possibly with land reserved for implementing the remaining 3/4 later if appropriate.  Even if the results from such a pilot project are not successful enough to warrant continuing with the project, this expenditure would not be completely wasted.  It should still be possible to sell the individual houses and fields at prices close to the costs for creating them.

 As soon as the International Development Trust creates the proposed

• Horn-of-Africa Education Trust,

• Horn-of-Africa Institute of Advanced Technology, and

• Horn-of-Africa Venture-Capital Company

as subsidiaries; the IDT could commission them to perform the next stages of project planning as well as performing pilot projects.  If the full project is implemented, then

• the HoA Education Trust could develop the multi-media educational materials for the project,

• the HoA IAT could perform continued research and consulting on the agricultural, economic, and technical aspects of the project, and

• the HoA VC Company could provide venture-capital financing for starting the project, until it becomes profitable and other investors can be recruited.

< Chapters 3-6

© DACO - DAvies COnsulting GmbH 1997

[Note for writers: Bookmarks are installed at the beginning of each section, i.e. 2.1 - 2.7, and for each figure, i.e. fig4-1.]