Growing garlic as a business: benefits and organization

How much can you earn growing garlic

Many novice businessmen are skeptical about such an undertaking. They believe that the consumption of garlic, compared to other vegetables, is much lower, and you can’t earn much from growing it. But only people far from agriculture can reason like that. In fact, garlic is a very valuable food product. Every family regularly consumes it, albeit in small quantities, and from the middle of summer, when the period of conservation and harvesting begins, the demand for the product increases many times over.

Analyzing the profitability of the garlic business, it should be noted that when growing a crop in open ground, you can easily do without the use of special equipment, which significantly reduces costs at the development stage. In addition, the ratio of yield and cost of the product is very attractive – the purchase price of the product starts from $ 1,3, and the retail price is two or more times higher. The average crop yield is 13 tons per hectare, while planting material per hectare will need approximately 1000 kg or 1 ton.

It is easy to calculate that the profit from the sale is quite high. But it all depends on the volume of production and the method of implementation. The highest profit can be obtained from retail sales – the cost of garlic on the market varies between 100-150 rubles per kilogram. If this method is not suitable, you can sell products to wholesalers or resellers. In this case, the cost of 1 kg will be 60–70 rubles, but the benefit is that all the goods are sold at once.

Of course, industrial cultivation of a crop in large volumes will bring higher profits. But keep in mind that farming requires special equipment, storage facilities, hiring personnel, and these are all additional costs.

According to estimates, the profitability of industrial cultivation of winter garlic is 70-80%, while in retail sales it reaches 150%.

As can be seen from the figures, the garlic business can be considered stable and highly profitable.

Organization of garlic business

Drawing up a business plan is the initial stage of organizing any business. Careful planning will ensure a safe and profitable business, as well as protect against possible risks and obstacles. But here it all depends on the scale of the enterprise. It is unlikely that a pensioner has a need to draw up a business plan for growing garlic in his summer cottage. However, for a farm, planning is necessary and inevitable, since doing such a business alone will not work.

Calculation of capital for planting and cultivation

A garlic growing business is especially profitable if you own a land plot, as additional capital will be required to rent the land. If your entrepreneurial activity in this direction is just beginning, then it is better to limit yourself to a small area, no more than 1 hectare – it is problematic to process a large area manually. You will have to hire staff, which will also result in additional expenses.

In addition to the land plot, sevok (garlic teeth) is also needed. The market price for seed is 30-200 rubles per 1 kg. The cost depends on the variety of garlic, so when buying seeds, think carefully about what is more important – to save on cheap varieties and get an average yield, or to purchase the best seed and get a high yield and a big profit.

Fertilizers are needed to grow garlic outdoors. Three times feeding of plants during the season will cost 4-5 thousand rubles. It is possible that one or more temporary workers will be needed during planting and harvesting, whose labor will also need to be paid.

If you plan to retail the crop, you need to take care of the storage room and storage containers. In this regard, it is more profitable to sell products in bulk and immediately in order to reduce storage costs.

In general, the total initial capital for this business can be 20-40 thousand rubles. It all depends on whether you will hire assistants, or manage on your own, whether you need to rent a warehouse, and other working moments. For industrial cultivation of crops in open ground, registration of a farm is required, and this is a completely different investment.

You should consider the costs of such organizational moments:

• registration of entrepreneurship;
• land lease;
• purchase of equipment, inventory;
• seed material;
• mineral additives and fertilizers;
• rental of storage facilities;
• hiring staff and paying them.

In this case, the size of the initial capital will depend on the scale of garlic cultivation in the open field. An approximate calculation of fertilizers and seed is presented above on the example of an area of ​​1 ha, plus the cost of solving organizational issues.

The subtleties of marketing garlic

If production volumes are large, then marketing issues must be resolved even before harvest.

First of all, pay attention to the enterprises and organizations involved in the production of food products. Large supermarkets, cafes or restaurants, meat processing enterprises, canneries can become your potential consumers.

If you manage to establish contact with them, then there will be no sales problems in subsequent years. When giving garlic to stores, be aware that they often take goods for sale there. This means that you will receive your income only after all the goods are sold. If this option suits you, then be sure to protect yourself from possible problems by concluding an agreement that specifies a fixed transaction amount.

Selling garlic in bulk is attractive because you shift all the risks associated with the storage and sale of products to resellers, and you yourself get a net profit. Of course, the income is not as great as it could be with retail sales, but there are no more problems with sales.

It is important to understand that profits increase with the expansion of the customer base, so constantly look for new distribution channels.

Video “The Economics of Growing Garlic”

Watch a video about the economic component of the garlic business and its organization.