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PC-1A PILOT PROJECT FOR CIGAR
SUBMITTED TO GOVERNMENT OF KHYBER PAKHTUNKHWADIRECTORATE GENERAL, AGRICULTURE RESEARCH SYSTEM,
KHYBER PAKHTUNKHWA, JULY, 2015
Total Allocation: 5.000 millionProject Cost: 4.260 millionDuration: 1 year (July-June 2015-16)ADP #. 19, Code 150732
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GOVERNMENT OF PAKISTAN PLANNING COMMISSIONPC-I FORM
(PRODUCTION SECTORS)
1. Name of the Project: A PILOT PROJECT FOR CIGAR
2. Location: This Project will be located in the following 6 locations of Khyber Pakhtunkhwa (
Peshawar, Swabi, Bunair, Serai Nourang, Abbottabad and Mansehra)
3. Authorities responsible for:
Indicate name of agency responsible for sponsoring, execution, operation and maintenance
i. Sponsoring Government of Khyber Pakhtunkhwa (ADP 2015-16) through
Agriculture, Livestock and Cooperative Deptt, Khyber Pakhtunkhwa
ii. Execution
Director General Agriculture Research through concerned P.I and Focal Persons
The Project activities will be based at 6 locations of Khyber Pakhtunkhwa
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iii. Operation and maintenance
Principal Investigator (P.I) along with Focal Person/s among the Research Officers of the
concerned Institute/Stations nominated by the Director General to run the project activities at their
respective location.
In case of more than one agency, give their component wise responsibility. For provincial
projects, name of the concerned federal ministry be provided.
NA
4. a. Plan provision
If the project is included in the plan, specify actual allocation.
The Project has been included in the plan and reflected in ADP 2015-16 with an amount
of Rs. 5.000 million. The PC-1 is submitted with an amount of Rs. 4.260 million after
concurrence issued by the Finance Department.
If not included in the current plan, what warrants its inclusion and how it is
now proposed to be accommodated
Include in the current plan.
If the project is proposed to be financed out of the block provision, indicate.
NA
b. Provision in the current year PSPD/ADP
Following is the provision in the ADP 2015-16 of the province
Head Allocation in ADP 2015-16
Project Cost after Concurrence
TF beyond 2015-16
Revenue 5.000 million 4.260 million 0.000
Total 5.000 million 4.260 million 0.000
5. Project objectives and its relationship with sector objectives:
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The objectives of the sector/sub sector as indicated in the medium term/five year plan
be reproduced. Indicate objectives of the project and develop a linkage between the
proposed project and sectoral objectives.
Project objectives:
This project is initiated to stream line the research activities with respect to climate change
and conservation for sustainable use of resources. Overall objective of the project is to introduce
the cigar tobacco crop and associated crop husbandry issues, area identification, growth and yield
assessment and thereafter learning associated procedures like fermentation and air curing etc.
Main objectives during the pilot phase include:
Collection and import of seed material for cigar tobacco.
Cultivation of cigar tobacco under controlled and open environment at different locations
like Peshawar, Swabi, Bunair, Serai Nourang, Abbottabad and Mansehra.
Comparative assessments and area suitability for cigar cultivation on selected sites.
Successful plantation testing, fermentation, curing for cigar suitability
Recommendations for farmers to select best varieties for quality Cigar formation
Relationship with sectoral objectives
The project falls under priority areas of both federal Government as well as Government of
Khyber Pakhtunkhwa. The main objectives of the project are in line with the growth and
promotion of Agricultural sector and mitigating climate change aspect during the pilot phase
In case of revised projects, indicate objectives of the project if different from original PC-I.
N.A
6. Description and Justification of Project
Describe the project and indicate existing facilities in the area and justify the
establishment of the project.
Tobacco technically called nicotiana tabacum has been used as pain killer before 2000
B.C. The plant contains nicotine a water soluble alkali that work as pain killer. In most of the
societies different law have been imposed but the tobacco usage just changes its shapes and style
such as snuffing, chewing, piping and so many others but it alter from one shape to another. The
word cigar originated from the Spanish cigarro, which in turn probably derives from the
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Mayan sicar ("to smoke rolled tobacco leaves “from si'c, "tobacco ;"). There is also a possible
derivation, or at least an influence, from the Spanish cigarra ("cicada"), due to their similar shape.
The English word came into general use in 1730.
A cigar is tightly-rolled bundle of dried and fermented tobacco leaf, rolled in a series of
types and sizes that is ignited so that its smoke may be drawn into the mouth. Cigar tobacco is
grown in significant quantities in the countries like Brazil, Cameroon, Cuba, Dominican Republic,
Honduras, Indonesia, Mexico, Nicaragua, Philippines, Puerto Rico, Spain, Italy and eastern
United States. However, the origins of cigar smoking are still unknown. A cigar is defined as “any
roll of tobacco wrapped in leaf tobacco or in any substance containing tobacco,” while a cigarette
is “any roll of tobacco wrapped in paper or any substance not containing tobacco.” Traditional
cigars don’t usually have filters.
Most cigars are made of a single type of air-cured or dried tobacco. Cigar tobacco leaves are first
aged for about a year and then fermented in a multi-step process that can take from 3 to 5 months.
Fermentation causes chemical and bacterial reactions that change the tobacco. This is what gives
cigars a different taste and smell from cigarettes. Cigars that are sold like cigarettes and smoked
like cigarettes are another way the tobacco industry has managed to get around federal laws and
taxes. For example, cigars that are small in size but meet the legal definition of large cigars (based
on weight) are taxed at lower rates than cigarettes and small cigars by state and federal
governments. The tobacco industry uses this to their advantage.
Cigar is combustible tobacco products available in packs like cigarettes and be used like
cigarettes, but not legally be considered cigarettes. This means they’re not subject to Drug
Administration (DA) regulations in country like US. Moreover, cigar can be flavoured, and
labelled with misleading descriptors like “light” or “low tar.” They can be marketed and sold with
fewer restrictions and much lower taxes than cigarettes.
So, these low-priced and less-regulated products seem to have led some cigarette smokers to
switch to other combustible tobacco products, and cigarette-like cigar in many part of the world.
In Pakistan the available cigarette (FCV) and hukka tobacco (Rustica) are very common and
under cultivation while there the cigar tobacco has no idea. Tobacco being a major cash crop of
the province can be further promoted through introducing cigar tobacco, which can further
flourish the tobacco industry through such innovative research.
Scope of Work:
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To introduce this new tobacco spp, for the cash revenue and to boost the already available
established cigarette market, cigar cultivation can be promoted with the idea to expand this cash
crop canvas. Like the cigarettes, cigars deliver nicotine of an average of about 8 milligrams, but
only deliver about 1 to 2 mg of nicotine to the smoker. The less harmful product for the smokers
with various tastes may be introduced in the proposed project. Therefore, with the introduction of
cigar tobacco crop and the identification of suitable places for the successful crop husbandry
practices will be carried out in the study along with their other fermentation processes involved.
This proposed pilot phase study is to envisage the cigar tobacco scope. Though, this project does
not deal directly with the concern of food security. However, keeping the great impact of the
existing tobacco business and its cash value the revenue generation will open up new export
market which will be a good alternative for the poor farmers. The high cash revenue and the
adjustment of new crop spp may help in the issues concerning to climate change in the region.
Successful plantation and identification of suitable location may help the livelihood change.
Additionally, the cigarette smoker’s habit can be altered from cigarette to cigar with
comparatively less harmful items. Perhaps cigar contain high level of nicotine as compared to
cigarette but the inhalation and puffing provides a little of the available nicotine with several other
flavours as well. The industry and smokers are also subject to lesser drugs control option as
already imposed on cigarettes.
Existing Facilities:
At present all the mentioned Research Institutes/Stations have the facilities like land,
scientists, building etc but there was no work on cigar tobacco. The research department mainly
focused on the edible items. However, to some extent work has been done on FCV tobacco
(Virginia tobacco). To initiate this new task research department will need to import the seed
material, testing their viability and survival under open and controlled environment and to assess
their growth and yield factors for further propagation of material to adapt this crop in the region.
Existing and Required facilities:
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Locations Existing Resources Required resources Remarks
ARI, Tarnab Peshawar,
ARS, Swabi,
ARS, Bunair,
ARS, Serai Nourang,
HARS, Abbottabad
ARS, Baffa Mansehra)
Almost all the major
facilities are
available e.g land
and human resource
etc.
No major facility
required. Seed and
related inputs will be
required
The research
needs basic
inputs like seed
and other related
inputs like
fertilizer,
pesticides etc
Provide technical parameters i.e. input and output of the project in quantitative
terms. Also discuss the technology aspect of the project.
S. No Input Output
2 Seed import and collection Best crop seed identification for further
propagation
3 Agronomic practices in controlled
and open condition
Best adaptive practices for successful
crop husbandry
4 Multiple location trials Identification of Best location to get
better crop
Provide details of civil work, equipments, machinery and other physical activities
required for the project
No, civil work is involved in any activity of the project.
List of equipments and Machinery:
01, Core i.3 Computer (Cost Rs. 0.070 million)
No heavy machinery involved in the pilot phase.
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Indicate governance issues of the sector relevant to the project and strategy to resolve
them.
NA
7. Capital Cost Estimates
Indicate date of estimation of project cost estimates:
July, 2015
Basis for determining the capital cost be provided. It includes market survey,
schedule rates, estimation on the basis of previous work done etc.
N.A
Provide Year wise estimation of physical activities as per following:
Summarized Physical Activities to be carried out in this Project:
S. No Physical Activities Units 2015-16 Total
1 Seed Collection & import of different Cigar varieties
No. 18 18
2 Open field experiments at 6 locations
No. 18 18
3 Controlled experiments at 3 locations
No. 06 06
4 Fermentation and curing of crop The produce will be fermented and cured to get a final product.
Note: About 100gm seed of each variety is needed to raise nursery for 1 acre..
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Year Wise/Component Wise Capital Cost Estimates Rs. (Million)Financial Code 2015-16 Total
Operational Seed Collection and procurement (Pg# 16) 2.000 2.000DPL (justification given on pg#16) 1.000 1.000POL 0.050 0.050Cost of Other Store (inputs & fermentation, curing and processing etc) (Pg#16) 1.000 1.000
TA/DA 0.100 0.100Stationary 0.020 0.020Printing and Publication 0.020 0.020Total Operational 4.190 4.190Physical Assets Computer (01 No. Core i,3) 0.070 0.070Total Physical Assets 0.070 0.070Grand Total 4.260 4.260
Summary:
Financial Code 2015-16 Total
Total Operational 4.190 4.190
Total Purchases 0.070 0.070
G. Total 4.260 4.260
8. Annual operating and maintenance cost after completion of the Project
Item wise annual operating cost based on proposed capacity utilization for 1year
Rs. 0.05 million
9. DEMAND AND SUPPLY ANALYSIS
Description of product/services
Demand/supply along with unit price for the last five years
NA
Import/exports for the last five years along with unit price (if applicable)
NA
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Project demand /supply for 10 years.
NA
Proposed year wise production and unit price of the product.
NA
Existing and proposed arrangements for marketing
NA
10. FINANCIAL PLAN
Source of Financing :
(a) Equity:
Indicate the amount of equity to be financed from each source
Sponsored own resources N.A
Federal Government N.A
Provincial Government 4.260 million
DFI’s/Banks NA
General Public NA
Foreign equity NA
NGO’s/ Beneficiaries NA
Others NA
(b) Debt:
Indicate the local and foreign debt, interest rate, and grace period and repayment period for
each loan separately. The loan repayment schedule be also annexed. N.A
(c) Grants along with source: N.A
(d) Weighted cost of capital: N.A
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11. PROJECT BENEFITS AND ANALYSIS
Financial:
Income to the project along with assumptions:
It is expected that the pilot phase of the project not soley based on an income generation activity.
However, it would be helpful to replicate the benefit to the end users. The successful crop
husbandry, productivity boost, and the expected income of the cash tobacco may help to boost the
income level of the poor farmers if successful practices are accomplished during introductory phase.
Economic Benefits:
Benefit to the economy along with assumptions
The project is an attempt to economic viability as it has both short term as well as long term
benefits. If the introduction of the cigar tobacco becomes successful it will open up option of cigar
cultivation in the region and through the export of this valuable cigar livelihood can be supported.
The Cigar tobacco could be a new commodity in the cropping pattern of Khyber Pakhtunkhwa if
introduced in the region successfully. Once the successful crop stands accomplished, it will later on
Create many job opportunities directly in the project activities and indirectly in the above sectors
due to increase in production area.
Social benefits
The farmers will understand physically new changes and their consequences in agriculture
production, which is highly exposed to natural process. Addition of one new cash crop may help
them in supporting their livelihood and accommodating another crop in the cropping pattern. Since
the crop is narcotic drug which are under human usage since 2000 B.C as pain killer. However, the
cigar is somewhat less hazardous for the health over the existing cigarette products if utilised
wisely.
Environmental impact assessment:
The project is environment friendly; perhaps the efforts are being carried out to monitor all the
positive and negative effects of the environment in relation to crop production.
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Financial/Economic Analysis (with assumptions) of the Project.
i) Financial
- This will be a new introduction in crop production potential & ultimately
increase farmers income and reduce their poverty
- If the successful plant growth achieved will boost the local production
- It will be a long term initiative for the scientists with plenty of commercial
aspects
- It will create job opportunities both directly and indirectly.
ii) Economic
NPV, IRR AND COST BENEFIT RATIO:
Year Project Cost O&M Cost Total Cost Benefits Net Benefits2015-16 4.260 0.000 4.260 0.000 -4.2602016-17 0.000 0.050 0.050 0.500 0.4502017-18 0.000 0.150 0.150 1.000 0.8502018-19 0.000 0.150 0.150 1.500 1.3502019-20 0.000 0.170 0.170 2.000 1.8302020-21 0.000 0.170 0.170 4.000 3.8302021-22 0.000 0.190 0.190 6.000 5.8102022-23 0.000 0.190 0.190 8.000 7.8102023-24 0.000 2.000 2.000 10.000 8.0002024-25 0.000 2.000 2.000 12.000 10.000
Total 4.260 5.070 9.330 45.000 35.670
NPV 12.884
IRR 44.17%
Benefit Cost Ratio 4.8
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SWOT Analysis of KHYBER PAKHTUNKHWA Agricultural Research System
Strengths
Highly qualified, well trained and experienced research staff in some fields but needs capacity
building
A network of well distributed research centers in Khyber Pakhtunkhwa.
Made significant contributions through successful strategic interventions at selected locations
around Khyber Pakhtunkhwa.
Weaknesses
Poor contacts and access to international research organizations.
Most scientists are short of writing skills and technical knowledge in new crops other than the
established crops.
No idea for cigar tobacco and need for self-discipline: most cannot work without supervision.
Opportunities
Great chances for improved collaboration and efficiency through merger of similar organization
i.e., research and Pakistan Tobacco board and tobacco companies.
Better services and more tangible benefits for researchers would uplift their lost moral.
Great opportunities for collaboration with all stakeholders.
Greater opportunity for well thought out research interventions as has been successful in the
past.
Threats
No idea, knowledge and facilities regarding fermentation of tobacco and curing
Empowerment of the scientists to work on the crop of their choice and expertise
12. (a) Implementation Schedule
Starting date
July, 2015-16
Completion date
June, 2015-16 (12 months)
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(b) Result Based Monitoring (RBM) Indicators
S.No Input Output Outcome Target impact Baseline indicator
Targets after completion of project
1 Collection and import of seed (cigar)
18 different kinds of cigar varieties
No variety is available in Pakistan.
Identification of viable varieties through experimentations
25-30 mnd per acre production(cured/processed)
2 Testing/experiments at 6 different locations
Crop production assessment
No work has been done
18 experiments under open field in 6 districts and 6 controlled experimentation at 3 locations
Identification of best adapted cigar varieties to be cultivated to increase farmers income
3 Growth assessment
Successful crop testing for fermentation and curing
No such activities were executed in Research system.
Fermented and cured crop from successful plantation
Selection of best suitable varieties. Recommendations for farmers to cultivate best adapted varieties for quality cigar formation
13. Management structure and manpower requirements including specialized skills during
construction and operational phases
Manpower requirements will be met by involving skilled professionals during execution and
operation of the project including germination testes, cleaning, culture practices, irrigation
fertilizer and pesticides application. All the Activities of this project will be executed through
Director General Agricultural Research. However the concern Principal Investigator (PI) and
focal person will be responsible for the overall execution and implementation.
14. Additional Projects/Decisions Required
N.A
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15. Certified that the project has been prepared on the basis of instructions provided by the
planning commission for the preparation of PC-1 for production sector projects
Prepared by
--------------------------------------------Dr. Bashir AhmadDirector Planning (Research)Directorate General Agric. Res. System
-------------------------------------------- Dr. Muhammad Asim
Dy. Director Planning Directorate General Agric. Res. System
------------------------------------------ Nasiruddin
Deputy Director Planning Directorate General Agric. Res. System
Checked by
--------------------------------------------Dr. Nazeer Hussain ShahDirector General Research,Agril. Research Khyber Pakhtunkhwa Peshawar
Approved by----------------------------------------------------SecretaryGovernment of Khyber Pakhtunkhwa,Agriculture, Livestock & Cooperative Deptt
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Justification of Seed Price:
Under prevailing conditions, 6gm of tobacco FCV costs Rs. 2000-2500. As the import of CIGAR is not in practice, hence its exact cost may not be possible to estimate. However, the allocated amount will cover cost of seed, cost of import including fee of different Government Departments.
Since, it is under Narcotics Drugs, the import would be made through Government involving Pakistan Tobacco Board and Quarantine Department. Pakistan Tobacco Board has imported CIGAR Tobacco only from single source, which remained unsuccessful.
Keeping the above facts in view and adding more chances for the project to be successful and viable, import of different varieties from different countries will be carried out.
Detail of Cost of Other: Rs. (million)
Items Unit Price No. of Experiments
Qty. Total Cost
Pesticides/Insecticides 500/litre 18 Exper. 1 lit/Exper. 0.009DAP 3800/bag -do- 1 bag/Exper. 0.068Urea 2000/bag -do- 1 bag/Exper. 0.036MOP/SOP 3400/bag -do- 1 bag/Exper. 0.061Accessories for Nursery Establishment e.g Germination trays, stands, plastic bags etc
- - - 0.300
Small tools for field operation - - - 0.146Curing and Fermentation - - - 0.380Total - - - 1.000
Justification for DPL:
No. of DPL/loc
Rate/month Duration No. of Experiments/
No. of locations
Dpl*Duration*loc*Rate
Open Field Experiments 02 15000 6 months 03 06 2*6*6*15000= 1.080 m
Controlled Experiments
01 15000 6 months 02 03 1*6*3*15000= 0.270 m
Total 1.350 million
Note: The no. of DPL per location has been kept up to minimum level and for minimum period. Even then the amount for DPL has been kept of Rs. 1.000 million.
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