Cost Benefit Analysis of Alternative Coffee Drying Methods at Limmu Kossa and Gomma I of Horizon Coffee Plantation PLC

Abstract

Around 40% of coffee quality is determined in the field, with the remaining 60% determined by post-harvest processing procedures. This demonstrates the significance of coffee processing in improving quality and value. As a result, this article examines the economic viability of Horizon Coffee Plantation Farm's three coffee drying methods: solar tunnel dryer, artificial dryer, and sun dryer. Several economic viability assessments and cost-benefit analyses are used. Furthermore, for each strategy, switching values and sensitivity analysis were done. According to the findings, the gross margin rate for the solar tunnel is Birr 35 per kg of green, followed by Birr 34.75 for the artificial drier machine and Birr 34.2 for the sun dryer method. Similarly, the artificial dryer method was found to be the most viable, with the highest NPV of Birr 89,292,673, followed by Birr 10,016,909 for the solar tunnel method and Birr 175,295 for the sun dryer method, implying that the firm's methods are all economically viable. The BCR and IRR criteria also confirm the same conclusion. The viability of all drying methods remains nearly constant regardless of the potential in costs of production and sales prices. Because investments in all drying methods are non-mutually exclusive, it is advised that the corporation continue to invest in all three drying methods as long as their NPV is greater than zero. However, this finding should be interpreted with caution because the present rise in fuel prices may make the use of artificial dryer methods more expensive and unviable.