Volume 6 • Issue 2 • 1000197 Arabian J Bus Manag Review ISSN: 2223-5833 AJBMR an open access journal Research Article Open Access Arabian Journal of Business and Management Review A r a b i a n J o u r n a l o f B u s i n e s s a n d M a n a g e m e n t R e v i e w ISSN: 2223-5833 Bushara and Aziz, Arabian J Bus Manag Review 2016, 6:2 DOI: 10.4172/2223-5833.1000197 Keywords: Financial and economic analysis indicators; Sudan Project analysis; Cotton; Sudan Introduction Sudan is the largest country in Africa, with an area of about one million square miles (2.5 million square kilometers). It is characterized by a variety of climatic zones from the desert in the north to tropical zone in the south. This gives it favorable environments for all agricultural activities as well as integrated investment in industries. The country forms wide basin sloping gently down towards the North, with high land on the other three sides, namely the Red Sea Hills and Ethiopian Highlands on the Eastern side, Jebel Marra range on the Western side and the Imatong range in the South the Imatong range in the South [1]. Te agricultural sector in Sudan is the most important sector in terms of its contribution to both Gross Domestic Product (GDP) and employment. In 2001 agriculture directly accounted for 45.6% of the GDP [2]. Ten it’s contribution decreased to 38.7% in 2003, and to 32.2%, 31.6%, 28.9%, 29.3%, and 31.1% in 2005, 2006, 2007, 2008, and 2009 respectively [3]. Te sector also provides about 80% of the country’s exports (excluding petroleum) and contributes to livelihood of 80% of its population [4]. Te agricultural sector is the source of raw material for processing factories in the country including textiles, sugar, vegetable, oil, soap factories, grain mills, dairies, etc.; which contribute 17% of the GDP and about 20% of foreign exchange earnings [5]. Most economies of the developing countries are basically agricultural. With respect to Sudan, agriculture is the largest contributor to national income and foreign exchange. Te average contributions of the agricultural sector in gross domestic product (GDP) and in export during the period 1990-1995 were 35% and 65% respectively. In addition this sector employs 70% of the labour force in Sudan [6]. Problem statement In the Sudan cotton has been the most important cash crop and foreign currency earner. According to Food and Agricultural [7], cotton production fuctuation afected cotton’s contribution to export revenue, as its contribution had dropped from 45-65% during the seventies to 34% in 2005 and in 2007 and 2008 it dropped below 16%, 18% respectively (Table 1). Tis fuctuation in export together with quality problems during harvesting and handling may lead to weak global demand for the Sudanese cotton and hence the loss of some international markets. Cotton production fluctuation may be due to the cumulative effects of production problems such as centralized government and scheme management’s decisions of area allocation between the different crops. In New Halfa, there are fuctuations in area, production, average *Corresponding author: Mohamed OA Bushara, Department of Agricultural Economics Faculty of Agricultural Sciences, University of Gezira, Wad Madeni, Sudan, Tel: (+249) 511 - 84 16 23; E-mail: mosman@uofg.edu.s Received January 09, 2016; Accepted January 27, 2016; Published February 03, 2016 Citation: Bushara MOA, Aziz YAM (2016) Financial and Economic Evaluation of Cotton Production in New Halfa Agricultural Corporation, Kassala State, Sudan (1981/1982-2009/2010). Arabian J Bus Manag Review 6: 197. doi:10.4172/2223- 5833.1000197 Copyright: © 2016 Bushara MOA, et al. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. Financial and Economic Evaluation of Cotton Production in New Halfa Agricultural Corporation, Kassala State, Sudan (1981/1982-2009/2010) Mohamed OA Bushara 1 * and Yaaqob AM Aziz 2 1 Department of Agricultural Economics Faculty of Agricultural Sciences, University of Gezira, Wad Madeni, Sudan 2 University of Gezira, Wad Madeni, Sudan Abstract The New Halfa agricultural Production Corporation (NHAPC) is considered as one of the leading agricultural scheme in cotton production, being the second largest in comparison with the Gezira scheme concerning the area. The Government’s agricultural policies were the main factors for the studying and knowing the fnancial and economic evaluation indicators for the production of cotton in New Halfa Agricultural Production Corporation during the period (1981/1982-2009/2010), and the comparison between these indicators for different periods in producing cotton at New Halfa Agricultural Production Corporation (frst period 1981/1982-1991/1992) individual account system, (second period 1992/1993-2009/2010) liberalization in the following phases: Financial and economic indicators (net present worth NPW, beneft cost ratio B/C , internal rate of return IRR, net beneft investment N/K ratio, and payback period), area, production and average yield. The study was mainly based on the secondary data of the cotton crop at (NHAPC) such as areas, production, average yield, return, costs, benefts and net benefts for period (1981/82- 2009/10), using descriptive statistics, simple mathematics, and different ways of analysis and descriptive tables. The fnancial and economic evaluation during the periods (1981/1982- 2009/2010), (1981/1982-1991/1992), (1992/1993- 2009/2010) study showed that the production of cotton was feasible and the indicators were positive. The study recommended that the Government should have a commitment to appropriate agricultural policies, subsidize the agricultural sector particularly with regard to increasing the areas of cotton production, reduce the cost of production, process cotton locally to increase the added value, and manufacture the inputs locally for making more foreign currencies, and increase the cotton production through research development and extension.