Establishing Static Soil Testing

1. Introduction
Fertilizer consumption in India is highly skewed with wide inter-state, inter- district and
inter-crop variations. The NPK ratio - a measure of balanced use of fertilizer - shows
wide inter-state disparity. Though there has been an impressive growth in the
consumption of fertilizers in post green revolution period, their reckless use has been one
of the reasons for declining productivity in recent years. Investigations have revealed that
one reason for the unbalanced fertilizer use is lack of adequate soil testing facilities that
forced the farmers to rely on fertilizer dealers for advice on the fertilizer requirement.
2. Constraints in functioning of existing Soil Testing Laboratories (STLs)
In spite of the proven benefits of the soil testing service for farmers, the service is
suffering on financial, management and technical fronts. Receipt of large number of
samples by each of the STLs makes it difficult for them to analyze and send the reports in
time to the farmers. This may be one of the reasons for lack of required success in the
programme, as time taken between collection of samples and receipt of recommendations
by the farmers is too long. In other words, it can be stated that the huge network of STLs
has not yet rendered the services of a watchdog for monitoring the soil health under
major cropping systems in the country.
There is a need to organize soil testing laboratories at block level so that farmers need not
travel far to get the soil tested and wait endlessly to get the results and recommendations.
Keeping this in view, a scheme is formulated to serve as guide to aspiring individuals /
institutions in establishing a static soil testing laboratory offering services of soil and
water testing, consultancy on problems like soil reclamation etc.
3. Objectives:
The scheme has the following objectives:i.

Undertake soil testing and testing of irrigation water for quality

ii.

Provide recommendation on fertilizer application including bio-fertilizers.

iii.

Provide guidance on soil reclamation and related areas.

4. Need for new Soil Testing Laboratories at Block Level:

The annual installed analyzing capacity of soil samples at STLs has also grown to 8.0
million samples with the annual growth rate of 11% during the last two decades. The
analyzing capacity per 1000 ha of Gross Cultivated Area (GCA) has more than doubled
during the last 20 years from 26 samples in 1980 to 56 samples in 2000. There is also a
wide disparity in the analyzing capacity in terms of number of samples per STL across

the regions. The annual analyzing capacity per STL has decreased in nineties in all the
regions (except for north-east region) which may be due to the fact that the new STLs
being set up are either mobile vans or are of less analyzing capacity (about 5.0 lakh
samples per year). In all the regions, potential of STLs are not efficiently utilized and
their utilization efficiency varies from 64% in northern region to as low as 16% in Northeastern region. The utilization efficiency of STLs has drastically reduced in all the
regions. It has been reduced by more than 50% in eastern and north eastern region
followed by 27% in northern region and about 11% both in southern and western regions
during the last 10 years resulting in a net reduction of 20% (from 76% to 56%) at all
India level. Since challenges ahead are to encourage precise and balanced fertilization in
irrigated areas (northern & southern region) and ensure adequate fertilization in other
area, especially dry land area of western & southern regions, there is a need for
maintaining or improving soil fertility, correcting inherent soil nutrient deficiency and
restoring productivity of the land that has been degraded by exploitative activities in the
past. It also highlights that the need for intensive soil tests for developing specific
nutrient management scenarios/strategies at more desegregated level is enormous in all
the regions. Thus, it reveals that the creation or establishment of new STLs in the country
at each block level is essential to cater to the needs of the farming community.
Though there is enormous scope for the project, lack of awareness among farmers on the
importance of soil test based fertilizer use limit the commercial scope. A laboratory with
a capacity to test 8000 samples per year will be adequate to cater to a few villages in one
block. The scientist manning the unit could also engage in providing guidance in the
areas of land reclamation, compost making, use of bio-fertilizer etc.
5. Project requirements
5.1 Location
Such a unit has to be located in block head quarters. The unit could also be housed in a
laboratory of the Junior college to take advantage of the facilities and expertise available.
Vocational course for S.S.C. students may also be run in those junior colleges on
collection of soil samples for testing and laboratory analytical methodologies during
summer months so that these students become expert trainees and they may be absorbed
as soil health workers at block level to facilitate soil testing programme with fair degree
of success.
5.2 Capacity of the Laboratory
Though it is possible to test 10000 -14000 samples in a year, the installed capacity is
considered at a moderate level of 8000 samples annually and the capacity utilization is
considered at 35%, 50%, 75%, and 80% in the first three years and fourth year onwards
in that order.
5.3 Equipment
The equipments suggested for the laboratory are given in Annexure I. These equipments
can be used for finding out pH, electrical conductivity, available Nitrogen, Phosphorus,

Potassium, Organic Carbon, available sulphur and calcareousness of soil etc.

5.4 Transport
As the Laboratory is static, there is need for transport to initially canvass for the work and
collect samples. As the awareness about the facility builds up in the villages, farmers
would come to the laboratory with the soil samples for testing. The trainees of vocational
course may be deputed and their services may be utilized for collection of representative
soil samples as well as transfer of them to the nearest laboratory.
5.5 Raw Material
Glass ware and chemicals required are available with leading scientific equipment
manufacturers and chemical suppliers.
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Establishing Static Soil Testing
5. Project requirements
5.1 Location
Such a unit has to be located in block head quarters. The unit could also be housed in a
laboratory of the Junior college to take advantage of the facilities and expertise available.
Vocational course for S.S.C. students may also be run in those junior colleges on
collection of soil samples for testing and laboratory analytical methodologies during
summer months so that these students become expert trainees and they may be absorbed
as soil health workers at block level to facilitate soil testing programme with fair degree
of success.
5.2 Capacity of the Laboratory
Though it is possible to test 10000 -14000 samples in a year, the installed capacity is
considered at a moderate level of 8000 samples annually and the capacity utilization is
considered at 35%, 50%, 75%, and 80% in the first three years and fourth year onwards
in that order.
5.3 Equipment
The equipments suggested for the laboratory are given in Annexure I. These equipments
can be used for finding out pH, electrical conductivity, available Nitrogen, Phosphorus,
Potassium, Organic Carbon, available sulphur and calcareousness of soil etc.
5.4 Transport
As the Laboratory is static, there is need for transport to initially canvass for the work and
collect samples. As the awareness about the facility builds up in the villages, farmers
would come to the laboratory with the soil samples for testing. The trainees of vocational
course may be deputed and their services may be utilized for collection of representative

soil samples as well as transfer of them to the nearest laboratory.

5.5 Raw Material
Glass ware and chemicals required are available with leading scientific equipment
manufacturers and chemical suppliers.
5.6 Manpower
One post graduate in agriculture with soil science specialization will man the laboratory
supported by two semi-skilled persons for collection, preparation of samples and other
laboratory/field related works.
6. Financial aspects
6.1 Benefits
The laboratory is primarily used for soil testing as also for water testing. Testing fee of
150/- per soil sample (excluding micro-nutrients) and 150/- per water sample is
considered in the model. The benefits in the first three years, and fourth year onwards
would be 4.200 lakh, 1.536 lakh, 3.936 lakh and 4.416 lakh respectively.
6.2 Project Cost
The project cost comprises of 8.60 lakh towards capital cost and 4.104 lakh for
operational cost in the first year. The detailed operational cost has been furnished in
Annexure II. The operational cost in the second, third and fourth year onwards is 4.464
lakh, 5.064 lakh and 5.184 lakh respectively.
6.3 Margin Money
The margin money / down payment considered in the model is 15 % of the unit cost
which works out to 190000.
6.4 Bank Loan
Bank loan of 85 - 95 % of the total cost shall be available from the financing institution.
Bank loan considered in the model is 85%. It works out to 1080000 in the model.
6.5 Rate of interest
Banks are free to decide the rate of interest within the overall RBI guidelines issued from
time to time. However, the ultimate lending rate has been considered as 12 % for working
out the bankability of the model project.
6.6 Security
Banks are guided by RBI guidelines issued from time to time in this regard.

6.7 Financial analysis

The techno economic parameters assumed in the model are given in Annexure III. The
cash flow statement and detailed financial analysis are shown in Annexures IV & V
respectively. The financial analysis indicates that the scheme is viable. The major
financial indicators are given below:
NPV : 2.98 lakh
BCR : 1.12 : 1
IRR : 28.79 %
6.8 Repayment schedule
Based on the cash flow the detailed repayment schedule has been worked out and
furnished in Annexure VI. The repayment period works out to six years.
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Establishing Static Soil Testing

Annexure I
Establishment of Soil Testing Laboratory and Soil Health Counseling Facility
Capital Costs
1
Laboratory Equipment
(Amount )
i)

pH meter

20000

ii)

Electrical Conductivity Meter

20000

iii)

Kjeldahl unit for Nitrogen distillation (Automatic)

200000

iv)

Spectro photometer

50000

v)

Flame photometer

50000

vi)

Nephlometer for sulphur analysis

10000

vii)

Analytical balance (Electronic)

40000

viii)

Top loading single pan balance

20000

ix)

Mini Rotary Shaker

35000

x)

Gas Connection

10000

xi)

Drying oven

30000

xiii)

Furniture for lab including wooden cabinets for storing soil

samples

50000

xiii)

Generator and Stabilizers

65000

Office equipment

i)

Motor cycle

50000

ii)

Office furniture

10000

iii)

Computer with accessories

30000

iv)

Telephone connection

5000

Chemical & glassware (initial stock)

115000

Miscellaneous and contingencies

50000

Total cost

860000

Annexure II
Establishment of Soil Testing Laboratory and Soil Health Counseling Facility
Operational Cost
(Amount )
Sl Item
Year 1
Year 2
Year 3
Year 4
No.
onwards
1

Power, Water @ 1000 per month

12000

12000

12000

12000

Manpower Soil scientist @

12,000/ pm and two Semi-skilled
@ 5000/ pm

264000

264000

264000

264000

Chemical and Glassware @ 30/

per sample

84000

120000

180000

192000

L.P.G 500/ per month

6000

6000

6000

6000

Stationery @ 500 per month

6000

6000

6000

6000

Repair & maintenance

7200

7200

7200

7200

Telephone @ 1000 per month

12000

12000

12000

12000

Travel for canvassing and

collection of samples @ 1000
per month

12000

12000

12000

12000

Misc. expenses like Printing of

literature etc. @ 600 per month

7200

7200

7200

7200

410400

446400

506400

518400

10 Total

Annexure III
Establishment of Soil testing and Soil Health Counseling Facility Techno-economic
Parameters
1. A team of one specialist and two Semi-Skilled workers can analyse 50 samples per day.
2. Analysis work will be done for five days in a week, sample collection, report writing etc
will be done on the remaining one day.
3. Monthly 1000 samples will be analysed and yearly 8000 samples will be analysed.
4. Sample collection and analysis will be done only eight months in a year depending upon
cropping pattern.

5. Capacity utilization will be 35%, 50%, 75% and 80% of the installed capacity in the first
three years and 4th year onwards in that order.
6. Charges for testing would be 150/ per soil sample and 150/ per water sample.
7. The chemicals and glassware consumption is considered @ 30/ per sample.
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Establishing Static Soil Testing

Annexure IV
Establishment of Soil Testing Laboratory and Soil Health Counseling Facility Cash flow
Statement
(Amount )
Sl
Item
Year 1
Year 2
Year 3
Year 4
No.
onwards
1

Capacity Utilization (%)

Soil Samples tested

Income from soil sample

testing @ 150/ per sample

Expenses incurred

Net Income

35

50

75

80

2800

4000

6000

6400

420000

600000

900000

960000

446400

506400

518400

420000

153600

393600

441600

Annexure V
Establishment of Soil Testing Laboratory and Soil Health Counseling Facility
Financial Analysis
Item
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Capital Cost

860000

Operational cost

410400

446400

506400

518400

518400

518400

Total cost

1270400

446400

506400

518400

518400

518400

Benefit

420000

600000

900000

960000

960000

960000

(850400)

153600

393600

441600

441600

441600

0.870

0.756

0.658

0.572

0.497

0.432

(739848)

116122

258989

252595

219475

190771

Net Benefit
Discount Factor at
15%
PW at 15%
NPW at 15%

298104

NPW at 25%

60224

NPW at 30%

(19177)

Benefit Cost Ratio

(BCR)
Internal Rate of
Return (IRR)

1.12
28.79%

Annexure VI
Establishment of Soil Testing and Soil Health Counseling Facility
Repayment Schedule
Total outlay
: 1270000
Margin money (15 %)

190000

Bank loan (85 %)

1080000

Rate of interest

: 12%

Year

Bank loan
Outstanding

Net Income

1080000

(Amount )
Net Surplus

Repayment
Principal

Interest

Total

420000

180000

129600

309600

110400

900000

153600

108000

108000

45600

900000

393600

200000

108000

308000

85600

700000

441600

250000

84000

334000

107600

450000

441600

250000

54000

304000

137600

200000

441600

200000

24000

224000

217600