Prof. Dr. Faiq Jazaa Yassin

Department of Agricultural Economics

The feasibility study represents the technical, economic and commercial basis for your preferred investment decision or rejection. What is meant by the feasibility study for the project: "the scientific group that is used to collect data and data to reach the results of accessibility, accessibility, success and continuity."

However, it must be noted that such information and data differ from one project to another, according to its nature, size, and the legal status of each project separately.

The feasibility study for agricultural projects is of special importance, whether at the level of the private investor or the public investor represented in the state. For the private investor, he is concerned with determining the viability of the project and to what extent it will achieve its objectives. Based on the results of those studies, the investor makes a comparison between alternative projects in order to choose the best one from his investment point of view. Also, the private investor aims to achieve the expected profits from these projects and to obtain the best return for his invested money. He also aims to know the recovery period of the invested capital and how to maintain it and to ensure the continuity of dealing with banks and other various sources of financing to obtain his financial needs, whether for this project or In addition, the private investor aims, behind the project's feasibility study, to obtain the approval of the official authorities to establish the project.

As for the importance of feasibility studies for the public investor, it is due to:

1. The state needs a method for selecting projects of greater public interest, and this can only be achieved through a feasibility study on the basis of which public projects can be arranged according to the degree of need for them.

2. The project's relationship with other projects. When the state settles on implementing a specific public project, it needs to define and define the project's form and its relationship to other projects.

3. The state does not grant a license to establish a project unless it is ascertained to it that the total burdens that result from that project are less than possible and that the returns and social benefits that the project brings to the community are as large as possible.

The importance of the feasibility study extends to include, in addition to new projects, existing and ongoing projects that need to be expanded, adding a new production line or adding a new product, and all this requires conducting feasibility studies for those new additions to existing projects.

The subject of economic feasibility studies has received great attention in achieving the optimal use and distribution of available economic resources. There is a close relationship between economic feasibility studies and the nature of investment decisions. The more comprehensive, accurate, objective and scientific studies are based on the decision, the more successful and safe the decisions will be in achieving the goals.

The economic feasibility study has become in today’s world an important tool for strategic planning. Rather, it is an effective methodology for the strategic management of projects in various economic and investment activities that enables the extrapolation of future visions with strategic thinking that leads to investment decision-making over the lifespan of the project with the least possible degree of uncertainty (risk). ). Therefore, the feasibility studies emerged from the core of economic theory to be a scientific tool of a high degree of importance to support investment decision-making in light of a certain degree of risk and uncertainty stemming from the presence of many internal and external variables related to the future and thus affect the making of those decisions.

Economic theory considers the economic resources available for investment and employment as being relatively scarce, and therefore it can have multiple uses when employed to produce goods and services, and then it must be used optimally. On this basis, the economic feasibility study and project evaluation is considered one of the branches of modern knowledge in the field of economic sciences, and it is the product of economic theory. An opportunity cost perspective. Therefore, the alternative that gives the greatest return or the best benefit should be chosen. The scope of the feasibility study consists of many detailed studies of various directions, including:

1- Technical Feasibility Study

2- Marketing Feasibility Study

3-  Environmental Feasibility Study

4-  Financing Feasibility Study

5- Financial Feasibility Study

6-  Legal feasibility study

7-  Social feasibility

Note that the above feasibility studies are not necessary to conduct all of them or conduct them separately from each other, but rather they are complementary to each other.

The evaluation criteria shown below are used to determine the financial and economic feasibility of the project or not, and there is no room to explain them in detail, and these criteria are:-

1- Net present Value

2- Benefit / Cost Ratio

3- Internal Rate of Return

4- Pay-Back period

5- Counting rate of return

6- Break-even point

 At the conclusion of this article, I would like to point out that the establishment of any project is not expected to be successful or is the best project without conducting a feasibility study for it, especially agricultural projects that are linked to the production of new varieties through agricultural experiments or research. Therefore, work, after producing a variety for a particular agricultural crop, requires that an economic feasibility study be conducted for it, and if its profitability is confirmed and compared with similar imported crops, it can then be considered an economically successful crop.