EXECUTIVE SUMMARY

This business shall be called South Cotabato Organic Vegetable

Production. The name has been chosen to emphasize that the vegetables that are
grown and marketed by the South Cotabato farmers are health-friendly and
addresses the demand for more ecological and human friendly food sources apart
from it providing income to a large number of vegetable grower from the place.

The production part of the business is to be run by the individual farmers while
the marketing part is going to be fac ilitated by the Mt. Matte Highlanders Association.

The Market Study showed that vegetables like potato, carrots, cabbage, bulb
onion, bell pepper and tomatoes planted in a ¼ hectare farm is very feasible the fact
that these vegetables have great demand in the market all throughout the year.
Based on the study, a total of 732.2 tons annually of these 6 types of vegetables are
needed in the markets of General Santos City and Koronadal City.

Market price of each of the vegetable considered in the study varies during
peak as well as lean seasons. Thus vegetable growers should take a careful
consideration on the timing of each vegetable production period.

While the usual vegetable chain passes through the three marketing channels,
vegetable growers are assured that 55% of their products go to the wholesale
market, while 30% of their products go to the institutional markets like hotels and
restaurants and the remaining 15% of their products go to the retail market.

On the other hand, the Technical and Production aspects of the study showed
that planting these 6 types of vegetables in a ¼ hectare farm size is very much
technically feasible. Aside from the ripened technical experience of South Cotabato
farmers in vegetable production the availability of the technical expertise of the
assigned Agricultural Technicians in the area ensures better and highly productive
vegetable growing industry in the area.

The Organization and Management Aspect showed that the project is also
organizationally viable since it will be run by the individual vegetable growers
maximizing the utilization of its immediate household members.

Lastly, the Financial Study showed that the project is very feasible having an ROI
of 272%. Cash Flow projections also showed that the project is viable since it has always
positive cash balances in each year. The average net profit margin is 67%.

Feasibility Study on Vegetable Production page 1

1.0. MARKETING ASPECT

1.1 Description of the Product

In horticulture, vegetables are herbaceous plants that are edible in

whole or part. Parts usually eaten include roots, stems, tubers, leaf
bases/petioles, entire leaves, flowers, immature and mature fruit. Vegetables
are important in the human diet because they are rich in vitamins and minerals
and supply fiber and bulk and are cheap source of protein. In the Philippines,
vegetables are usually eaten with rice.

Vegetable crops play an important role in the economy of the Philippines

as vegetable production, processing and trading provide livelihood for millions of
Filipinos. The country’s varied climate and geography favor the cultivation of wide
range of vegetable crops and follow specialization in the production of the more
economically important vegetables. Vegetable production in fact in Asia grew at
an annual average rate of 3.4% in 1980s and 1990s (AVRDC).

In the Philippines, the most commonly grown vegetables consist of

annual crops which include solanaceous, crucifers, cucurbits, bulb crops and
other indigenous vegetables. In South Cotabato particularly, vegetable
industry is growing at 2.2% per annum (Source: DA-UDP vegetable research,
2000). The so- called vegetable areas in South Cotabato is the TATATU areas
(Municipalities of Tantangan, Tampakan and Tupi). These areas have large
vegetable production area and have type IV climate wherein rainfall is more or
less distributed throughout the year.

Specifically, the products to be marketed include: potato, carrots,

cabbage, bell pepper, bulb onion, and tomatoes. These products include not
just vegetables but spices as well.

Vegetable industry in South Cotabato specifically in the municipalities of

Tantangan, Tampakan and Tupi (TATATU) is growing steadfastly. Vegetable
crops as compared to other crop commodities are generally early maturing
and have high nutritive value and are suitable in various cropping systems
such as backyard gardening, subsistence farming, cash crop production and
processed food production. Vegetable crops have a wide range of adaptation
to soil and climatic conditions. It is worth noting that income from vegetable
crops is generally higher than most field crops and probably as profitable as
fruit crops per unit area and time.
Vegetable production holds potentials as an economic springboard for
rural families from the nutrition standpoint and augmentation of the farm family
income. Besides, its diversity and compatibility in most cropping systems, it
requires little investment especially for a typical subsistence farmer.
Government action programs on selected vegetables have shown promise of
being profitable. Vegetables contain rich sources of Vitamin A, C, thiamin,
niacin and other elements essential for human health.

Feasibility Study on Vegetable Production page 2

1.2 Pricing

Price of the vegetable products in South Cotabato varies during its peak
season as well as during the lean season. The listing of the vegetable prices
for both season (peak and lean) is shown in table 1.

Table 1. Wholesale buying price by location (in kilogram)

Vegetables GenSan Koronadal Tupi Banga Alabel
Peak Lean Peak Lean Peak Lean Peak Lean Peak Lean
1. Potato 15-20 18-35 15-20 20-30 12-15 15-30 13-18 25-35 10-15 15-30
2. Carrots 10-15 20-30 10-15 20-30 10-20 12-35 8-15 20-30 10-20 35-45
3. Cabbage 3-8 10-25 3-10 10-25 5-10 10-25 6-18 20-30 15-20 25-30
4. Bulb Onion 25-30 28-75 20-50 25-75 40-80 60-120 40-60 70-120 30-65 50-95
5. Tomato 5-15 8–18 6–15 8 -25 10-12 12-25 - - 5-10 10-15
6. Bell Pepper 15-25 40-100 10-25 35-80 - - - - - -
Source: Vegetable Market Research in South Cotabato 2002

Prices of vegetables vary over time within a particular market. The quality of
vegetables, however, also plays an important role as determinant of the final price. It
also varies between markets at any one time because of the different market
specifications, end use and supply source.

Normal wholesale/retail mark ups for bulk transaction are in the 20-50% range
but for the more perishable crops, mark ups of 100% and up are common.

Four (4) of the vegetables grown in South Cotabato that are included in this
feasibility study has its best price during the months of January, September –
December (Potato, Carrots, Cabbage and Bell Pepper). The bulb onion has a better
command of price during the months of January to April as well as from October to
December. The tomato on the other hand, commands a better price almost all
throughout the year from the months of January, Mid-March up to the month of
December, (Refer to Annex A for the commodity price calendar)

1. 3 Market Area

Vegetables coming from Tantangan are marketed and delivered directly to

Koronadal and Sultan Kudarat markets while the bulk of Tampakan and Tupi vegetables
go to the two (2) major terminal markets in General Santos City and Koronadal City.
However, there are also other market outlets for the vegetable products of South
Cotabato like in Alabel, Banga, Digos City and Davao City.

1. 4 Main Customers and Distribution Channel

The main customers of the vegetable products of South Cotabato are mostly
the wholesale buyers of General Santos City and Koronadal City. Like in many other
places, most vegetables in South Cotabato pass through wholesalers and retailers
before they reach to the consumers’ level. The wholesaler is responsible for
assembling and retailing the produce and financing production and marketing.
However, there are instances where the channels of distribution tend to vary with the
value and degree of perishability of the vegetables. Highly perishable and valuable

Feasibility Study on Vegetable Production page 3

vegetables such as cauliflower tend to go directly from the wholesaler to the larger
retailers or institutional buyers (hotels and restaurants) while less perishable
vegetables such as squash will follow a more traditional route of distribution.

The vegetable farmers sell their products based on market feedback. It means
that the vegetable grower themselves inquire from their prospective buyers some
product specifications such as the buyers’ volume requirement, terms and mode of
payments, delivery arrangements and especially price even prior to actual production
of the said vegetable products.

1.5 Major Market Segments

The market segment for vegetable industry in South Cotabato basically

comprise of the wholesale market, institutional market as well as the retail market.
For higher value vegetables, 15% of the volume goes to retail, 30% to the institutional
markets like hotels, restaurants and 55% to the wholesale market (UDP Vegetable
Market Research, 2002).

The retail/consumer market is segmented into the traditional “wet markets”

estimated to account for 70% of the retail trade in fresh vegetables. This is manifested as
bulk purchases of goods from the “bagsakan centers” of GenSan and Koronadal are
retailed in public and small markets of both cities and its neighboring towns.

1. 6 Marketing Systems

Marketing arrangements for vegetables vary widely from region to region and
will depend on the type of production system involved. Homestead production of
vegetables is widespread. The choice of a market outlet is influenced by the prices
offered and the existence of alternatives. Other considerations include the
perishability of the product, urgent need of money for farm operations, credit tie up
arrangements with buyers and farmers’ attitudes (Librero et al. 1987)

1.7 Demand and Supply Analysis

Total Demand

In considering the demand of the product, only the two (2) major markets are
being considered, the General Santos City and Koronadal City markets. Table 2
shows the demand of the vegetable products in these major markets.

Feasibility Study on Vegetable Production page 4

Table 2. Volume of vegetable products required in the market
Vegetables Volume Required (kgs./year) Total
General Santos City Koronadal
1. Potato 134,515 83,500 218,015
2. Carrots 148,975 57,950 206,925
3. Cabbage 111,192 59,574 170,766
4. Bulb onion 25,630 63,375 89,005
5. Tomato 13,130 29,090 42,220
6. Bell Pepper 2,675 8,650 11,325
Total 436,117 302,139 738,256
Source: UDP Vegetable Market Research 2002

1.8 Total Supply

Bulk of the supply of vegetable products in South Cotabato mainly come from the three
(3) municipalities namely Tantangan, Tampakan and Tupi. Since the major market is
also at General Santos and Koronadal Cities, data on the vegetable product supply
that would plough in to these major markets are shown in Table 3.

Table 3. Volume of vegetable supply in the market

Vegetables Volume of Vegetable Supply (in kgs./year) Total

Gen San Koronadal
1. Potato 93,515 54,320 147,835
2. Carrots 114,775 38,900 153,675
3. Cabbage 36,822 43,488 80,310
4. Bulb Onion 24,375 51,325 75,700
5. Tomato 11,468 13,504 24,972
6. Bell Pepper 4,475 1,440 5,915
Total 285,430 202,977 488,407
Source: UDP Vegetable Market research 2002

These vegetables (potato, carrots, bell pepper, bulb onion and cabbage) are
classified according to sizes like small, medium and big while tomato is classified as
good or reject. Most common suppliers of these vegetables are from the Barangays
of Miasong, Glandang, Banate, Laurel, Palakasam, Liganfa, San Jose and Qumang.
Other sources of these vegetables come from Kapatagan (Davao del Sur), some
barangays in Sultan Kudarat as well as from Koronadal.

1.9 Demand and Supply Gap Analysis

The demand and supply gap analysis of the vegetable products in South
Cotabato can best be described through the table below:

Feasibility Study on Vegetable Production page 5

Table 4. Demand and supply gap of the prioritized vegetable products in South
Cotabato
Vegetables Total Demand of Total Volume of Demand-
vegetables for SoCot vegetables supplied in Supply Gap
(kgs./year) the market (kgs./year) (kgs./yr)
1. Potato 218,015 147,835 70,180
2. Carrots 206,925 153,675 53,250
3. Cabbage 170,766 80,310 90,456
4. Bulb Onion 89,005 75,700 13,305
5. Tomato 42,220 24,972 17,248
6. Bell Pepper 11,325 5,915 5,410
Total 738,256 488,407 249,840

1.10 Marketing Channel

According to the recently conducted vegetable market research in South

Cotabato, vegetable supply chain in the area followed the three (3) layer channels in
marketing to wit:

Farmers Wholesale/ Retailers Consumers

This situation reaffirms the national data that most vegetables pass through
the wholesalers and retailers before they reach consumers. Most often, the
wholesaler is responsible for assembly and retailing the produce and financing
production and marketing.

1.11 Marketing Costs

Vegetables in South Cotabato have the following marketing costs incurred

based on the recently conducted vegetable research by UDP. Marketing costs
incurred is presented in table 5 below:

Table 5. Marketing costs of a ¼ hectare vegetable production

Vegetables Marketing Cost Marketable Total Mktg. Marketable Total Cost for
Yield ¼ ha. Costs for ¼ ha. Yield per 417 417 m2 (P)
m2 (Kgs)
1 2* 3* 4 (2x3) 5+ 6 (2x5)
1. Potato 6.50/kg. 1,390 9,035 232 1,508
2. Carrots 1.55/kg. 945 1,465 158 245
3. Cabbage 1.60/kg. 3,045 4,872 508 813
4. Bulb Onion 2.25/kg. 357 803 59 133
5. Tomato 2.70/kg. 107 289 18 49
6. Bell Pepper 2.25/kg. 191 423 32 72
Total 6,035 16,887 1,007 2,820
Source: UDP Vegetable Marketing Research 2002

Feasibility Study on Vegetable Production page 6

Legend:
* Given Data
+ Ratio and proportion

The marketing costs presented in table 5 focused only on the prioritized vegetables
which are to be produced by an individual farmer on a one fourth hectare farm.

1.12 Promotional Measures

In order to entice more buyers of the products, vegetable farmers should not forget to
promote their products by way of the following system:

a. Maintain good business relationship with existing buyers such as delivery

of agreed volume and quantity of quality products on time, honesty in
dealing with the business partners and many others.
b. Take an extra effort at maintaining and expanding market networks thru
participation in locally organized agri-trade fairs, .
c. Regular participation to locally scheduled agri-trade fairs, market forum as
well as market encounters.
d. Distribution of flyers that will more or less contain the following capsulized
information:
Ÿ Name of farmer/producer
Ÿ Types of vegetable grown
Ÿ Planting/ harvesting calendar
Ÿ Production Capacity
Ÿ Farm location (including information on the accessibility of the farm
to market road)
Ÿ Indicative farm gate prices to entice the interest of buyers
e. Maximizing the linkages built by the assisting line government agencies
(e.g. DA and UDP) to avail marketing support services for client growers.

2.0. Technical and Production Aspect

2.1 The Vegetable Production Flow

While production and cultural practices vary from one type of vegetable to
another, the general cultural practices for vegetable production discussed
below apply:

a. Land Preparation

Prepare the field at least one month before planting by plowing

and harrowing the area for several times. Follow each plowing with
harrowing to efficiently prevent weeds from growing .

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Prepare furrows at a distance required by each vegetable type to
be grown. For wet season cropping, prepare raised beds instead of
furrows. In low and mid elevation areas, make deep furrows with 0.5m
wide. In high elevations, seed beds are prepared according to the width
requirement of each type of vegetable.

b. Seedling Production

Seedling production is necessary for those vegetables which can

not be directly seeded like tomato, eggplant, cabbage and others.
These can be produced through seed bed methods and tray methods.
Seed bed methods require incorporation of manure and rice hull ash or
wood ash for better seedling growth results.

c. Planting and Transplanting

There are vegetables that can be either sown directly in soil or be

transplanted. Direct seeding is carried out by broadcasting or by sowing
the seeds in row, then covering the seeds through spreading additional
top soil.
To facilitate transplanting, there is a need to water the seed beds
and gently uprooting the seedlings and transplant it in lower at a
distance required by each type of the vegetables,

d. Fertilization and Weeding

Applying the newly transplanted vegetable seedling with starter

solutions using organic fertilizers at the rate of 2t/gallon of H2O.
However, there are vegetables that requires larger application o f
organic fertilizer at planting to be followed with side dressing
applications especially on the vegetative stages of the grown
vegetables. Fertilizers are best applied after weeding to facilitate
maximum utilization of NPK contents of fertilizers by the plants.

e. Trellising/ Vine Training/ Pruning

For those creeping and climbing vegetables, use trellis to protect

the fruits from rotting and malformation. Construct vertical and overhead
trellis using Ipil-ipil or bamboo poles, abaca twines or straw wires are
done.

Train the vines on the vertical trellis (e.g. bitter gourd). Lateral
shoots may be pruned leaving only the main vine. Removing all female
flowers below the overhead trellis enhanced full development of well
formed fruits.

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f. Pest Management and Maintenance

An integrated pest and disease management is encouraged

nowadays. IPM can be applied by pruning and burning old infected
leaves at regular intervals. Virus spread can be prevented by using
healthy seeds. Avoid nematode damage through crop rotation and use
of organic manure.

Another method for pest management is to use botanical

pesticides or soap solutions which is found effective to control aphids
and cabbage looper worms. Hot pepper extracts are sprayed to leafy
vegetables (petchay/lettuce) to control damping off, soft root and club
root diseases. Today’s generation of farmers used organic pesticides in
controlling the occurrence of peace and disease of plants.

g. Harvesting

Harvesting is done when vegetables have reached its full maturity

growth stage. Some vegetables are harvested with mature, green or fully
ripened fruits or harvesting is done just before fruits are fully ripe or when
the peduncle starts to dry up (e.g. squash). Some mode of harvesting is
done according to the number of days after planting (DAP) or when 75% of
the leaves turn yellow or leaves would begin to fold over (e.g. garlic).
(Please refer to table 6 for the detailed production process and
maintenance of specific vegetables grown in South Cotabato)

2.2 Production Schedule and Farm Size

Each farmer shall be allowed to till one fourth (1/4) hectare only but
each farmer has to grow six (6) types of vegetables with an average plantable
size of 417 square meters per vegetable crop.

The limitation on the planting size of a vegetable farmer/grower is

influenced by the intensity of the maintenance required by these types of
vegetable crops. A total of ninety hectares (90.0 has.) shall be planted with these
prioritized vegetables with one fourth hectare/farmer planted with 6 types of
vegetables. Refer to Table 7 for the details of the production schedule.

Feasibility Study on Vegetable Production page 9

The Vegetable
Production
Flow

Vegetable Production Flow

Marketing Land Preparation

Seedbed/Seedling Transplanting/
Preparation planting

Harvesting
Feasibility Study on
Vegetable
Production

Pest Management Trellising/ Vine Weeding

Tracing/Pruning
Fertilization

page 10
Table 6. Cultural practices and maintenance applied to South Cotabato Vegetable

Production Process and Maintenance

Vegetables Land Seedling Planting and Fertilization Trellising/Vine
Preparation Preparation Transplanting Training/Prunin M
g
1. Tomatoes  Plowing/  seedbed transplant 3-5 1 tbsp /hill of bamboo or ipil- 
Harrowing preparation true leaves fertilizer applied ipil
one (1) month 1 -2 seedlings/ hill 2 days before use of rope or 
before with 40cm transplanting twine
planting spacing/hill
 0.75cm-1.0 transplant time is
width of during late in the
furrows afternoon
 1m distance
between
furrows
2. Bell Pepper  Plowing/  1hectare requires transplant 3-4 apply basal apply mulching 
harrowing the 100-200grams of weeks after fertilizer using 5- using rice hull
area seeds sowing w/ a 10 tons / has. Of and rice straw 
thoroughly distance of 0.3- manure
 Make furrows 0.5m hill 
0.5-0.75m use mulch to
apart for control weeds
single row and promote
planting better growth


3. Bulb Onion  Application of  1hectare needs transplant 4-6 1has.:11bags of  
30cm rice hull 5kgs. Seeds since weeks after 21-0-0, 27 bags 
layer 1 month a 300-500 sq. sowing of super
prior to last meter seedbed 15cm./hill is the phosphate, 4 
preparation produces enough planting distance bags of 0-0-60
 Land transplants basal/ side
preparation  prepare seed beds dressing
done 1 month at 1m wide
prior to line sow at 3-5kgs.
transplanting Seeds in a row
 Plowing/  reduce watering
harrowing  expose seedlings
operations to sunlight before
transplanting

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Table 7 presents the production schedule or the planting calendar for vegetable
suitable to type IV climate.

Table 7. Southern Mindanao Vegetable Product Planting Calendar

Vegetables Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
1. Potato
2. Carrot
3. Cabbage
4. Onion (Bulb)
5. Tomato
6. Bell Pepper
Source: Dept. of Agriculture XI

2.3 Farm Location

The major vegetable producing zones in South Cotabato are in the

municipalities of Tampakan, Tantangan and Tupi or most commonly known as
the TATATU cluster municipalities.

2.4 Building and Facilities

Individual vegetable grower/farmer usually facilitate production-

harvesting efforts in a makeshift shelter nearest to the production area. In most
cases, farm area is inaccessible to water and power services. The makeshift
shelter (payag) is usually constructed by the farmer and this is usually utilized
as temporary storage of harvested products before it will be hauled by the
buyers or brought to the BAGSAKAN CENTER. Most makeshift shelters’ cost
vary from P3,000 to P5,000 and this can be useful between 3 – 5 years only.

To facilitate good yield and better vegetable crop production, cropping

maintenance is of utmost necessity from seedling stage to maturity. To
achieve this, vegetable growers are required to establish proper and/or
efficient watering/irrigation facilities.

2.5 Machinery and Equipment

Farm Production Level

Table 8 shows common types of equipments used in the vegetable

production of South Cotabato farmers.

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Table 8. Equipment used in the vegetable production phases:
Farm Operation Equipment & Quantity Cost
Phases Machineries needed
1. Land Preparation Plow 1 1,000
Harrow 1 800
Carabao 1 10,000
2. Seedling Bolo 1 180
Preparation Shovel 2 300
Hoe 2 300
3. Planting/ Same tool in #2 - -
Harvesting
4. Fertilization/ Pail 3 300
Weeding Scythe 2 300
5. Trellising/ Vine Bolo (same tool in #2) - -
Training & Pruning
6. Pest Management Knapsack sprayer 1 1,150
7. Harvesting Knife 5 250
Kegs 10 500
Total 15,080.00

These farm equipment to be used in the vegetable production operation

can be acquired from local sources such as from the traders in General
Santos City or Koronadal City.

These equipments are to be used during the entire production period

and are to be acquired/purchased on cash basis and/or these are
considered farmers’ counterpart the fact that it is already within the
possession of the farmers.

2.6 Raw Materials and Supplies

The most common raw materials/ supplies used in vegetable production

are the planting materials (which include seeds or tubers), fertilizers (organic)
as well as organic pesticides.

2.7 Waste Disposal

Vegetable waste especially during harvest time are just allowed to rot or
decompose in the field. However, there are cases when vegetable wastes
are placed within the periphery of the production area and just allowed a
natural decomposition to happen. Burning is also done, but not to be
encouraged. Other means of disposing waste is through composting.
Farmers should be taught on the proper way of composting maximizing the
technical expertise of the Agri Technicians. The compost product can in
turn be utilized by the farmers themselves in their farms.

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2.8 Labor Requirements

Labor requirement in vegetable production also requires some degree

of technical expertise which can be developed and enhanced through
experience. In most cases, a total of 8 man animal days (MAD) and 25
mandays (MD) is required in a hectare of vegetable production. This
consist of the following:

Operations Labor Req’t. Unit Cost Total Total labor

Cost/cropping cost/year
1. Land Preparation and 8 MAD 200 / MAD 1,600 3,200.00
Lay – out
2. Planting 9 MD 100 / MD 900 1800.00
3. Crops Mgt. 8 MD 100 / MD 800 1600.00
4. Harvest/ Marketing 8 MD 100 / MD 800 1600.00

Total 25 MD 5,032.00

Note: Assumed to have 2 cropping cycles/year of operation

Since this study has its focus only on the one-fourth (1/4) hectare
vegetable farm, the following labor requirement is needed:

Operations Labor Req’t. Unit Cost Total Cost/cropping

A. Land Preparation
1. Plowing 2 MAD 200/MAD 400
2. Harrowing 1 MAD 200/MAD 200
3. Plotting Lay-out 2 MD 100/MD 200
4. Seed bed prep 1 MD 100/MD 100
5. Planting 2 MD 100/MD 200

2.9 Total Production Costs

Table 9 below details the production costs incurred in a ¼ hectare

production area:

Table 9: Total Production Costs of the 6 vegetables in a ¼hectare farm

Vegetables Prod’n costs Marketable Plantable Area Marketable Total Cost for
per ¼ ha. Yield ¼ ha. (Has) Yield per 417 417 m2 (P)
m2 (Kgs)
1. Potato 8000 1,390 12.0 232 1,334
2. Carrots 3900 945 14.0 158 651
3. Cabbage 5300 3,045 8.0 508 884
4. Bulb Onion 6000 357 9.0 59 1,001
5. Tomato 650 107 40.0 18 108
6. Bell Pepper 1500 191 7.0 32 250
Total 6,035 90.0 1,007 4,228

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3.0. Organization and Management Aspect

3.1 Name of the Enterprise:

The business is called South Cotabato Organic Vegetable Production.

3.2 Form of Enterprise

The business is solely a single proprietorship type of business which

is to be managed individually by each farmer grower. However, Mt. Matte
Highlanders’ association will act as the product consolidator of the farmer
growers. This means to say that the association must have in its
possession available records on the list of farmers and the vegetables they
had grown in each cropping cycle and provide such information to the
Financial Service Center (FSC) for financial assistance consideration.

Likewise, the association too must have in its possession

information on the financial assistance portfolio available in the FSC so
that it will also be relayed to the farmer grower themselves.

The association too should initiate setting up the selection criteria for
potential borrowers and to be endorsed to the Financial Service Center

3.3 Organizational Structure

The organizational structure that is being presented here is a pilot

organizational structure representing one barangay only.

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Organizational Structure

UDLF
UBA
(Mt. Matte
Highlanders
Association)
FSC

UCO UCO UCO UCO

1 2 3 4

Farmer Farmer Farmer Farmer

members members Members members

3.4 Duties, Functions and Responsibilities

1. UDLF (Upland Dev’t. Loan Fund)

a. Considered to be the fund source for this project

2. FSC (Financial Service Center)

a. Shall facilitate the releasing of loan funds to qualified farmers

b. Shall process the necessary documents for the legality of the loan
fund accessing.
c. Shall be responsible for setting the final selection criteria for would-
be clients

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d. Responsible to collect the repayments of the farmer borrowers
e. Responsible also to conduct orientation session to the farmer
borrowers emphasizing some critical points in loaning such as the
interest rate, mode of repayment, loan maturity and many more.
f. Shall facilitate in updating the loan records of each borrower and
provide such information to the borrowers themselves.

3. Upland Barangay Association (s)

a. Conduct consultation among the upland community organization

b. Formulate policies as to repayment process, loan fund usage and
limits
c. Provide information/ updates on production trends and market
potentials of the grown vegetable production

4. Upland Community Organizations

a. Conduct meeting with their respective members for information

updating

5. Members

a. Considered as the vegetable growers who are in charge in the

production of the necessary vegetable products

3.5 Qualification of Members

1. Physically fit to do hard labor

2. Must not below 18 years of age but not more than 60 years old
3. Must have at least ¼ hectare of land tilled
4. Willing to attend trainings and adopt technologies that enhance
agricultural productivity
5. Must cooperate with the policies formulated by the UCOs

3.6 Pre Operating Activities and Expenses

The vegetable production pre-operating activities and expenses

of a farmer- grower include preparation of planting materials as well as
purchase of farm inputs needed for the whole cropping season. These
activities assumed to constitute only 10% of the total production costs.

Feasibility Study on Vegetable Production page 18

4.0. Financial Study

4.1. Assumptions

b. A total of 90 hectares are targeted to be planted with these six (6)

prioritized vegetables
c. A total of 360 target farmer growers are to be assisted
d. Each farmer has to farm ¼ hectare to be planted with these 6 types of
vegetables
e. Average production area per vegetable per farmer is 417 square meters
only
f. Interest rate is 36% per annum

4.2.Total Financial Requirement

Each vegetable farm size required by the farmer to till which is one
fourth hectare would require a total production cost of P4,228.00 (See
Table 9), thus production cost per hectare will be amounting to P16,912.00.
Therefore, for the ninety hectares (90.0) potential plantable areas for these
6 types of vegetable crops, the financial requirement is P1,522,080.00

This figure affirms that the proposed loan package model for each
farmer to avail of a one fourth hectare farm which is P5,000.00 is enough in
order for the vegetable farmer grower to proceed in its farming operations.

Feasibility Study on Vegetable Production page 19

4.3. Project Financial Statement

Schedule1

Projected sales of a one fourth hectare vegetable farm planted with 6 types of vegetables during Peak
Period/Cropping season

Potato Carrots Cabbage Bulb Onion Tomato Bell Pepper

Year Marketab Price per Total Marketable Price per Kg. Total Marketable Price per Total Marketa Price per Total Marketable Price per Total Marketa Price per Total Grand Total
le Yield Kg. Yield Yield Kg. ble Yield Kg. Yield Kg. ble Yield Kg.
2003 232 17.60 4,083.20 158 10.60 1,674.80 508 13.20 6,705.60 59 57.00 3,363.00 18 14.30 257.40 32 25.00 800.00 16,884.00
2004 232 19.36 4,491.52 158 11.66 1,842.28 508 14.52 7,376.16 59 62.70 3,699.30 18 15.73 283.14 32 27.50 880.00 18,572.40
2005 232 21.30 4,941.60 158 12.83 2,027.14 508 16.00 8,128.00 59 68.97 4,069.23 18 17.30 311.40 32 30.25 968.00 20,445.37
2006 244 23.43 5,716.92 166 14.11 2,342.26 533 17.60 9,380.80 62 75.81 4,700.22 19 19.03 361.57 34 33.27 1,131.18 23,632.95
2007 244 25.77 6,287.88 166 15.50 2,573.00 533 19.36 10,318.88 62 83.31 5,165.22 19 20.93 397.67 34 36.60 1,244.40 25,987.05

Assumptions:

1. Buying price taken from the average of the maximum price during peak season
2. Only the marketable yield is considered
3. There is no increase in the quantity of the marketable yield for the first three years
4. A 5% increase of the marketable yield to happen by year 4 and shall remain in year 5.Projected increase in
the marketable yield is influenced by the decline of the production .
5. A 10% annual increase of price of the vegetable products is projected.

Feasibility Study on Vegetable Production page 20

Schedule 2:

Projected sales of a one fourth hectare vegetable farm planted with 6 types of vegetables during lean
period/cropping season

Potato Carrots Cabbage Bulb Onion Tomato Bell Pepper

Year Marketab Price per Total Marketable Price per Kg. Total Marketable Price per Total Marketab Price per Total Marketable Price per Total Marketa Price per Total Grand Total
le Yield Kg. Yield Yield Kg. le Yield Kg. Yield Kg. ble Yield Kg.
2003 232 32.00 7,424.00 158 34.00 5,372.00 508 27.00 13,716.00 59 97.00 5,723.00 18 20.75 373.50 32 90.00 2,880.00 35,488.50
2004 232 32.00 7,424.00 158 34.00 5,372.00 508 27.00 13,716.00 59 97.00 5,723.00 18 20.75 373.50 32 90.00 2,880.00 35,488.50
2005 232 32.00 7,424.00 158 34.00 5,372.00 508 27.00 13,716.00 59 97.00 5,723.00 18 20.75 373.50 32 90.00 2,880.00 35,488.50
2006 244 32.00 7,808.00 166 34.00 5,644.00 533 27.00 14,391.00 62 97.00 6,014.00 19 20.75 394.25 34 90.00 3,060.00 37,311.25
2007 244 32.00 7,808.00 166 34.00 5,644.00 533 27.00 14,391.00 62 97.00 6,014.00 19 20.75 394.25 34 90.00 3,060.00 37,311.25

Assumptions:

1. There is no increase in the quantity of the marketable yield for the first three years
2. There is 5% increase of marketable yield for year 4 only
3. No increase in price of the vegetable products during lean period is projected

Feasibility Study on Vegetable Production page 21

Schedule 3: Projected Annual Income Statement Per Vegetable (2
cropping cycle)

Assumptions:

1. There is 5% increase of expenses per year

2. Each farmer will access loan on a per cropping basis and will pay it on a
per cropping basis too
3. Interest rate is 36% per annum, since the farmer will pay it after
every cropping interest rate is computed at 18% / cropping
4. Farmer can access a total of P10,000.00 annually basing on their
P5,000.00 loan package/farmer/cropping
5. Principal amount and interest payment is distributed to each vegetable.
6. One cropping cycle is estimated to cover six (6) months
7. Computation is good for 2 croppings

Projected Annual Income Statement Per Vegetable (2 Cropping Cycles)

3.a. Name of Vegetable: Potato

Particulars 2003 2004 2005 2006 2007

Sales 8,166.40 8,983.04 9,883.20 11,434.00 12,576.00
Less: Operating
Expenses
Production Cost 2,668.00 2,801.40 2,941.47 3,088.54 3,243.00
Loan Payment 1,967.00 1,967.00 1,967.00 1,967.00 1,967.00
Net Income 3,531.40 4,214.64 4,974.73 6,378.46 7,366.00

3.b. Name of Vegetable : Carrots

Particulars 2003 2004 2005 2006 2007

Sales 3,350.00 3,684.00 4,054.00 4,681.00 5,153.00
Less: Operating
Expenses
Production Cost 1,302.00 1,367.00 1,435.00 1,507.00 1,582.00
Loan Payment 1,967.00 1,967.00 1,967.00 1,967.00 1,967.00
Net Income 81.00 350.00 652.00 1,207.00 1,604.00

Feasibility Study on Vegetable Production page 22

3.c. Name of Vegetable: Cabbage

Particulars 2003 2004 2005 2006 2007

Sales 13,411.00 14,752.00 16,256.00 18,762.00 20,638.00
Less: Operating
Expenses
Production Cost 1,768.00 1,856.00 1,948.00 2,046.00 2,148.00
Loan Payment 1,967.00 1,967.00 1,967.00 1,967.00 1,967.00
Net Income 9,676.00 10,929.00 12,341.00 14,749.00 16,523.00

3.d. Name of Vegetable: Bulb Onion

Particulars 2003 2004 2005 2006 2007

Sales 6,726.00 7,399.00 8,138.00 9,400.00 10,330.00
Less: Operating
Expenses
Production Cost 2,002.00 2,102.00 2,207.00 2,317.00 2,433.00
Loan Payment 1,967.00 1,967.00 1,967.00 1,967.00 1,967.00
Net Income 2,757.00 3,330.00 3,964.00 5,116.00 5,930.00

3.e. Name of Vegetable: Tomato

Particulars 2003 2004 2005 2006 2007

Sales 257.40 283.14 311.40 361.51 398.00
Less: Operating
Expenses
Production Cost 216.00 227.00 238.00 250.00 262.00
Loan Payment 1,967.00 1,967.00 1,967.00 1,967.00 1,967.00
Net Income (1,926.40) (1,910.86) (1,893.60) (1,855.49) (1,831.00)

3.f. Name of Vegetable: Bell Pepper

Particulars 2003 2004 2005 2006 2007

Sales 800.00 880.00 968.00 1,131.00 1,244.00
Less: Operating
Expenses
Production Cost 500.00 525.00 551.00 578.00 607.00
Loan Payment 1,967.00 1,967.00 1,967.00 1,967.00 1,967.00
Net Income (1,667.00) (1,612.00) (1,550.00) (1,414.00) (1,330.00)

Feasibility Study on Vegetable Production page 23

Schedule 4: Projected financial statement of a one fourth hectare planted
with 6 types of vegetables (2 cropping cycles only)

a) Projected Annual Income Statement of a ¼ hectare farm planted

with 6 vegetables

Particulars 2003 2004 2005 2006 2007

Sales 32,711.00 35,981.00 39,621.00 45,772.00 50,339.00
Less: Operating
Expenses
Production Cost 8,456.00 8,878.00 9,320.47 9,786.54 10,275.00
Loan Payment 11,802.00 11,802.00 11,802.00 11,802.00 11,802.00
Net Income 12,453.00 15,301.00 18,498.53 24,183.46 28,262.00

Assumption: 2 cropping seasons

b) Cash Flow Statement of a one fourth hectare

farm (For Year 1)

Cash In

Sales 32,711.00

Loan Proceeds 10,000.00

Equity 500.00
Total Cash In
43,211.00
Cash
Out
Production Cost
8,456.00
Loan Payments
11,802.00
Total Cash Out
20,258.00
Net Cash Flow
22,953.00

Feasibility Study on Vegetable Production page 24

c) Financial Analysis for a one fourth hectare only

Return on Investment = Net Income

Total Capital Requirement

= 12,453.00 = 124%
10,000.00

Net Profit Margin = Net Profit

Sales

= 12,453
32,711 = 38%

Cash Payback Period = Total Capital Requirement

Net Income

= 10,000.00
12,453.00

= 0.8 ~ 1 year

Feasibility Study on Vegetable Production page 25

Schedule 5:

Income Statement for Each Vegetable Planted/Cropping/Farmer

Particulars Potato Carrots Cabbage Bulb Onion Tomato Bell Pepper Total
Sales 4,083.20 1,674.80 6,705.60 3,363.00 257.40 800.00 16,884.00
Less:
Operating
Expenses
Production 1,334.00 651.00 884.00 1,001.00 108.00 250.00 4,228.00
Cost
Loan Payment 983.33 983.33 983.33 983.33 983.33 983.33 5,899.98
Net Income 1,765.87 40.47 4,838.27 1,378.67 (833.93) (433.33) 6,756.02

Note: Each vegetable is planted in a 417 square meter area. The above data
showed that tomato and bell pepper can not pay off the cost incurred. The
payment of the loan will be subsidized from the income of cabbage, potato and
bulb onion. The general picture however shows that planting 6 vegetables in a
¼ hectare farm can still generate a farmer’s income amounting to P6,756.00
on a per cropping basis. Only the marketable yield is considered.

Schedule 6:

Production Volume of ¼ hectare planted with 6 crops/farmer (within 5 years)

in kilograms.

Year and Potato Carrots Cabbage Bulb Tomato Bell Total

Cropping Onion Pepper
Season
2003 232 158 508 59 18 32 1007
232 158 508 59 18 32 1007
2004 464 316 1016 118 36 64 2014
2005 464 316 1016 118 36 64 2014
2006 244 166 533 62 19 34 1058
244 166 533 62 19 34 1058
2007 488 332 1066 124 38 68 2116
Total 2368 1612 5180 602 184 328 10274

Note:

1. Only the marketable yield is considered

th th
2. Increase of Marketable yield (5%) during the 4 and 5 year
assuming there is also a decline of production losses

Feasibility Study on Vegetable Production page 26

Schedule 7:

Production Volume of Marketable Yield for the 90 hectares for the 3 municipalities
# of farmers # of
Year to be Hectares Production Volume (1/4 hectare) Total Production Volume
served per per
cropping cropping
Potato Carrots Cabbage Bulb Onion Tomato B. Pepper Potato Carrots Cabbage Bulb Onion Tomato B. Pepper
Year 1 Cr 1 360 90 232 158 508 59 18 32 8,350 56,880 182,880 21,240 6,480 11,520
Cr 2 360 90 232 158 508 59 18 32 8,350 56,880 182,880 21,240 6,480 11,520
Year 2 Cr 1 360 90 232 158 508 59 18 32 8,350 56,880 182,880 21,240 6,480 11,520
Cr 2 360 90 232 158 508 59 18 32 8,350 56,880 182,880 21,240 6,480 11,520
Year 3 Cr 1 360 90 232 158 508 59 18 32 8,350 56,880 182,880 21,240 6,480 11,520
Cr 2 360 90 232 158 508 59 18 32 8,350 56,880 182,880 21,240 6,480 11,520
Year 4 Cr 1 360 90 232 158 508 59 18 32 8,350 56,880 182,880 21,240 6,480 11,520
Cr 2 360 90 232 158 508 59 18 32 8,350 56,880 182,880 21,240 6,480 11,520
Year 5 Cr 1 360 90 232 158 508 59 18 32 8,350 56,880 182,880 21,240 6,480 11,520
Cr 2 360 90 232 158 508 59 18 32 8,350 56,880 182,880 21,240 6,480 11,520
Total 3,600 900 2,320 1,580 5,080 590 180 320 83,500 568,800 1,828,800 212,400 64,800 115,200

Feasibility Study on Vegetable Production page 27

Schedule 8:

Projected Sales of Marketable yield for 90 hectares planted with 6 types of vegetables

Vegetable 1 Vegetable 2 Vegetable 3 Vegetable 4 Vegetable 5 Vegetable 6 Grand Total

Year Mt'ble Price (P) Total Mt'ble Price (P) Total Mt'ble Price (P) Total Mt'ble Price (P) Total Mt'ble Price Total Mt'ble Price Total
Yield Yield Yield Yield Yield (P) Yield (P)
2003 167,040 17.60 2,939,904.00 113,760 10.6 1,205,856.00 365,760 13.20 4,828,032.00 42,480 57.00 2,421,360.00 12,960 14.30 185,328.00 23,040 25.00 576,000.00 12,156,480.00
2004 167,040 19.36 3,233,894.40 113,760 11.66 1,326,441.60 365,760 14.52 5,310,835.20 42,480 62.70 2,663,496.00 12,960 15.73 203,860.80 23,040 27.50 633,600.00 13,37 2,128.00
2005 167,040 21.30 3,557,952.00 113,760 12.83 1,459,540.80 365,760 16.00 5,852,160.00 42,480 68.97 2,929,845.60 12,960 17.30 224,208.00 23,040 30.25 696,960.00 14,720,666.40
2006 119,520 23.43 2,800,353.60 119,520 14.11 1,686,427.20 383,760 17.60 6,754,176.00 44,640 75.81 3,384,158.40 13,680 19.03 260,330.40 24,480 33.27 814,449.60 15,699,895.20
2007 119,520 25.77 3,080,030.40 119,520 15.52 1,854,950.40 383,760 19.36 7,429,593.60 44,640 83.31 3,718,958.40 13,680 20.93 286,322.40 24,480 36.60 895,968.00 17,265,823.20

Legend:

Vegetable 1-Potato
2-Carrots
3-Cabbage
4-Bulb Onion
5-Tomato
6-Bell Pepper

Feasibility Study on Vegetable Production page 28

Schedule 9:

Projected Income Statement for the 90 hectares farmed by 360 target

farmers (5 Years)

Particulars 2003 2004 2005 2006 2007

Sales 12,156,480.00 13,365,302.00 14,720,667.00 15,699,895.00 17,265,822.00
Less: Operating
Expenses
Production Costs
Potato 967,680.00 1,008,504.00 1,058,929.20 1,111,874.40 1,167,480.00
Carrots 468,720.00 492,120.00 516,960.00 542,520.00 569,520.00
Cabbage 636,480.00 668,160.00 701,280.00 736,560.00 773,280.00
Bulb Onion 720,720.00 756,720.00 794,520.00 834,120.00 875,880.00
Tomato 77,760.00 81,720.00 85,680.00 90,000.00 943,320.00
Bell Pepper 180,000.00 189,000.00 198,360.00 208,080.00 218,520.00
Interest Expense 1,296,000.00 1,296,000.00 1,296,000.00 1,296,000.00 1,296,000.00

Total Expenses 4,347,360.00 4,492,224.00 4,651,729.20 4,819,154.40 5,844,000.00

Profit/Loss 7,809,120.00 8,873,078.00 10,068,937.80 10,880,740.60 11,421,822.00

Schedule 10:

Projected Cash flow Statement for the 90 hectares (good for 360 farmers) in
five years

2003 2004 2005 2006 2007

Cash Inflow
Sales 12,156,480.00 13,365,302.00 14,720,667.00 15,699,895.00 17,265,822.00
Counterpart (Savings 180,000.00 180,000.00 180,000.00 180,000.00 180,000.00
Mob)
Loan Proceeds 3,600,000.00 3,600,000.00 3,600,000.00 3,600,000.00 3,600,000.00
Total Cash Inflow 15,936,480.00 17,145,302.00 18,500,667.00 19,479,895.00 21,045,822.00
Cash Outflow
Production Loan 3,051,360.00 3,196,224.00 3,355,729.20 3,523,154.40 4,548,000.00
Loan Payment
Principal 3,600,000.00 3,600,000.00 3,600,000.00 3,600,000.00 3,600,000.00
Interest 1,296,000.00 1,296,000.00 1,296,000.00 1,296,000.00 1,296,000.00
Total Cash Outflow 7,947,360.00 8,092,224.00 8,251,729.20 8,419,154.40 9,444,000.00
Total Cash Flow/Increase 7,989,120.00 9,053,078.00 10,248,937.80 11,060,740.60 11,601,822.00
In Cash
Cash Beginning Balance - 7,989,120.00 17,042,198.00 27,291,135.80 38,351,876.40
Cash Ending Balance 7,989,120.00 17,042,198.00 27,291,135.80 38,351,876.40 49,953,698.40

Feasibility Study on Vegetable Production page 29

Schedule 11

Projected Balance Sheet for the 90 hectares production in 5 years

2003 2004 2005 2006 2007

Assets
Cash 7,989,120.00 17,042,198.00 27,291,135.80 38,351,876.40 49,353,398.40

Total Assets 7,989,120.00 17,042,198.00 27,291,135.80 38,351,876.40 49,353,398.40

Liabilities and Owner Equity

Loans Payable - - - - -
Member Equity 180,000.00 360,000.00 540,000.00 720,000.00 900,000.00
Undivided 7,809,120.00 16,682,198.00 26,751,135.80 37,631,876.40 49,053,698.40
Income/Loan

Total Liabilities 7,989,120.00 17,042,198.00 27,291,135.80 38,351,876.40 49,953,698.40

Feasibility Study on Vegetable Production page 30

5.0. Socio Economic Viability

The opportunities for increased income for the farmers in South Cotabato by growing
these prioritized vegetables will generate the following socio economic benefits:

1. With increase income from vegetable growing, the living condition of the farmers
would improve which would redound to better family condition and would influence
better access to education
2. Improved family health in the rural areas the fact that fifty two percent (52%) of
the production losses are being consumed
3. Enhanced the development of self confidence among the farmers in the sense that
they are directly the ones that will negotiate with the FSC for loan availment
4. Improved the attitude towards credit in the sense that they are really to pay the
loans availed
5. Improved the organizational capacity also of the organization in running
certain economic affairs of the group

Feasibility Study on Vegetable Production page 31

Annex A. Commodity Price Calendar

Commodity January February March April May June July August September October November December
Potato
Carrots
Cabbage
Baguio Beans
Cauliflower
Raddish
Bell Pepper
Chinese Cabbage
Chayote
Bulb Onion
Ginger
Garlic
String Beans
Squash
Eggplant
Ampalaya
Mongo
Tomato

Legend:

Low Price
High Price

Source: Vegetable Marketing Research in South Cotabato

Feasibility Study on Vegetable Production page 32

Annex B

Farmers’ Production Loss Usage

Usage % Rate
1. Sell at Lower 25%
Price
2. Consume 52%
3. Convert to 12%
Feeds
4. Throw or 8%
Give Away
5. Seedling 2%

% Rate

60%
50%
40%
30% % Rate
20%
10%
0%
Consume . Seedling

... t... ...

L or
.Sell at 2 . Convert . Throw 5
.
1 3 4

Source: Vegetable Market Research 2002 by UDP

Analysis:

The quantity of the production losses of the vegetable farmers have still productive uses.

A bigger portion of the considered production losses is being consumed (52%) while
those that are sold at lower prices reach are sold at lower prices reach 26%, those products
which are converted to feeds is 12% and those that are already thrown away is 8%.

Feasibility Study on Vegetable Production page 33

Annex C

Presentation of a comparative Analysis on Vegetable Producers’ Production

Cost and Yield on a ¼ hectare/vegetable and ¼ hectare with 6 crops

Marketable Yield Production Costs % rate

Vegetable a. 2,500 sq. b. 417 sq. a. 2,500 sq. b. 417 sq.
meter / veg. meter / veg. meter / veg. meter / veg.
Potato 1,390 232 8,000 1,334 17
Carrots 945 158 3,900 651 17
Cabbage 3,045 508 5,300 884 17
Bulb Onion 357 59 6,080 1,001 17
Tomato 107 32 650 108 17
Bell Pepper 191 18 1,500 250 17

A – Data based on the UDP vegetable marketable

research B – Data computed by ratio and proportion

Feasibility Study on Vegetable Production page 34

Annex D

Computed data on Ra tio and Proportion

Marketable Yield Production Costs Marketing Costs

Vegetable Baseline 417 sq. Baseline 417 sq. Baseline 417 sq.
(2500sq. meter (2500sq. meter (2500sq. meter
Meter) Meter) Meter)
Potato 1390 232 8000 1334 6.50/kg 1507
Carrots 945 158 3900 651 1.55/kg 244
Cabbage 3045 508 5300 884 1.60/kg 244
Bulb Onion 357 59 6000 1001 2.25/kg 134
Tomato 107 32 650 108 2.25/kg 73
Bell 191 18 1500 250 270/kg 49
Pepper

Feasibility Study on Vegetable Production page 35

Annex E

Total Production Costs Per Vegetable ( 2 cropping x 360 farmers)

Vegetable Year Production No. of Total Amount

Cost Farmers
Potato Year 1 2,688.00 X 360 967,680.00
Year 2 2,801.40 X 360 1,008,504.00
Year 3 2,941.47 X 360 1,058,929.20
Year 4 3,088.54 X 360 1,111,874.40
Year 5 3,243.00 X 360 1,167,480.00
Carrots Year 1 1,302.00 X 360 468,720.00
Year 2 1,367.00 X 360 492,120.00
Year 3 1,435.00 X 360 516,600.00
Year 4 1,507.00 X 360 542,520.00
Year 5 1,582.00 X 360 569,520.00
Cabbage Year 1 1,768.00 X 360 636,480.00
Year 2 1,856.00 X 360 668,160.00
Year 3 1,948.00 X 360 701,280.00
Year 4 2,046.00 X 360 736,560.00
Year 5 2,148.00 X 360 773,280.00
B. Onion Year 1 2,002.00 X 360 720,720.00
Year 2 2,101.00 X 360 756,360.00
Year 3 2,207.00 X 360 794,520.00
Year 4 2,317.00 X 360 834,120.00
Year 5 2,433.00 X 360 875,880.00
Tomato Year 1 216.00 X 360 77,760.00
Year 2 227.00 X 360 81,720.00
Year 3 238.00 X 360 85,680.00
Year 4 250.00 X 360 90,000.00
Year 5 262.00 X 360 94,320.00
Bell Pepper Year 1 500.00 X 360 180,000.00
Year 2 525.00 X 360 189,000.00
Year 3 551.00 X 360 198,360.00
Year 4 578.00 X 360 208,080.00
Year 5 607.00 X 360 218,520.00

Feasibility Study on Vegetable Production page 36

Annex F. Details of the computation of the data used

Expenses Per Year

Equity - 500/year divided by 2 = 250/2,500 ha.

P250= ¼ ha. = .25 ha.

Loan - 10,000 / year divided by 2 = 5,000/2,500 ha.

P5,000 = ¼ ha. = .25 ha.

Equity: 500/farmers x 360 farmers

Year 1 180,000.00
Year 2 180,000.00
Year 3 180,000.00
Year 4 180,000.00
Year 5 180,000.00

Loan Proceeds: 10,000 / year / farmer x 360 farmers

Year 1 3,600,000.00 x 36% 1,296,000.00

Year 2 3,600,000.00 x 36% 1,296,000.00
Year 3 3,600,000.00 x 36% 1,296,000.00
Year 4 3,600,000.00 x 36% 1,296,000.00
Year 5 3,600,000.00 x 36% 1,296,000.00

Feasibility Study on Vegetable Production page 37

Annex G. General financial analysis of the 90 hectares planted with 6 vegetables (360 farmers) in 5 years

Financial Analysis

2003 2004 2005 2006 2007

Return on Net Income 7,809,120.00 217.00% 8,873,078.00 246.00% 10,068,987.80 280.00% 10,880,740.00 302.24% 11,421,822.00 317.27%
Investment Total Capital Req't. 3,600,000.00 3,600,000.00 3,600,000.00 3,600,000.00 3,600,000.00
Net Profit Net Profit 7,809,120.00 64.00% 8,873,078.00 66.00% 10,068,987.80 68.00% 10,880,740.60 69.30% 11,421,822.00 66.15%
Margin Sales 12,516,480.00 13,365,302.00 14,720,667.00 15,699,895.00 17,265,822.00
Cash Total Capital Req't. 3,600,000.00 0.46 3,600,000.00 0.40 3,600,000.00 0.36 3,600,000.00 0.33 3,600,000.00 0.32
Payback Net Income 7,809,120.00 8,873,078.00 10,068,987.80 10,880,780.60 11,421,822.00
Period

Feasibility Study on Vegetable Production page 38

Annex H

Total Production Data of the Prioritized Vegetables for a ¼ hectare area in

South Cotabato

Vegetables Source Prod’n. Yield Prod’n Consumption Marketable

Costs (Kgs.) Loss (kgs) Yield
1. Potato Tupi 8000 1500 -105 5-10 1385
2. Carrots Tupi 3900 1000 -75 3-5 920
3. Cabbage Tupi 5300 3600 1080 5-15 2505
4. Bulb OnionTampakan 6000 400 40 .5-3 357
5. Tomato Tantangan/ 650 160 48 1-5 107
Tampakan
6. Bell Pepper Tampakan 1500 240 48 .25-1 191
Source: UDP Vegetable Marketing Research 2002

Feasibility Study on Vegetable Production page 39

Annex I

Price trends of the six (6) vegetables in South Cotabato for the last 5years
(1997 – 2001)
Vegetables Region XI Region XII Ave.
97 98 99 00 01 97 98 99 00 01 Price
1. Potato 25.80 32.79 34.88 35.70 33.00 21.95 25.88 27.98 26.15 25.10 28.92
2. Carrots 24.72 42.28 35.69 31.69 34.24 30.53 46.27 40.66 33.52 35.72 35.53
3. Cabbage 19.09 29.80 19.45 23.25 12.35 18.17 27.42 17.16 21.41 19.42 20.75
4. Bulb Onion 153.87 61.41 58.61 168.45 149.94 162.45 41.26 39.07 - 156.25 109.10
5. Tomato 15.93 25.02 19.72 18.65 22.45 17.89 23.64 17.01 17.77 18.58 19.66
6. Bell Pepper 46.88 81.36 66.78 54.39 48.58 46.88 62.78 46.59 45.69 49 50.03
Source: Bureau of Agricultural Statistics Office, Davao City

Feasibility Study on Vegetable Production page 40

ANNEX J

Summary of Projected Sales of a ¼ hectare farm of 6 vegetables for one

cropping only

Vegetables 2003 2004 2005 2006 2007

1. Potato 4,083.20 4,491.52 4,941.60 5,717.00 6,288.00
2. Carrots 1,674.80 1,872.28 2,027.14 2,342.26 2,576.32
3. Cabbage 6,705.60 7,376.16 8,128.00 9,380.80 10,319.00
4. Bulb Onion 3,363.00 3,699.30 4,069.23 4,700.22 5,165.22
5. Tomato 257.40 283.14 311.40 361.51 397.67
6. Bell Pepper 800.00 880.00 968.00 1,131.18 1,244.40
Total 16,884.00 18,572.40 20,445.23 23,631.13 25,952.60

Feasibility Study on Vegetable Production page 41