BUSINESS PLAN

Organic Rice Trading

Title of Enterprise

Malahutayong Kahiusahan sa Kababayen-an sa Bukidnon (MAKAKABUS)

Bukidnon Organic Products Corporation (BOPC)
Philippine Development Assistance Programme (PDAP)
Business Partners

Purok 1, Sinayawan, Valencia City

Hayes St corner Tiano St., Cagayan de Oro City
Business Addresses

Submitted by:

Sircio C. Chan
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EXECUTIVE SUMMARY

1. BRIEF DESCRIPTION OF THE ENTERPRISE

A number of farming families in Valencia City, Bukidnon produce high-quality, organically grown rice.
These families are members of MAKAKABUS, a women’s organization in eight barangays centered
around Barangay Sinayawan of the city.

The commercial collaboration of MAKAKABUS and BOPC intends to engage in organic rice trading.
The product will be sold to walk-in buyers from the warehouse of the organization in Sinayawan, as
well as through distributors of BOPC in various cities of the Philippines.

2. BRIEF PROFILE OF THE CO-ENTREPRENEURS

MAKAKABUS was established in 1999 to continue the partnership with PDAP in providing loans for
working capital in organic rice farming as well as in facilitating equipment rental and conducting
organic/inorganic rice trading. Since then, the people’s organization has succeeded in building up its
funds and in sustaining the interest of members in organic rice farming.

BOPC, a corporation based in Cagayan de Oro City, is intent on continuing its business partnership
with MAKAKABUS in full-scale trading of organic rice for the Philippine market and, in a few years,
the world market as well. Through some distributors, it presently ships organic rice to the cities of
Cagayan de Oro, Bacolod, and Iloilo. It also maintains its own retail outlet at the business center of
Cagayan de Oro.

PDAP, a funding agency in the Philippines for the Federal Government of Canada, seeks to harness
the productive capacity of Valencia City’s organic rice farmers and help BOPC’s penetration of the
huge market for organic rice in the domestic and foreign markets. The agency’s overarching goal is
to ensure the sustainability of the enterprise of the two business partners.

3. ENTERPRISE’S OBJECTIVES AND CONTRIBUTIONS TO THE COMMUNITY

Conversion to organic agricultural systems, like in organic rice farming, attains a number of objectives all
at once, namely: (a) enhances economic self-reliance; (b) conserves natural resources; (c) prevents
widespread use of toxic agri chemicals; (d) ensures food self-sufficiency; and (e) strengthens social
development of rural areas.

Specifically, organic rice trading by MAKAKABUS members in eight (8) barangays of Valencia City
seeks to attain the following targets:
1. revenues for farmer-members of MAKAKABUS that total almost P1 Million by the first year of
the plan and reach P10 Million by the fifth;
2. labor income (occasional employment income from palay processing) of P175,000 by 2007;
MAKAKABUS – BOPC – PDAP Sircio C. Chan
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 it is estimated that occasional employment to be generated will equal the number of

hectares cultivated during the cropping, i.e., 12 workers to be hired to dry, haul, and
stack palay per harvest period in 2003, rising to 120 workers per harvest period in
2007; they are expected to be husbands and sons of MAKAKABUS wives-members;
3. net income for MAKAKABUS of less than P100,000 in 2003, mounting to more than P1.5
Million by 2007;
4. net income for BOPC of around the same level;
5. amount loaned from PDAP fully repaid by MAKAKABUS by end-2005, by BOPC by end-
2007;
6. health benefits for involved farmers and their family members due to reduced exposure to
toxic agri chemicals; since these chemicals typically trigger headaches, tumors, and allergies,
reduced exposure to them lessens medical expenses and boosts productivity potential; and
7. cascade effect on other farmers in Valencia, resulting to reduced load of toxic chemicals in
the farming communities of the city, to the welfare of inhabitants and the environment.

MAKAKABUS – BOPC – PDAP Sircio C. Chan

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Section 1
MARKETING PLAN
1.1 DESCRIPTION OF THE PRODUCT/SERVICE

High-quality, organically grown rice will be sold directly by MAKAKABUS to local buyers in Bukidnon
as well as through domestic distributors contracted by BOPC. Aromatic M-9 rice will be produced in
increasing volumes by farming families in eight (8) barangays centered around Barangay Sinayawan
in Valencia City, Bukidnon.

1.2 COMPARISON OF THE PRODUCT WITH ITS COMPETITORS

The following features will ensure the competitiveness of the product to both local and foreign
markets. One, farming families belonging to MAKAKABUS will deliver M-9 rice, red-colored for the
Philippine and foreign markets and white-colored for the Bukidnon market. The rice variety is proven
to be resistant to numerous pests and bears an attractive scent. Second, organic farming methods
sharply lower production cost and allows MAKAKABUS to sell palay to BOPC or rice to walk-in
buyers at reasonable prices while ensuring sufficient income for farmers. And third, discounts by as
much as 17% off the quoted price, will be allowed by MAKAKABUS for volume orders.

Table 1.2 -- Competitive Analysis of the Product

Product Proposed
Competitors
Features Enterprise
Aroma 1 2
Price 1 2
Volume discount 1 4
Legend: 3 - Good
1 - Outstanding 4 - Fair
2 – V. Good 5 - Poor

1.3 LOCATION

MAKAKABUS intends to sell a portion of its members’ produce to walk-in buyers—in wholesale and
retail—milled rice from its warehouse in Barangay Sinayawan, Valencia, Bukidnon (see location map
below). It will sell the balance through BOPC’s retail outlets and local and foreign distributors.

Figure 1.3 -- Location Map

to Valencia City center

X
to Sinayawan Parish Church

to Barangay Laligan

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1.4
MARKET AREAS AND MAIN CUSTOMERS

High-end retailers like malls and supermarkets in Cagayan de Oro, Iloilo, and Bacolod—and later on,
Cebu, Manila, and urban centers near Manila—as well as BOPC’s own retail outlet in Cagayan de
Oro, will absorb supply coursed through the corporation. Traders and direct consumers from within
Bukidnon will serve as customers of the retail outlet/warehouse of MAKAKABUS in Barangay
Sinayawan. Through years of organic rice production, the PO and its rice variety have become
popular to Bukidnon traders and consumers.

Figure 1.4 - List of Market Areas and Their Size

Population
Area Sectors
(high-end consumers: 1% of pop.)
High-end retail
Selected Philippine
500,000 outlets serving
urban centers
affluent
Bukidnon 11,000 customers who
prefer organically
TOTAL 511,000 grown foods

1.5 TOTAL ANNUAL DEMAND

Global consumption, i.e., effective demand, of rice for 2002 is estimated by the UN Food and Agriculture
Organization (FAO) to be 409.8 Million tons. At around US$175 per ton, the global rice market is
approximately US$71.715 Billion. There is no firm data on the organic rice market, but current world
market for all organic products is huge. Sales were estimated to have reached US$21 Billion in 2001,
and growing. In the United States alone, annual growth of retail sales of organic products is more than
20%, such that by 2005 sales are expected to reach US$20 Billion. The retail market for organic food in
Canada is worth $300 to $750 million, with 80% of the products being imports; this market represents 1%
of total retail sales and sales are growing at an average annual rate of over 15%.

In the Philippines, domestic consumption of rice for 2002 is estimated by the Department of
Agriculture and the UN Food and Agriculture Organization (FAO) at 9,402,000 tons —translating to a
per-capita rice consumption of 118 kg. Assuming that 1% of the population belong to the affluent
class and are, at the same time, interested in purchasing only organic rice for health reasons, current
demand for organic rice in the Philippines can be placed at 94,020 tons. With the target market for
the product estimated at 511,000 persons, demand for the product in the selected locations is
estimated to be 60,300 tons in 2002. Following population trends, growth in domestic demand can
be estimated as 2% per annum.
Projected annual demand for the next five years can therefore be shown as follows:

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Table 1.5 -- Table of Projected Demand Per Year: Bukidnon & Rest of the Phils.

Domestic Demand for

Year Market
Organic Rice (tons)
Bukidnon
2003 61,506
Rest of Phils.
Bukidnon
2004 62,736
Rest of Phils.
Bukidnon
2005 63,991
Rest of Phils.
Bukidnon
2006 65,271
Rest of Phils.
Bukidnon
2007 66,576
Rest of Phils.

1.6 MARKET SHARE

At the moment, only 16 ha. are organically farmed by families who are members of MAKAKABUS.
Experience has shown that from each hectare, farmers can sell to the PO or other traders thirty (30)
sacks of milled rice (1.5 tons) per cropping, or 3 tons/year at 2 croppings. Hence, for 2002, 75 tons
will be produced. Working on the assumptions that 25 ha will be planted organically in 2003,
increasing by 50 hectares per year thereafter—possible through smooth coordination by the PO and
PDAP with microfinance institutions that will provide production funds to farmers—the table below
shows projected production figures and market share estimates.

Table 1.6 -- Table of Projected Market Share of the Enterprise

Total Production for Projected

No. of Has. Market
Year the Enterprise (tons) Domestic
Planted Share (%)
(at 3 tons/ha/yr) Demand
2003 25 75 61,506 0.12%
2004 75 225 62,736 0.36%
2005 125 375 63,991 0.59%
2006 175 525 65,271 0.80%
2007 225 675 66,576 1.01%

The above market shares—about one-tenth of 1% in 2003 and a little more than 1% by 2007—are
miniscule and suggest the following:

a. the project has good market potential and

b. it needs to be steered well in order to satisfactorily cater to this demand, particularly

through

b.1 manageable expansion of area planted and

b.2 strict quality control.

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1.7 BUYING AND SELLING PRICE

The Department of Agriculture reports that the current selling price of fancy rice in Metro Manila is
P30 per kilo while premium rice is sold at P25 per kilo. The price for fancy rice compares well with
BOPC’s existing selling price to high-end retailers in Cagayan de Oro, which is P32 per kilo, with the
retailers selling the product in turn at P35 per kilo. Current palay buying price by MAKAKABUS from
its members is P9.00 per kilo.

1.7A MAKAKABUS

It is safe to assume that the people’s organization will continue buying palay at P9 per kilo from its
members and will sell palay to BOPC at P11.00 per kilo in 2003. For subsequent years, P0.25
increase in selling price each year is reasonable.

Not all produce will be sold to BOPC. Learning from the experience in 2001 and 2002, a fixed
volume of 2 tons of palay will be retained for selling as milled rice (at P24 per kilo) at Sinayawan by
the PO, as direct consumers and traders regularly visit their warehouse. The stock will also serve as
buffer to the members in case of scarcity of rice in Valencia due to cut-off of irrigation by the
government—as happened in the early part of this year—or in cases of drought or crop failure.

1.7B BOPC

Following the PO’s new policy, BOPC can buy palay at P11.00 per kilo in 2003. The corporation has
indicated its willingness to respect this price at the planned volume, and is willing to increase the
buying price in the succeeding years as the volume escalates.

1.8 SALES/REVENUE FORECAST

Basing from the figures above, projected revenues for farming families who are members of
MAKAKABUS, for the PO itself, as well as for BOPC will be as follows:

SCHEDULE 1.8A -- PROJECTED REVENUES – ORG. RICE FARMERS

Year 2003 2004 2005 2006 2007

Projected Volume – Palay (tons)
(at 4.3 tons/ha/yr, net of harvest 107.50 322.50 537.50 752.50 967.50
costs)

Selling Price per Kilo 9.00 9.25 9.50 9.75 10.00

Projected Revenues – Farmers

967,500 2,983,125 5,106,250 7,336,875 9,675,000
(Peso)

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SCHEDULE 1.8B -- PROJECTED REVENUES FROM ORG. RICE TRADING-- MAKAKABUS

Year 2003 2004 2005 2006 2007

Projected Volume – Rice (tons)

1.4 1.4 1.4 1.4 1.4
(for local direct buyers)

Selling Price per Kilo 24.00 24.25 24.50 24.75 25.00

Projected Revenues
33,600 33,950 34,300 34,650 35,000
(Peso)

Year 2003 2004 2005 2006 2007

Projected Volume – Palay

105.50 320.50 535.50 750.50 965.50
( tons) (for BOPC)

Selling Price per Kilo

11.00 11.25 11.50 11.75 12.00
(Wholesale)
Projected Revenues
1,160,500 3,605,625 6,158,250 8,818,375 11,586,000
(Peso)

Year 2003 2004 2005 2006 2007

Consolidated Projected
1,194,100 3,639,575 6,192,550 8,853,025 11,621,000
Revenues – PO (Peso)

SCHEDULE 1.8C -- PROJECTED REVENUES – BOPC

Year 2003 2004 2005 2006 2007

Projected Volume – Milled (tons)

74 224 374 524 674
(sold by BOPC thru distributors)

Selling Price per Kilo 32.00 32.25 32.50 32.75 33.00

Projected Revenues – BOPC

2,368,000 7,224,000 12,155,000 17,161,000 22,242,000
(Peso)

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1.9 PROMOTIONAL MEASURES AND MARKETING STRATEGY

While regularly supplying BOPC, MAKAKABUS will continue to cater to existing direct buyers who
regularly visit their warehouse.

BOPC, on the other hand, will utilize its existing retail outlet at the business center of Cagayan de
Oro as well as high-end supermarkets and malls in the city. It will continue shipping the products to
Iloilo and Bacolod distributors and commence delivery to Metro Manila and adjacent urban centers,
plus Metro Cebu, once MAKAKABUS’s production picks up in 2004. Following standard practice, it
will allow terms of payment, from 45 to 90 days.

1.10 MARKETING BUDGET

Being on the selling side of the partnership, BOPC will have a significant budget for marketing, as
follows:

SCHEDULE 1.10 -- TECHNICAL BUDGET - MAKAKABUS

Account Title 2003 2004 2005 2006 2007

Retail outlet: salaries, utilities, rent 84,000 120,000 156,000 192,000 228,000
Freight out 120,000 240,000 360,000 480,000 600,000
Representation and transportation 120,000 150,000 180,000 210,000 240,000
TOTAL BUDGET - MARKETING 324,000 510,000 696,000 882,000 1,068,000

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Section 2
TECHNICAL PLAN

2.1 TECHNICAL PROCESS

Both MAKAKABUS and BOPC are thoroughly familiar with the technical aspect of the enterprise,
having been engaged in rice trading since 1997. The technical aspect consists of the following steps:

Figure 2.1 -- Process Flow Chart

freshly threshed hired members dries palay in for its reserve, PO mills
palay delivered by the solar drier until it is ready palay
farmer-members to for milling
the warehouse P488/ton palay
P9,000/ton palay P90/ton palay (@P35/sack rice)

milled rice packed into

BOPC picks up sacked rice stored in the sacks, hauled, and
palay (wholesale) warehouse arranged in the
P11/kg or warehouse
P11,000/ton palay P90/ton palay

Local traders and

consumers walk in
to buy rice (retail)
P24.00/kg rice

2.2 FIXED CAPITAL FOR TECHNICAL ASPECT

The people’s organization will be best assisted through provision of materials for the construction of
a solar dryer and bigger warehouse. Both will be constructed on a parcel of land it recently
purchased. The cost of these facilities is estimated by the PO to be as follows:

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SCHEDULE 2.2 -- FIXED CAPITAL (FIXED ASSETS)

Cost Life Depreciation

Account Title
(Pesos) (Years) (Pesos)
Solar dryer with fence 100,000 20 5,000
Warehouse/retail outlet 200,000 20 10,000
TOTAL FIXED CAPITAL
300,000 15,000
– TECHNICAL

2.3 SOURCES OF CONSTRUCTION MATERIALS

There are many suppliers of construction materials in Valencia City and nearby areas.

2.4 FARM, WAREHOUSE, AND DRYER LOCATIONS

The farming family-members of MAKAKABUS cultivate rice in farms located in eight (8) adjacent
barangays in Valencia City. The warehouse and solar dryer will be located near the Catholic Parish
Church of Barangay Sinayawan.

Figure 2.4 -- Location

to Valencia City center

Newly purchased lot

X
to Sinayawan Parish Church

to Barangay Laligan

2.5 NEEDED VOLUME AND COST OF MATERIALS

The cost of purchase of palay by both organizations is estimated as follows:

2.5A MAKAKABUS

Figure 2.5A -- Needed Volume and Cost of Palay

Annual Volume Ave. Buying Price Cost

Year
(tons of palay) (Pesos/kg) (Pesos)
2003 107.50 9.00 967,500
2004 322.50 9.25 2,983,125
2005 537.50 9.50 5,106,250
2006 752.50 9.75 7,336,875
2007 967.50 10.00 9,675,000

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2.5B BOPC

Figure 2.5B -- Needed Volume and Cost of Palay

Annual Volume Ave. Buying Price Cost

Year
(tons of palay) (Pesos/kg) (Pesos)
2003 105.50 11.00 1,160,500
2004 320.50 11.25 3,605,625
2005 535.50 11.50 6,158,250
2006 750.50 11.75 8,818,375
2007 965.50 12.00 11,586,000

2.6 AVAILABILITY OF MATERIALS

The government, through its provision of irrigation water, allows two (2) cropping seasons in Valencia.
Harvest periods for organic rice is around October and April of each year. Supply of organic rice during
other months of the year will depend on the inventory levels of MAKAKABUS. As for supply of seeds and
organic fertilizers, the PO will make sure that farmers set aside one (1) sack of seeds per hectare farmed. It
will also retain a number of sacks of palay as buffer seed stocks. Production of organic fertilizers, another
enterprise of the PO that has grown highly successful, will be continued to answer farmers’ requirements.
However, although MAKAKABUS members will be prioritized in the allocation of the fertilizer, the fertilizers
will be sold in cash to buyers on a first come-first served basis to ensure market discipline.

2.7 AVAILABILITY OF LABOR AND COST OF MILLING AND LABOR

Availability of needed manpower or womanpower is not a problem, as the PO can easily tap its
farming family-members. Below is the package cost of labor in palay drying-milling-sacking-storing:

Table 2.7A -- Package Cost/Unit

Employment Cost per Ton

Step Skill
Status (Peso)

Workers for drying All-around Package basis 90/ton palay

Milling charges - Package basis 488/ton palay

Packing, hauling,
All-around Daily wage 90/ton palay
stacking of sacks
668 per ton
Total
palay

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Table 2.7B -- Total Processing Cost - MAKAKABUS

Processing
Volume Total Cost
Year Buyers Cost/Ton
(tons rice) (Pesos)
(Pesos)
BOPC (w/o milling) 105.5 180
2003 20,326
Walk-in 2.0 668
BOPC (w/o milling) 320.5 180
2004 59,026
Walk-in 2.0 668
BOPC (w/o milling) 535.5 180
2005 97,726
Walk-in 2.0 668
BOPC (w/o milling) 750.5 180
2006 136,426
Walk-in 2.0 668
BOPC (w/o milling) 965.5 180
2007 175,126
Walk-in 2.0 668

2.8 PRODUCT QUALITY CONTROL

The enterprise will ensure product integrity through coordinated quality control. Below is the quality
control process chain, as originally envisioned by BOPC but slightly modified for this study:

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PRODUCT FLOW CONTROL MEASURES

Farmer Level First Level of Control

Production Operation
- choice of seeds - organic seeds sourced from PO members
- planting - organic fertilizer applied
- weeding/maintenance - PO has its own threshing facilities
- fertilization - farmer-producer’s product registered with the PO
- harvesting - capital support for organic rice production provided
- threshing - production practices of farmers monitored by
cluster leaders

PO Level Second Level of Control

- first level of procurement - regular monitoring: from seed selection,

- drying transplanting, maintenance, up to harvesting
through technical and field staff
- only products certified by the PO leaders and
cluster leaders are procured
- farmer producers registered his farm and area as
organic before planting season

BOPC/Exporter Level Third Level of Control

- PO registers names of organic producers and
locations for field monitoring and verification by
- drying
BOPC and exporter(s)
- milling
- BOPC, exporter(s), and PO jointly set he
- packaging
guaranteed procurement price
- distribution
- BOPC staff monitors the planted areas during
cultivation, i.e., before harvesting
- farmers register with BOPC and exporter(s)
through PO before production operation
- PO dries the product separately to ensure non-
contamination, monitored by BOPC and
exporter(s)
- BOPC & exporter(s) monitor scheduled milling by PO
- quality control and packaging
- storage and distribution

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2.9 TECHNICAL/PRODUCTION BUDGET

Cost control will be implemented, especially in the technical aspect of the business. Production and
technical expenses will be limited to the following items:

SCHEDULE 2.9A -- TECHNICAL BUDGET - MAKAKABUS

Account Title 2003 2004 2005 2006 2007

Palay purchase 967,500 2,983,125 5,106,250 7,336,875 9,675,000
Palay processing 20,326 59,026 97,726 136,426 175,126
SUB-TOTAL BUDGET – PROD’N 987,826 3,042,151 5,203,976 7,473,301 9,850,126
Depreciation – Building & Dryer 15,000 15,000 15,000 15,000 15,000
TOTAL BUDGET – PROD’N 1,002,826 3,057,151 5,218,976 7,488,301 9,865,126

SCHEDULE 2.9B -- TECHNICAL BUDGET - BOPC

Account Title 2003 2004 2005 2006 2007

Palay purchase from P.O. 1,160,500 3,605,625 6,158,250 8,818,375 11,586,000
Freight in 105,000 320,000 535,000 750,000 965,000
Palay processing 23,210 72,112 123,165 176,367 231,720
TOTAL BUDGET – PROD’N 1,288,710 3,997,737 6,816,415 9,744,742 12,782,720

2.10 PRODUCTION COST PER UNIT

The cost per unit for MAKAKABUS is reasonable and assures a healthy profit margin of more than
P1.50 per kilo of rice sold:

Table 2.10A -- Production Cost/Unit Sold – MAKAKABUS

Account Title 2003 2004 2005 2006 2007

Production Cost (Peso) 1,002,826 3,057,151 5,218,976 7,488,301 9,865,126
Production Volume (Kg) 107,500 322,500 537,500 752,500 967,500
Production Cost/Kg 9.33 9.48 9.71 9.95 10.20

Table 2.10B -- Production Cost/Unit Sold – BOPC

Account Title 2003 2004 2005 2006 2007

Production Cost (Peso) 1,288,710 3,997,737 6,816,415 9,744,742 12,782,720
Production Volume (Kg) 105,500 320,500 535,500 750,500 965,500
Production Cost/Kg 12.22 12.47 12.73 12.98 13.24

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Section 3
ORGANIZATION AND MANAGEMENT PLAN

3.1 FORM OF BUSINESS

Near-Term

 MAKAKABUS and BOPC will be business partners in trading the organic rice produced by the
farming families involved. They will sign a Marketing Agreement to assure the former about the
selling price and the latter about the volume and quality of supply.
 Members of MAKAKABUS will also sign Delivery Agreements with MAKAKABUS to assure the latter
about the volume and quality of supply and the former about the farmgate price..
 At the moment, the PO is afraid of being merely used by BOPC, without getting any tangible
benefits for itself. BOPC, on the other hand, wants to ensure product integrity, while PDAP
wishes to see its past and planned additional investments yield acceptable returns. Continued
negotiation and discussion among the three institutions may, in time, resolve differences—
regarding finance, price, cost, target markets, vision of the enterprise—build mutual trust, and
create a workable business team.
 To comply with PDAP requirements, MAKAKABUS will perform the following:
a. apply for registration as a Cooperative with the Cooperative Development Authority (CDA);
b. revise its Constitution and By-Laws so as to have clear rules on the following:
b.1 use of profits (how much to set aside for purchase/set-up of other fixed assets, how much for
additional working capital, or how much for distribution as dividends)
b.2 payment of loans and other obligations
b.3 nepotism and favoritism within the organization
b.4 internal sanctions on erring members (including non-payment of financial obligations and
violations of organic growing practices)
b.5 compulsory and voluntary savings using sales of products in order to hike members’ equity to
P200,000 by 2004;
c. assign one board seat to PDAP-Philippines until it finishes paying its loan from the latter;
d. agree with BOPC and PDAP on its capability-building (technical and organizational) requirements;
e. willing participate in the capability-building program; and
f. grant PDAP-Philippines the following rights:
f.1 inspect and audit its books;
f.2 select and assign an external auditor;
f.3 review relevant marketing contracts;
f.4 assign specific tasks to be accomplished by the organization; and
f.5 participate in selecting and hiring a professional management team.

 BOPC, on the other hand, will perform the following:

a. gradually increase its equity to P1,000,000 by end-2004 from the present P500,000 both by
a.1 increasing the investment of its existing shareholders and
a.2 inviting at least one additional investor (individuals, cooperatives, corporations) per year;
b. assign one board seat to PDAP-Philippines until it finishes paying its loan from the latter; and
c. agree to a scheme of periodic and progressive payment of its loan;
d. agree with BOPC and PDAP on its capability-building (marketing, technical, and management)
requirements; and
e. willingly participate in the capability-building program; and
f. grant PDAP-Philippines the following rights:
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f.1 inspect and audit its books;

f.2 select and assign an external auditor;
f.3 review relevant marketing contracts;
f.4 assign specific tasks to be accomplished by the organization; and
f.5 participate in selecting and hiring a professional management team.

Long-Term

 In the long term, BOPC is interested to invite other groups of farmers producing rice in the organic
way to join the marketing partnership.
 BOPC will also invite other investors or obtain a loan to construct a closed-type, multi-pass rice
milling facility worth around P6 Million, which will help ensure that the product passes minimum
quality standards set by certifying bodies for export-grade organic products. BOPC estimates that the
facility would be viable if supported by a minimum of 150 hectares of organic-rice farmlands. Such
hectarage can be achieved by 2006, the fourth year of the enterprise.

3.2 WORKING RELATIONSHIP

MAKAKABUS has been a development partner of PDAP for some time. However, BOPC is presently
not a partner, but will become one once PDAP agrees to lend it an additional working capital ( see
Section 4.1ff). BOPC has been the trading partner of MAKAKABUS since the latter ventured into
organic rice production, using its own limited working capital.

BOPC desires to improve its existing working relationship with MAKAKABUS and at the same
maintain or enhance product quality. For its part, the PO is willing to smoothen areas of conflict to
ascertain that a fair and lasting commercial relationship will be established with BOPC to help
improve the economic condition of its farmer-members.

Internally, BOPC incorporators remain united in their vision for a long-term engagement in trading of
organic rice and other farm products. Likewise, MAKAKABUS members, having gone through years
of team-building efforts by PDAP and BCSA, PDAP’s Bukidnon-based NGO partner, are eager to
collaborate in producing organic rice as long as an established buyer commits to purchase their
product at a reasonable price.

3.3 ORGANIZATIONAL STRUCTURE

Below is the arrangement, to be firmed up through a Marketing Agreement, proposed by both

MAKAKABUS and BOPC. PDAP-Philippines will broker the formulation and signing of the
agreement.

Figure 3.3 -- Organizational Chart

assured market
MAKAKABUS BOPC
assured supply

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3.4 BUSINESS EXPERIENCE AND QUALIFICATION OF CO-ENTREPRENEURS

MAKAKABUS and BOPC have been engaged in organic rice trading for more than three years. The
former also engages in trading of rice that is grown in the “inorganic”/“traditional” or chemical-
dependent manner. The latter has cultivated contacts among local distributors and intends, search
for more for other local markets. PDAP, through its contacts, will help BOPC in obtaining certification
from a Manila-based institute for its product so it can establish a firm foothold in the domestic
upscale market. This certification will pave the way for an eventual certification by an international
body for the corporation’s proposed exportation of the product in the near future.

3.5 PRE-OPERATING ACTIVITIES

 To cement the working relationship among MAKAKABUS, BOPC, and PDAP, it is advisable that
activities geared towards team-building, conflict resolution, visioning, and medium-term/long-term
planning will be conducted throughout September 2002.
 Once the vision and plans are in place, the PO’s new warehouse and solar drier can be
constructed in January 2003, using a grant from PDAP. A typewriter and filing cabinet will also be
purchased for MAKAKABUS.
 Negotiations with local microfinance institutions will also be conducted towards the end of the
year, the formal signing of agreement and access of funds by the PO’s farmer-members targeted
for end-December. In this way, farmers will be able to plant using organic inputs and have
salable palay by April 2003. With the help of a firmed-up microfinance setup, the enterprise aims
for a total of 25 hectares cultivated organically in 2003, to increase by a minimum of 50 hectares
with each passing year through full adoption of the farming method by member-farmers and
recruitment of other farmers in Valencia City.
 BOPC and MAKAKABUS will commence participating in a capability-building program (there will be
a separate budget for this).

Figure 3.5 -- Pre-Operating Activities

Timetable (2002-2003)
Activities
Sep Oct Nov Dec Jan
Corporate team-building, visioning, planning
Construction of new warehouse and solar
drier
Negotiation with local microfinance institutions
for farmers’ and PO’s financing needs
Signing of contract with MFI(s)
Release of production loan by MFI in time for
the planting season
Purchase of office fixtures

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3.6 PRE-OPERATING EXPENSES

The cost of the above-mentioned activities for BOPC are as follows:

SCHEDULE 3.6 -- PRE-OPERATING COST

Account Title Cost

Corporate team-building, visioning, planning 40,000
Negotiation with local microfinance institutions for
2,000
farmers’ and PO’s financing needs
Signing of contract with MFI(s) 1,000
Release of production loan in time for planting season -
Purchase of a filing cabinet 5,000
Purchase of a typewriter 2,000
TOTAL PRE-OPERATING COST 50,000

3.7 GENERAL AND ADMINISTRATIVE (OPERATING) EXPENSES

Only necessary office supplies will be bought to keep costs down. MAKAKABUS and BOPC already
have adequate fixed assets.

SCHEDULE 3.7A -- GENERAL AND ADMINISTRATIVE BUDGET, 2003

MAKAKABUS

Account Title Cost

Office supplies 5,000
Travel expenses 5,000
Meetings & conferences 5,000
Permits & licenses 1,500
Miscellaneous expenses 5,000
TOTAL 21,500

SCHEDULE 3.7B -- GENERAL AND ADMINISTRATIVE BUDGET, 2003

MAKAKABUS

Account Title Cost

Office supplies 5,000
Travel expenses 5,000
Meetings & conferences 5,000
Permits & licenses 1,500
Miscellaneous expenses 5,000
TOTAL 21,500

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Section 4
FINANCIAL PLAN
4.1 PROJECT COST

PDAP will provide a loan of P100,000 to augment the working capital of MAKAKABUS and another
P2,000,000 to increase the working capital of BOPC. It will be used by each organization to buy
palay. The funding agency will also release to MAKAKABUS P300,000, following the standard
procurement procedure, for the construction of drying and storage facilities, plus P50,000 for pre-
operating activities.

SCHEDULE 4.1A -- PROJECT COST

MAKAKABUS

PDAP – PDAP –
Particulars Equity Total
Grant Loan
A. Fixed Capital (Fixed Assets)
Solar dryer - 100,000 100,000
Warehouse/retail outlet - 200,000 200,000
Sub-Total Fixed Assets - 300,000 300,000
B. Pre-Operating Expenses
Sub-Total Pre-Op. Cost - 50,000 50,000
C. Working Capital (Current Assets)
Cash for first-cropping purchases 130,000 - 100,000 230,000
Sub-Total Working Capital 130,000 - 100,000 230,000
Grand Total -- Currency 130,000 350,000 100,000 580,000

Grand Total -- (%) 23% 60% 17% 100%

SCHEDULE 4.1B -- PROJECT COST

BOPC

Particulars Equity PDAP – Loan Total

A. Fixed Capital (Fixed Assets)
B. Pre-Operating Expenses
C. Working Capital (Current Assets)
Cash 500,000 2,000,000 2,500,000
Sub-Total Working Capital 500,000 2,000,000 2,500,000
Grand Total -- Currency 500,000 2,000,000 2,500,000

Grand Total -- (%) 20% 80% 100%

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SCHEDULE 4.1C -- PROJECT COST

CONSOLIDATED

PDAP – PDAP –
Particulars Equity Total
Grant Loan
A. Fixed Capital (Fixed Assets)
Solar drier - 100,000 100,000
Warehouse/retail outlet - 200,000 200,000
Sub-Total Fixed Assets - 300,000 300,000
B. Pre-Operating Expenses
Sub-Total Pre-Op. Cost - 50,000 50,000
C. Working Capital (Current Assets)
Cash for first cropping purchases –
130,000 - 100,000 230,000
MAKAKABUS
Cash – BOPC 500,000 - 2,000,000 2,500,000
Sub-Total Working Capital 630,000 - 2,100,000 2,730,000
Grand Total -- Currency 630,000 350,000 2,100,000 3,080,000

Grand Total -- (%) 21% 11% 68% 100%

4.2 FINANCING PLAN OF THE ENTERPRISE AND LOAN REQUIREMENT OF FARMERS

BOPC and MAKAKABUS will put in a total of 21% of the cash requirements of the enterprise. PDAP
will participate through a loan of P2,100,000 (68% of project cost) and grant of P350,000 (11% of
project cost).

With regard to farmer’s cash requirements, the enterprise will ensure that they are linked to tested
local microfinance institutions and will facilitate their loan applications. A non-collateralized solidarity
or group loan, following a modified Grameen model to accommodate longer repayment terms, may
be availed of by MAKAKABUS, with payment collection to be conducted by the people’s
organization. This will help ensure organic rice farming of a minimum of 25 hectares in 2003 and
additional 50 hectares with each succeeding year.

4.3 TERM OF LOAN AND SCHEDULE OF PROJECTED AMORTIZATION –

(MAKAKABUS: 3 years to pay, 12% interest per annum; BOPC: 5 years, 6% p.a.)

SCHEDULE 4.3A – LOAN AMORTIZATION SCHEDULE

MAKAKABUS

Account Title 2003 2004 2005

Amortization of Principal 33,333 33,333 33,334

Interest Expense 12,000 8,000 4,000

Total Annual Payment 45,333 41,333 37,334

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SCHEDULE 4.3B – LOAN AMORTIZATION SCHEDULE

BOPC

Account Title 2003 2004 2005 2006 2007

Amortization of Principal 200,000 300,000 400,000 500,000 600,000
(10%-15%-20%-25%-30% scheme)

Interest Expense (@ 6%) 120,000 108,000 90,000 66,000 36,000

Total Annual Payment 320,000 408,000 490,000 566,000 636,000

4.4 PROJECTED INCOME STATEMENT (PROFIT AND LOSS STATEMENT)

SCHEDULE 4.4A -- PROJECTED INCOME STATEMENT

MAKAKABUS - Organic Rice Trading

INCOME STATEMENT
Five Year Projection

PARTICULARS 2003 2004 2005 2006 2007

SALES 1,194,100 3,639,575 6,192,550 8,853,025 11,621,000

Less: COST OF GOODS SOLD
Materials 967,500 2,983,125 5,106,250 7,336,875 9,675,000
Labor 20,326 59,026 97,726 136,426 175,126

TOTAL COST OF GOODS SOLD 987,826 3,042,151 5,203,976 7,473,301 9,850,126

GROSS INCOME 206,274 597,424 988,574 1,379,724 1,770,874

Less: OP. & SELLING EXPENSES
Pre-operating expenses 50,000
Administrative expenses 21,500 23,650 26,015 28,617 31,478
Depreciation 15,000 15,000 15,000 15,000 15,000

TOTAL OPERATING EXPENSES 86,500 38,650 41,015 43,617 46,478

OPERATING INCOME 119,774 558,774 947,559 1,336,107 1,724,396

Less: Interest Expense 12,000 8,000 4,000 - -

NET INCOME 107,774 550,774 943,559 1,336,107 1,724,396

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SCHEDULE 4.4B -- PROJECTED INCOME STATEMENT

BOPC - Organic Rice Trading

INCOME STATEMENT
Five Year Projection

PARTICULARS 2003 2004 2005 2006 2007

SALES 2,368,000 7,224,000 12,155,000 17,161,000 22,242,000

Less: COST OF GOODS SOLD 1,288,710 3,997,737 6,816,415 9,744,742 12,782,720
GROSS INCOME 1,079,290 3,226,263 5,338,585 7,416,258 9,459,280
Less: OP. & SELLING EXPENSES
Marketing Expenses 324,000 510,000 696,000 882,000 1,068,000
Administrative expenses 21,500 23,650 26,015 28,617 31,478

TOTAL OPERATING EXPENSES 345,500 533,650 722,015 910,617 1,099,478

OPERATING INCOME 733,790 2,692,613 4,616,570 6,505,641 8,359,802

Less: Interest Expense 120,000 108,000 90,000 66,000 36,000

NET INCOME 613,790 2,584,613 4,526,570 6,439,641 8,323,802

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4.5 PROJECTED CASH FLOW STATEMENT

SCHEDULE 4.5A -- PROJECTED CASH FLOW STATEMENT

MAKAKABUS - Organic Rice Trading

CASH FLOW STATEMENT
Five Year Projection

Pre-Op.
PARTICULARS 2003 2004 2005 2006 2007
Period
Cash Balance Beginning - 230,000 369,441 901,882 1,827,107 3,178,214
Cash Inflow
Equity 130,000
PDAP Loan 100,000
PDAP Grant 350,000
Sales 1,194,100 3,639,575 6,192,550 8,853,025 11,621,000
Total Cash Inflow 580,000 1,424,100 4,009,016 7,094,432 10,680,132 14,799,214
Cash Outflow
Materials 967,500 2,983,125 5,106,250 7,336,875 9,675,000
Labor 20,326 59,026 97,726 136,426 175,126
Administrative expenses 21,500 23,650 26,015 28,617 31,478
Amortization of Principal 33,333 33,333 33,334 - -
Interest Expense 12,000 8,000 4,000 - -
Pre-Operating Expenses 50,000 - - - - -
Const. of warehse & drier 300,000 - - - - -
Total Cash Outflow 350,000 1,054,659 3,107,134 5,267,325 7,501,918 9,881,604
Cash Balance, end 230,000 369,441 901,882 1,827,107 3,178,214 4,917,610

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SCHEDULE 4.5B -- PROJECTED CASH FLOW STATEMENT

BOPC - Organic Rice Trading

CASH FLOW STATEMENT
Five Year Projection

Pre-
PARTICULARS Operating 2003 2004 2005 2006 2007
Period
Cash Balance Beginning 2,500,000 2,913,790 5,198,403 9,324,973 15,264,614
Cash Inflow
Equity 500,000
PDAP Loan 2,000,000
PDAP Grant
Sales 2,368,000 7,224,000 12,155,000 17,161,000 22,242,000
Total Cash Inflow 2,500,000 4,868,000 10,137,790 17,353,403 26,485,973 37,506,614
Cash Outflow
Production Expenses 1,288,710 3,997,737 6,816,415 9,744,742 12,782,720
Marketing Expenses 324,000 510,000 696,000 882,000 1,068,000
Administrative Expenses 21,500 23,650 26,015 28,617 31,478
Amortization of Principal 200,000 300,000 400,000 500,000 600,000
Interest Expense 120,000 108,000 90,000 66,000 36,000
Total Cash Outflow 0 1,954,210 4,939,387 8,028,430 11,221,359 14,518,198
Cash Balance, end 2,500,000 2,913,790 5,198,403 9,324,973 15,264,614 22,988,416

MAKAKABUS – BOPC – PDAP Sircio C. Chan

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MAKAKABUS - Organic Rice Trading

MONTHLY CASH FLOW STATEMENT
First Year

Total
PARTICULARS Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec
2003
Cash Balance Beginning 230,000 226,833 225,166 223,499 310,969 312,102 313,235 314,368 401,838 402,971 406,904 410,837 230,000
Cash Inflow
Equity
PDAP Loan
Sales (BOPC) 580,250 580,250 33,600
Sales (Walk-in Buyers) 2,800 2,800 2,800 2,800 2,800 2,800 5,600 5,600 5,600 1,160,500

Total Cash Inflow 230,000 226,833 225,166 806,549 313,769 314,902 316,035 897,418 404,638 408,571 412,504 416,437 1,424,100

Cash Outflow
Materials 483,750 483,750 967,500
Labor 10,163 10,163 20,326
Administrative expenses 3,167 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 21,500
Interest Expense 60,000 60,000
Amortization of Principal 166,667 166,667
Pre-Operating Expenses -
Const. of warehouse & drier -

Total Cash Outflow 3,167 1,667 1,667 495,580 1,667 1,667 1,667 495,580 1,667 1,667 1,667 228,334 1,235,993

Cash Balance, end 226,833 225,166 223,499 310,969 312,102 313,235 314,368 401,838 402,971 406,904 410,837 588,103 588,107

Note: 1. Slight differences may be observed between December and total-annual cash balance due to accumulated centavo receipts/disbursements that
have been rounded off to the nearest peso in each month.

2. It is not possible at this point to predict the month-to-month cash flow of BOPC, although it is safe to assume that its substantial working capital
will allow it to comfortably manage its cash flow.
 4.6 PROJECT BALANCE SHEET STATEMENT

SCHEDULE 4.6A -- STATEMENT OF BALANCE SHEET

MAKAKABUS – Organic Rice Trading

STATEMENT OF BALANCE SHEET
Five Year Projection
Pre-Op
PARTICULARS 2003 2004 2005 2006 2007
Period
ASSETS
Current Assets
Cash (available cash) 230,000 369,441 901,882 1,827,107 3,178,214 4,917,610
Total Current Assets 230,000 369,441 901,882 1,827,107 3,178,214 4,917,610
Fixed Assets
Fixed Assets for Production 300,000 300,000 300,000 300,000 300,000 300,000
Less: Accumulated Depreciation - 15,000 30,000 45,000 60,000 75,000
Total Fixed Assets 300,000 285,000 270,000 255,000 240,000 225,000
Other Assets
Pre-Operating Expenses 50,000
Total Other Assets 50,000
TOTAL ASSETS 580,000 654,441 1,171,882 2,082,107 3,418,214 5,142,610
GRANT
PDAP Grant 350,000 350,000 350,000 350,000 350,000 350,000
Total Grant 350,000 350,000 350,000 350,000 350,000 350,000
LIABILITY
PDAP Loan 100,000 66,667 33,334 - - -
Total Liability 100,000 66,667 33,334 - - -
EQUITY
Equity, beg. 130,000 130,000 237,774 788,548 1,732,107 3,068,214
Net Income 107,774 550,774 943,559 1,336,107 1,724,396
Equity, end 130,000 237,774 788,548 1,732,107 3,068,214 4,792,610
Total Equity 130,000 237,774 788,548 1,732,107 3,068,214 4,792,610
TOTAL GRANT & EQUITY 580,000 654,441 1,171,882 2,082,107 3,418,214 5,142,610
 28

SCHEDULE 4.6B -- STATEMENT OF BALANCE SHEET

BOPC – Organic Rice Trading

STATEMENT OF BALANCE SHEET
Five Year Projection
Pre-Op
PARTICULARS 2003 2004 2005 2006 2007
Period
ASSETS
Current Assets
Cash (available cash) 2,500,000 2,913,790 5,198,403 9,324,973 15,264,614 22,988,416
Total Current Assets 2,500,000 2,913,790 5,198,403 9,324,973 15,264,614 22,988,416
Fixed Assets
Fixed Assets for Production
Less: Acc. Depreciation
Total Fixed Assets
Other Assets
Pre-Operating Expenses
Total Other Assets
TOTAL ASSETS 2,500,000 2,913,790 5,198,403 9,324,973 15,264,614 22,988,416
GRANT
PDAP Grant
Total Grant
LIABILITY
PDAP Loan 2,000,000 1,800,000 1,500,000 1,100,000 600,000
Total Liability 2,000,000 1,800,000 1,500,000 1,100,000 600,000
EQUITY
Equity, beg. 500,000 500,000 1,113,790 3,698,403 8,224,973 14,664,614
Net Income 613,790 2,584,613 4,526,570 6,439,641 8,323,802
Equity, end 500,000 1,113,790 3,698,403 8,224,973 14,664,614 22,988,416
Total Equity 500,000 1,113,790 3,698,403 8,224,973 14,664,614 22,988,416
TOTAL GRANT & EQUITY 2,500,000 2,913,790 5,198,403 9,324,973 15,264,614 22,988,416

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4.7 BREAK-EVEN POINT

For both MAKAKABUS and BOPC, the enterprise has low break-even points compared to
projected sales and production figures, suggesting viability and even comfortable levels of
profit.

SCHEDULE 4.7A -- BREAK-EVEN POINT – MAKAKABUS

BEP 2003 2004 2005 2006 2007

BEP Sales (Pesos)* 500,740 235,460 256,923 279,869 305,002

BEP Production (tons)** 6.603 2.935 3.068 3.207 3.356

SCHEDULE 4.7B -- BREAK-EVEN POINT – BOPC

BEP 2003 2004 2005 2006 2007

BEP Sales (Pesos)* 758,039 1,194,908 1,643,899 2,107,141 2,585,249

BEP Production (tons)** 7.416 11.439 15.438 19.416 23.378

Formulae:

Annual Sales X Annual Operating Expenses (Annual Fixed Cost)

*BEP Sales =
Annual Sales - Annual Cost of Goods Sold (Annual Variable Cost)

Annual Fixed Cost

**BEP Production =
Unit Selling Price + Unit Variable Cost

Reference Data – A 2003 2004 2005 2006 2007

Sales 1,194,100 3,639,575 6,192,550 8,853,025 11,621,000
Operating Cost 86,500 38,650 41,015 43,617 46,478
Gross Inc. (Var. Cost) 206,274 597,424 988,574 1,379,724 1,770,874
No. of Kg. Sold by P.O. 106,900 321,900 536,900 751,900 966,900
Unit Var Cost 1.93 1.86 1.84 1.83 1.83
Weighted Unit Selling Price 11.17 11.31 11.53 11.77 12.02

Reference Data – B 2003 2004 2005 2006 2007

Sales 2,368,000 7,224,000 12,155,000 17,161,000 22,242,000
Operating Cost 345,500 533,650 722,015 910,617 1,099,478
Gross Inc. (Var. Cost) 1,079,290 3,226,263 5,338,585 7,416,258 9,459,280
No. of Kg. Sold by BOPC 74,000 224,000 374,000 524,000 674,000
Unit Var Cost 14.59 14.40 14.27 14.15 14.03
Weighted Unit Selling Price 32.00 32.25 32.50 32.75 33.00

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4.8 FINANCIAL MEASUREMENTS

An examination of the financial ratios shows the viability and profitability of the
enterprise for both MAKAKABUS and BOPC. They can even afford to pay its officers
starting in 2004. As long as projections on production volumes in the first three
years are realized, product quality is maintained by MAKAKABUS members, and
BOPC faces no purchasing constraints, the PO will be more than able to service its
financial obligations to PDAP as well as turn in a decent profit for itself.

SCHEDULE 4.8A -- FINANCIAL MEASUREMENTS

MAKAKABUS

PARTICULARS 2003 2004 2005 2006 2007

A. ASSET UTILIZATION RATIO

1. Assets Turn-over
Gross Income
0.24 0.49 0.50 0.42 0.35
Total Assets
B. PROFITABILITY RATIOS
2. Gross Profit Margin
Gross Income
0.17 0.16 0.16 0.16 0.15
Gross Sales
3. Net Profit Margin
Net Income
0.52 0.92 0.95 0.97 0.97
Gross Income
4. Return on Assets/Investment
(ROA/ROI)
Net Income
0.16 0.47 0.45 0.39 0.34
Total Assets
5. Return on Equity
Net Income
0.45 0.70 0.54 0.44 0.36
Equity
C. SELF-SUFFICIENCY RATIOS
6. Cash-Based
Gross Income
0.17 0.18 0.18 0.18 0.18
Cash Expenses
7. Full Operational
Gross Income
2.38 15.46 24.10 31.63 38.10
Operational Cost
8. Full Financial
Gross Income
0.19 0.19 0.19 0.18 0.18
Full Cost
D. PAYBACK PERIOD
1 year and 5 months
(for P580,000 investment)
E. SOLVENCY RATIOS
10. Debt-Equity
Total Debt
1.76 0.24 - - -
Total Equity
11. Total Debt
Total Assets – Total Equity
0.38 0.14 - - -
Total Assets

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SCHEDULE 4.8B -- FINANCIAL MEASUREMENTS

BOPC

PARTICULARS 2003 2004 2005 2006 2007

E. ASSET UTILIZATION RATIO

1. Assets Turn-over
Gross Income
0.37 0.62 0.57 0.49 0.41
Total Assets
F. PROFITABILITY RATIOS
2. Gross Profit Margin
Gross Income
0.46 0.45 0.44 0.43 0.43
Gross Sales
3. Net Profit Margin
Net Income
0.57 0.80 0.85 0.87 0.88
Gross Income
4. Return on Assets/Investment
(ROA/ROI)
Net Income
0.21 0.50 0.49 0.42 0.36
Total Assets
5. Return on Equity
Net Income
0.55 0.70 0.55 0.44 0.36
Equity
G. SELF-SUFFICIENCY RATIOS
6. Cash-Based
Gross Income
0.55 0.65 0.66 0.66 0.65
Cash Expenses
7. Full Operational
Gross Income
3.12 6.05 7.39 8.14 8.60
Operational Cost
8. Full Financial
Gross Income
0.66 0.71 0.71 0.70 0.68
Full Cost
H. PAYBACK PERIOD
1 year 2 months
(for P2,500,000 investment)
E. SOLVENCY RATIOS
10. Debt-Equity
Total Debt
1.62 0.41 0.13 0.04 1.62
Total Equity
11. Total Debt
Total Assets – Total Equity
0.62 0.29 0.12 0.04 0.62
Total Assets

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4.9 BUSINESS DEVELOPMENT SERVICES

To increase the probability of success and eventual growth of the enterprise, the following services
need to be provided by expert institutions to BOPC and MAKAKABUS:

Business Development Services Possible Providers

Marketing
 Drafting and signing of Marketing Agreement between BOPC  PDAP
and MAKAKABUS  BOPC with assistance from
 Search for reliable domestic distributors professional marketing firms
Technical
 Refresher training on organic rice farming  BCSA (charge to Phase 1)
 Installation of a field monitoring system (MAKAKABUS)  XU-Sustainable Agri Center
 Installation of and coaching on harvest and storage systems  Manila-based certifying institute
 Application for organic certification by a Manila-based institute  Professional training firms
 Good Housekeeping & Good Management Practices Course  Professional training firms
 Coaching and consultancy on housekeeping and production
management (BOPC and MAKAKABUS)  BOPC
 Search for fellow investors to put up P6 Million closed-type,
multi-pass rice mill (BOPC)
Organization & Management
 Team-building sessions  Professional training firms
 Vision-mission-goal formulation  Professional training firms
 Negotiation and conflict resolution  Professional training firms
 Registration and license application  Experienced bookkeepers
 Installation of marketing, organizational, management,  Professional training firms
compensation, recordkeeping, payment collection, compulsory
and voluntary savings, and inventory systems of MAKAKABUS  Professional training firms
(including all relevant forms for these systems, plus savings
passbook)  Professional training firms
 Review of organizational, management, collection, and marketing
systems of BOPC
 Coaching and follow-up consultancy for MAKAKABUS and
BOPC
Finance
 Negotiation with local MFIs for fund access by farmer-members  PDAP-Cagayan de Oro and
as a group, packaging of production loan application, and professional consulting firms
facilitation of release of funds to farmers

MAKAKABUS – BOPC – PDAP Sircio C. Chan

Feasibility Study on Organic Rice Trading