A FEASIBILITY STUDY ON YELLOW CORN

PRODUCTION
PROCESSING AND MARKETING
SALUG VALLEY ARC CLUSTER, ZAMBOANGA DEL SUR
(Revised as of May 7, 2019)
 MAJOR REVISION/MODIFICATION
• Focused on Production(sir Nards)
• Widen the Market (sir Alfred)
• Adjustment in hectarage for production area per ARBO
• Insertion of 800,000 php revolving funds for Farm inputs
800k farm inputs fund will cover a total of 50 has. For the 1st
year that is equivalent to 16,000 php/ hectares.
BLISA 20 ha.= 320K, UDARBA 15ha.= 240K And MLBCARCC 15
ha.= 240K = 50ha 800K
• Deployment of CDC in ARBO with least drying Facilities
MAJOR REVISION/MODIFICATION
• The project will require 20% Coop Equity for the VC Equips.(sir
Alfred)
• Additional Potential Market(Philmico, Aurora and Asugas)
• The Market facilitator/consolidator for this project is UDARBA
• Project Funds and Sources
VC Equips – 14.4 million (2.88M Coop Equity, DA, LGU, other
Government line agencies and Foreign assistance)
Operation Cost –6.6 Million (800k, grant from ConVerge, the
remaining will be Coop’s Equity)
External Funds – 12.32 million or 58.67%
Enternal Funds – 8.68 million or 41.33%
MAJOR REVISION/MODIFICATION
• VC equipment priority/needed for the 1st year operation.(sir
Nards)
• Equips and Facilities of MANTILIBA-FIAMCO & MAFAMCO will
be available for the ARBO’s
• IRR 57.33%
Scope of the Study

• The focus of this study is on producing of quality yellow corn for the
raw material for animal feeds, processing of harvested cobs, from
de-husking, shelling and drying of corn grains and market them to
potential buyers of corn produced by ARBO’s involve in the
program in Salug Valley Cluster through value chain approach.
Project Brief
Proponents:
• Mag-uuma sa Lower Bogo Calabat Agrarian Reform
Community Cooperative (MLBCARCC)

• Upper Dimorok Agrarian Reform Beneficiaries Association

(UDARBA)

• Barangay Licabang Solar Association (BLISA)

• Project’s Cost
Php. 21,800,000.00

 VC Equipment’s: 14,400.000.00 (2.88M Coop Equity) 68.6%

 Operation Cost: 6,600,000.00 (800k, Grant) 31.4%
 Grant: 800,000 for farm inputs(for approval)
 External: 12.32M or 58.67%
 Internal: 8.68M or 41.33%

• Implementing Period: To be implemented 2019-2021

PROJECT PROFILE

• Nature of Project
 Production
 Farm Production of Corn (farmer)

 Processing (farmer/ARBO)
 Shelling
 Drying

 Marketing (Marketing facilitatator/Consolidator)

 Delivery to Identified Buyers
 Corn price watch
 Identifying of additional Markets
Major components

• The major components of the project are the value chain

activities assumed by the cooperatives in the cluster. The farm
production and processing will be handled by the corn
farmers. The consolidation, delivery and marketing of the
dried shelled corn will be handled by the identified project
market facilitator/consolidator within the program.
Other important features

-Aside from the consolidation and marketing of dried shelled

corn grain. The project’s other features are:

 Existing of Post-Harvest Equipment's and Facilities from

neighboring Cooperative/Association
that are not directly in into the program.
(MAFAMCO and MANTILIBA FIAMCO)

 Deployment of CDC in ARBO’s that has least drying Facilities

 Additional Identified Potential Market

Project area or location

• BLISA in
Dumingag

• UDARBA in
Molave

• MLBCARRC in
Josefina
Intended Beneficiaries

- The Project aim to serves all:

 Men and women corn farmers that are members of
Cooperatives/ Associations within the Salug Valley Arc Cluster.

Agrarian reform beneficiaries and small holder farmers but

mostly focus with the members of the cooperative and
associations that plants yellow corn.
Financial requirements and proposed
source of funding

• The project will require a total investment of 21 Million Php

 6.6 Million or 31.4% % for the production
will be source out from financing agency and
cooperatives equity.
 800K Grant for start-up capital(subject for
approval)
14.4 million or 68.6% for VC equipment’s that
Will be source out from DA, LGU, other
government agencies, foreign Aid and 20% of VC
equips will be Coop’s Equity.
Proponent or Implementing
Entities
• Participating
 BLISA
 UDARBA
 MLBCARRC

• All Three Proponents are categorized as participating except for

UDARBA that will function also as Marketing Facilitator/
Consolidator for this project.
Objectives or Purposes

Primarily to educate the ARBOs and men and women farmer

beneficiaries on the significance of Value Chain of Yellow Corn

To elevate the quality of living of both men and women

farmers involved in the Program through Value Chain.

Aims to improve the community-level supply chain of corn

products.
Methodology Used

o The method used in the conduct of this study is participatory value

chain analysis planning for the secondary crop.

o The approach and participation is multi-stakeholders. Meaning

various stakeholders-government and the private sector were in the
analysis and planning for the secondary crop.

o Assessment of agribusiness potential of secondary

crops/commodities identified in the cluster plans was done by DAR-
PO using the following criteria
a) Production Capacity
b) Market Potential
c) Sustainability
d) Potential impact in terms of job creation
SWOT ANALYSIS (strenghts
and opportunities
• Ability of the farmers to produce good quality corn;

• Increasing demand for corn in the country(national, regional,

provincial and municipal);

• Availability of high-yielding varieties ( hybrid);

• Existence of government programs to provide the necessary

interventions to support the farmers and other stakeholders; and
SWOT ANALYSIS (weakness &
Threats)
• Farmers tend to be wary of new technologies, resulting in the time
lag in their adoption to improve production efficiency;

• There is the existence of buyers/traders/millers informal economic

control in the area that may conduct price manipulation resulting in
low farm gate prices;

• Cooperatives lack the necessary capital and entrepreneurial skill to

support the needs of their members in production and marketing;

• Lack of drying facilities both at the level of the ARBs and ARBOs
resulting in poor quality produce;
 II.MARKETING STUDY
corn is the most significant crop next to rice

Robust corn industry is vital to the Philippines’ food security

Steadily increasing demand for corn

Job Opportunities

The corn outlook is clear and optimistic.

 Commodity Map for Yellow Corn ARBO

ARBO
ARBO
ARBO
Logistics
Logistics

Harvesting Shelling Drying

Farm Inputs Production
(Farmer) (Farmer) (Farmer)
(ARBO’s) (Farmer)

ARBO

Logistics

Market Delivery Warehousing Sacking

(Consolidator/MF) (Consolidator/ (ARBO/C/MF) (Farmer)

MF)

Conso/MF ARBO/C/MF ARBO

Logistics Logistics Logistics

End User
Demand Analysis

• For this project, the cluster had identified potential buyers for
which the consolidated volume of corn grains will be sold.

 PMC-OGIS in Molave
 ABUEVA FEED MILL in Tambulig
 PHILMICO in Iligan City
 AURORA CORN MILLING in Aurora
 ASUGAS MILLING in Pagadian

PMC-OGIS, ABUEVA FEED MILL, PIILMICO, AURORA and

ASUGAS MILLING are currently engage into yellow corn
trading, for feeds processing and marketing
 Supply Analysis
Year 1 Year 2 Year 3

BLISA
161.520 MT 242.280 MT 323.040 MT 726.84 MT

UDARBA
121.14 MT 201.900 MT 282.660 MT 605.7 MT

MLBCARCC
121.14 MT 201.900 MT 282.660 MT 605.7 MT

TOTAL
403.8 MT 646.08 MT 888.36 MT 1938.24 MT
 Supply & Demand Analysis
DEMAND/SUPPLY BLISA, UDARBA, MLBC

Year 1 Year 2 Year 3

PHILMICO 133.33MT 213.33MT 293.33MT

PMC-OGIS 2,400MT 133.33MT 2,400MT 213.33MT 2,400MT 293.33MT

AURORA

ASUGAS

AVUEBA FEED MILL 880MT 133.33MT 880MT 213.33MT 880MT 293.33MT

Total 3280MT 400MT 3280MT 640MT 3280MT 880MT

Gap 2880MT 2640MT 2400MT

III.TECHNICAL FEASIBILITY
• Description of Products, Service and Technology
The participating ARBO’s will:

1) Produce Quality Corn

2) Implement Good Agricultural Practices
1) Food safety
2) Produce Quality
3) Worker’s health, safety and welfare

3) Philippine National Standard for Corn will be adopted both in farm

production and management.
 1ST 2ND 3RD
YEAR YEAR YEAR
BLISA 20 +10 +10

UDARBA 15 +10 +10

MLBCARCC 15 +10 +10

TOTAL 50 +30 +30 110

Project Size

On the implementation of the program a total of

110 hectare was committed to the project.
 VC Equipment's
• Machinery and Equipment
a) Hauling Truck (3)
b) Warehouse (3)
c) Solar Dryer (3)
d) Mechanical Dryer (1)
e) Tractor (1)
f) Sheller (1) (Priority for the 1st year)

All VC Equipment's will cost a total of 14.4 Million.

The project will require 20% or 2.88m from the Coop’s equity
 Project Implementation
Schedule
D
JAN FEB MAR APR MAY JUN JUL AUG SEPT OCT NOV E
C

Farm production TRAINI 2TRAI

NGS NINGS
and transfer of AND AND
technology SEMINA SEMIN
RS ARS
(Trainings on GAP,
Crop
Management, etc.)

Establishment of Post Post Post Post

harve harvest harves harvest
post-harvest st t
facilities

Start of operation Produ Product Produ Produ

ction ion ction ction
 V. FINANCIAL STUDY
ITEM UNIT UNIT COST EXTERNAL Grant COOP' LOAN TOTAL
• VC Equipment's and Production Cost FUND S
EQUIT
Y
A. Machines and Facilities
6 Wheeler hauling truck 2 2,000,000.00 2,000,000.0 4,000
0 ,000.00
Hauling truck, Isuzu 4x4 1 2,000,000.00 2,000,000.0 2,000,000.
0 00
Warehouse, 20 tons capacity 2 1,500,000.00 1,500,000.0 3,000,000.
0 00
Warehouse, 20x40 floor plan 1 300,000.00 300,000.00 300,000.00
Solar dryer, 30x60 sq. meters 2 400,000.00 400,000.00 800,000.00
Solar dryer, 40x60 1 500,000.00 500,000.00 500,000.00
Mechanical Dryer, Recirculating 1 2,000,000.00 2,000,000.0 2,000,000.
0 00
Tractor 1 1,500,000.00 1,500,000.0 1,500,00.0
0 0
Sheller with De-husker 1 300,000.00 300,000.00 300,000.00
Sub-Total 14,400,000 14,400,000
.00 .00

B. Production Cost
Operation Cost per Hectare 110 30,000.00 3,300, 3,300, 6,600,000.00
000.00 000.0
0

Sub-Total 6,600,000.00

GRAND TOTAL 21,800,000.0

 Farm Plan Budget
PARTICULARS MEASURE QUANTITY UNIT AMOUNT
1. ACTIVITY
A. Land Prep

1. Bushing MD 10 200 2,000.00

2. Furrowing MAD 4 400 1,600.00
A. Planting MD 10 200 2,000.00

A. Fertilizing
1. Basal MD 10 200 800.00

A. Spraying(herbicide) KNAPSACK 30 25 750.00

A. 1st Side-dress MD 2 200 400.00

A. 2nd Side-dress(optional) MD 2 200

A. Weeding(herbicide) KNAPSACK 30 25 750.00

A. Harvesting Packing SACK 124 30 3,720.00

A. Hauling MD 124 20 2,480.00

A. Shelling SACK 124 23 2,852.00

A. DRYING SACK 124 15 1,860.00

Sub-total 19,212.00
 Farm Plan Budget
2. Materials

a. Seeds BAG 2 2,500 5,000

a. Fertilizer

1. Chicken Manure BAG 0 0 0

2. Basal(14-14-14) BAG 5 1,200 6,000.00
3. Side dress Urea BAG
4. (16-20-0) BAG 4 1,000.00 4,000.00
5. (0-0-60) BAG 0 0
6. Foliar Fertilizer LITER/S 0 0 0

a. Insecticide

Atrazine Kg 2 500

a. Herbicide

Glyzone GALLON/S 2 1000 2,000

a. Sacks Pcs 124 5.00 620.00

Sub-Total 17,620.00

TOTAL COST 36,832.00

Production Cost

Production Total Costs = 36,832.00 Php

• Farm Operation Costs = 19,212.00 Php

• Farm Inputs Costs = 17,620.00 Php

• 16,000 (Inputs Grant) + 14,000 (Coops Equity) + 6,832 (FE)

= Total Production Costs = 36,832.00 Php

Input Fund allotment per hectare.

• Input Fund allotment per hectare.

 MLBCARCC – 16,000 x 15 = 240,000or 30%
 UDARBA – 16,000 x 15 = 240,000or 30%
 BLISA – 16,000 x 20 = 320, 000 or 40%
COMPUTATION OF TOTAL SALE PER HECTARE

• Number of Hills per Hectare

• 1Ha /furrows(width) x hills(distance)
=10,000 square meters / 70cm x 26cm
=10,000 / .70 x. 26
=10,000 / .182

 54,945 hills per Ha

COMPUTATION OF TOTAL SALE PER
HECTARE
54,945 x .02 = 53,846 hills (mortality rate)
53,846 x.300 = 16,153 kgs cob (ACW)
16,153 x .50 = 8,076 kgs shelled (cobs-grain)
8,076 x .50 = 4,038 kgs dried grains (MC)
4038 kgs x 15 = 60,570 Php (Buying Price)

Total Sale: 60,570 Php

COMPUTATION OF NET INCOME

TS – Tc = NI
Php 60,570 – Php 36,832 =
Net Income Php 23,738

NI / TE x 100
23,738 / 36,832 x 100 =
ROI 64.44 %
To be continue on excel
format…