Feasibility Study on Herbs Farming Essay Example

family would be the one responsible to look for jobs; however such jobs are only good for a few days. After the job has been done, the family is left with no income again. Having two to three square meals a day is the top priority; sending their children to school is only held secondary. The need for a stable job or livelihood is indeed vital so that poverty and unemployment experienced by these people would drastically be reduced, if not eliminated. They need an enterprise that will provide them the opportunity to generate a steady source of income.

• What is your proposed inventive/innovative business solution and why do you think your project entry is important in addressing the social need/issue?

The proposed business is a one-hectare farm in Brgy. Palanog Tacloban City which will concentrate on growing and distributing high quality and organic culinary herbs. The project aims to cultivate ten culinary herbs that are widely used in foreign and Filipino cuisines among local hotels and restaurants in the city. The herbs will be grown by the families of the Gawad Kalinga Housing community whose members have little or no source of income. This will mobilize the community and provide them with a steady source of income.

The product will be known for its freshness and high quality backed by the right organic farming technology. The proponents will establish supplier relationships with the hotels and restaurants which will help them achieve their goal to be the leading supplier of culinary herbs in the city.

• As a team, why did you propose the project?

The Philippines is still

primarily an agricultural country despite the plan to make it an industrialized economy by 2000. Most citizens still live in rural areas and support themselves through agriculture (Encyclopedia of the Nations). Being a country situated in the tropics, Philippines makes itself abundant with a lot of natural resources. Its climatic conditions and geographical make-up enables it to be very much suitable for agricultural activities. Even now, developing regions of the country are busy innovating new technologies on how to create better yields in their agricultural activities.

In Region VIII, otherwise known as Eastern Visayas, agriculture serves as the major driving force of its economy. Majority of the people are dependent on the four sectors of agriculture which are farming, fisheries, livestock and forestry. The region is basically an agricultural area with 45% (976,415 hectares) of its total land area devoted to agricultural activities (DA Region VIII, 2012). Of the four sectors, farming has the largest contribution to employment. Nevertheless, despite the wide space allocation for agricultural activities, farming in particular, poverty and unemployment still prevail all over the region. Poverty remains a serious and persistent problem in the Philippines especially in this region. In fact, almost one third of the population in the region lives below the poverty threshold.

In Eastern Visayas alone, ten (10) municipalities or cities are rated among the highest poverty incidence in 2009; seven were from the province of Leyte while three were from Biliran. Eastern Visayas is indeed one of the poorest regions in the country.

As Filipino youth, the proponents would like to be part of the solution.

The proponents have chosen this business idea

because the demand for culinary herbs in Tacloban City is increasing at a higher rate. This increasing demand is spurred by the growing population of Tacloban City. As of 2010, Tacloban City has a population of 245,000 growing at a rate of 2.73% annually. The greater the population, the bigger the market for goods and services. In addition, Tacloban City, being a Highly Urbanized City, has a growing number of local hotels and restaurants. With the proliferation of restaurants and hotels, the culinary herbs have created a market of its own. Locally, consumers go for the fresh produce because it spices up food served in every table.

The culinary herbs post high demand because a lot of preparations now use these to entice the changing food preference and preparations of the Filipino people. Overall, culinary herbs post higher prices and created a niche in the market. Given these factors, there is indeed a substantial demand for herbs in Tacloban City. Furthermore, the proponents of this study considered the government support through the Department of Agriculture programs being implemented. Acquisition of capital will be of fewer burdens since DA can assist the proposed project with regards to its financial aspects and even the raw materials as well. `

• How will the business/enterprise generate revenues? Initially, the target market will only include the local hotels and restaurants in the city. However, if operation goes as planned, the business will be able to expand its market and serve other segments. The culinary herbs that will be grown are the following: bayleaf, basil, lemongrass, chives, bell pepper, ginger, thyme, parsley, tomato and tarragon. These herbs are

easily grown and would take about 6-10 weeks to mature and would be ready for harvesting. The average price of these products when sold at the market ranges from Php 60-80 per kilo. The farm will operate at 90-95% capacity and it would produce about 100 kgs. of each product per season. The expected initial annual revenue of the project would reach Php 380,000-500,000. The sales are expected to increase in its next years of operation once the marketing strategy of building alliances with local hotels and restaurants would have fully been established.

The marketing strategy will be based on generating awareness of the new organically produced culinary herbs. It will rely on different forms of communication such as brochures, advertisements in the local newspaper and magazine, and word-of-mouth to promote the products. Another way is to join numerous trade fairs in order to establish networks as well as to learn about new developments in the industry. In addition, after successfully serving a wider range of market, the business will host a domain, on the servers of local Internet Service Provider. The website will be efficient, fast loading, and customer-friendly, and will adhere to good web design principles at all times. Moreover, pages in different social networking sites will be created in order to reach a larger market.

The sales strategy will focus on continuously identifying potential customers and turning them into paying customers. The main sales effort would be to reinforce the fact that aside from being organically produced, this business is a social enterprise; that buying our herbs means taking an active part towards helping reduce poverty in the rural area

of Brgy. Palanog. Moreover, every transaction will not be thought of as individual sales, but as long-term relationships.

Being a social enterprise, gaining large profits is only secondary. However, it is a requisite that the business shall generate profit beyond the break-even point. Meaning, a more than enough net income must be achieved to be able to address the purpose of the project which is to help alleviate poverty evident among its beneficiaries. It must be remembered that profitability without cash flow is a recipe for disaster and cash flow without profitability is a terminal condition. Thus, efforts must be exercised to develop this project into a good business that will generate increasing levels of profitability and cash flow onwards. In line with this mission, the proponents will execute a “1-hectare farm plan” to help manage a micro-farm in creating a feasible, sustainable, and profitable business.

The proponents will take care of the capital, as well as the management and marketing segment of the business. As young investors, requesting a loan from micro-lending agencies would be the most feasible. Government sponsored programs, and of course, personal resources would also be of great help in raising start-up capital. On the other end, the project beneficiaries are responsible for all the labor needed for the business to start, grow and sustain its operation. Around forty (40) families from the Gawad Kalinga community will begin growing the herbal garden on a one-hectare section of the farm.

Since the farm will operate at 90-95% capacity and would produce about one hundred (600) kilograms of each herb per season, the expected initial annual revenue of the project

would reach Php 1,680,000 and expected to grow at an annual rate of 10%. Total project cost is perceived to reach Php 852,500.00. It would take at least one year of flourishing business operation to reach break-even point and at least two years to finally realize profit. Profit-sharing schedule would be in a 80:20 ratio. This means that eighty percent (80%) of the net income will go to the project beneficiaries while the twenty percent (20%) will go to the proponents and will be used to pay for expenditures and additional investments or any expansion for the business.

• What will be the social outcome and impact of your project to the community/nation?

Through this project, the beneficiaries would generate income as a fruit of their own sweat. One of the visions of this project is to involve more people in the agricultural production in order to create a healthy rural economy by providing livelihood and employment. It aims to make a positive difference in the community and be a good role model to other young people who may have an interest in sustainable farming. The job that this would provide would mobilize their economic activities, thus, strengthening their purchasing power. The project does not only aim to reduce the poverty incidence and unemployment rate of the city, but as well as of the region in general. It also aims to improve the moral and social conditions of the Taclobanons.

Assuming that the project will be given the opportunity to be implemented, and the proponents equipped with management skills, determination, perseverance, and the passion to bring hope and optimism in the hearts

of the unprivileged Filipinos, this agricultural project will be the best instrument that could alleviate a community from poverty and hunger and support environmental sustainability. The team believes that this kind of social enterprise, if implemented, will be a strong supporter of Gawad Kalinga’s development programs which is significant for the community both socially and economically.