Rice Business-Model3

Republic of the Philippines
CITY GOVERNMENT OF BUTUAN

CITY AGRICULTURE OFFICE
Regional Government Center, Brgy. Tiniwisan, Butuan City
BUSINESS MODEL
1. PROJECT IDENTIFICATION:
Project Title: RICE FARM MECHANIZATION AND PROCESSING

PROJECT
Proponent: Office of the City Agriculturist

City Government of Butuan
Contact Person: Lois Y. Pajaron

PPHF Coordinator
0912 4821 310
lois.pajaron.lp@gmail.com
Beneficiaries: Rice FMSP-Farmers’ Cooperative & Association,
Location: South Market Complex

Brgy. Villa Kananga, Butuan City
Project Cost: Php 31,166,850.00
Source of Funds: City Government of Butuan
2. INTRODUCTION
Background and Agri-fishery Development Situationaire:
Strategically located along the logistical highways and the regional capital of Caraga Region,
Butuan City envisioned to be a great hub city of opportunities for all that spurs and supports
Caraga’s sustainable growth and development.
Phone : (085) 817-8486

Email : cago@butuan.gov.ph
FB Page: Butuan City Agriculture Office
Website: www.bxuagri.com

With this development direction, Butuan City wants to
assert its role as the driver and catalyst of the economic
development of Caraga region.
Aligned to the development themes of NEDA Caraga for

the holistic development of fishery, agriculture, mining
and eco-tourism (FAME) and cognizant to the natural
endowments such as fertile alluvium and alfisol soils,
conducive climate and abundant rainfall, as well as the
agri-fishery production potential of all provinces within
Caraga Region, Butuan City positions as the supply chain,
processing, marketing and logistics center with
the establishment of special economic zones,
international seaport and international airport.
Breakthroughs as a Hub City of Opportunities

for Caraga Sustainable Development:
In 2016, Butuan City started its transformation

journey as the hub city of opportunities for the
region. Guided by the mantra, what Caraga
produces, Butuan City can process: In synergy,
we can create wealth together, master
development plan and spatial strategy is geared
towards catalyzing the growth of agro-industrial
economy of the region.
Phone : (085) 817-8486


In recent years, the City Government of
Butuan has laid-out the imperatives for an
agro-industrial economy such as water,
power, communication and support
infrastructure, to motivate investors and
private sector to locate and to increase
investments in food processing, product
innovation and distribution in this part of the
region.
Must-win Strategic Initiatives:
In order to sustain the socio-economic development momentum, Butuan City identified 6+12
strategic infrastructure projects that will drive the city toward becoming an agro-
industrialized economy
Best available technologies (BAT) and best environment practices (BEP) of partner LGUs
and international organizations and governments were adopted in the preparation of plans and
designs of the strategic infrastructure.
Phone : (085) 817-8486


Implementation of these projects will be through public-private partnership and official
development assistance (ODA).
Agri-Fishery Development as Driver for Growth:
It is pragmatic for the City Government Butuan

City to prioritize and increase its investment in
agriculture and fishery sector towards agro-
industry development. One-third (1/3) of the
81,000-Ha total land area, covering 27,000-Ha,
is delineated as strategic agriculture and fishery
development zone (SAFDZ).
In support to the Department of Agriculture

development mantra of “Masaganang Ani at Mataas na Kita”, the City Government of
Butuan promotes farm integration and diversification in SAFDZ areas to increase land
productivity.
Moreover, partnership and alliances with adjacent cities and provinces were pursued, to make
Butuan City’s Special Economic Zones more competitive as center for value adding, product
innovation, logistics and marketing of agri-
fishery products produced within Caraga Region.
Consequently, this strategy will increase the
gross regional domestic product (GRDP),
increase wealth creation, ensure regional food
security and increase middle income families.
In partnership with private sector, a number of

agri-industry projects were established in Butuan
City such as clustered rice farms, top of the line rice mill and aquaculture farms. These
projects created positive influence in providing economic opportunities to the people.
Phone : (085) 817-8486

3. RICE INDUSTRY DEVELOPMENT SITUATIONAIRE
Rice remains the agricultural commodity with foremost political and economic significance
in the Philippines. As a major staple, rice accounts for 35 percent of average calorie intake of
the population and as much as 60-65 percent of the households in the lowest income quartile
(David and Balisacan, 1995). Moreover, rice farming is the source of income and
employment of 11.5 million farmers and family members. Rice contributes 13 percent to the
Consumer Price Index (CPI), 16 percent to the Gross Value Added (GVA) of agriculture, and
3.5 percent to the Gross Domestic Product (GDP) (Gonzales, 1999). Due to its economic
importance, rice has become the central focus of government agricultural policies.
The growth of rice farm mechanization sector has also been affected by different factors.
Rice farmers are struggling on high postharvest losses and high production cost per kilo with
low local price of palay in the market. Rice farm operations were limited due to lack of farm
machineries and facilities in the city. This posed as a hindrance in producing better quality
rice palay harvest. In fact, some farmers shifted to other commodities due to these issues and
problems.
In attaining a competitive rice industry sector with the aim of ensuring food security and
making the farmers globally competitive, it is important to maximize the country’s greatest
resources. One of the best strategy is by equipping the rice farmers through the introduction
of farm machines to Farmers’ Cooperatives and Associations (FCAs) and grooming them as
effective Farm Machinery Service Provider (FMSP) to reduce postharvest, production cost
per kilo and improve the mechanization of level of the rice industry while generating rural
employment.
3.1 Butuan City Rice Production Performance
Butuan City has around 8,100 hectares favorable for

rice production. For the past five (5) years, local rice
Phone : (085) 817-8486
E-mail : cago@butuan.gov.ph
FB Page : Butuan City Agriculture Office
Website : www.bxuagri.com
production
CITY(in MT per year)
AGRICULTURE and yield (MT/hectare) are increasing. Despite of the adverse
OFFICE
climatic conditions that occurred in the past years, Butuan City managed a 6.45% increase in
annual average yield from 4.34 MT/Ha in 2019 to 4.62 MT/Ha in 2020. This was possible
through the interventions from the Local Government Unit of Butuan and Regional Line
Agencies like Department of Agriculture, PhilRice and Agricultural Training Institute,
specifically utilization of hybrid rice varieties 424 hectares. Promotion and adoption of
hybrid rice technology was highlighted by the conduct of the 11th National Rice Technology
Forum (NRTF) in Butuan City wherein 130 hectares’ compact hybrid rice area demonstrated
an average production of 7.5 MT/ha. Use of hybrid rice varieties resulted to around 85%
increase in yield compared to other seeds varieties. Several interventions were conducted and
implemented such as provision of pre and post-harvest agricultural machineries, implements,
and equipment; construction of irrigation system facilities; allocation of free rice seeds
(hybrid & certified) and fertilizer; allocation of financial support and loans to the rice
farmers; free crop insurance; and conduct of research and development and technology
demonstration; and free training and seminars related to rice production, processing and
marketing.
Through these interventions, Butuan City achieved 101.07% rice self-sufficiency in CY
2020.
4. RICE FARM MECHANIZATION INDUSTRY GAPS
4.1 Development Gaps and Threats
1. Increasing palay production cost per kilo.

2. Increasing rice postharvest losses.
3. Decreasing price of rice palay per kilo.
4. Low farm mechanization level in the city.
4.2 Farm Mechanization Gap Analysis
Farm Mechanization Gap Analysis shows the level of mechanization in the Rice Industry of
Butuan City in production and post-harvest machineries.
4.2.1 Power Units/ Tractors

Phone : (085) 817-8486
A. FourCITY
Wheel Tractor – As
AGRICULTURE defined in Philippine Agricultural Engineering Standard (PAES
OFFICE
118:2001), are self-propelled, wheeled vehicle having two axes designed to carry, pull or propel
agricultural implements and machines. Four Wheel Tractors were used in land preparation and
other farm operations in Butuan City. Benefits of using Tractors includes *;
● Can work in wet and dry soil conditions

● More efficient and has better traction
● Recommended for large-scale farm operations
● Can be used for hauling and transport of farm inputs
*Philippine Center for Postharvest Development and Mechanization (PHilMech)
B. Walking-type Agricultural Tractor (Hand Tractor) – As defined in Philippine Agricultural

Engineering Standard (PAES 111:2000), are self-propelled machine having a single axle
designed primarily to pull and propel trailed or mounted agricultural implements and machinery
use for land preparation.
Table 1.0 Barangays in Butuan City which uses Tractors based on Rice Area Harvested
Rice Area
Rice Area (Accessible to
Barangay Harvested
Tractor)
(Ha)
Ambago 42.50 42.50
Amparo 34.05 32.35
Ampayon 140.00 140.00
Antongalon 111.50 105.93
Aupagan 297.00 282.15
Baan 263.60 263.60
Bancasi 31.25 31.25
Banza 104.00 104.00
Baobaoan 427.50 406.13
Basag 206.60 196.27
Bilay 37.66 37.66
Bitan-agan 45.25 42.99
Bit-os 108.75 108.75
Bobon 133.95 133.95
Bonbon 75.87 75.87
Buhangin 29.75 29.75
Cabcabon 33.50 33.50
Phone : (085) 817-8486
CITY AGRICULTURE OFFICE Rice Area Rice Area (Accessible to

Barangay Harvested Tractor)
Camayahan (Ha) 63.50 63.50
Dankias 116.75 116.75
Doongan 77.00 77.00
Dulag 30.50 30.50
Dumalagan 70.75 70.75
Florida 171.90 171.90
Kinamlutan 198.00 188.10
Lemon 401.75 401.75
Libertad 113.90 113.90
Los Angeles 640.05 640.05
Maguinda 128.50 122.08
Mahay 97.00 97.00
MJ Santos 43.30 41.14
Mandamo 155.50 147.73
Maug 71.80 71.80
Nongnong 1.00 1.00
Pigdaulan 303.50 303.50
Pinamanculan 164.50 156.28
Salvacion 73.80 70.11
San Mateo 100.00 100.00
San Vicente 140.00 140.00
Rice Area
Rice Area (Accessible to
Barangay Harvested
Tractor)
(Ha)
Sumilihon 90.00 90.00
Sto. Niň o 752.75 752.75
Tagabaca 503.95 503.95
Taguibo 75.50 75.50
Taligaman 33.75 33.75
Tiniwisan 264.60 251.37
Tungao 34.00 34.00
Villa Kananga 44.75 44.75
Mahogany 37.00 37.00
Bading 22.30 22.30
TOTAL AREA 7,144.33 7,036.85
The table above shows the barangays in Butuan City which utilizes the use of Four Wheel Tractor
for farm operations. Table 1.0 shows that Butuan City has a gap of 16 units of four-wheel tractor
needed to cover/ serve the total actual rice area of the city with the corresponding number of units
present for farm operations.
Phone : (085) 817-8486

Tables below shows the gap analysis of Four-wheel tractor and Hand tractor used for farm operation in Butuan City.
Table 2.0 Four Wheel Tractor (Four-wheel Drive) Gap Analysis

4 Wheel Tractor (4 wheel drive)

No. of Units Assumptions
Total Total No.
Total area Total area of
Estimat
ACT area covered area covered Units
POTE ed Total
UAL Field covere per year covered per year Need
NTIAL coverag Calendar Area
RICE Gov' Capa d per under per unit (has) ed
RICE Specifica Efficie e area days of Defic
ARE t Priv Tot city day calendar per year based on for
AREA tion* ncy (%) for operation it
A Fun ate al (ha/d (has) days of (has) optimal Area
optimal (days/crop
ded ay) based operation based on use of Defic
use/crop ping)
on (has) optimal machine it
ping
availab based on use of of the
(ha)
le units available machine available
units units
7,144 8,163.0 2,244
32 3 35 45 hp 85 3.00 70.00 15.00 105.00 3,150.00 140.00 4,900.00 16
.33 5 .33
Source: Office of the City Agriculturist, PPHF Inventory 2022
Based on Table 2, Butuan City has only a total of 39 existing hand tractors which can served the 44% of the total actual rice area. The City has a
deficit of 63 units of tractor on the total area served on hectares per month basis.
Phone : (085) 817-8486

Table 3.0 Two Wheel Tractor (Hand Tractor) Gap Analysis
ACT
Website POTEN
: www.bxuagri.com 2 Wheel Tractor (Hand Tractor) Total No.

Total Total
Total
Total area area of
Estimat area
area covered covered Units
ed covered
UAL Field covere per year per year Need
TIAL coverag Calendar per unit Area
RICE Gov' Efficie Capa d per under (has) ed
RICE Specifica e area days of per year Defic
ARE t Priv Tot ncy city day calendar based on for
AREA tion* for operation (has) it
A Fun ate al (%) (ha/d (has) days of optimal Area
optimal (days/crop based
ded ay) based operation use of Defic
use/crop ping) on
on (has) machine it
ping optimal
availab based on of the
(ha) use of
le units available available
machine
units units
7,144. 4,414
8,163.05 30 9 39 12 hp 85 1.5 35.00 15.00 58.50 1,755.00 70.00 2,730.00 63
33 .33
4.2.2 Mechanical Rice Transplanter

Phone : (085) 817-8486

A. Riding Type Rice Transplanter – As defined in the Philippine Agricultural Engineering Standard (PAES 151: 2010), are type of self-propelled rice
transplanter that allows operator to ride on the machine during operation, designed for transplanting rice seedlings into a puddled and leveled field.
Riding-type rice transplanter are used on medium to large sizes of farms in the city.
B. Walk-behind Type – As defined in the Philippine Agricultural Engineering Standard (PAES: 151: 2010), are type of self-propelled rice transplanter
wherein the operator walks behind the transplanter during the operation, designed for transplanting rice seedlings into a puddled and leveled field. Walk-
behind rice transplanter are used on small to medium sizes of farms in the city.
Table 4.0 Riding Type Rice Transplanter Gap Analysis
Riding-Type Transplanter

Total Total Total
Total No. of
Estimat area area area
ACT area Units
POTEN ed covered covered covered Total
UAL Field covere Neede
TIAL coverag per year per unit per year Area
RICE Effici Capa Calendar d per d for
RICE Specifica e area under per year (has) Defic
ARE Gov't ency city days of day Area
AREA Priv Tot tion* per unit calendar (has) based on it
A Fund (%) (ha/d operation (has) Defici
ate al for days of based optimal
ed ay) (days/crop based t
optimal operation on use of
ping) on
use/crop (has) optimal machine
availa
ping based on use of of the
ble
(ha) available machin available
units
units e units
7,144. 5,884
8,163.05 7 7 21 hp 80 3 90 25 21 1,050.0 180.0 1,260.0 33
33 .33
The table above shows the gap of the number of units of riding –type rice transplanters needed to satisfy the actual rice area of Butuan City has a total of
33 units.
Phone : (085) 817-8486
FB Page
Table: Butuan City Agriculture
5.0 Walk-behind RiceOffice
Transplanter Gap Analysis

Walk-behind Transplanter
Total No.
Total Total of
Total area
Estimat area area Unit
ACT area covered
POTEN ed covered covered Total s
UAL covere per unit
TIAL Field coverag per year per year Area Nee
RICE Calendar d per per
RICE Effici Capa e area under (has) Defic ded
ARE Gov't Specifica days of day year
AREA Priv Tot ency city per unit calendar based on it for
A Fund tion* operation (has) (has)
ate al (%) (ha/d for days of optimal Area
ed (days/crop based based
ay) optimal operation use of Defi
ping) on on
use/crop (has) machine cit
availa optimal
ping based on of the
ble use of
(ha) available available
units machin
units units
e
7,144. 5,144
8,163.05 25 25 4 hp 80 2 40 25 50 2,500.0 80 2,000.0 18
33 .33
Table 5 shows that Butuan City still needs a total of 18 units of walk-behind transplanter to cover the total actual rice area of 7,144.33.
Table 6.0 Riding Type and Walk-behind Rice Transplanter Gap Analysis
Riding-Type Transplanter Walk-behind Transplanter
Total area covered Total area covered No. of Units
ACTUAL RICE per year (has) based Field per year (has) based Total Area Total Area
Field Capacity Needed for Area
AREA on optimal use of Capacity on optimal use of Planted Deficit
(ha/day) Deficit
machine of the (ha/day) machine of the
available units available units
7,144.33 3 1,260 2 2,000 3,260 3,884.33 38
Phone : (085) 817-8486
Based on Table 6, there is still 38
units of mechanical transplanter needed (riding-type and walk-behind) to serve an area of 3,884.33 hectares.

4.2.3 Harvesters and Threshers
A. Combine Harvester – As defined in Philippine Agricultural Engineering Standard (PAES 224:2005), are mobile grain-harvesting machine for
cutting, picking, stripping or picking up crop, threshing, separating, cleaning and conveying grain into a grain hopper and depositing harvest residue
onto the ground.
Table 7.0 Combine Harvester and Thresher Gap Analysis based on harvesting
Combine Harvester
Total No.
area Total of
Total
covere area Unit
Estimat Total area
ACT d per covered s
POTEN ed area covered
UAL unit per year Total Nee
TIAL Specific Field coverag covere per year Area
RICE Calendar per (has) ded
RICE ation* Effici Capa e area d per under
ARE Gov't days of year based Defici for
AREA Priva Tot (Power ency city per unit day calendar t
A* Fund operation (has) on Are
te al Require (%) (ha/d for (has) days of
ed (days/crop based optimal a
ment) ay) optimal based operatio
ping) on use of Defi
use/cro on n (has)
optima machin cit
pping availab based on
l use e of the
(ha) le units availabl
of availabl
e units
machi e units
ne
7,021. 8,163.0 3,420.0 3,601.
16 3 19 85 hp 85 3.5 90 20 66.5 2,660.00 180.00 20
33 5 0 33
Based on the gap analysis of rice combine harvester computed in table 7, there is still 20 units needed to cover an area of 3,601.33 hectares of
Butuan City.
Phone : (085) 817-8486
E-mail
Table: cago@butuan.gov.ph
7.0 Combine Harvester Gap Analysis based on threshing

Combine Harvester
Producti Total
Total weight of
on weight of
Thresh unthreshed No. of
(unthres Specifica unthreshe Weight of
ing Calendar grains threshed Additional
hed, mt tion* Efficie d grains unthreshed
Capaci days of based on Units
per Gov't (Power ncy threshed grains (mt)
Private Total ty operation calendar of Needed
cropping Funded Requirem (%) based on
(mt/da (days/crop operations
) ent) available
y) ping) under available
units/per
units/per year
day
(mt)
(mt)
55,222.6
16 3 19 85 hp 85 14.53 20 276.07 11,042.80 44,179.88 76
8
Table 7.0 above shows that there still 76 units of combine harvester needed based on the average production (mt) of rice palay in Butuan City.
Table 9.0 Reaper Gap Analysis

Total No. of
Reaper Area Units
No. of Units Efficie Fiel Assumptions Deficit Needed
ncy d Estimate Calenda Total Total area Total area Total for
(%) Cap d r days area covered covered area Area
Total Specif acit coverag Deficit
icatio of covered per year per unit covered
Area y e area operatio per day under per year per year
not n* (ha/ per unit
(Powe n (has) calendar (has) (has)
acces Gov't Privat Tot day) for (days/cr based on days of based on based
sible Fund r
e al Requi optimal opping) available operation optimal on
ed
remen use/crop units (has) use of optimal
t) ping based on machine use of
Phone : (085) 817-8486 (ha) available machin
E-mail : cago@butuan.gov.ph units e of the
availabl

e units
122.
7 7 3.5 65 2.5 30 10 17.5 350 60 420 (297.02) -
98
*See Table 10.0
Table 9.0 above shows that the number of rice reapers available in Butuan City is enough to cover the 122.98 hectares of rice areas not accessible to
combine harvesters (see table 10.0 for barangays not accessible to combine harvesters with corresponding rice areas).
Table 10.0 Standard Scale Thresher Gap Analysis
Standard Scale Thresher

Total weight
Produc of
Total weight unthreshed Weight
tion
Thresh Volume of grains of No. of
(unthr Specific Calendar
ing of Yield unthreshed threshed unthresh Additiona
eshed, ation* Efficie days of
Capaci threshin ed l Units
mt per Gov't Priv Tot (Power ncy per
operatio
grains based on
ty grains Needed
croppi Fund ate al Require (%) g hectare
n
threshed calendar of
ed (mt/hr unit/per per unit based on operations (mt)
ng) ment) (days/cr
) cropping (tons/ha) available under
opping)
(mt) units/per day available
(mt) units/per
year
(mt)
55,222 52,162.
19 32 51 7 85 1 180 5 30 51 3,060.00 870
.68 68
Table: (085)
Phone 10.0 817-8486
shows that there still 870 units of Rice Thresher needed for the average production of rice palay in Butuan City.
Table 11.0 Barangays with corresponding areas not accessible to Combine Harvester
Area (5%) not accessible

Barangay Total Area
(ha)
Amparo 30.00 1.50
Antongalon 203.50 10.18
Aupagan 330.00 16.50
Baobaoan 436.00 21.80
Basag 228.30 11.42
Bitan-agan 64.50 3.23
Kinamlutan 434.80 21.74
Maguinda 116.10 5.81
Mandamo 169.25 8.46
MJ Santos 74.30 3.72
Pinamanculan 11.90 0.60
Salvacion 104.95 5.25
Tiniwisan 256.00 12.80
TOTAL 122.98
4.2.4 Heated Air Mechanical Grain Dryer
A. Flat Bed type – As defined in Philippine Agricultural Engineering Standard (PAES 201:2001),
are shallow bed batch type dryer wherein fixed volume of grain is held stationary in a horizontal
grain holding bin. This type of dryers was commonly used in Butuan City because of its low
costing and easy to use among farmers. The table below shows the gap analysis of flatbed dryers
in the city.
Phone : (085) 817-8486

Table 11.0 Heated Air Mechanical Grain Dryer (Flat bed type) Gap Analysis
Based on Table 11- computed gap analysis of mechanical grain dryer- flatbed type, there is still a lacking of 53 units to dry the assumed average
production of rice palay in Butuan City.
B. Recirculating type – As defined in Philippine Agricultural Engineering Standard (PAES 201:2001), are batch type dryer equipped to circulate
and/ or mixed fixed volume of grain during the drying operation. This type of dryer was used only in some areas in Butuan City due to its high
costing. Recirculating dryers has higher drying efficiency than flat bed types dryers. The table below shows the gap analysis of recirculating dryer
in Butuan City.
Table 12.0 Heated Air Mechanical Grain Dryer (Recirculating type) Gap Analysis
Based on Table 12- computed gap analysis of mechanical grain dryer- recirculating/ vertical type, there is still a lacking of 31 units to dry the
Phoneassumed average production of rice palay in Butuan City.
: (085) 817-8486
Table 13.0 Gap Analysis on Total Requirement of Mechanical Grain Dryers

Flat Bed Type Recirculating Type
Total Weight
of Grain Dried Total Weight of Total weight
at 14 MC for Grain Dried at Total weight No. of
Total Production Drying Drying of Grain (MT,
3 months 14 MC for 3 of fresh palay Additional
(MT) Capacity Capacity dried for 3
based on months based on (MT, undried) Units Needed
(tons/day) (tons/day) months)
drying drying
efficiency efficiency (MT)
(MT)
29,648.97 6 7,695.00 10 5,355.00 13,050.00 16,598.97 32
Table 13 shows the analysis of flat bed type and recirculating type mechanical grain dryers when utilized both, there is still 32 units needed to dry
the assumed average production of rice palay in Butuan City.
4.2.5 Rice Mill
A. Rubber roll type rice mill – As defined in Philippine Agricultural Engineering Standard (PAES 206:2000), are type of rice mill using rubber
roll huller and utilizes friction and/ or combination of other types of whitener. Most rice mill in Butuan City were rubber roll type rice mill. Table
below shows the gap analysis of rice mill in Butuan City.
Table 14.0 Gap Analysis on Rice Mill
Rice Mill
Total No. No. of Units Specificatio
of Bags to Total No. of Total No. of
n* Milling Milling
be milled well-milled well-milled No. of Units
Gov't (Power Recovery Capacity
Private Total grain grain Needed
Funded Requireme (%) (bags/hour)
(bags/day) (bags/year)
nt)
513,699 39 39 65 150 1,200.00 438,000.00 7
Phone : (085) 817-8486
Source: Office of the City Agriculturist,
PPHF Inventory 2022
Table 14 shows the computed gap analysis of rice mill in Butuan City which shows that there still 7 rice mills needed with a milling capacity of
150 bags per hour ( in 1 year) to cater the assumed 513, 699 bags for milling.
Phone : (085) 817-8486

5. PROJECT DESCRIPTION
The Business model on Butuan City as Food Processing Center for rice in Butuan City, is
anchored on improving rice farmers’ productivity and making the rice industry of the city
competitive and sustainable through increasing the level of farm mechanization from
production to post-harvest which contributes to the intensification and diversification of
agricultural production systems. The project aims to reduce the cost of production and reduce
postharvest losses of the rice industry among farmers by providing at least 50% of the total
gap requirement of the farm mechanization.
The Government has been implementing programs that contributes to the improvement of
farm mechanization level of the country. One of the programs implemented is the Rice
Competitiveness Enhancement Fund (RCEF) Program which started from the year 2019 to
2025 through the mechanization program component which allocated a budget of 5 billion
every year in the country. This program aims to improve the mechanization level of the
country by introducing farm machines to Farmers’ Cooperatives and Associations (FCAs).
Though the program is expected to increase the level of mechanization of the country, still it
can’t suffice all the needed machineries of the rice industry, especially in Butuan City. The
rice industry of the city is still bombarded with gaps on farm machineries thus reduces the
sufficient supply of local well-milled rice.
The proposed program aims to address these gap requirement of fam machineries by
providing at least 50% of the machinery requirement of the industry. The proposed program is
composed of the following project components.
5.1 Project Goals and Objectives
The main goal of rice farm mechanization program is to improve the mechanization level of
Butuan City while uplifting the livelihood of Farmers’ Cooperatives and Associations (FCAs)
to sustain rice self-sufficiency amidst pandemic and climate change, as a springboard towards
production surplus and agro-industrialization.
1. Reduced rice palay production cost per kilo.

2. Reduced rice palay postharvest losses.
3. Increased FCAs farm income.
4. Capacitate FCAs as effective Farm Service Provider (FMSP).

5. Produced better quality harvest.
6. Increased rice palay yield by 15%.
Phone : (085) 817-8486


5.2 Project Components
5.2.1 Learning and Development Services
This refers to the conduct of various trainings, seminars and capability-building activities to
facilitate access to nest available technologies as a strategy in equipping the rice farmers with
appropriate farm mechanization knowledge by molding FCAs to become effective Farm
Machinery Service Providers (FMSP).
5.2.2 Production Support Services
This refers to the services extended to farmers’ groups in accessing production materials, inputs
and working capital. Services include;
A. Facilitation assistance for farm machineries insurance – This refers to assistance in farm
machineries insurance application of farmers. Increased access to farm machinery
insurance will enable rice farmers in improving their capacity to manage risks.
5.2.3 Farm Mechanization Support
This refers to services extended to farmers’ organizations in accessing agricultural machinery,

equipment & post-harvest facilities such as hand and farm tractors, transplanters, combine
harvesters, seeders and drying facilities. Farm mechanization is geared towards increasing
efficiency of farm operations, reducing post-harvest losses and production cost while increasing
the yield.
5.1.4 Program Management Team
This refers to mentoring, coaching, and tracking of activities comprising the program
implementation by the supervisor to the implementers in the field. Assessment of progress
against the agreed indicators is actively pursued. The supervisor and implementers undertake
joint discussion of problems and solutions to reach agreements on suitable actions to achieve the
project’s objectives and targets. This is to ensure that the performance commitment of the
workers will be carried out.
Phone : (085) 817-8486

Phone : (085) 817-8486

6. MARKETING PLAN
6.1 Demand Analysis
Considering the 2020 estimated population of Butuan City and the per capita consumption of rice as determined by the Philippines Statistics
Agency (PSA), below is the projected population and demand/ requirement for three (3) years.
Table 15.0 Rice Projected Consumption/ Demand (2023-2025)

Per 2020 2021 2022 2023 2024 2025
Butuan
Capita
City Proj. Proj. Proj. Proj. Proj. Proj.
Consump Proj. Proj. Proj. Proj. Proj. Proj.
Barang Reqrt Reqrt Reqrt. Reqrt Reqrt Reqrt
tion Pop. Pop. Pop. Pop. Pop. Pop.
ays (MT) (MT) (MT) (MT) (MT) (MT)
(kg/year)
Urban
Barang 106,15 12,419. 114,643. 13,413. 133,719 15,645. 144,41 16,896. 15,597 18,248.5 16,844 19,708.
116.7
ays (27 0.00 55 00 23 .00 12 7.00 79 0.1 1 7.7 39
%)
Rural
Barang 287,00 33,579. 309,959. 36,265. 361,537 42,299. 390,46 45,683. 42,169 49,338.5 45,543 53,285.
116.7
ays (73 0.00 00 00 20 .00 83 0.00 82 7 5 2.8 64
%)
393,15 45,998. 424,602. 49,678. 495,256 57,944. 534,87 62,580. 57766 67587.0 623880 72994.
Total
0.00 55 00 43 .00 95 7.00 61 7.2 6 .5 02
Source: Philippine Statistics Authority (PSA), 2020
Office of the City Agriculturist (OCAg) Butuan City Agricultural Profile (2020-2021)
Based on the table above, the projected population and consumption/ demand is directly proportional with an increase of 0.08% annually.
Phone6.2: (085) 817-8486

Demand and Supply Analysis

Table 16.0 Rice Projected Demand and Supply (2020-2025)
2020 2021 2022 2023 2024 2025
Co Sur
m Pro De Pro Prod
plus Surplu Surplu Surpl Surpl Surpl
mo Dem duct ma duct Dema Produ Dema Produ Dema Produ Dema uctio
/ s/ s/ us/ us/ us/
dit and ion
Defi
nd ion
Defici
n ction
Defici
nd ction
Defic
nd ction
Defic
nd n
Defici
y (MT) (MT (M (MT (MT) (MT) (MT) (MT) (MT) (MT) (MT) (MT
cien ent ent ient ient ent
) T) ) )
t
39,9 - 496 38,5 - - - -
Ri 45,99 57,94 41,04 62,58 43,70 18,87 67,58 46,54 72,99 49,5
13.8 6,08 78. 36.1 11,142 16,903 21,03 23,41
ce 8.55 4.95 1.05 0.61 8.71 1.90 7.06 9.78 4.02 75.5
9 4.66 43 9 .24 .90 7.3 8.51
Table 16 shows the three (3) year projected demand and supply of rice. Based on the computed analysis, the demand is expected increase with an
average of 8% annually while the supply cannot suffice the gap.
Phone : (085) 817-8486

7. OPERATION PLAN
7.1 Operation and Management of Services
The Rice Mechanization Center Business Model/ program through the conduct of trainings
and seminars as guide for proper operation and management of farm machineries, will train
the Farmers’ Cooperative and Associations (FCAs) to become an effective Farm Machinery
Service Providers (FMSP). This is to ensure the sustainability of the program and to deliver
effective services to the rice farmers of Butuan City.
The FMSP will provide the services of the farm machines granted under the program to its
members and as well as non-members. The FMSP will serve as a facility that combines the
different kinds of rice farm machinery needed for on-farm operation such as land preparation,
plant establishment, harvesting and threshing and off-farm processing such as drying and
milling of rice. The facility shall likewise provide repair services of machinery and serve as
information hub on farm mechanization.
The FMSP will operate through rental system and will be managed by FCAs trained in
partnership with other Government agencies such as DA RFOs, PhilMech, LGUs and other
concerned agencies.
7.2 Organization and Management
Figure 1. Management Structure of FMSP

7.3 Business Model
The proposed Rice Mechanization Center Business Model/ program involves the
intensification and diversification of agricultural production systems through the provision of
agricultural machines and providing extension services by helping FCAs to become Farm
Machinery Service Providers (FMSP).
The FMSP will serve as a facility that houses different kinds of rice farm machinery and
provides services to its members and non-members. These services include land preparation,
crop establishment, harvesting and threshing, drying and milling of rice. The FMSP will also
provide repair and maintenance of farm machineries. FMSP will be managed by trained
FCAs and will operate through rental systems based on the services offered.
Through FMSP, FCAs-beneficiaries and non-members will be able to enjoy the services of
the farm machines which reduces production cost, postharvest losses, generates rural
employment and produces better quality harvest while improving the mechanization level of
the country and ensuring food security. Below is the business model of the proposed Rice
Mechanization Center Business Model.
Table 17.O Business Model (VARS)

Element Key Feature
✔ Butuan City has only 20% level of agricultural
mechanization
1. Motivation ✔ High farm production cost
✔ High postharvest losses
✔ Butuan City has a large area for rice production
✔ Rice Mechanization Center offers different kinds of farm
services and shall likewise provide repair services of
machinery
✔ Rice Mechanization Center serves as information hub on
2. Value Proposition
farm mechanization
✔ Rice Mechanization Center ensures quality well-milled rice
✔ Rice Mechanization Center offers lower cost of farm
services than other service providers
✔ Increased income of FCAs who are trained FMSP
✔ Reduce production cost
2.1 Entrepreneur
✔ Reduce postharvest losses
✔ Enhance capability and competitiveness
✔ Quality and Effective farm services
2.2 Customer ✔ Reduce production cost
✔ Assured better quality rice products
✔ Increased rice self-sufficiency to 100% by 2026
2.3 Industry ✔ Increased mechanization level by 30%
✔ Enhance rice industry’s competitiveness
3. Activities, Resources, Capabilities
3.1 Technology ✔ Extension services such as Trainings and Seminars for

Element Key Feature
Institutional Sustainability as FMSP
✔ Higher yield and quality rice produced
3.2 Capabilities
✔ Eased and fast farm operations
4. Revenue Realization
4.1 Revenue or Sales Sell products to buyers
Model Provide/ Offer farm machinery service/ operations
4.2 Sales platform ✔ By word of farmers
4.3 Sources of Fees and charges for farm service provider operations
Revenue Fees and charges for machine services
5. Scope of Enterprise Rice industry
8.0 INVESTMENT COST

Particulars Qty Unit Unit Cost Total Cost
(PhP)
(PhP)
Investment Cost
Agricultural Buildings 9,000,00

0.00
Construction of Rice Mill with sq.m 6,000,0 5,000,00

Warehouse 250.0 00.00 0.00
Construction of Flatbed Dryers Unit 1,000,0 3,000,00

3.0 00.00 0.00
Construction of Multi-Purpose sq.m 1,000,00

Pavement Dryers 500.0 0.00
Production and Post Harvest 17,040,000

Machineries .00
Four-Wheel Tractor Unit 1,400,0 4,200,00

3.0 00.00 0.00
Hand Tractor Unit 150,0 300,00

2.0 00.00 0.00
Riding type Rice Transplanter Unit 1,600,0 4,800,00

3.0 00.00 0.00
Walk-behind Rice Transplanter Unit 500,0 1,500,00

3.0 00.00 0.00
Combine Harvester Unit 2,000,0 6,000,00

3.0 00.00 0.00
Rice Reaper Unit 140,0 140,00

1.0 00.00 0.00
Thresher (mini scale) Unit 100,0 100,00

1.0 00.00 0.00
Processing Tools and Facilties

450,000.00
Bag Closer, 75 bags/hour Unit 70,0 280,00


4.0 00.00 0.00
Horizontal Sifter, 15 bags per Unit 35,0 70,00

hour 2.0 00.00 0.00
Weighing Scale Piec 50,0 100,00

2.0 es 00.00 0.00
Motor Pool 375,00

0.00
Grinding Machine Unit 50,0 50,00

1.0 00.00 0.00
Lathe Machine Unit 200,0 200,00

1.0 00.00 0.00
Crocodile Jack Unit 40,0 40,00

1.0 00.00 0.00
Stationary Grinding Machine Unit 30,0 30,00

1.0 00.00 0.00
Welding Machine (300 Amp) Box 15,0 15,00

1.0 00.00 0.00
Compressor (Double Piston) Unit 30,0 30,00

1.0 00.00 0.00
Acetyylene Unit 10,0 10,00

1.0 00.00 0.00
Vehicle 1,400,00
0.00
Hauling Truck unit 700,0 1,400,00

2.0 00.00 0.00
SUB-TOTAL 28,265,000
.00
Operational Cost
Labor Cost 993,60

0.00
Utilities

Electricity 240,00
0.00
Fuel and Oil 195,00

0.00
Repair and Maintenance Cost 1,413,25

0.00
Administrative Support Cost 60,00

0.00
SUB-TOTAL 2,901,85
0.00
GRAND TOTAL 31,166,850.0

0
CITY AGRICULTURE
9.0 FINANCIAL PLAN OFFICE
9.1 Revenue Estimates on Farm Services (Annually at 2 croppings)

Projected
Revenue
Particulars Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
I. Farm
Mechanization
Four-Wheel
Tractor
Service
Area, Ha. 240.00 242.40 254.52 267.25 280.61 294.64 309.37 324.84 341.08 358.14
Price
2,650.00 2,676.50 2,703.27 2,730.30 2,757.60 2,785.18 2,813.03 2,841.16 2,869.57 2,898.27
Total Sales
of Services 1,272,00 1,297,56 1,376,07 1,459,32 1,547,61 1,641,241. 1,740,536. 1,845,839. 1,957,512. 2,075,942
0.00 7.20 0.02 2.25 1.25 73 85 33 61 .13
Hand Tractor
Service
Area, Ha. 60.00 60.60 63.63 66.81 70.15 73.66 77.34 81.21 85.27 89.53
Price
1,600.00 1,616.00 1,632.16 1,648.48 1,664.97 1,681.62 1,698.43 1,715.42 1,732.57 1,749.90
TotalCITY AGRICULTURE OFFICE

Sales
of Services 192,000. 195,859. 207,708. 220,275. 233,601. 247,734.6 262,722.5 278,617.26 295,473.6 313,349.7
00 20 68 06 70 0 4 0 5
Riding
Transplating
Service
Service
Area, Ha. 240.00 242.40 254.52 267.25 280.61 294.64 309.37 324.84 341.08 358.14
Price
7,800.00 7,878.00 7,956.78 8,036.35 8,116.71 8,197.88 8,279.86 8,362.66 8,446.28 8,530.75
Total Sales
of Services 3,744,00 3,819,25 4,050,31 4,295,36 4,555,23 4,830,824. 5,123,089. 5,433,036. 5,761,735. 6,110,320
0.00 4.40 9.29 3.61 3.11 71 60 53 24 .22
Walk-behind
Rice
Transplanter
Service
Area, Ha. 60.00 60.60 63.63 66.81 70.15 73.66 77.34 81.21 85.27 89.53
Price
7,800.00 7,878.00 7,956.78 8,036.35 8,116.71 8,197.88 8,279.86 8,362.66 8,446.28 8,530.75
Total Sales
of Services 936,000. 954,813. 1,012,57 1,073,84 1,138,80 1,207,706. 1,280,772. 1,358,259. 1,440,433. 1,527,580
00 60 9.82 0.90 8.28 18 40 13 81 .05

Combine
Harvester
Service
Area, Ha. 240.00 242.40 254.52 267.25 280.61 294.64 309.37 324.84 341.08 358.14
Price
5,000.00 5,050.00 5,100.50 5,151.51 5,203.02 5,255.05 5,307.60 5,360.68 5,414.28 5,468.43
Total Sales
of Services 2,400,00 2,448,24 2,596,35 2,753,43 2,920,02 3,096,682. 3,284,031. 3,482,715. 3,693,420. 3,916,871
0.00 0.00 8.52 8.21 1.22 51 80 72 02 .93
Rice Reaper
Service
Area, Ha. 60.00 60.60 63.63 66.81 70.15 73.66 77.34 81.21 85.27 89.53
Price
1,800.00 1,818.00 1,836.18 1,854.54 1,873.09 1,891.82 1,910.74 1,929.84 1,949.14 1,968.63
Total Sales
of Services 216,000. 220,341. 233,672. 247,809. 262,801. 278,701.4 295,562.8 313,444.41 332,407.8 352,518.4
00 60 27 44 91 3 6 0 7
Thresher
Service
Area, Ha. 60.00 60.60 63.63 66.81 70.15 73.66 77.34 81.21 85.27 89.53
Price

4,300.00 4,343.00 4,386.43 4,430.29 4,474.60 4,519.34 4,564.54 4,610.18 4,656.28 4,702.85
Total Sales
of Services 516,000. 526,371. 558,217. 591,989. 627,804. 665,786.7 706,066.8 748,783.88 794,085.3 842,127.4
00 60 08 22 56 4 4 0 7
Dryig
Services
Wet Palay,
bags 20,160.0 20,565.2 21,809.4 23,128.8 24,528.1 26,012.13 27,585.87 29,254.81 31,024.73 32,901.72
0 2 1 8 8
Price
30.00 30.30 30.60 30.91 31.22 31.53 31.85 32.16 32.49 32.81
Total Sales
of Services 1,209,60 1,246,25 1,334,86 1,429,78 1,531,44 1,640,340. 1,756,977. 1,881,907. 2,015,720. 2,159,047
0.00 2.09 6.84 2.55 7.24 80 23 09 10 .88
Milling
Services
Dried
Palay,kg 1,008,00 1,028,26 1,090,47 1,156,44 1,226,40 1,300,606. 1,379,293. 1,462,740. 1,551,236. 1,645,086
0.00 0.80 0.58 4.05 8.91 65 36 60 41 .21
Price
2.00 2.02 2.04 2.06 2.08 2.10 2.12 2.14 2.17 2.19
Total Sales
of Services 2,016,00 2,077,08 2,224,77 2,382,97 2,552,41 2,733,901. 2,928,295. 3,136,511. 3,359,533. 3,598,413

0.00 6.82 8.07 0.92 2.07 33 38 82 50 .13
TOTAL 12,501,6 12,785,7 13,594,5 14,454,7 15,369,7 16,342,92 17,378,05 18,479,115 19,650,32 20,896,17
REVENUE 00.00 86.51 70.60 92.15 41.33 0.01 5.51 .18 1.98 1.03
9.2 Cash Flow Projection

Particulars Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Cash Inflow:
Four-Wheel 1, 1,2 1,3 1, 1, 1,7 1, 1,

Tractor 272,000. 97,567.2 76,070.0 459,322. 1,547,61 641,241. 40,536.8 845,839. 957,512. 2,075,94
00 0 2 25 1.25 73 5 33 61 2.13
Hand Tractor 1 2 2
192,000. 95,859.2 07,708.6 220,275. 233,601. 247,734. 62,722.5 278,617. 295,473. 313,349.
00 0 8 06 70 60 4 26 60 75
RidingCITY
typeAGRICULTURE
Rice OFFICE
3, 3,8 4,0 4, 4, 5,1 5, 5,
Transplanter 744,000. 19,254.4 50,319.2 295,363. 4,555,23 830,824. 23,089.6 433,036. 761,735. 6,110,32
00 0 9 61 3.11 71 0 53 24 0.22
Walk-behind Rice 9 1,0 1, 1, 1,2 1, 1,

Transplanter 936,000. 54,813.6 12,579.8 073,840. 1,138,80 207,706. 80,772.4 358,259. 440,433. 1,527,58
00 0 2 90 8.28 18 0 13 81 0.05
Combine 2, 2,4 2,5 2, 3, 3,2 3, 3,

Harvester 400,000. 48,240.0 96,358.5 753,438. 2,920,02 096,682. 84,031.8 482,715. 693,420. 3,916,87
00 0 2 21 1.22 51 0 72 02 1.93
Rice Reaper 2 2 2
216,000. 20,341.6 33,672.2 247,809. 262,801. 278,701. 95,562.8 313,444. 332,407. 352,518.
00 0 7 44 91 43 6 41 80 47
Thresher 5 5 7
516,000. 26,371.6 58,217.0 591,989. 627,804. 665,786. 06,066.8 748,783. 794,085. 842,127.
00 0 8 22 56 74 4 88 30 47
Drying 1, 1,2 1,3 1, 1, 1,7 1, 2,

209,600. 46,252.0 34,866.8 429,782. 1,531,44 640,340. 56,977.2 881,907. 015,720. 2,159,04
00 9 4 55 7.24 80 3 09 10 7.88
Milling 2, 2,0 2,2 2, 2, 2,9 3, 3,

016,000. 77,086.8 24,778.0 382,970. 2,552,41 733,901. 28,295.3 136,511. 359,533. 3,598,41
00 2 7 92 2.07 33 8 82 50 3.13
Total Cash Inflow 8, 8,9 9,4 10,0 10, 11, 11,9 12,7 13,4 1
- 760,000. 36,076.0 76,708.6 50,049.4 658,077. 302,891. 86,716.0 11,912.3 80,983.0 4,296,58

00 0 0 7 46 15 6 8 8 2.56
Cash Outflow:
Construction of 5,0
Rice Mill with 00,000.0
Warehouse 0
Construction of 3,0
Flatbed Dryers 00,000.0
0
Construction of 1,0
Multi-Purpose 00,000.0
Pavement Dryers 0
Four-Wheel 4,2
Tractor 00,000.0
0
Hand Tractor 3
00,000.0
0
Riding type Rice 4,8

Transplanter 00,000.0
0
Walk-behind Rice 1,5


0
Combine 6,0
Harvester 00,000.0
0
Rice Reaper 1
40,000.0
0
Thresher (mini 1
scale) 00,000.0
0
Processing 4
Tools and Facilties 50,000.0
0
Motor Pool 3
75,000.0
0
Vehicle 1,4
00,000.0
0
Labor Cost 9 1,0 1,0 1, 1, 1,0 1, 1,

93,600.0 993,600. 03,536.0 13,571.3 023,707. 1,033,94 044,283. 54,726.4 065,273. 075,926. 1,086,68
0 00 0 6 07 4.14 59 2 69 42 5.69
Electricity 2 2 2

240,000. 42,400.0 44,824.0 247,272. 249,744. 252,242. 54,764.8 257,312. 259,885. 262,484.
00 0 0 24 96 41 4 48 61 47
Fuel and Oil 1 1 2

195,000. 96,950.0 98,919.5 200,908. 202,917. 204,946. 06,996.4 209,066. 211,157. 213,268.
00 0 0 70 78 96 3 39 06 63
Repair and 1, 1,4 1,4 1, 1, 1,5 1, 1,

Maintenance Cost 413,250. 27,382.5 41,656.3 456,072. 1,470,63 485,339. 00,193.3 515,195. 530,347. 1,545,65
00 0 3 89 3.62 95 5 29 24 0.71
Administrative
Support Cost 60,000.0 60,600.0 61,206.0 61,818.0 62,436.2 63,060.6 63,691.2 64,328.1 64,971.4 65,621.1
0 0 0 6 4 0 1 2 0 2
Depreciation 2, 2,3 2,3 2, 2, 2,3 2, 2,

326,500. 26,500.0 26,500.0 326,500. 2,326,50 326,500. 26,500.0 326,500. 349,765. 2,373,26
00 0 0 00 0.00 00 0 00 00 2.65
Total Cash Outflow 29,25 5, 5,2 5,2 5,3 5 5, 5,4 5, 5,4

8,600.00 228,350. 57,368.5 86,677.1 16,278.9 ,346,176 376,373. 06,872.2 437,675. 92,052.7 5,546,97
00 0 9 6 .75 51 5 97 3 3.26
Net Cash Flow - 3, 3,6 4,1 4,7 5 5, 6,5 7, 7,9

29,258,6 531,650. 78,707.5 90,031.4 33,770.5 ,311,900 926,517. 79,843.8 274,236. 88,930.3 8,749,60
00.00 00 0 1 1 .71 63 1 41 5 9.30
9.2 Cash Flow Projection

Particulars Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Benefits
Four-Wheel 1, 1,2 1,3 1, 1, 1,7 1, 1,

Tractor 272,000. 97,567.2 76,070.0 459,322. 1,547,61 641,241. 40,536.8 845,839. 957,512. 2,075,94
00 0 2 25 1.25 73 5 33 61 2.13
Hand Tractor 1 2 2
192,000. 95,859.2 07,708.6 220,275. 233,601. 247,734. 62,722.5 278,617. 295,473. 313,349.
00 0 8 06 70 60 4 26 60 75
Riding type Rice 3, 3,8 4,0 4, 4, 5,1 5, 5,

Transplanter 744,000. 19,254.4 50,319.2 295,363. 4,555,23 830,824. 23,089.6 433,036. 761,735. 6,110,32
00 0 9 61 3.11 71 0 53 24 0.22
Walk-behind Rice 9 1,0 1, 1, 1,2 1, 1,

Transplanter 936,000. 54,813.6 12,579.8 073,840. 1,138,80 207,706. 80,772.4 358,259. 440,433. 1,527,58
00 0 2 90 8.28 18 0 13 81 0.05
Combine 2, 2,4 2,5 2, 3, 3,2 3, 3,

HarvesterCITY AGRICULTURE OFFICE400,000. 48,240.0 96,358.5 753,438. 2,920,02 096,682. 84,031.8 482,715. 693,420. 3,916,87
00 0 2 21 1.22 51 0 72 02 1.93
Rice Reaper 2 2 2
216,000. 20,341.6 33,672.2 247,809. 262,801. 278,701. 95,562.8 313,444. 332,407. 352,518.
00 0 7 44 91 43 6 41 80 47
Thresher 5 5 7
516,000. 26,371.6 58,217.0 591,989. 627,804. 665,786. 06,066.8 748,783. 794,085. 842,127.
00 0 8 22 56 74 4 88 30 47
Drying 1, 1,2 1,3 1, 1, 1,7 1, 2,

209,600. 46,252.0 34,866.8 429,782. 1,531,44 640,340. 56,977.2 881,907. 015,720. 2,159,04
00 9 4 55 7.24 80 3 09 10 7.88
Milling 2, 2,0 2,2 2, 2, 2,9 3, 3,

016,000. 77,086.8 24,778.0 382,970. 2,552,41 733,901. 28,295.3 136,511. 359,533. 3,598,41
00 2 7 92 2.07 33 8 82 50 3.13
8, 8,9 9,4 10,0 10, 11, 11,9 12,7 13,4 1

760,000. 36,076.0 76,708.6 50,049.4 658,077. 302,891. 86,716.0 11,912.3 80,983.0 4,296,58
Total Cash Inflow - 00 0 0 7 46 15 6 8 8 2.56
Cost:
Construction of 5,0
Rice Mill with 00,000.0
Warehouse 0

Construction of 3,0
Flatbed Dryers 00,000.0
0
Construction of 1,0
Multi-Purpose 00,000.0
Pavement Dryers 0
Four-Wheel 4,2
Tractor 00,000.0
0
Hand Tractor 3
00,000.0
0
Riding type Rice 4,8

0
Walk-behind Rice 1,5

0
Combine 6,0
Harvester 00,000.0
0
Rice Reaper 1
40,000.0

0
Thresher (mini 1
scale) 00,000.0
0
Processing Tools 4
and Facilties 50,000.0
0
Motor Pool 3
75,000.0
0
Vehicle 1,4
00,000.0
0
Labor Cost 9 1,0 1,0 1, 1, 1,0 1, 1,

93,600.0 993,600. 03,536.0 13,571.3 023,707. 1,033,94 044,283. 54,726.4 065,273. 075,926. 1,086,68
0 00 0 6 07 4.14 59 2 69 42 5.69
Electricity 2 2 2
240,000. 42,400.0 44,824.0 247,272. 249,744. 252,242. 54,764.8 257,312. 259,885. 262,484.
00 0 0 24 96 41 4 48 61 47
Fuel and Oil 1 1 2

195,000. 96,950.0 98,919.5 200,908. 202,917. 204,946. 06,996.4 209,066. 211,157. 213,268.
00 0 0 70 78 96 3 39 06 63
Repair and 1, 1,4 1,4 1, 1, 1,5 1, 1,


Maintenance Cost 413,250. 27,382.5 41,656.3 456,072. 1,470,63 485,339. 00,193.3 515,195. 530,347. 1,545,65
00 0 3 89 3.62 95 5 29 24 0.71
Administrative
Support Cost 60,000.0 60,600.0 61,206.0 61,818.0 62,436.2 63,060.6 63,691.2 64,328.1 64,971.4 65,621.1
0 0 0 6 4 0 1 2 0 2
Depreciation 2, 2,3 2,3 2, 2, 2,3 2, 2,

326,500. 26,500.0 26,500.0 326,500. 2,326,50 326,500. 26,500.0 326,500. 349,765. 2,373,26
00 0 0 00 0.00 00 0 00 00 2.65
Total Cash Outflow 29,25 5, 5,2 5,2 5,3 5 5, 5,4 5, 5,4

8,600.00 228,350. 57,368.5 86,677.1 16,278.9 ,346,176 376,373. 06,872.2 437,675. 92,052.7 5,546,97
00 0 9 6 .75 51 5 97 3 3.26
- 3, 3,6 4,1 4,7 5 5, 6,5 7, 7,9

29,258,6 531,650. 78,707.5 90,031.4 33,770.5 ,311,900 926,517. 79,843.8 274,236. 88,930.3 8,749,60
Net Benefits 00.00 00 0 1 1 .71 63 1 41 5 9.30
Return of Investment 29.69 %
Internal Rate of Return 34.17 %
Net Present Value, PhP 3,229,508.9
Benefit/Cost Ratio 2.34
Pay-back Period 3 years

9.3 Financial Ratios:
9.3.1 Rate of Investment (ROI) per Year
With initial investment of PhP is 31,166,850.00, the rate of Investment per year of
operation is 26.69%. Since the enterprise ROI is greater than the maximum allowable rate of
return of 18%, this enterprise is a worthwhile investment.
9.3.2 Internal Rate of Return (IRR)
Setting the maximum allowable rate of return (MARR) which is equivalent to the
existing bank interest rate plus inflation rate at 12% per annum, the internal rate of return (IRR)
of this enterprise project is 34.17 %. The IRR being higher than the MARR indicates that this
projects is a viable business.
9.3.3 Net Present Value (NPV)
Having a net present value (NPV) of PhP 3,229,508.9, which is greater than zero, it can
be inferred that this enterprise project is a commendable investment.
9.3.4 Benefit-Cost Ratio (BCR)
With a benefit-cost ratio (BCR) of 2.34 which is greater than 1.0, this means that every
peso investment will earn 134 centavos. Thus, it can be concluded that this enterprise is a good
business.
9.3.5 Pay-back Period
Since the pay-back period is less than the designed operational life of the business
which is five years, it can be said that this enterprise project is a worthy investment.

Rice Business-Model3

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Rice Business-Model3

Uploaded by

Copyright:

Available Formats

Republic of the Philippines

CITY GOVERNMENT OF BUTUAN

Project Title: RICE FARM MECHANIZATION AND PROCESSING

Proponent: Office of the City Agriculturist

Contact Person: Lois Y. Pajaron

Beneficiaries: Rice FMSP-Farmers’ Cooperative & Association,

Location: South Market Complex

Project Cost: Php 31,166,850.00

Source of Funds: City Government of Butuan

Background and Agri-fishery Development Situationaire:

Phone : (085) 817-8486

CITY GOVERNMENT OF BUTUAN

CITY AGRICULTURE OFFICE

Aligned to the development themes of NEDA Caraga for

Breakthroughs as a Hub City of Opportunities

In 2016, Butuan City started its transformation

Phone : (085) 817-8486

CITY GOVERNMENT OF BUTUAN

CITY AGRICULTURE OFFICE

Must-win Strategic Initiatives:

Phone : (085) 817-8486

CITY GOVERNMENT OF BUTUAN

CITY AGRICULTURE OFFICE

Agri-Fishery Development as Driver for Growth:

It is pragmatic for the City Government Butuan

In support to the Department of Agriculture

In partnership with private sector, a number of

Phone : (085) 817-8486

CITY GOVERNMENT OF BUTUAN

CITY AGRICULTURE OFFICE

3. RICE INDUSTRY DEVELOPMENT SITUATIONAIRE

3.1 Butuan City Rice Production Performance

Butuan City has around 8,100 hectares favorable for

CITY GOVERNMENT OF BUTUAN

4. RICE FARM MECHANIZATION INDUSTRY GAPS

4.1 Development Gaps and Threats

1. Increasing palay production cost per kilo.

4.2 Farm Mechanization Gap Analysis

4.2.1 Power Units/ Tractors

CITY GOVERNMENT OF BUTUAN

● Can work in wet and dry soil conditions

*Philippine Center for Postharvest Development and Mechanization (PHilMech)

B. Walking-type Agricultural Tractor (Hand Tractor) – As defined in Philippine Agricultural

CITY GOVERNMENT OF BUTUAN

CITY AGRICULTURE OFFICE Rice Area Rice Area (Accessible to

Phone : (085) 817-8486

CITY GOVERNMENT OF BUTUAN

CITY AGRICULTURE OFFICE

Table 2.0 Four Wheel Tractor (Four-wheel Drive) Gap Analysis

Phone : (085) 817-8486

CITY GOVERNMENT OF BUTUAN

CITY AGRICULTURE OFFICE

4.2.2 Mechanical Rice Transplanter

CITY GOVERNMENT OF BUTUAN

CITY AGRICULTURE OFFICE

Table 4.0 Riding Type Rice Transplanter Gap Analysis

No. of Units Assumptions

CITY GOVERNMENT OF BUTUAN

CITY AGRICULTURE OFFICE

CITY GOVERNMENT OF BUTUAN

CITY AGRICULTURE OFFICE

CITY GOVERNMENT OF BUTUAN