Subproject Title ENHANCEMENT CONSOLIDATION AND MARKETING OF FRESH

LACATAN BANANA

Location Brgy. Mua-an, Kidapawan City

Proponent Group Mua-an Farmers Producers Cooperative (MFPC)

Name and MR. ECCLESIASTES ROQUE JR.

Telephone Number Manager
of the Contact 09469344480
Person
Financing Modality Small Enterprise
Based on the P9,120,600
Amount of
Subproject
Type of PG Upgrading of Facility and Expansion of Production
undertaking
Nature of Plastic Crates
Expansion/ * Part of the quality control of the product is making sure
Upgrading (for SPs that it is clean, unblemished and free from scorching thus,
under the it needs to be in a secured container/case especially
expansion/ during transportation
upgrading * Newly harvested fresh banana from the production area
Category) will be placed in the plastic crates and will be transported
to the packing house for classification and eventually for
packing
Hauling Trucks (6 Tonner Capacity)
 Volume is one of the requirement in banana business, thus, the
presence of a hauling truck is of great necessity to pick-up and
transport the products in big volume. It will bring fresh
banana from the production area straight to the packing
house for classification and packaging using wood crates.
 From the packing house it will immediately transport the
product to scheduled ports within Mindanao(GenSan, Davao,
Cagayan de Oro) for shipment to Manila, Cebu and Boracay or
via cargo planes in GenSan or Davao City. For shipment,
Cagayan de Oro Port is the most convenient and fast since it
has the most number of ship going to the products destination.

Hauling Truck (4 Tonner Capacity)

 It is very necessary for the cooperative to have their own

transportation equipment in Manila where the bulk of the
product is being delivered to institutional buyers such as
Shopwise(Rustans), SM Supermarkets, Wellcome
Hypermarket and Divisoria Retail Outlet. From the
port/airport, fresh banana in crates will be transported to the

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 warehouse(cold storage facility) for sorting before it will be
delivered to identified buyers based on orders.
 It will transport the product fast and easy thus, eliminating
spoilage
 It will also serve to transport other business opportunity and
added income of the cooperative.

Working Capital
 Mua-an FPC will serve as consolidator of its farmers’ produce
being sold to institutional buyers. It will buy the existing
volume produce of the farmers , and since the cooperative is
very much eager to meet the demand volume of the buyers ,
they will be needing additional financing capital to be able to
supply the required volume. With this, additional number of
farmers will have the chance to sell their produce and avail of
the higher price the coop is offering.
Product/Services Product: Fresh Lacatan Banana
Annual Capacity: 60.4MT
Seasonality: 2 croppings/year
Services: Consolidation
Trading and Marketing
Trucking/Hauling
Volume of Harve Target Month of No. of No. of Estimated yield
Production st Harvest Farmers Hectar (after 10yrs)
Seaso (after es
n 10yrs) (after
10yrs)
1 Aug-Oct 135 220 60.4 MT/has
2 Jan-March 135 220 60.4 MT/has

Target Market/s Name of Volume Frequency Marketing

Buyer Requirement / of Delivery Terms of
month Arrangement
Payment
Shopwise 16,000 3 x per wk 30 days
Rustan’s 3,000 3 x per wk 30 days
Supermarket
Wellcome 13,000 3 x per wk 30 days
Fresh One 32,000 2 x per wk 15 days
Divisoria 32,000 3 x per wk 15 days
Hotels 20,000 3 x per wk 15 days
Cebu Cust. 28,000 2 x per wk 15 days
Boracay Is. 16,000 2 x per wk 15 days

Table 1_. Investment Cost

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 FUND SOURCES
Components / Line Items Capacity Qty/ Has Unit Unit Cost Total Cost LP GOP PLGU Proponent Group
60% 20% 20% Cash In  Kind
Part I: ACQUISITION OF EQUIPMENT
Hauling Truck, four wheel drive 6 tonner 1 unit ₱ 2,405,000.00 ₱ 2,405,000.00 ₱ 1,443,000.00 ₱ 481,000.00 ₱ 481,000.00
Hauling Truck, rear wheel drive 6 tonner 1 unit ₱ 2,022,800.00 ₱ 2,022,800.00 ₱ 1,213,680.00 ₱ 404,560.00 ₱ 404,560.00
Delivery Truck, use in Manila 4 tonner 1 unit ₱ 1,892,800.00 ₱ 1,892,800.00 ₱ 1,135,680.00 ₱ 378,560.00 ₱ 378,560.00
Total Support for Equipment ₱ 6,320,600.00 ₱ 3,792,360.00 ₱ 1,264,120.00 ₱ 1,264,120.00 ₱ - ₱ -
Part II: Facilities/Processing Site
Land ₱ 1,500,000.00 ₱ 1,500,000.00
Total Support for Facilities/Processing Site ₱ 1,500,000.00 ₱ - ₱ - ₱ - ₱ - ₱ 1,500,000.00
Part III: Production Support
Plastic Crates ₱ 100,000.00 ₱ 60,000.00 ₱ 20,000.00 ₱ 20,000.00 ₱ 200,000.00
Total Support for Production ₱ 100,000.00 ₱ 60,000.00 ₱ 20,000.00 ₱ 20,000.00 ₱ 200,000.00 ₱ -
Part IV: Working Capital
Trading Capital ₱ 1,000,000.00 ₱ 1,000,000.00 ₱ 600,000.00 ₱ 200,000.00 ₱ 200,000.00
Total Trading Capital & Admin Cost ₱ 1,000,000.00 ₱ 600,000.00 ₱ 200,000.00 ₱ 200,000.00 ₱ - ₱ -

Enterprise Cost ₱ 8,920,600.00 ₱ 4,452,360.00 ₱ 1,484,120.00 ₱ 1,484,120.00 ₱ 200,000.00 ₱ 1,500,000.00

Grand Total ₱ 8,920,600.00 ₱ 4,452,360.00 ₱ 1,484,120.00 ₱ 1,484,120.00 ₱ 200,000.00 ₱ 1,500,000.00

Role of the Enterprise to the Commodity Value Chain Upgrading

One of the goals of our government is to support the small/marginalized

farmers in the entire country and in order to attain this, various consultations and
forums were conducted as a manner to gather the idea from the grassroots on how to
alleviate the economic status of the farmers and be able to identify the appropriate
interventions for them.

Below are among the long list of identified constraints that this enterprise will
address.

1. Lack of access to refrigerated / appropriate transportation and storage facilities

2. Lack of access to postharvest facilities
3. Lack of financial resources to undertake and/or scale up collective marketing

Farmers can produce premium bananas because of the technology that they
access from various government institutions and some from private and foreign entities
but during the harvest time their agony of hauling and transporting their produce to
consolidation centers / traders torn them apart because the unavailability of
transportation facilities. Availability of trucks for rent is also very limited since most of
the private owners have also their own business. The possibility of providing a unit for r
Lk;,?
>”:<?hgfdsaent is during its vacant time only. Hauling and time plays a very vital role
in maintaining the freshness of the bananas since it is perishable.

P a g e 3 | 93
 The availability of refer vans or hauling trucks that will transport the product
from the consolidation centers going to the ports or airports for shipment to various
destinations all over the country is another big concern. Most of the time farmers will
lose their biggest opportunity on this stage of marketing their product especially during
shipment delays caused by natural calamities. Banana will reach the ports already ripen
and this will be automatically rejected by buyers since standards were not met.

The lack of financial capacity of the consolidation entities is also a big issue. The
government encourage the organization of farmers into a cooperative and association in
order for them to pull their resources and technical capacity to run a business. The
government envisions that farmers will NOT remain a farmer forever but an
Entrepreneur for this would pull him out of poverty . But since majority of the farmers
are in the threshold of poverty they cannot barely contribute to the resources of the
association and no matter how they contribute, it is not enough to start a business.

These mentioned constraints with the help that will be coming from PRDP
will be properly addressed as the interventions will focus on the priority concerns
like provision of hauling trucks, plastic crates and additional working capital for the
cooperative as consolidator. The equipment (hauling trucks) that will fast track the
transportation services from the production area to the cooperative’s
warehouse/packing house will eliminate if not minimize after production losses.
This will also eliminate rental expenses from the cooperative and would generate
additional income. As a result, coops income is projected to increase which the
farmer member will be benefited in terms of dividends /profit sharing scheme and
other perks. Crates will ensure the security of the produce during the course of
transportation and additional working capital that will increase the buying capacity
of the cooperative . Apart from these mentioned interventions, the proponent group
along with the lgu will be capacitated by the Department of Agriculture XII I-REAP
Component in managing the enterprise. They will undergo series of trainings and
workshops that will be conducted by the RPCO with the Project Support Office and
the National Project Coordinating Office and tapping other government entities like
DTI, DENR, DAR, CDA to also give technical support.

Brief The proposed enterprise ”Enhancement Consolidation and Marketing of

Description Fresh Lacatan Banana” is an upgrading of Mua-an FPC’s existing buying,
of the consolidating and marketing business. Fresh Lacatan banana that were
subproject coming from their farmer members which production area has been
monitored and guided by experts from selecting the issue cultured seedlings
to planting, input applications until harvesting and eventually packing and
delivery to institutionalized buyers. The investment proposal includes
provision of hauling trucks, plastic crates, and additional working capital

The cooperative will transport its own produce placed securely in plastic
crates from the production area to packing house/warehouse to designated
ports and airports going to different destinations using PRDP hauling trucks .
Deliveries to different buyers in Metro Manila will be done using a 4 tonner
capacity hauling truck from PRDP also to ensure fast and timely delivery.
P a g e 4 | 93
Enterprise General Objectives:
/Subproject
Objectives Generally, the objective of this enterprise is to help banana farmers access
assistance from PRDP thru the cooperative to attain financial stability.

Specific Objectives:

1. Increase farmers’ annual income from Php315,144.96 to PhP 651,688.80

with PRDP intervention or an increase of 107 %.
2. Increase household income of farmers from Php332,908 to
Php651,688.80/hectare/year or 96%
3. Increase the banana farmers’ cooperative membership from 49 existing
farmer members and additional of at least 11members for the succeeding
years or a total of additional 96 members in 10 years;
4. To generate rural employment opportunity for planters, harvesters and
laborers from 78 to 108 jobs, or an increase of 38 % after year 1.

New Ways of Mua-an FPC will directly buy fresh Lacatan Bananas from its farmer
Doing members and consolidate it for delivery to identified buyers . The provision of
Things/ a hauling truck from PRDP will enable the cooperative to expand its banana
Innovations trading operation through product buying and selling in volume to various
institutional buyers without compromising its quality. Marginal farmer
members and non members who wish to supply bananas to MFPC can avail of
the consultancy/technical services offered by MFPC. This is to insure that the
bananas produced by those farmers can conform to the quality specifications
of the buyers in its appearance and contents. Such technical and consultancy
services will be given free to those farmers in order to encourage and propel
them to maximize yield and profitability of their farming activity.

To be able to help the small farmer members, the cooperative facilitated for
the members to access a loan from Land Bank of the Philippines to finance
their input and operating expenses in production. Payment of the said loan
will be directly paid by the farmers to the bank with minimal interest under
the agreed terms and conditions.

Unlike the changing price of traders based on the prevailing market price,
farmer members of the cooperative will have the advantage of a higher and
stable price because of the existing marketing agreement with its buyers. The
marketing agreement secured the farmer from the dilemma of price
fluctuation. Increase income of the farmers is definite as long as the quality
of the produce meet the buyers specifications. This will further encourage the
non-member farmers to be part of the Cooperative.

Further, consolidators/coop generally do not have sufficient capital to

sustain its trading activities. With the big volume of harvests from vast
banana farms they can only cater about 60-70% of the produce , one the

P a g e 5 | 93
 reasons why they cannot also meet the demand volume of the buyers.

With the provision of plastic crates and hauling trucks, the problem on post
harvest losses will be addressed and farmers will surely benefit from the
equipment at the same time the cooperative will have a much bigger and
efficient trading process. Having PRDP interventions will make farming life
easy, reliable and profitable.

Economic Individual Household

Benefits: No. Beneficiaries IP Non IP IP Non
of Direct (Year 1) IP
M F M F Total M F M F Total
Beneficiaries Farmer member 3 8 11 27 49 3 8 11 27 49
Technician 1 1 1 1
Laborer 6 6 6 6
Packing Crew 3 3 3 2 11 3 3 3 2 11
Crate Former 6 2 8 6 2 8
Admin Staff 1 1 1 3 1 1 1 3
TOTAL 7 17 22 32 78 7 17 22 32 78
Job Job Title Existing New Job Incremental
Generation Jobs
Farmer Member 49 7 0
Laborer 6 2 2
Technician 0 1 1
Packing Crew 11 7 7
Crate Former 8 2 2
Admin Staff 3 5 5
Others 0 6 6
(driver/helper)
TOTAL 78 30 30
Investment Direct Beneficiaries: P 1,384,912.20
Cost
per Non direct beneficiaries: P 1,087,200
Beneficiaries

Table 2. Summary of Production Area

Elevation Area Planted

Name of ASL (M) Non - TOTAL
No. Soil Type Productive
Barangay Productive
  (ha) ( hectare)
(ha)
1 Amas 109-110 Kilada Clay loam 6 4 10
2 Amazion 115 Kilada clay loam 6 5 11

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 3 Balabag 700-1000 Kidapawan clay loam 80 22.03 102.03
4 Balindog 250-260 Kilada clay loam 40 20 60
5 Binoligan 115 Kilada clay loam 6 2 8
6 Birada 499 Kidapawan clay loam 36.75 1.25 38
7 Gayola 100 Kilada clay loam 17.3 5 22.3
8 Ginatilan 660 Kidapawan clay loam 41 11 41
9 Ilomavis 1000-1500 Kidapawan clay loam 37.75 33.49 71.24
10 Indangan 500-700 Kidapawan clay loam 26 7 33
11 Junction 150 Kilada Clay loam 19.3 10.25 29.55
12 Kalaisan 136 Kilada Clay loam 42 6.36 48.36
13 Kalasuyan 260 Kidapawan clay loam 59.2 20 79.2
14 Katipunan 120 Kilada Clay loam 12.5 3.5 16
15 Lanao 258 Kidapawan clay loam 7 2 9
16 Linangkob 240 Kidapawan clay loam 55.96 15 70.96
17 Luvimin 260 Kidapawan clay loam 27.57 10 37.57
18 Macebolig 180 Kilada Clay loam 8.29 1.5 9.79
19 Magsaysay 146 Kilada Clay loam 10 1 11
20 Malinan 103 Kilada Clay loam 45 5 50
21 Manongol 490 Kidapawan clay loam 31 6 37
22 Marbel 254 Kidapawan clay loam 24   24
23 Mateo 254 Kidapawan clay loam 28 7 35
24 Meohao 630 Kidapawan clay loam 44 20 64
25 Mua-an 619 Kidapawan clay loam 20 43 63.93
26 New Bohol 250 Kidapawan clay loam 45 8 53
27 Nuangan 400 Kidapawan clay loam 17 21 38
28 Onica 100 Kilada Clay loam 5 15 20
29 Paco 129 Kilada Clay loam 20 19 39
30 Patadon 103 Kilada Clay loam 2 9.75 11.75
31 Perez 800-1200 Kidapawan Clay loam 34 12 46
32 San Isidro 115 Kilada Clay loam 13 3 16
33 San Roque 100 Kilada Clay loam 40 15 55
34 Sibawan 250 Kidapawan Clay loam 20 12 74
35 Sikitan 115 Kilada Clay loam 25 15 32
36 Singao 235 Kilada Clay loam 25 15 40
37 Sto. Niño 110 Kidapawan Clay loam 26 14 40
38 Sudapin 313 Kidapawan Clay loam 94.6 36 130.6
39 Sumbac 140 Kidapawan Clay loam 15.02   15.02
40 Poblacion     5   5
  TOTAL     1117.24 456.13 1597.3

Table 3. Farmers Income (Before and After PRDP)

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 Particula Before After PRDP
Increase r PRDP
In Yr 0 Yr1 Yr2 Yr3 Yr4 Yr5 Yr6 Yr7 Yr8 Yr9 Yr10
Farmers Yield/ha 30.2 30.2 30.2 30.2 30.2 30.2 30.2 30.2 30.2 30.2 30.2
Income s.
(MT)/cro
pping
Total 60.4 60.4 60.4 60.4 60.4 60.4 60.4 60.4 60.4 60.4 60.4
volume
(MT)/year
Buying 18 20 20.6 21.2 21.8 22.5 23.1 23.8 24.6 25.3 26.10
Price/kg 0 2 5 1 9 8 4
Farmers 1,087,2 1,208, 1,244 1,281 1,319 1,365, 1,400, 1,442, 1,485, 1,530, 1,576,440
00 000 ,240 ,690 ,740 644 676 352 840 536
Income
Increme 120,8 36,24 37,45 38,05 39,424 35,032 41,676 43,488 44,696 45,904
00 0 0 0
ntal
Income
Financial Existing Net Income(Baseline):Php1,087,200
Analysis Projected Average Net Income: Php1,336,318.09
Net
income of
Enterprise FIRR: 86% Payback Period: 2.44 years
Financial ROI: 618.74% Benefit-Cost Ratio: 1.12%
Ratios:
Breakeven
Analysis Volume: 40,022.30 Price: 2,515,301.40 Sales:194,924,456.58

Technical Agency Nature of Estimated Cost Source of Funding

Support Technical
Assistance
DA Capacity 50,000 DA PRDP 2nd Quarter 2018
Enhancement
DTI/DA- Training on Product 25,000 DA-ATI/DTI 2nd Quarter 2018
ATI Promotions
DA XII Pest Control 30,000 DA/PLGU OPAG 1st Quarter 2018
Management
DTI/DA- Training on Product 10,000 DTI/DA-AMAD 3rd Quarter 2018
ATI Enhancement and
Entrepreneurship
DA XII Financial Mgt. & 25,000 DA-PRDP 2nd Quarter 2018
Simple Bookeeping
DA XII Participation to 100,000 DA XII/MFP On invitation

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 Congress and Trade (Usually 2-4 times a
Expos year)
TOTAL 250,000
Duration This project implementation period is 10 years.
of project
implement
ation

Table 4. Subproject Summary Data/Monitoring Sheet

Parameters Baseli Year Year Year Year Year Year Year Year Year Year
ne 1 2 3 4 5 6 7 8 9 10
Increase 315,144 651,6 679,94 697,5 716,0 735,2 755,0 775,6 796,8 818,7 841,
.96
farmers 88.80 3.01 89.85 29.62 01.26 72.99 30.02 67.98 89.35 401.
income 30
Increase HH 332,908 651,688 679,943. 697,58 716,02 735,20 755,07 775,63 796,86 818,78 841,40
.80 01 9.85 9.62 1.26 2.99 0.02 7.98 9.35 1.30
income
Increase 842,8 1,930, 3,035, 17,31 35,52 54,87 75,17 96,44 118,4 141,
Income of 90.02 384.21 856.4 3,873. 2,973. 5,735. 1,992. 1,342. 52,80 757,
Enterprise 4 61 95 69 87 06 6.58 342.
00
Women 34 34 44 54 64 74 84 94 104 114 124
participation
Membership 49 49 60 70 80 92 102 113 124 136 145
base
Employment 78 108 119 129 170 182 192 204 246 258 267
Generated

EXECUTIVE SUMMARY

It has not been long that Lacatan variety of desert banana was introduced in the
market but it already gain its place in the local market scenario especially to places
where it is abundant. For its health benefits, it possesses high contents of nutrients like
potassium, fiber , vitamin c. It also become part of almost every Filipino’s meal as
dessert because of its abundance and affordable price.

Based on statistics, of the existing Lacatan banana production areas in

Mindanao, 27% is coming from SOCCKSARGEN of which 60% of the regions supply is
coming from North Cotabato being the top producing province in terms of yield.
Notable municipalities having vast banana plantation are Kidapawan City, Magpet,
Makilala, Antipas and Pres. Roxas. Kidapawan City is the highest in production and
having the most volume of production delivered to big buyers all over the country. The
Local Government Unit have been supportive and promoting their “sweetest banana”
making it as the city’s One Town One Product (OTOP). It is also the place where the
chosen Proponent Group for the Lacatan Banana enterprise is located, the MUAAN
Farmers Producers Cooperative.
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 Muaan FPC is being regarded as an institution when it comes to Lacatan Banana
production and having forged marketing agreements with top of the line buyer,
SHOPWISE of Rustans in Manila. Aside from this, they are also a regular supplier of the
said commodity to SM Supermarkets and hypermarkets, Wellcome Hypermarkets,
Fresh Ones and has a retail outlet in Divisoria to supply fruit vendors and retailers. It
also has buyers in Boracay and Cebu City.

With its present facilities and financial capacity, Muuan can no longer
accommodate the demands from their buyers and other prospective buyers. Supply gap
have already reached to 3,012 MT/year and potentially increasing. Potential production
area is very vast but the capacity of the cooperative to consolidate and market the
product hinders them. To enhance the capacity of the Proponent Group , they will be
needing 3 hauling trucks (2 units 6 tonner for Kidapawan City operation and 1 unit 4
tonner for Manila operation), additional working capital and plastic crates. This is to
augment the coop’s operation and for them to be able to accommodate not only the
buyers demand but more so to accommodate banana farmer producers.

Hauling trucks will be utilized to haul and deliver banana from farmers
production areas to the packing house to available ports or airports for shipment to
various destinations. One truck will be assigned to Manila where big institutional buyers
are located and the bulk of the produce are being shipped. It will be utilized to fasten the
delivery from pier to the warehouse going to different buyers location. Additional
working capital from PRDP will assure the farmers of a cash on delivery payment of
the cooperative. It will have a higher buying capacity and can accommodate increase in
supply in the succeeding years as the business expands. Plastic crates will minimize
post harvest losses as it ensures the quality of the produce, no bruises or blemishes.

Specifically, the project aims to generally 1. Increase farmers’ annual income

from Php315,144.96 to PhP 651,688.80 intervention 2. Increase the banana farmers’
cooperative membership from 49 existing farmer members and additional of at least
11 members for the succeeding years or a total of additional 96 members in 10 years;
3. To generate rural employment opportunity for planters, harvesters and laborers
from 78 to 108 jobs, or an increase of 38 % after year

Delivery of the banana is on average of 3x a week all throughout the year. Each
buyers have different volume demand and specifications , most of the time premium
quality. Of the 85 hectares production area of the coop, it can produce an average of
60.4 MT /hectare /year (2 croppings) of which 90% is being classified as “A-B” or
premium and 10% for Class C. Class A has a Php20/kilo farm gate price and Php10 for
class C. Reject and spoilage is at 30% during harvest and transportation.

The sub-project will entail a total cost of Php91,326,312 for its year 1 operation.
After one year of operation it is projected to post a net income of PhP 842,890.02. In the
succeeding years it will generate an average increase in net income of 92.9% until the
tenth year of its operation which is the maximum scope of this financial projection. The
capital investment is P9,120,600 coming from the World Bank, the DA and the MLGU
including the 20% counterpart from the Proponent Group. Internal Rate of Return is
pegged at 86% signifying a positive financial scenario. Benefit-Cost Ratio is placed at
P a g e 10 | 93
1.12% giving a picture of a profit and Return of Investment (ROI) is pegged at 618.74%
exhibiting a definite optimistic financial outcome. Payback period is expected to be at 2
years and 18 days of the implementation of the subproject/enterprise.

I. DESCRIPTION OF THE BUSINESS ENTERPRISE

The buy and sell of Lacatan Banana is the enterprise that MFPC has ventured as a
cooperative while the production of fresh lacatan bananas which MFPC buys is the
initiative/undertaking of individual farmers and contracted growers. It started in
October 2016 when Land Bank of the Philippines North Cotabato Lending Center
approved a working capital loan of Five Million Pesos (P5,000,000.00) to MFPC. Prior to
actual engagement in the buy and sell business, MFPC through its officers had
participated in trade missions, banana congresses, trade fares and other trade
promotion activities spearheaded by Department of Agriculture Region 12, Department
of Trade and Industry and other agencies. It was during the Banana Congress in 2016
held in General Santor City that buyers from Manila, particularly Rustan Supercenters,
Inc., operators of Rustans Hypermarket, Shopwise Supermarket and Wellcome
Convenience Stores came to General Santos City and made discussions for MFPC to
supply their fresh lakatan banana requirements. By end of October, the Supply and
Marketing Agreement was signed at the Shopwise Supermarket at Harrison Plaza outlet
in Malate, Manila. Initial delivery of Fresh Lakatan Bananas to Manila by means of
refrigerated van also took place during that time. In order to serve growing number of
customers , MFPC has rented a forwarding warehouse in Balot, Tondo, Manila and
opened a retail outlet in Divisoria Market. The purpose of the warehouse is for
temporary storage of bananas from the pier before delivery to customers. The mall
customers require MFPC to use carton or paper board boxes as packing materials with
PE foam as liners to prevent peel bruises, while the traders and distributors still prefer
bananas to be packed in wood crates utilizing cardava banana bracts as lines and
coolers as it is much cheaper.

Key players in the enterprise are the farmers, harvesters, quality man, packers
and transport personnel. The farmers are the decision makers as to what kind of fresh
bananas he will produce. If he wants his bananas to be marketable for high end buyers
and command a good price, then he will focus his attention and investment in order to
attain his objective, that is, to produce the best quality bananas. The harvester is a farm
worker, either paid by piece work or daily. The quality man is the worker of MFPC. He
will be the one to remove the bananas from the fruit steam (de-hand), classify it based
on established specifications namely;
CLASS WEIGHT/HAND (KG) DIAMETER LENGTH/FINGER PEEL
CONDITION
A 3.1 UP 46 mm up 6 inches up SMOOTH, NO BLEMISHES OR BRUISES
B 2.1-3.035.1-45 mm 5.5-5.9 inches
C 1.5-2.030-35 mm 4.5-5.4 inches
Bananas must have at least five (5) leaves upon harvest

After classifying, he will weigh, if packed in wood crates, it must be thirty (33) or
thirty five (35) kilos per crate. If packed in cartons, weighing is done after packing. Note,
that the carton and pe foam together weigh one half (1/2) kilo. The job of the quality
man is very critical for MFPC, He becomes the judge as to what bananas can pass or not
P a g e 11 | 93
despite being aware of the quality specifications. The packers are those workers in-
charge of washing, cleaning, drying, packing, sealing and loading of packed bananas to a
cargo truck. Their work is also critical and can completely affect the quality of bananas.

When the bananas are packed and sealed coded markings are imprinted on the
crates or cartons to indicate the farm-owner, classification, packing crew and customer.
This will ensure traceability in case problems on quality and weight contents will crop
up. The loading of the crates or cartons to the hauling truck at the farm and the same
transfer of same to a bigger truck at the trans-loading area can also affect the fruit
quality. Note, that at least there are five times that the crates or cartons are being loaded
and unloaded by workers from the farm up to the delivery to the customer in Manila or
in other destinations.

Payment to farmer can be on cash basis on the day of harvesting at the office of
MFPC or one week after harvest. Aside from workers, the transport vehicles, facilities
and machineries also affect the quality of bananas. Before, MFPC use to ship bananas in
cartons via a refrigerated van. It was found out later however, that the reefer van must
be used right after packing up to the time it is prepared for ripening, otherwise if we use
reefer van from the pier in Cagayan de Oro or Davao up to the pier in Manila only, the
result is that the bananas will become pulpy and green ripe as the fresh bananas are
being subjected to extreme temperatures during transport. The facilities in our ports as
well as the container yards of shipping lines are not designed to handle fresh produce.
There are no transient sheds available, such that during transfer loading from cargo
trucks to container vans, the bananas are exposed to the elements like searing heat, dust
and other debris. As far as transport facilities are concerned, the use of dry van is not
acceptable, as it cannot provide the needed ventilation to prevent build-up of heat and
ethylene gas. From the time the bananas are cut to the time it is brought to the trans-
loading area, it takes at least twelve (12) to eighteen (18) hours then travel from the
trans-loading facility to the pier in Cagayan de Oro City twelve (12) hours. At the pier,
the bananas in crates or cartons will stay at the pier for another six (6) hours under the
heat of the sun before it can be loaded to the vessel that will bring it to Manila. It will
take another seventy two (72) hours for the sea vessel to travel from CDO port to
Manila. Bananas will reach Manila, four (4) days after harvesting under such varying
and extreme temperatures.

Upon arrival in Manila pier, at the Manila North harbor bananas are being
unloaded and brought to the designated stripping areas of the pier. There, the
consignees as well as the buyers from different parts of Luzon are waiting for the
cargoes to be unloaded after which the trading and haggling take place. For MFPC, all
bananas that are shipped to Manila have designated buyers, so the truck driver and
helper will process the cargo release papers so they can proceed with the pull out of
bananas. Fresh Ones Fruit Trader, the bananas are directly delivered to the warehouse
of the said customer. There the bananas are unloaded and classified and those that do
not conform to the specifications are rejected, and those that are accepted are invoiced
and received by the warehouse in-charge. The rejected bananas are brought to the
Divisoria Market and sold at a lesser price just to recover the cost of product. If the
bananas are intended for delivery to Rustans, then it is brought to the Divisoria outlet.
The quantity of bananas to be prepared will depend on the quantity indicated on the
Purchase Order of the customer which is given a week earlier. At the Distribution
P a g e 12 | 93
Center, the warehouse in-charge will inspect the cartons one by one and if there are off
specs, it is rejected and the good ones are received weighed and corresponding delivery
receipt is issued based now on the actual volume/quantity of bananas received.
Issuance of invoice is done electronically by the customer and can be accessed on their
B2B Portal. The rejected bananas are returned to the Divisoria outlet for retail selling.

MFPC would like to be a leader in the local banana industry by

instituting/implementing methods/processes similar to the multinational companies.
Right after cutting, the bananas must be de-hand at the farm, placed in a plastic crates
cushioned with PE Foam and brought to the packing house where it will be cleaned,
classified, weighed, dried, packed in cartons cushioned with PE foam and placed to a
cold room with a constant temperature of 13.5˚C to 14.5˚C. This process must be
performed within the six (6) hour window otherwise the bananas will start to degrade.
A reefer van will be used to transport by land bananas from the cold room of the
packing house to the Cagayan de Oro City or Davao City Port. At the shipping port, the
bananas will be transferred to the reefer van of the shipping line for shipment to Manila.
Once unloaded from the vessel in Manila port, the reefer van will be moved to the
container yard of the shipping company where the reefer van of MFPC which is being
used as transient storage is waiting and the cargo will be transferred to it. The workers
in Manila will just withdraw the quantity indicated in the purchase order of the
customer for ripening and delivery.

I.1. Opportunity for the Enterprise

Registered in the Cooperatives Development Authority (CDA) last 2012, Mua-an

has been operating for five years now and had able to establish its credibility in the
Banana Industry. Manage by experts in banana farming , Mu-an have already gone thru
a lot of success, lost opportunities and also failures.

It was able to forge marketing agreements with top buyer Shopwise of Rustans
and delivers produce banana to SM Supermarkets, Wellcome Hypermarkets and Fresh
Ones. It has also a retail store in Divisoria to cater the medium-small scaled fruit
vendors. It also supplies banana fruits in Boracay and Cebu. With these institutional
buyers demand of 5,040 MT/year, Mua-an FPC can only supply about 1,920 MT of fresh
Lacatan banana leaving a gap of 3,120 MT . The harvest of the farmer members can
actually provide the demand but identified constraints encountered hinders them so.

Constraints identified in the earlier segment of the Business Plan will be

addressed by the interventions that will be coming from PRDP and increase in income
of farmers and coop is definite. Another advantage of Mua-an is the quality of the
banana they are offering to buyers, guaranted sweet, clean and bruise free. The
sweetness of the produce is attributed to the right input applications and the location of
the area. Being in the foot of the majestic Mt. Apo, 500-800 meters above sea level.
These areas are within the so called “Banana Belt” of North Cotabato. The soil is very
rich and the temperature is perfect for growing bananas. Apart from this, Mua-an was
able to acquire an MRL (Minimum Residue Limit) Certificate which proves that their
produce is safe and that they are NOT using any banned chemicals(pesticides and
insecticides) and fertilizers that can bring harm when intake.
P a g e 13 | 93
 I.2. Business Overview

The MU-UAN FARMERS PRODUCERS COOPRATIVE (MFPC) is a cooperative whose

members are farmers and farm workers from Brgy. Mu-uan, Kidapawan City. The said
farmers are engaged in the cultivation and production of Cardava and Lakatan Bananas.
MFPC was registered with the Cooperative Development Authority (CDA) CDA
Registration No. 9520-12020999 dated January 9, 2012. Right now, it has forty nine
(49) members and has a total production area of Eighty Five (85) hectares planted with
Lakatan Bananas. Every month, MFPC is producing an average of one hundred sixty
(160) metric tons of Lakatan Bananas.

In the past, the lacatan farmer members of MFPC were selling their farm produce to
the banana traders operating in Kidapawan City Area. However, they have observed
that the traders were treating them arbitrarily in terms of the farm gate price and the
quality specifications. This resulted to huge losses to them and uncertainty on the
marketability of their products as the traders had no obligation to buy their produce all
the time. Aside from the marketing woes, MFPC Banana growers also encountered
problems in their farm productivity and expansion due to lack of capitalization. Note
that lacatan banana production needs substantial capitalization in order that the
bananas being produced are of premium quality, safe to eat and pleasing to the eye of
the consumers. With regard to the production areas, it was observed that it was
dwindling during that time as the production areas were mostly planted with other
permanent crops such as rubber and coconut trees. After five or more years, the said
production areas no longer have enough space to continuously grow bananas.

In terms of financing the trading activity of the coop seek financing support from
Land Bank of the Philippines. Due to its credibility and diligence granted a working
capital loan to the organization with full guaranty cover from North Cotabato Credit
Surety Fund where it is a member. With the existing production areas by members , the
total production areas under MFPC is Eighty Five (85) hectares.

The enterprise that MFPC is venturing into is lacatan banana trading and is
leading in this business in the entire North Cotabato Province. There are two (2) key
components of this undertaking; the production of high quality bananas and the post-
harvest and marketing. MFPC has an existing Eighty Five (85) hectares production
areas located in the City of Kidapawan . The farthest area from the packing house is
approximately fifty (50) kilometers. Seventy percent (70%) of the production areas are
located in the mountain barangays at the foothills of Mount Apo, with elevation ranging
from five hundred (500) to eight hundred (500-800) meters above sea level. This areas

P a g e 14 | 93
from Makilala, Kidapawan City and Magpet is what is called the “Banana Belt” and
bananas produced from these areas are guaranteed sweet.

The intervention on the production side is towards the assistance in accessing the loan
facility offered by banking institution such as the Land Bank of the Philippines. Note
that most banks do not extend unsecured loans to individual borrowers but rather on
cooperatives with excellent track record in handling and paying loans. For individual
borrowers, bank will require a lot of documents including collateral in form of land
titles or bank deposits. Aside from financing, the PG can also provide technical services
through regular trainings and field exposures.

1.3 Products and Services Offered / Undertaken

Most of the farmer-members are small banana farmers who desires to have a
good income from their farm to augment the financial needs of their families. In fact,
most of them is only renting a land from generous and landed businessman and private
individuals at an agreed price of Php10,000-12,000 per year. Apart from lacatan banana
trading, the coop is also engaged in micro-lending and cardava banana trading.

MFPC being the consolidator of the farmer produce will be providing training
on proper cultural management of banana and is also providing consultancy and
technical services to the members for free. This is in coordination with the Department
of Agriculture RFO12, Cotabato Provincial Agriculture and Kidapawan City Agriculture
Office and other government agencies like Bureau of Water and Soil Management
(BSWM) and Fertilizer and Pesticide Authority (FPA) with the assistance of some
Agriculture Chemical and Fertilizer suppliers and traders. MFPC management is also
looking into the possibility of providing the pests and disease control services to farmer
growers by acting as service provider in pesticide application using modern
machineries like boom spray or drones. This will ensure that the bananas are being
applied with the right kind of pesticides, right amount and the right timing. This will
guaranty that the bananas produced can conform to the MRL(Minimum Residue Limit)
for food safety consequently acceptability by the consumers.

1.4 Location Map

The proponent’s official business location is in Brgy. Mua-an, Kidapawan City in

the Province of North Cotabato while its packing house/warehouse is in the next
Barangay Manunggol of the same municipality, about 5-10 minutes ride. The area
(3,500 sqm) was donated by the chairman of the coop with the Deed of Donation
document signed and notarized. The construction of the warehouse from the
Department of Agriculture is on-going.

P a g e 15 | 93
Map 1. Location of Mua-an FPC Office

Map 2. Proposed Warehouse Site

P a g e 16 | 93
Map 3. Production Areas

1.5 E-VSA

Expanded Vulnerability and Suitability Map (E-VSA) Is a user-based online tool

available at PRDP website that uses the VSA resulbility to lacatan banana commodity.
Per E-VSA result indeed Kidapawan City is on top of the list among the municipalities of
the Province of North Cotabato with an index of 0.76234. This means that the area is
suitable to the commodity and therefore potential areas for expansion is very possible.
It has also the highest volume of production and number of farmers engage in banana
production.

P a g e 17 | 93
Map 4. E-VSA Map

Table 5. E-VSA Statistics, Lacatan Banana

POVE VOLUM NUMB NEW
PROD OLD OLD NEW
PRO- MUNICIP RTY E OF ER OF COMPO GEOCO
REGION UCTIO INDE RAN RAN
VINCE ALITY Incide PRODU FARME SITE DE
N Area X K K
nce CTION RS INDEX
KIDAPA
SOCCSKS
NCOT WAN 0.595 1.25E+0
ARGEN
CITY 27.7 1607.3 1271 55259 3 6 0.76234 1 8
SOCCSKS 0.461 1.25E+0
NCOT
ARGEN MAGPET 48.9 1684 1006 27610 3 15 0.62676 2 8
SOCCSKS ALAMAD 0.456 1.25E+0
NCOT
ARGEN A 54.3 921.5 478 37320 7 17 0.52336 3 8
PRESIDE
SOCCSKS
NCOT NT 26930. 0.563 1.25E+0
ARGEN
ROXAS 47.6 669 500 6 8 8 0.51468 4 8
SOCCSKS MAKILAL 19688. 0.526 1.25E+0
NCOT
ARGEN A 39.4 458.2 210 16 1 12 0.42128 5 8
SOCCSKS MATALA 0.608 1.25E+0
NCOT
ARGEN M 43 356 203 5261.1 8 4 0.41387 6 8
SOCCSKS TULUNA 1.25E+0
NCOT
ARGEN N 45.4 377.6 164 8139 0.563 9 0.40034 7 8
SOCCSKS NCOT ANTIPAS 41.1 330 322 4968 0.516 13 0.37162 8 1.25E+0
P a g e 18 | 93
 ARGEN 6 8
SOCCSKS MIDSAYA 0.613 1.25E+0
NCOT
ARGEN P 39.6 104.9 130 481.1 7 3 0.36487 9 8
SOCCSKS 0.652 1.25E+0
NCOT
ARGEN M'LANG 38.3 33.5 4 216 4 1 0.36399 10 8
SOCCSKS 0.599 1.25E+0
NCOT
ARGEN ALEOSAN 58.2 41.5 76 990 7 5 0.36345 11 8
SOCCSKS 0.613 1.25E+0
NCOT
ARGEN PIKIT 57.8 24 2 1152 7 3 0.36265 12 8
SOCCSKS KABACA 0.626 1.25E+0
NCOT
ARGEN N 38 18.7 85 376.8 9 2 0.35603 13 8
SOCCSKS PIGKAW 0.582 1.25E+0
NCOT
ARGEN AYAN 41.9 0 0 0 5 7 0.32725 14 8
SOCCSKS LIBUNGA 0.561 1.25E+0
NCOT
ARGEN N 39.6 27 40 1192.3 3 10 0.32427 15 8
SOCCSKS 0.550 1.25E+0
NCOT
ARGEN CARMEN 56.4 0 0 0 9 11 0.3239 16 8
SOCCSKS BANISILA 0.499 1.25E+0
NCOT
ARGEN N 45.4 0 0 0 4 14 0.2887 17 8
SOCCSKS 0.456 1.25E+0
NCOT
ARGEN ARAKAN 53.9 0 0 0 9 16 0.27476 18 8

1.6 Role of the Enterprise

Constraints in the banana industry identified in the PCIP and VCA are varied
and broad considering that it tackles and considers all factors affecting the industry.
During the enterprise prioritization activity for the enterprise result shows that among
those constraints VCA and PCIP topping the list are the following; 1.) lack of access to
refrigerated / appropriate transportation and storage facilities 2.)lack of access to postharvest
facilities and 3.) lack of financial resources to undertake and/or scale up collective marketing.
In the current operation of the cooperative it is being affected by these constraints resulting to
post harvest losses and lost opportunities for Muaan and eventually of the farmers.

To address the abovementioned constraints, the proposed enterprise is

requesting for additional trading ancillary like plastic crates to lessen the damage from
post-harvest handling. Moreover, hauling trucks will be utilized to haul and deliver
banana from farmers production areas to the packing house to available ports or
airports for shipment to various destinations. One truck will be assigned to Manila
where big institutional buyers are located and the bulk of the produce are being
shipped. It will be utilized to fasten the delivery from pier to the warehouse going to
different buyers location. Additional working capital from PRDP will assure the farmers
of a cash on delivery payment of the cooperative. It will have a higher buying capacity
and can accommodate increase in supply in the succeeding years as the business
expands.

II. MARKET ANALYSIS

P a g e 19 | 93
 Market Characteristics

Among the four cultivars of banana, Latundan and Lakatan varieties are popular
dessert banana varieties in the domestic market with the latter more preferred by
consumers. Cardaba is classified as cooking banana while Cavendish, Latundan, and
Lakatan are dessert bananas.

Production of Lacatan banana is increasing as many farmers/cultivars are

engaging in farming and production areas are being expanded. This is to compliment
with the growing and increasing demand for the product as it is being considered not
only as a dessert but one of the staple foods in the table. It can be used as an alternative
to rice or wheat and becomes a regular part of everyday meal. As the population
increases the effect would mean increase in the demand of human basic needs, on top
of its is the food it consumes everyday.

Production Trends

Global Production

Based on the Value Chain Analysis (VCA) of the Department of Agriculture (DA),
there were no detailed data on production by type of banana for the past five years.
Hence, data used in the said report were accessed from various studies and sources and,
as such, there may be inconsistencies and slight variations.

As per data from the UNCTAD INFOCOMM Commodity Profile 2016 presented in
Table 6, World production of banana reached 133.69 million MT in 2013.
Approximately 59% were dessert banana varieties (Cavendish, Gros Michel, et al).
Generally, in Latin American countries and China, dessert banana varieties comprised
more than 90% of production. In these countries, banana is a staple food. In Asia, a 60;
40 to 70:30 ratio with dessert banana comprising the majority. Philippines was the 4 th
top producer of banana in the world in 2013.

World Production of dessert banana increased from 69.20 million MT in 2008 to

78.86 million MT in 2013. China registered the highest increase at 57% followed by
Guatemala with a 46% increase. Philippines had the third highest increase at 35%.

Table 6. World Production of Banana by Type, 2013

Country Production Volume (in MT)

Dessert Banana Cooking Banana Total
World 78,860,773 54,831,192 133,691,965
59% 41%
India 17,075,000 10,500,000 27,575,000
62% 38%
China 11,506,238 569,000 12,075,238

P a g e 20 | 93
 Table 6. World Production of Banana by Type, 2013

Country Production Volume (in MT)

Dessert Banana Cooking Banana Total
95% 5%
Uganda 500,000 8,426,308 8,926,308
6% 94%
Philippines 5,790,091 2,855,658 8,645,749
67% 33%
Brazil 6,402,622 490,000 6,892,622
93% 7%
Ecuador 6,145,527 594,212 6,739,739
91% 9%
Colombia 2,587,625 2,817,740 5,405,365
48% 52%
Indonesia 3,289,115 2,070,000 5,359,115
61% 39%
Rwanda 250,000 3,013,462 3,263,462
8% 92%
Nigeria 315,000 2,907,000 3,222,000
10% 90%
Others 24,999,550 20,587,808 45,587,358
55% 45%
Source: Lescot, 2015/UNCTAD INFOCOMM Commodity Profile, 2016

The world banana (dessert banana including Lacatan) was about 24,999,550
hectares during the year 2013. In terms of production area, India rank 1 st while
Philippines ranked 5th among the top producing countries.

Philippine Production

Table 7 shows that according to the Philippine Statistics Authority (PSA), Philippines
produced 9,083,929 MT of banana from a total area of 443,370 hectares in 2015.
Lakatan comprised 13% of hectarage with an 11% share in total production. Cavendish
accounted for 19% of total hectarage planted to banana and comprised 50% of total
banana production. Average yield of Lakatan per hectare is more or less about 32% of
that of a Cavendish farm.

Table 7. Breakdown of Banana Production in the Philippines by Cultivar, 2015

Cultivar Area Planted Production Volume Ave Yield
Hectare % to Total Metric Ton % to Total (MT/ha)
Cardaba 182,001 41% 2,627,129 29% 14.43
Cavendish 85,809 19% 4,566,907 50% 53.22
Lakatan 56,473 13% 970,496 11% 17.19
Others 119,088 27% 919,397 10% 7.72
Total 443,370 100% 9,083,929 100% 20.49
Source: Philippine Statistics Authority (PSA)

P a g e 21 | 93
 Based on PSA data (Table 7), Lakatan banana production area in the Philippines
decreased from 57,032 hectares in 2011 to 56,473 hectares in 2015. The decrease in
hectarage was primarily because many farmers in Luzon stopped planting Lakatan due
to the bunchy top virus.

Accordingly, in Mindanao, area planted to Lakatan increased by 2% in 2015 over

2011 figures. ARMM posted the highest percentage increase of 10.3% during the period
between 2011 and 2015. PSA statistics also indicate that area planted to Lakatan in
Mindanao in 2015 increased by 1% over 2014 figures. Last 2016, it was observed that
many of the farms were damaged due to drought and the bunchy top virus. Lakatan is
very susceptible to banana bunchy top virus (BBTV). Infection with BBTV results in
stunted plants with a rosetted appearance and chlorotic leaves. Infected plants are
unable to produce a harvestable bunch. The virus is systemic, meaning that the disease
is transmitted from the infected mother plant to subsequent suckers, and eventually the
whole mat dies. The virus is spread by an aphid (Pentalonia nigronervosa).

Regional Production

Table 8. Area Planted to Lakatan by Region, 2011 to 2015

Region Area Planted (in ha) % Change
2011 2012 2013 2014 2015 2015/1 2015/14
1
PHILIPPINES 57,032 58,071 55,908 56,395 56,473 -1.0% 0.1%
Luzon 14,264 14,390 13,501 13,259 12,953 -9.2% -2.3%
CAR 965 1,004 1,142 954 981 1.7% 2.8%
Ilocos Region 282 283 283 279 260 -7.7% -6.6%
Cagayan Valley 3,214 3,245 3,286 3,283 3,105 -3.4% -5.4%
Central Luzon 1,290 1,288 1,283 1,214 1,185 -8.1% -2.4%
CALABARZON 2,406 2,391 2,388 2,349 2,253 -6.4% -4.1%
MIMAROPA 5,028 5,100 4,040 4,105 4,111 -18.2% 0.1%
Bicol Region 1,079 1,079 1,080 1,075 1,059 -1.9% -1.5%
Visayas 5,663 5,711 5,743 5,653 5,662 0.0% 0.2%
Western Visayas 1,816 1,874 1,893 1,880 1,896 4.4% 0.9%
Central Visayas 2,376 2,386 2,399 2,381 2,390 0.6% 0.4%
Eastern Visayas 1,472 1,451 1,451 1,392 1,377 -6.5% -1.1%
Mindanao 37,104 37,970 36,664 37,484 37,857 2.0% 1.0%
Zamboanga 3,540 4,308 4,365 4,395 4,349 22.9% -1.0%
Peninsula
Northern Mindanao 6,724 6,726 6,724 6,724 6,706 -0.3% -0.3%
Davao Region 11,345 11,417 10,971 11,287 11,669 2.9% 3.4%
SOCCSKSARGEN 6,752 6,800 6,950 6,820 6,786 0.5% -0.5%
Caraga 3,493 3,491 2,416 2,526 2,556 -26.8% 1.2%
ARMM 5,250 5,228 5,238 5,732 5,791 10.3% 1.0%
Source: PSA

Figure __ indicates that Mindanao has the highest yield per hectare among the
three island groups as per PSA data. In 2015, average yield of Mindanao farms was at
21.75 MT per hectare, which was 27% higher than the national average of 17.19 MT/ha.
P a g e 22 | 93
Luzon and Visayas had average yield of 7.51 MT/ha and 8.81 MT/ha, respectively.
National average yield increased by 5.8% in 2015 over 2011 figures. Luzon registered a
slightly higher percentage increase of 5.3% during the 2011-2015 period than
Mindanao’s increase of 4.5%.

Contributing factors includes the suitability of the area for banana planting, rich
soil and the climate. Mindanao Island is not prone to flooding and typhoons that can
easily swipe farms.

Figure 1. Average Yield per Hectare (MT/ ha) by Island Group, 2011 to 2015

As per PSA

statistics, Davao Region had the largest area planted to Lakatan and the highest volume
production. Although area planted to Lakatan in SOCCKSARGEN was only 58% of that of
Davao Region, production volume of the former was only 0.7% lower than the latter due
to significantly higher yield. SOCCKSARGEN had the highest average yield at 32.94 MT
per hectare followed by Northern Mindanao and ARMM at 25.09 MT/ha and 21.26
MT/ha, respectively.

Table 8--. Top Performing Regions and Provinces, 2015

Area Planted to Lakatan

Region Area (in ha) Province Area (in ha)

Davao Region 11,669 Davao Oriental 4,200

SOCCSKSARGEN 6,786 North Cotabato 4,030
Northern Mindanao 6,706 Maguindanao 3,960

P a g e 23 | 93
 Table 8--. Top Performing Regions and Provinces, 2015

ARMM 5,791 Davao del Sur 3,561

Zamboanga Peninsula 4,349 Oriental Mindoro 3,018
Volume

Region Volume (in MT) Province Volume (in MT)

Davao Region 225,196 North Cotabato 134,700

SOCCSKSARGEN 223,527 Davao del Sur 97,978
Northern Mindanao 168,267 Lanao del Norte 84,236
ARMM 123,105 Maguindanao 78,901
Zamboanga Peninsula 63,756 Davao Oriental 69,953
Average Yield per Hectare

Region Ave Yield Province Ave Yield (MT/ha)

(MT/ha)

SOCCSKSARGEN 32.94 Lanao del Norte 39.00

Northern Mindanao 25.09 Lanao del Sur 37.58
ARMM 21.26 Sarangani 36.42
Davao Region 19.30 North Cotabato 33.42
Zamboanga Peninsula 14.66 Ifugao 33.20
Source: PSA

At the provincial level, Davao Oriental had the largest area at 4,200 hectares
followed by North Cotabato at 4,030 hectares. In terms of volume, North Cotabato had
the highest volume as it had a higher yield than Davao Oriental. The province though
with the highest yield in 2015 was Lanao del Norte at 39 MT/ha followed by Lanao del
Sur at 37.58 MT.

Provincial Production

The VCA for Lakatan states that globally, the Philippines is the only producer of
Lakatan Banana and among its regions, Davao Region had the largest area planted to
Lakatan and the highest volume production. Although area planted to Lakatan in
SOCCKSARGEN was only 58% of that of Davao Region, production volume of the former
was only 0.7% lower than the latter due to significantly higher yield. SOCCKSARGEN
had the highest average yield at 32.94 MT per hectare followed by Northern Mindanao
and ARMM at 25.09 MT/ha and 21.26 MT/ha, respectively (Lakatan Banana VCA).

According to the Philippine Statistics Authority (PSA), Philippines produced

9,083,929 MT of banana from a total area of 443,370 hectares in 2015. Lakatan
comprised 13% of hectarage with an 11% share in total production. Cavendish
accounted for 19% of total hectarage planted to banana and comprised 50% of total
banana production. Average yield of Lakatan per hectare is more or less about 32% of
that of a Cavendish farm.
P a g e 24 | 93
 SOCCSKSARGEN region’s production of 223,527 MT in 2015 comprised 27% of
Mindanao’s total Lakatan production. Top producer of Lakatan in the region in 2015 as
per statistics from PSA was North Cotabato followed by South Cotabato. It should be
noted though that South Cotabato’s production was only 47% of that of North Cotabato.
Sarangani had the highest yield at 36.42 MT per hectare. Sultan Kudarat had the 2 nd
highest average yield per hill but had the lowest number of bearing hills per hectare
thereby it had the lowest overall yield per hectare.

Table 9. Lakatan Production Trends in SOCCKSARGEN, 2011 to 2015

CAGR: Compound Annual Growth Rate

SOCCKSARGEN
 Comprised 27% of Mindanao’s Lakatan production
 Annual production volume increased at an annual rate of 0.04% primarily due to area
expansion albeit at a very low rate of 0.13% per annum
 Although number of bearing hills per hectare slightly increased by 0.03% per year, the
average yield per hill declined at a rate of 0.11% per year. This resulted to an 0.08%
decline in overall yield per year.

2011 2012 2013 2014 2015 CAGR

Volume (in MT) 223,141 225,610 229,324 230,828 223,527 0.04%
Area (in ha) 6,752 6,800 6,950 6,820 6,786 0.13%
Yield (MT/ha) 33.05 33.18 33.00 33.85 32.94 -0.08%
No. of bearing hills/ha 909.72 901.19 871.85 908.17 910.82 0.03%
Ave yield/hill (kg/hill) 36.33 36.82 37.85 37.27 36.16 -0.11%
North Cotabato
 Comprised 60% of region’s Lakatan production
 Annual production grew at a rate of 1% per year. Growth came from expansion of area
planted to Lakatan. The 1.8% annual growth rate of Lakatan hectarage cushioned the
impact of declining farm productivity.
 Number of bearing hills per hectare decreased at an annual rate of 0.2% while average yield
per hill had a negative growth rate of 0.6% per annum. Consequently, overall yield per
hectare decreased at an annual rate of 0.8%.

2011 2012 2013 2014 2015 CAGR

Volume (in MT) 129,291 131,347 134,469 139,849 134,700 1.0%
Area (in ha) 3,750 3,770 3,970 4,000 4,030 1.8%
Yield (MT/ha) 34.48 34.84 33.87 34.96 33.42 -0.8%
Bearing hills/ha 900.00 895.49 854.97 888.75 893.30 -0.2%
Ave yield/hill (kg/hill) 38.31 38.91 39.62 39.34 37.42 -0.6%
Sarangani
 Accounted for 8% of region’s Lakatan production
 Annual production volume grew at 6.6% per year due to an 8.3% growth rate in area
planted to Lakatan which cushioned the decline in yield.
 Overall productivity declined at a rate of 1.5% per year due to decrease in number of
bearing hills per hectare at 1.6% per annum.
 Average yield per hill slightly improved at an annual rate of 0.1%

2011 2012 2013 2014 2015 CAGR

P a g e 25 | 93
 Table 9. Lakatan Production Trends in SOCCKSARGEN, 2011 to 2015

Volume (in MT) 14,527 16,752 18,225 19,215 18,754 6.6%

Area (in ha) 375 420 440 512 515 8.3%
Yield (MT/ha) 38.74 39.89 41.42 37.53 36.42 -1.5%
Bearing hills/ha 822.13 799.05 809.09 771.68 769.32 -1.6%
Ave yield/hill (kg/hill) 47.12 49.92 51.19 48.63 47.33 0.1%
South Cotabato
 Comprised 28% of region’s Lakatan production
 Annual volume of production decreased by 3.8% per annum due to decline in Lakatan
hectarage at an annual rate of 4%
 Average yield per hectare slightly increased at annual rate of 0.2%.
 Overall yield increase per hectare was due to the 0.3% increase in number of bearing hills
per hectare. The increase in number of bearing hills compensated for the decline in
average yield per hill.

2011 2012 2013 2014 2015 CAGR

Volume (in MT) 73,797 69,241 66,742 64,561 63,091 -3.8%
Area (in ha) 2,297 2,270 2,200 2,018 1,950 -4.0%
Yield (MT/ha) 32.13 30.50 30.34 31.99 32.35 0.2%
Bearing hills/ha 1,016.65 977.31 959.59 1,023.12 1,027.03 0.3%
Ave yield/hill (kg/hill) 31.60 31.21 31.61 31.27 31.50 -0.1%
Sultan Kudarat
 Comprised 3% of region’s Lakatan production in 2015
 Volume of production increased by 6% due to increase in yield at the rate of 9.4% per
annum.
 Improvement of farm productivity was due to increase in number of bearing hills per
hectare.
 The decrease in average yield per hill was compensated by the increase in number of
bearing hills per hectare

2011 2012 2013 2014 2015 CAGR

Volume (in MT) 5,526 8,271 9,888 7,204 6,982 6.0%
Area (in ha) 330 340 340 290 291 -3.1%
Yield (MT/ha) 16.74 24.33 29.08 24.84 23.99 9.4%
Bearing hills/ha 375.33 582.35 582.35 617.08 625.23 13.6%
Ave yield/hill (kg/hill) 44.61 41.77 49.94 40.25 38.38 -3.7%
Source of data: PSA
Source: OPAG North Cot.

Municipal Production

In the municipal level, among the 41 barangays of Kidapawan City, Brgys. Balabag,
Kalasuyan, Ilomavis, Linangkob posted on top 5 in terms of production area and
harvest/yield.

Table 10. Banana Production Per Barangay

No Name of Elevation Production

. Barangay Soil Type Topography Level Volume (MT
P a g e 26 | 93
        (MASL)

1 AMAS 81
KILADA CLAY LOAM PLAIN /ROLLING 109-110

2 AMAZION 81
KILADA CLAY LOAM PLAIN /ROLLING 115

3 BALABAG 1,720
KIDAPAWAN CLAY LOAM PLAIN/HILLY 700-1000

4 BALINDOG 660
KILADA CLAY LOAM PLAIN /HILLY 250-260

5 BINOLIGAN 99
KILADA CLAY LOAM PLAIN 115

6 BIRADA 790.12
KIDAPAWAN CLAY LOAM PLAIN 499

7 GAYOLA 233.6
KILADA CLAY LOAM PLAIN 100
KIDAPAWAN CLAY LOAM/CLAY
8 GINATILAN 881.5
SANDY LOAM PLAIN 660
KIDAPAWAN CLAY LOAM/CLAY
9 ILOMAVIS 811.6
SANDY LOAM PLAIN/HILLY 1000-1500

10 INDANGAN 559
KIDAPAWAN CLAY LOAM PLAIN 500-700

11 JUNCTION 260.6
KILADA CLAY LOAM PLAIN 150

12 KALAISAN 567
KILADA CLAY LOAM PLAIN 136

13 KALASUYAN 1,272.8
KIDAPAWAN CLAY LOAM PLAIN 260
KIDAPAWAN CLAY LOAM/SILTY
14 KATIPUNAN 206.3
CLAY LOAM PLAIN/ROLLING 120

15 LANAO KIDAPAWAN CLAY LOAM PLAIN 258

115.5

16 LINANGKOB 1,203.1
KIDAPAWAN CLAY LOAM PLAIN 240

17 LUVIMIMN 592.8
KIDAPAWAN CLAY LOAM PLAIN 260
KIDAPAWAN CLAY LOAM/SILTY
18 MACEBOLIG 111.9
CLAY LOAM PLAIN 180

19 MAGSAYSAY 165
KILADA CLAY LOAM PLAIN 146

20 MALINAN 607.5
KILADA CLAY LOAM PLAIN/HILLY 103

21 MANONGOL 666.5
KIDAPAWAN CLAY LOAM PLAIN 490

22 MARBEL 516
KIDAPAWAN CLAY LOAM PLAIN 254
KIDAPAWAN CLAY
23 MATEO 602
LOAM/SANDY CLAY LOAM PLAIN 254
KIDAPAWAN CLAY
24 MEOHAO 946
LOAM/SANDY CLAY LOAM PLAIN / ROLLING 630

25 MUA-AN 430
KIDAPAWAN CLAY LOAM PLAIN 619

26 NEW BOHOL 967.5

KIDAPAWAN CLAY LOAM PLAIN 250

27 NUANGAN 365.5
KIDAPAWAN CLAY LOAM PLAIN 400

P a g e 27 | 93
 KIDAPAWAN CLAY LOAM/SILTY
28 ONICA 67.5
CLAY LOAM PLAIN / ROLLING 100

29 PACO 330
KILADA CLAY LOAM PLAIN 129

30 PATADON 27
KILADA CLAY LOAM PLAIN 103

31 PEREZ 731
KIDAPAWAN CLAY LOAM PLAIN 800-1200

32 POBLACION 175.5
KIDAPAWAN CLAY LOAM PLAIN 320

33 SAN ISIDRO 540

KILADA CLAY LOAM PLAIN 115

34 SAN ROQUE 270

KILADA CLAY LOAM PLAIN 100
KIDAPAWAN CLAY
35 SIBAWAN 537.5
LOAM/SANDY LOAM PLAIN 250

36 SIKITAN 412.5
KILADA CLAY LOAM PLAIN 115

37 SINGAO 351
KILADA CLAY LOAM PLAIN 235

38 STO.NINO 1,560.9
KIDAPAWAN CLAY LOAM PLAIN 110

39 SUDAPIN 322.9
KIDAPAWAN CLAY LOAM PLAIN 313

40 SUMBAC 67.5
KILADA CLAY LOAM PLAIN 140
20,838.62
Legend:

GREEN - UPPER PORTION - 18-25 mt/ha 21.5

ORANGE- CENTER Portion -15-18mt/ha 16.5

BLUE- LOWER PORTION-12-15mt/ha 13.5

Source: City Agriculturist, Kidapawan City

Market Scenario in North Cotabato

For the year 2016, North Cotabato posted a record of 189,584.5 metric tons
production, the highest of which comes from Kidapawan City where Mua-an is located,
is at 55,259 metric tons followed by Alamada at 37,320 metric tons. Magpet and
President Roxas followed at 27,610 and 26,930.5 metric tons, respectively. Four
municipalities of Arakan, Banisilan, Carmen and Pigcawayan has no Lakatan hectarage .

Table 11. Comparative Data on Lakatan Banana Production by Municipality in MT, 2012-2016

YEAR
LGU
2012 2013 2014 2015 2016

P a g e 28 | 93
 1. Alamada 18000 32520 31707 37320 37320

2. Aleosan 480 2520.6 5041.2 7561.8 990

3. Antipas 4272 2376 8100 4968 4968

4. Arakan 0 0 0 0 0.0

5. Banisilan 0 0 0 0 0.0

6. Carmen 0 0 0 0 0.0

7. Kabacan 0 0 0 48 376.8

8. Kidapawan City 48,132.96 24372 32496 50179.2 55259

9. Libungan 2400 1132.8 1132.8 1132.8 1192.3

10. Magpet 47148 34304.88 51624.72 27609.984 27610

11. Makilala 0 1091.4 1309.68 19688.16 19688.16

12. Matalam 0 0 0 5261.1 5261.1

13. Midsayap 960 960 800 720 481.1

14. Mlang 0 0 3121.2 3544.2 216.0

15. Pigcawayan 0 0 0 0 0

16. Pikit 0 0 0 576 1152.0

17. Pres. Roxas 2304 3809.333 5578.56 12540.7296 26930.6

18. Tulunan 2550 4320 7560 7029 8139.0

Total 126246.96 107407 148471.16 178178.9736 189584.5

Source: OPAg, Cotabato Province

North Cotabato Performance

Table 12. SOCCKSARGEN Production Indicators, 2015

Province Volume Area Planted Bearing Ave Yield/ Ha Ave

(in MT) (in Ha) Hills/ha (in MT) Yield/Hill
(in kg)

REGION 223,527 6,786 910.82 32.94 36.16

North Cotabato 134,700 4,030 893.30 33.42 37.42
Sarangani 18,754 515 769.32 36.42 47.33
South Cotabato 63,091 1,950 1,027.03 32.35 31.50
Sultan Kudarat 6,982 291 625.23 23.99 38.38

P a g e 29 | 93
 Table 12. SOCCKSARGEN Production Indicators, 2015

Province Volume Area Planted Bearing Ave Yield/ Ha Ave

(in MT) (in Ha) Hills/ha (in MT) Yield/Hill
(in kg)

Source: PSA

The region’s production of 223,527 MT in 2015 comprised 27% of Mindanao’s

total Lakatan production as shown in Table ---. Top producer of Lakatan in the region in
2015 as per statistics from PSA was North Cotabato followed by South Cotabato. It
should be noted though that South Cotabato’s production was only 47% of that of North
Cotabato. Sarangani had the highest yield at 36.42 MT per hectare. Sultan Kudarat had
the 2nd highest average yield per hill but had the lowest number of bearing hills per
hectare thereby it had the lowest overall yield per hectare.

Lakatan Banana Distribution Flow in Mindanao

The Lakatan banana chain involves and includes: input suppliers, primary
producers, and layers of intermediaries. The cooperative directly pick-up the banana
from the farmers area to the packing house for classification and packing. These will
brought then to ports within Mindanao for shipment to various destinations. Volume
shipped in Manila will be picked-up by hauling truck and will be distributed to
institutional buyers same true with other selling points in Cebu and Boracay. Based on
key informant interviews, it is estimated that about 50% to 60% of the production that
meet basic quality requirements are brought to Cebu and Manila through ports in
Davao, Cagayan de Oro, Agusan, Surigao, Ozamis, Iligan, and General Santos. Once the
bananas reach the consignees and wholesalers, these are then distributed to public
markets, supermarkets, and fruit stands. Some farmers also do the shipping to
consignees or do the distribution in Manila or Cebu. Shippers from Cotabato prefer the
ports of CDO, Davao and General Santos.

Most of the time the difficulty of transporting the produce from the farm to the
packing house to the ports and distribution points because of the unavailability of the a
carrier is compromising the quality of the banana and worst of all, it will result to
opportunity loss for the farmers and the coop. In key cities like Manila and Cebu, traffic
contributes to the delay of delivery to the buyers.

Despite the huge potential of the industry in the province, it is not yet capable
of fully engaging in the national market more so with the international market because
of its lacking post harvest facilities and transportation equipment.

Prospective Market

The coop has already an existing market contract with Shopwise of Rustans and
a regular supplier at Wellcome Hypermarkets, Fresh Ones in Manila and has also
P a g e 30 | 93
capture a market in Divisoria supplying fresh lacatan banana to fruit retailers. It also
supply fresh Lacatan banana fuits in Cebu City and Boracay in the Visayas. Presently
with the huge demand coming from these buyers, the cooperative cannot even meet the
required volume because of various constraints in transportation/hauling trucks
availability, lack of financial capital to cater the produce of the farmers . It only rely on
the rented equipment and facilities in its operation. The interventions that will be given
by PRDP will answer these constraints making farmers life more easy.

With the planned expansion of the production area from year 2 to year 10, and
with additional financing, facilities and equipment, the cooperative’s capacity to supply
will increase and therefore, will give them opportunity to look for more buyers. Truth
of the matter is, the cooperative did not accommodate It is also planning to engage in
export industry since many countries are importing bananas from tropical countries
like the Philippines. Currently, there are already target export market that hopefully
soon will be realized.

International Market

Unlike the Cavendish banana that has already a niche in the market, Lacatan
banana has just started to enter the export arena and still establishing linkage to the
export world to be able to get big and good buyers of the product. Like any other new
entrants in the industry. Lacatan banana is still struggling to gain recognition and
market patrons because of some factors including the price. The price of Lakatan
Banana is approximately 1.5 times that of Cavendish and other bananas commonly sold
in the international markets.

Table 13. Volume of Banana Exports from the Philippines, 2011 to 2015
HS 0803 Bananas and plantains, fresh or dried
Importing Country Export Volume (in MT) %
Change
2015/11
2011 2012 2013 2014 2015
World 2,046,771 2,648,369 3,267,968 7,927,742 1,223,133 -40%
Japan 976,314 1,085,053 1,080,852 5,347,730 380,049 -61%
China 358,828 423,211 501,647 974,421 329,477 -8%
Iran 149,174 98,980 166,188 280,120 142,775 -4%
Korea, Republic of 195,696 265,506 409,814 454,476 139,090 -29%
United Arab 101,614 262,826 406,687 223,286 59,887 -41%
Emirates
Saudi Arabia 7,837 116,127 99,196 133,288 49,811 536%
Kuwait 18,868 79,509 103,332 99,561 35,294 87%
Hong Kong, China 19,807 90,310 62,761 103,046 22,618 14%
New Zealand 47,853 48,991 44,372 36,485 14,481 -70%
Singapore 107,075 123,286 181,610 109,959 13,604 -87%

P a g e 31 | 93
 Source: International Trade Center

Another consideration was the general decline of export volume due to the following:
a) weak harvest due to El Nino; b) China and Korea are already producing their own
bananas and, as such, significant cut in their importation; and c) tariffs imposed on
banana products shipped to Japan which eroded competitiveness of Filipino exporters
vis-à -vis banana exporters from Vietnam, Indonesia, Mozambique, and Costa Rica who
enjoy zero tariff. Middle East markets for banana though grew in 2015 but unstable
peace and order conditions in these countries also affect importation.

In the world market, the

Table 14. Annual per Capita Consumption in
European Union is the top
Importer Countries, 2014
consumer of dessert banana.
Country Consumption per Capita
Within the European Union, the
(in kg)
United Kingdom and Sweden are
United Kingdom 17.1
the main banana consumer
Sweden 16.8
countries, with more than 14
kg/capita/year. the US market is Denmark 14.1
the world number two with an United States 12.5
average per capita consumption of EU-28 average 10.2
12.5 kg in 2014. On the other hand, France 8.7
banana consumption in Japan has Russia 8.6
been declining since 2009. Imports Poland 7.5
have collapsed, dropping back Japan 7.4
under the one million MT mark Romania 3.2
since 2013. Annual consumption Source: Loeillet, 2015/UNCTAD InfoCOMM, 2016
per capita has fallen to 7.4 kg, a
level last seen in 2002. The main reasons behind this drop in consumption are i) a weak
yen which favors exports rather than imports, and ii) falling household consumption
due to a steep increase in VAT (UNCTAD InfoCOMM, 2016)
Domestic Market

Table 15. Geographic Markets of Lakatan from Mindanao Regions

Region Within the Major Destination Markets
Region NCR Bicol Iloilo Cebu
Region
Zamboanga Peninsula 
100%
Northern Mindanao    
25% 75%
Davao Region     
20% 80%
SOCCKSARGEN    
15% 85%
CARAGA  
75% 25%
ARMM   
P a g e 32 | 93
 25% 75%
Source: KII triangulated with FIES 2012 survey results

It appears that 75% to 80% of the Lakatan produced in Northern Mindanao, Davao
Region, SOCCKSARGEN, and ARMM are shipped to Metro Manila, Cebu, Iloilo, and Bicol
Region. CARAGA consumes about 75% of its Lakatan and sells 25% to Cebu and other
supply deficit areas. It would seem that Lakatan production in Zamboanga Peninsula is
consumed within the region.

Mindanao Lakatan production goes to Cebu, Metro Manila, and Iloilo largely
through ports in Cagayan de Oro, Agusan, Ozamis, Iligan, and Surigao and, to a limited
extent, in Davao City. Bananas from SOCCKSARGEN are generally shipped from
Cagayan de Oro. Shippers generally do not use the port in General Santos because
loading means longer travel time to Manila. It takes 56 hours to reach Manila from
General Santos, 48 hours from Davao and 30 hours from Cagayan de Oro.

Industry Outlook

Market Trend and Competition

Table 16. Geographic Markets of Lakatan from Mindanao Regions

Region Within the Major Destination Markets
Region NCR Bicol Iloilo Cebu
Region
Zamboanga Peninsula 
100%
Northern Mindanao    
25% 75%
Davao Region     
20% 80%
SOCCKSARGEN    
15% 85%
CARAGA  
75% 25%
ARMM   
25% 75%
Source: KII triangulated with FIES 2012 survey results

Mindanao Lakatan production goes to Cebu, Metro Manila, and Iloilo largely
through ports in Cagayan de Oro, Agusan, Ozamis, Iligan, and Surigao and, to a limited
extent, in Davao City. Bananas from SOCCKSARGEN are generally shipped from
Cagayan de Oro. Shippers generally do not use the port in General Santos because
loading means longer travel time to Manila. It takes 56 hours to reach Manila from
General Santos, 48 hours from Davao and 30 hours from Cagayan de Oro.

Market Structure

P a g e 33 | 93
Target Costumer Profile

Considered as one of the staple food in the table, banana has become part of the
meal rather than an ordinary dessert hence , as the population grows so as the number
of customers increased. Customers who would also consume and at the same time sell
it to consumers.

Target customers for this commodity are supermarkets, hypermarkets, hotels

fruit vendors and retailers. These identified customers are the one moving the market
of every commodity and even dictates the price and act as the distributor of the
product. On this matter, Mu-an has already established thru contract agreement with
established institutional buyer like Shopwise of Rustans. It also a regular supplier of
Lacatan banana in, SM Supermarkets, Wellcome Hypermarket, Freshones in Manila and
t has also a current market in Cebu and Boracay in the Visayas and a retail outlet in
Divisoria.

Customer Analysis

Table 17.. Target Customer/ Geographical Coverage

SHOPWISE UBM/FRESH DIVISORIA CEBU BORACAY

ONES

Geographi National National National Local Local

cal Market

Geographi Metro Manila Metro Manila Metro Manila Cebu City Boracay,Aklan
cal
Location

Channel Manila Port Manila Port Manila Port Cebu Port Aklan Port

Payment Check Check Check Cash Cash

Quality Premium, Premium, Class Premium, Class Class A-B Class A-B
requireme Class A A A
nt

Purchase Weekly Weekly 2x a Week 2x a Week 2x a Week

behavior

Operation Whole year Whole year Whole year Whole year Whole year
round round round round round

P a g e 34 | 93
Note: Php20.00 / kilo - Class A-B Banana and Php10.00/kilo for Class C

Marketing of Bananas in Metro Manila and in other key cities is very stiff and can
be described as “survival of the fittest”. There are lots of suppliers of not only bananas
but also of other tropical fruits and imported ones like apples, grapes and poncans. For
Bananas, the PG is competing against Fresh Ones/UBM, supplying to malls like
Robinsons, Waltermart and SM Supermarkets, JP Fresh Products supplying to Hotels,
Casinos, and Restaurants, SL Fruits that is also supplying to malls and convenience
stores, Dizon Farms and Cojuangco Farms all are supplying malls and large institutional
buyers like hotels, hospitals, theme parks and resorts.

The PG cannot really fight with the giant players in the fruit industry toe to toe.
Therefore, the PG will only maintain the existing customer in malls which is the
Rustans/Shopwise which the PG already has an existing vendor’s code. In order to serve
part of the requirements of the malls, the PG will engage into supply of bananas to large
fruit distributors mentioned earlier. This is the only strategy that can be employed for
the time being that the cold chain has not been established. Once the cold chain is set up,
the PG can by then afford to store the bananas in their own cold storage facility without
fear that the bananas will spoil or rot, while awaiting disposal to its customers.

Supply and Demand Analysis

Write-up of the comparative data for the demand of institutional buyers vis-a-vis
the capacity of the PG to supply .

Table 18. Identified Buyer and the Demand for the Supply of Lakatan
Banana

P a g e 35 | 93
Target Location Product Volume Volume of Supply Gap Per
Buyers Demand Demand Per Delivery from Year
Year MUA-AN Per (2 Croppings )
1st Year
Year
Shopwi Manila Fresh Banana 336 192 816
se
Rustan Manila Fresh 60 36 24
Super Banana
market
We’llco Manila Fresh 276 156 144
me Banana
Hyper
market
Divisor Manila Fresh 720 384 120
ia Banana
Fresh Manila Fresh 1,200 384 336
One Banana
Hotels Manila Fresh 480 240 240
Banana
Cebu Visayas Fresh 1,296 336 960
Banana
Boraca Visayas Fresh 672 192 480
y Banana
TOTAL 5,040 1,920 3,120

Source: Mua-an FPC

Though MFPC has already established its linkages with various institutional buyers and
have earned marketing contracts, it is striving more to maintain its good track record
for future plan of engaging to potential buyers and be able to compete with big and
more stable Lacatan Banana Producers identified as follows:

1. JP Fresh-serving the requirements of Hotels, Casinos, Resorts and Restaurants.

Carrying all popular local tropical fruits and imported ones.

2. UBM/Fresh Ones – while its one of the major customers of the PG, this customer is
serving the requirements of Supermarkets like SM, Waltermart, Robinsons and etc.
P a g e 36 | 93
3. SL Fruits and Dizon Fruits – serving the requirements of large malls and supermarket
chains. The carry wide range of local tropical as well as imported fruits. They have cold
storage facilities and can deliver their products to the malls on consignment basis.

4. Cojangco Farms – selling their own lakatan bananas produce from their farms in
Bacolod and Davao Occidental. They can offer longer credit terms to their customers.

Chart 1
DEMAND VS. SUPPLY
(IN METRIC TONS)

6,000

3,120 Tons 5,000

Gap on the
monthly 4,000
Supply of
fresh 3,000

Banana vs.
Demand of 2,000

the
Customer 1,000

of MFPC. In
0
Metro DEMAND SUPPLY

Column1

Table 19. Production Area and Volume of Production Committed to the Enterprise.

Participating # of Ave. Per Has. Volume

Organization Hectarage (MT) Committed/Cropping
(MT)
MUA-AN FPC 85 30.20 MT 2,567 MT

All produce of farmer-members consisting of 85 hectares will be delivered to Mua-an

FPC to supply its demand for institutional buyers. To ensure that supply will be sustained, this
arrangement is being binded by a notarized supply agreement.

International Context
P a g e 37 | 93
 There is no much data as to the export industry for Lacatan banana. This is
because it is still in the introductory level in the international market and still on the
process of capturing its own market unlike Cavendish banana.

National Context

Table 20-, below presents the projected national demand for Lakatan Banana in 2017
and 2020, representing 17 regions.

Table 20. Projected Demand for Lakatan Banana, 2017 and 2020
Region Annual Per Capita Consumption: Projected Lakatan Demand
Table Banana (in MT) (in MT)
2008 2012 CAGR 2017 2020
NCR 9.73 11.05 3.2% 107,935 118,776
CAR 13.10 13.664 1.1% 9,816 10,130
Ilocos Region 8.45 8.38 -0.2% 20,763 20,639
Cagayan Valley 13.47 10.56 -5.9% 10,134 8,444
Central Luzon 9.65 11.451 4.4% 62,485 71,040
Calabarzon 7.72 11.689 10.9% 110,001 150,133
Mimaropa 6.52 9.019 8.5% 23,944 30,551
Bicol Region 10.99 13.139 4.6% 26,804 30,640
Western Visayas 7.68 13.154 14.4% 77,199 115,626
Central Visayas 7.92 12.857 12.9% 51,811 74,518
Eastern Visayas 7.21 9.169 6.2% 22,522 26,961
Zamboanga 12.10 12.224 0.3% 19,164 19,310
Peninsula
Northern Mindanao 15.32 15.84 0.8% 19,424 19,921
Davao Region 13.45 13.547 0.2% 37,534 37,727
SOCCKSARGEN 12.10 16.367 7.8% 42,895 53,799
CARAGA 13.56 11.691 -3.6% 10,935 9,781
ARMM 5.68 6.841 4.8% 23,005 26,460
Source of basic data: PSA, FIES 2012

National demand in 2020 is projected to reach 824,456 metric tons which is

21.19% higher than the 2017 demands.

Local Context

According to the 2016 third quarter report from PSA, Lakatan production from
January – September 2016 was 10% lower than last year. In absolute number, the
difference was about 71,934 MT. In Davao del Sur, production in 2015 based on data
from the Office of the Provincial Agriculturist was only 13,316 MT which is about 86%
lower than the 97,978 MT from PSA. In 2016, production in Davao del Sur is estimated
to be lower due to drought and BBTV. Most of the smallholder farms were producing
P a g e 38 | 93
about 50% of their usual harvest and a significant number of farms were totally
damaged. Traders estimate that supply as of the 2 nd and 3rd quarter 2016 was only about
60% to 70% of the normal output. Gap between supply and demand may reach more
than 100,000 MT.

Table 21. Supply and Demand Gap for Fresh Lakatan Banana

Table 21. Estimated Gap between Lakatan Supply and Demand, 2016
10% ↓ in 2016 30% ↓ in 2016 40% ↓ in 2016
Production Production Production
(PSA Jan – Sept 2015 (Traders’ Estimate) (Traders’ Estimate)
monitoring)
Production 873,446.24 679,347.07 582,297.49
(Base data: PSA 2015)
Postharvest Losses (20%) 174,689 135,869 116,459
(Estimates of players)
Balance for consumption 698,756.99 543,477.66 465,837.99
Projected Consumption 636,093.47 636,093.47 636,093.47
(Based on FIES 2012 and
CAGR banana annual per
capita consumption)
Surplus/Deficit 62,663.53 (92,615.81) (170,255.47)

III. COMPETITOR ASSESSMENT

Description and Product/Service Features

The pricing of other banana traders/consolidators ranges from PhP 18-20 per
kilo depending on the places of pick up. The buying price is low if the pick-up point or
loading point is situated in far flung / inner barangays.

These competitors ship out most of its banana to Manila and Cebu also primarily
via Cagayan de Oro. Bananas are collected weekly from farmers at their farms or these
are brought at the nearest buying stations. Assemblers usually work with buying
stations and agents and pick up the bananas collected weekly or twice a week. The
assemblers sell the bananas to consignees based in key urban areas. The consignees sell
the bananas to wholesalers and jobbers who, in turn, distribute these to wet markets
and supermarkets.

Traders and strikers usually entice farmers with the good selling propositions
like higher buying price and the availability for a cash advance in case farmers would be
needing money. This way farmers will be committing his product in lieu of the favor.

P a g e 39 | 93
 The advantage of the Proponent Group over this traders and strikers are in
terms of price stability . Since the PG has a marketing agreement with institutional
buyers which specified fixed price during the entire duration of the contract. In effect,
farmer suppliers are ensured of the price of their produce. Since they have a contract
they are also assured of their market.

Table 22.Geographic Location and Area of Influence

Group Location Outlet/delivered Annual Area of

Volume Influence
Traders Within North All over the 1,680 MT All over
Cotabato, country Region 12
Kidapawan City
Strikers Davo City, Gen All over the 1,120 MT All over
San, Cagayan country Mindanao
City

Traders in Kidapawan City are delivering the consolidated banana products to

their contact traders also in Davao City, Cagayan De Oro, and Cebu . They have also their
contact buyers in Manila which is being arranged by their brokers and shippers.

Channels of Distribution

The local traders in Kidapawan City are delivering the consolidated fresh lacatan
banana from the farmer members to big traders in Davao del Sur, Davao City and
Cagayan de Oro City. It also directly deliver the bananas in Metro Manila and Luzon
thru brokers and shippers. Buying price of fresh banana is unstable due to the influence
of the big traders in the industry. It easily changes depending on the supply capacity
and demand of their buyers and also the time consideration and expense in
transporting the product.

The brokers upon arrival of the product in the port will distribute it to the
consignee and other contact buyers.

Relationship with Suppliers and Buyers

Traders relationship with its suppliers is through “suki” or loyalty system.

They have already build a good relationship and entrusted confidence with each other.
They allow Cash Advances (CA) to their loyal suppliers (customers) whenever they
need money especially in cases of emergency but with interest. Payment will be
automatically deducted right after harvest. Farmer suppliers are being tied up to

P a g e 40 | 93
 deliver his produce because of this favor. On the other hand, strikers engagement with
its suppliers is on a “come and go” system. Strikers buy banana from farmers through
their contact/agents in the locality. They only purchase the volume they needed to fill
the demand required by their contact buyer.

Traders and strikers relationship with their buyers are the same. Engagement is
through agents/brokers who is looking for prospective big buyers that can give them
better prices. They don’t stick to one only and hooping around for the highest bidder
of their banana

Marketing strategies

Traders and strikers have almost the same strategies in marketing their
consolidated
purchases from individual farmers. They rely on their personal contacts and referrals
and quickly shift fro one buyer to another. This is because they are looking for buyers
who could offer them a higher buying price and added perks. In-charge of scouting for
prospective buyers are the agents/brokers who have various linkages and contacts in
big hotels and establishments including supermarkets. This way, their banana also
penetrates big markets.

Current Market Share

Mua-an is not the only trader /consolidator of fresh Lacatan Banana Kidapawan
City There are also other traders /assemblers/consolidators operating in the city and
neighboring towns. Strikers nearby provinces and even as far from Cebu and Cagayan
De Oro City. Most of the production volume of the city is absorb by Mua-an since most
of the planters are Mua-an members (owned and rented). Table below shows the
market share of these competitors in terms of banana enterprise.

Table 23. Competitors’ Market Share

Competitors Buying Price % Share of market Relationship with Average volume

(PhP) customers procured per
cropping season

Traders P 19.00/ kg 12.6% Direct 1,680 MT

Strikers Php22.00/kg 8.4% Indirect 1,120 MT

P a g e 41 | 93
Chart_2. Comparative Supply and Demand

120

100

80

60 TOTAL VOLUME
MFPC DELIVERY

40

20

0
UBM RSCI/SHOPWISE DIVISORIA HOTEL CEBU BORACAY

Financial Strength/Cost Position

Being on the business for some time already, the competitors have the strong
financial position. These traders are long time businessmen in the community with
P a g e 42 | 93
established financial capacity and credibility. Their purchasing capacity is very high
and equipped with the needed facilities like hauling trucks, dryers, warehouses and
have even big mechanical dryers which can accommodate drying of wet and fresh palay
during rainy days. Apart from this, they already establish strong partnership with big
traders in key places all over the country. Like traders, these strikers have also a high
purchasing capacity considering their area of influence and the volume they are
delivering to their contact bookers

IV. MARKETING PLAN

Product
The product that MFPC is bringing to the market is fresh lacatan bananas. There
are buyers like Mall chains who would like to have it delivered as partially ripened half
yellow, number four in the color chart while other customers like distributors prefer the
green one’s as they are the ones to schedule the ripening. The unique selling
propositions of MFPC lacatan bananas are the following; its sweet taste of 26 brix. Being
mostly grown in the banana belt, and area in the western side of Mt. Apo, with an
elevation from five hundred to eight hundred (500-800) meters above sea level, the
bananas are being pampered by nature with cool weather, fertile volcanic soil and cool
year round sunlight and rainfall which are essential for banana fruits to fully develop
and attain its maximum sweetness. It is complemented by the appropriate cultural
management developed by farmers through years of banana production and research
studies by the academe and scientists involved in agribusiness. The second USP is its
compliance to MRL to insure food safety. Farmers are taught to use only FPA approved
pesticides and they are guided on how to use it and when to apply. This is achieved by
regular training and field monitoring conducted by MFPC technician and field
technicians from agri chemical companies. The third USP is the quality. Bananas are
classified at least two to three times before it reaches the customers. Aside from that,
much attention is given to the handling of bananas from harvest, to post harvest and
transport making sure that bananas reaching the customers are farm fresh without
bruises and in pretty excellent shape.

As for the traceability, each farmer and farm location is assigned a specific code
to indicate its name and location. Also, the Quality Man who is designated to classify the
bananas either Class A/B or C has also its designated code. All the coding is marked on
the carton or wood crates so that if ever there are complaints in the market, the culprit
can easily be traced. In the future, the PG is looking at using bar codes in order that
traceability can be done even to the level of the individual banana hands.

Table 24. Product Description

Variety Variety Yield Description

P a g e 43 | 93
 (Tons/ha.) Fresh
Lakatan Banana

GIANT 30 At least 6 hands per bunch and average of 20

kilos per bunch, suited in midland and
upland location, 12 to 15 months to harvest

“PONGGUK” 12 At maximum of 5 hands per bunch and

average of 12 kilos per bunch, shorter finger
length, suited in lowland 8 to 11 months to
harvest

The “Giant” lakatan and “Pungok” lakatan can also be classified into class A, B
and C. The Manila and Luzon market in general prefers “pungok” variety while the
Visayas market especially those in primary tourist locations prefer “Giant”. Both Visayas
and Metro Manila Markets however, are buying the 2 varieties in varying degrees or
volumes.

At present, Class A and B farm gate price is between P20.00- P23.00 per kilo
depending on the distance from the packing house to the farm and the road condition
while Class C is between P10.00 to P13.00 per kilo depending also to the distance to the
packing house and road condition.

Price

The pricing of bananas just like other agricultural commodities depends largely
on the demand and supply. MFPC recognize this reality in the market place that is why it
urges the farmers to be very efficient in utilizing inputs so that it can produce large
volume in lower cost. This way, it can absorb price fluctuations when there is an
oversupply of bananas or any other fresh fruits in the market.

MFPC focused its marketing activities primarily in Metro Manila, Cebu and
Boracay Island. In Metro Manila alone, there are at least 12.8 million inhabitants as of
2015 census. Based on the national per capita consumption of 136.44 grams per day,
Metro Manila alone will need 2.3 million kilos of bananas per day or roughly 76 hectares
of bananas to be harvested daily to supply such huge demand. However, Metro Manila
market is not an easy territory to penetrate and conquer for a small Cooperative like
MFPC. Large fresh fruits distributors are lording over the place having established sales
and distribution networks from high-end supermarkets to the lowly fruit retailer in the
flea markets. This is further aggravated by the difficulty in moving around goods from
place to place due to terrible traffic condition, prohibitive building rental cost and other
amenities and services and finally high cost of labor. It is such a struggle for MFPC in
P a g e 44 | 93
order to survive in highly competitive market of Metro Manila. For Cebu City and
Boracay Island, MFPC is relying much on the fruit distributors who will market their
bananas there. The market is also very competitive due its proximity to the ports of CDO
and Nasipit. Bananas coming from North Mindanao and Bukidnon even in small
quantities can easily be brought to those areas quicker and at a lesser cost. It is not
surprising that sales in those areas have not really grown substantially.

The selling price to institutional buyers are as follows;

Rustan’s/Shopwise – Class A only – P54.50 per kilo;(in a cartoon)

Fresh One’s – Class A,B&C – P41.00 per kilo; (Wooden crates)

Divisoria Outlet – Class A & B – P41.00 per kilo, Class C- P35.00 per kilo;(wooden crates)

For Cebu and Boracay buyers, the selling price is computed FOB Cagayan de Oro
– Class A & B –P28.00 per kilo and Class C is P18.00 per kilo.

Figure 2. Market Selling and Buying Price

FRESH
PRODUCT PACKED BANANAS IN CARTON
BANANAS

PRICE P20.00 P51.00 P54.50

PLACE FARMERS PG’S MANILA SHOPWISE

Place

With the absence of a warehouse/packing house of the PG, they are only using
an improvised packing house which is being utilized to sort, wash/clean and in packing
the bananas ready for delivery. Because of financial limitations they were not able to
construct a concrete packing/warehouse building. What the PG have established
presently is the coop’s office located in Brgy. Muaan. It was able to acquire also a 3,500
sqm lot through a donation intended for the incoming facilities of the group. In terms
of transportation equipment, the PG is only renting trucks utilized in hauling fresh
Lacatan bananas. Storage room/warehouse to cater the supplies for the buyers within
Manila and the truck to deliver the produce to institutional buyers are being rented
only by the PG.

P a g e 45 | 93
 To be competitive to other buyers (e.g. traders) of raw fresh Lacatan banana in
the proposed enterprise, using the requested hauling truck, the Proponent Group will
pick up the banana from the farmers area going to the coop’s packing house in Brgy.
Manonggol, Kidapawan City, adjacent to the coop’s office and production area. The high
quality Lacatan bananas will be directly transported to the ports for shipment to Manila,
Cebu and Boracay . In addition, bananas will placed in plastic crates to ensure that the
bananas will be free from damages or bruises.

Promotion

MFPC has no budget for promotion of its product. So it must rely largely to
government agencies like Department of Agriculture, Department of Science and
Technology, Department of Trade Industry and the Department of Health to provide the
much needed exposure of bananas its health benefits to the consuming public. Activities
like Banana Congress, Trade Expositions/Fairs, Trade Missions, Night Markets and
Multi Media campaigns can help very much in pushing for increase in consumption of
bananas.

Aside from this, the City Government of Kidapawan is doing their share in
promoting the Lacatan banana in the local and national market by making it as the One
Town One Product (OTOP) of the city and encouraging its locality to promote and
patronize the product.

Control/Services

Product/Ser Technology to be Technical Remarks

vices used Specification
Product: No contamination Proper application of
Fresh Lacatan and free from recommended inputs
Banana chemicals with MRL
Certified
Services Hauling and packing Packaging is in -Ensure quality of the
labelled box @ 30 product for higher value
kls/box -Assurance of volume to
be delivered
Table 24. Quality Control

Pricing Strategies

P a g e 46 | 93
 The existing buying price of fresh Lacatan banana in the local market (as of
October ) is at ₱18.00 per kilo but from time to time it changes depending on the
demand in the national market. Farmer members product will be hauled by the coop’s
truck directly from the area for free thus, post harvest expenses is very minimal.
MFPC’s price will be based on the price of the buying rate of its institutional buyers
which most of the time higher compared to the existing market price and stable. The
buying price of the product is definitely increasing as the demand in the market
increased.

After the post harvest process it will be delivered to buyers majority of which
are in Manila at an average rate of Php42.00/kilo.

Cost of Goods Segment

Table 25. Annual Volume of Fresh Lacatan Banana Purchased, Sold

and Revenues Generated
Particulars Fresh Lacatan Banana/has

Average Production (MT)/cropping 5,134 MT

@85 has
Less kilos 1,540.2MT
Net kilos 3,593.80 MT
Price (Php)
Class A (Php20/kl) 64,688,400
Class C (Php10/kl)) 3,593,800
Gross income ₱68,282,200
Less: Operating expenses
Honorarium 3,329,616.80
Hauling fee (Handling) 12,096,000
Shipping Costs 27,242,316.67
Supplies & Materials (packing Costs) 9,006,861.00
Rent Expense (Manila Warehouse) 9,980,000.00
Depreciation Expense 420,390.00
Fuel & Oil 64,887.09
Repairs and Maintenance 166,499.32
Total operating expenses Php52,326,180.88
NET INCOME (1 cropping) Php15,956,019.12

P a g e 47 | 93
Marketing Strategies

Cost of Good Segment

Table shows the estimated income and expenses incurred by the cooperative in
two croppings (1 year). With the given data, total annual purchases of banana is
3,234.42 MT or 3,234,420 kilos at Php20.00 per kilo for Class A-B which is 90% of the
total produce and 359.38 MT or 359,380 kilos for Class C, 10% at Php10/kilo . This will
give a gross income of ₱68,282,200 less the total operating expenses amounting to
Php52,326,180.88 will give the coop a net income of Php15,956,019.12. Spoilage of the
product which is 20% to the gross tonnage of the production.

Marketing Strategies

While marketing of fresh Lacatan banan presents a challenge in the national and
local market scenario, MFPC will forge marketing agreement with the prospective
buyers and more so with their “suki” buyers to ensure the operation of the enterprise.
Demand for the banana is increasing every year, thus the increase in production of the
cooperative will complement with this trend. It will also encouraged more farmers to
join the cooperative for them to be able to avail and utilize the interventions coming
from the government.

Production Segment

Table 26.. Annual Volume of Fresh Lacatan Banana Produced and Revenues Generated
Particular Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
Area covered (ha) 85 100 115 130 145 160
Effective Area
Harvesting/ 85 100 115 130 145 160
Cropping
Fresh Banana 2,567 3,020 3,473 3,926 4,379 4,832
yield/cropping
(MT)
Total Fresh Banana 5,134 6,040 6,946 7,852 8,758 9,664
yield/ year (MT)
Price per Kilo
Class A-B 71,880,00 84,560,00 97,244,00 109,928,00 122,612,000 135,296,000
(Php20/kl) 0 0 0 0
Class C 3,593,800 4,228,000 4,862,200 5,496,400 6,130,600 6,764,800
(Php10/kl)
Annual Income 75,473,80 88,788,00 102,106,2 115,424,40 128,742,600 142,60,800
0 0 00 0
Less: Expenses

P a g e 48 | 93
 Net Income

Target Expansion

The cooperative will expand the area of production by 15 hectares every year
starting year 2 of operation or a total of One Hundred Thirty Five (135) hectares until
year 10. At the tenth (10 th) year of operation, the cooperative will have a total area of
production at Two Hundred Twenty (220) hectares. The expansion area will be that of
the banana farmers who will be joining the cooperative as a member.
.

Place of Delivery and Distribution System

Diagram below shows the distribution pattern of Mua-an’s fresh Lacatan banana
from the farm of the members to the coop’s packing house going to identified places of
buyers after it was put in a labelled box for shipment.

Diagram 1. Distribution Pattern

V. OPERATIONAL PLAN

Ownership and Management

P a g e 49 | 93
 The MU-UAN FARMERS PRODUCERS COOPRATIVE (MFPC) is a cooperative
whose members are farmers and farm workers from Brgy. Mu-uan, Kidapawan City. The
said farmers are engaged in the cultivation and production of Cardava and Lakatan
Bananas. MFPC was registered with the Cooperative Development Authority (CDA) CDA
Registration No. 9520-12020999 dated January 9, 2012. The cooperative is open for
membership to all Filipino citizens, of legal age, with capacity to contract. To become a
member, a farmer or farm worker must signify his/her intention to become a member
of the Cooperative by filing a duly accomplished membership form to the Board of
Directors as the approving body. He/she should have attended the Pre-Membership
Seminar (with certificate) and paying the required paid up capital of P500.00 and
membership fee of Php100.00 Right now, it has forty nine (49) members and has a
total production area of one hundred (100) hectares planted with Lakatan Bananas.
Every month, MFPC is producing an average of one hundred sixty (160) metric tons of
Lakatan Bananas.

The Cooperative has a Board of Directors duly elected from the members by the
General Assembly. They will serve a two year term and can be reelected and serve for
another terms. Other officers include the Secretary, Treasurer all appointed by the BOD
from among the members of the GA. There are also Chairpersons of the different
Committees such as Audit and Election Committees whose members were all elected by
the GA. The Business Manager is appointed by the BOD and is tasked in running all the
business activities of the Cooperative. Under the Business Manager are Quality
Inspectors, Harvesting In-charge, Packing Crew, Load Dispatcher, Office Staff and
Marketing and Sales Staff in Metro Manila.

OPERATIONAL PLAN

The MU-UAN FARMERS PRODUCERS COOPRATIVE (MFPC) is a cooperative

whose members are farmers and farm workers from Brgy. Mu-uan, Kidapawan City. The
said farmers are engaged in the cultivation and production of Cardava and Lakatan
Bananas. MFPC was registered with the Cooperative Development Authority (CDA) CDA
Registration No. 9520-12020999 dated January 9, 2012. To become a member, a farmer
or farm worker must signify his/her intention to become a member of the Cooperative
by attending the Pre-Membership Seminar and paying the required paid up capital of
P500.00. Right now, it has forty nine (49) members and has a total production area of
one hundred (100) hectares planted with Lakatan Bananas. Every month, MFPC is
producing an average of one hundred sixty (160) metric tons of Lakatan Bananas.

The Cooperative has a Board of Directors duly elected from the members by the General
Assembly. They will serve a two year term and can be reelected and serve for another
terms. Other officers include the Secretary, Treasurer all appointed by the BOD from
among the members of the GA. There are also Chairpersons of the different Committees

P a g e 50 | 93
such as Audit and Election Committees whose members were all elected by the GA. The
Business Manager is appointed by the BOD and is tasked in running all the business
activities of the Cooperative. Under the Business Manager are Quality Inspectors,
Harvesting In-charge, Packing Crew, Load Dispatcher, Office Staff and Marketing and
Sales Staff in Metro Manila.

During the General Assembly Meeting in 2016 March, the body agreed that the
Cooperative will expand its production areas and go into Lacatan Banana trading and at
the same time seek financing support from Land Bank of the Philippines.

The enterprise that MFPC is venturing into is lacatan banana trading. There are two (2)
key components of this undertaking; the production of high quality bananas and the
post-harvest and marketing.

The buy and sell of Lacatan Banana is the enterprise that MFPC has ventured as a
cooperative while the production of fresh lacatan bananas which MFPC buys is the
initiative/undertaking of individual farmers and contracted growers. It started in
October 2016 when Land Bank of the Philippines North Cotabato Lending Center
approved a working capital loan of Five Million Pesos (P5,000,000.00) to MFPC.

Key players in the enterprise are the farmers, harvesters, quality man, packers and
transport personnel. The farmers are the decision makers as to what kind of fresh
bananas he will produce. If he wants his bananas to be marketable for high end buyers
and command a good price, then he will focus his attention and investment in order to
attain his objective, that is, to produce the best quality bananas. The harvester is a farm
worker, either paid by piece work or daily. The quality man is the worker of MFPC. He
will be the one to remove the bananas from the fruit steam (de-hand), classify it based
on established specifications namely;

CLASS WEIGHT/HAND (KG) DIAMETER LENGTH/FINGER PEEL

CONDITION

A 3.1 UP 46 mm up 6 inches up SMOOTH, NO BLEMISHES OR BRUISES

B 2.1-3.035.1-45 mm 5.5-5.9 inches

C 1.5-2.030-35 mm 4.5-5.4 inches

Bananas must have at least five (5) leaves upon harvest

After classifying, he will weigh, if packed in wood crates, it must be thirty (33) or
thirty five (35) kilos per crate. If packed in cartons, weighing is done after packing. Note,
that the carton and pe foam together weigh one half (1/2) kilo. So in computing the
weight of bananas inside a carton, the gross weight is deducted one half (1/2) kilo to
arrive at need weight per box. The job of the quality man is very critical for MFPC. The
packers are those workers in-charge of washing, cleaning, drying, packing, sealing and

P a g e 51 | 93
loading of packed bananas. Their work is also critical and can completely affect the
quality of bananas. The loading of the crates or cartons to the hauling truck at the farm
and the same transfer of same to a bigger truck at the trans-loading area can also affect
the fruit quality. Note, that at least there are five times that the crates or cartons are
being loaded and unloaded by workers from the farm up to the delivery to the customer
in Manila or in other destinations.

After packing the bananas in the farm, the Quality Man will issue a cutting slip to
the farmer indicating the number of crates or cartons that are packed and the
corresponding classification. The cutting slip is the basis of MFPC and the Farmer in
computing how much is the sales of his bananas during that particular harvesting date.
Payment to farmer can be on cash basis on the day of harvesting at the office of MFPC or
one week after harvest. As far as transport facilities are concerned, the use of dry van is
not acceptable, as it cannot provide the needed ventilation to prevent build-up of heat
and ethylene gas. From the time the bananas are cut to the time it is brought to the
trans-loading area, it takes at least twelve (12) to eighteen (18) hours then travel from
the trans-loading facility to the pier in Cagayan de Oro City twelve (12) hours. At the
pier, the bananas in crates or cartons are unloaded from the large hauling truck and
loaded to a dry container van and it will stay at the pier for another six (6) hours under
the heat of the sun before it can be loaded to the vessel that will bring it to Manila. It will
take another seventy two (72) hours for the sea vessel to travel from CDO port to
Manila. In the minimum, the Bananas will reach Manila, four (4) days after harvesting
under such varying and extreme temperatures.

Upon arrival in Manila pier, at the Manila North harbor, the container vans filled
with bananas are being unloaded and brought to the designated stripping areas of the
pier. There is cut throat competition starting at the pier as shippers would like to
dispose their cargoes as early as possible otherwise, their bananas can no longer be sold
at premium price if it remained unsold late in the afternoon. For MFPC, all bananas that
are shipped to Manila have designated buyers, so the truck driver and helper will
process the cargo release papers so they can proceed with the pull out of bananas. Once
the bananas are loaded in the cargo truck of MFPC, the driver already knows where to
deliver it, if it is ordered by Fresh Ones Fruit, the bananas are directly delivered to the
warehouse of the said customer. There the bananas are unloaded and classified and
those that do not conform to the specifications are rejected, and those that are accepted
are invoiced and received by the warehouse in-charge. The rejected bananas are
brought to the Divisoria Manila at a lesser price just to recover the cost of product.
Bananas intended for delivery to Rustans will be brought to the Divisoria outlet for
classifying again, cleaning , removal of crown and dipping in ethrel solution for ripening.

The quantity of bananas to be prepared will depend on the quantity indicated on

the Purchase Order of the customer which is given a week before. After dipping, the

P a g e 52 | 93
bananas are again packed using same carton and PE foam and weighed before
delivering it to the Distribution Center of Rustans. At the DC, the warehouse in-charge
will inspect the cartons one by one and if there are off specs, it is rejected and the good
ones are received weighed and corresponding delivery receipt is issued based now on
the actual volume/quantity of bananas received. Issuance of invoice is done
electronically on the B2B System of the customer. The rejected bananas are returned to
the Divisoria outlet for proper disposal.

The local lacatan banana industry is already an established business and MFPC would
like to be a leader in the local banana industry by instituting/implementing
methods/processes similar to the multinational companies. Right after cutting, the
bananas must be de-hand at the farm, placed in a plastic crates cushioned with PE Foam
and brought to the packing washed where it is cleaned, classified, weighed, dried,
packed in cartons cushioned with PE foam and placed to a cold room with a constant
temperature of 11˚C to 13.5˚C. This process must be performed within the six (6) hour
window otherwise, the bananas will start to degrade. A reefer van will be used to
transport by land bananas from packing house to the Cagayan de Oro or Davao City
Port. At the shipping port, the bananas will be transferred to the reefer van of the
shipping line for shipment to Manila. Once unloaded from the vessel in Manila port, the
reefer van will be moved to the container yard of the shipping company where the
reefer van of MFPC which is being used as transient storage is waiting and the cargo will
be transferred onto it. The workers in Manila will just withdraw the quantity indicated
in the purchase order of the customer for ripening and delivery.

Right now, MFPC does not own vehicles and facilities. It is just renting the vehicles used
in its operation here in Kidapawan and in Metro Manila The Department of Agriculture
Regional Field Office 12 High Value Crops Division has granted a banana packing house
with cold storage room to MFPC. It is being constructed at the lot donated by Chairman
Luis T. Chua to the Coop in Brgy. Manongol, Kidapawan City. On the other hand, DA-
RFO12 AMAD has committed to provide two (2) twenty footer refrigerated container
vans to MFPC in 2018, one will be used in transporting bananas from the packing house
here in Kidapawan City to the shipping points either in Cagayan de Oro City or Davao
City. While the other one will used as temporary cold room in Metro Manila where
bananas are stored while awaiting deliveries to customers.

MFPC badly needs three (3) hauling trucks now in order to reduce much dependence
from the vehicles of LUMEN VENTURES. The two (2) trucks must have the following
specifications:

Unit # 1 – Six Wheel rear wheel drive with drop side body, 6 tons capacity

Unit # 2 - Six Wheel Four Wheel Drive with drop side body, 6 tons capacity

Unit # 3 – Four Wheel with FB 4 tons capacity with dual aircon

P a g e 53 | 93
The Unit # 1 and # 2 will be used here in Kidapawan City to haul freshly harvested
bananas from the farm to the packing house. The bananas will be placed inside the
plastic crates with PE foam cushion.

The unit # 3 will be used in Manila to haul bananas in crates and cartons arriving
at Manila North harbor and for delivery to customers or in the warehouse/retail outlet
in Divisoria.

Profit Sharing Scheme

The cooperative practices or follow the profit sharing scheme of the CDA Law
(RA 9520) Educational Fund 10 %, Reserved Fund 10%, Building and Other Infra
Improvement 7%, Community Development Fund 3%, Dividends for the Members 70%.
Dividends are being distributed/given every 1st quarter of the following year.

Diagram 2. Management and Organizational Structure of MUAAN FPC

Table 27. Functions of Existing Organizational Structure

CBMEG Evaluation and monitoring of the project

President/Chairman Presides over all meetings. Represent for and in behalf of the
organization
Vice He shall assume the duties and responsibilities of the president
when incapacitated/Head of Educ/membership committee
Secretary Takes down the minutes of the general assembly meetings. Keep and

P a g e 54 | 93
 maintain up to date list of all members and records of the
organization
Treasurer Acts as custodian of assets and finances of the organization and
reimburse legitimate expenses incurred officially/Head of Finance
Committee
Audit Committee It shall have the power and duty to continuously monitor the
adequacy and effectiveness of the cooperative's management control
system and audit the performance of the cooperative and its various
responsibility centres.
Finance Committee Shall plan and implement all the plans promulgated for the
economic and social upliftment of the organization.
Mediation and Formulate and develop the Conciliation-Mediation Program and
Conciliation ensure that it is properly implemented;
(Grievance) Committee
Procurement Take charge of canvassing and purchasing of stocks
Committee
Membership and Shall promote educational and technological advancement of the
Education Comm. members in cooperation with the officers of the organization
Sub-project Monitoring Responsible for monitoring the actual activities and record of
and Evaluation Evaluation Committee (SPMEC) stocks delivered during
Committee implementation of subproject at PO level

The Management Structure (for the PRDP Project)

The proposed project shall be implemented and managed based on the following
organizational structure.

Table 28. MANAGEMENT ORGANIZATIONAL, QUALIFICATION AND

RESPONSIBILITIES

QUALIFICATIONS FUNCTIONS/RESPONSIBILITIES
General Manager 1. Male or Female, of 1. Responsible for supervising
legal age the operations of the business,
2. Must be a member of observing compliance of
the cooperative operational schedule and proper
3. With good moral execution of the operational
character procedures.
4. Preferably experience in
2. Ensures that legal
rice production
compliance is well
5. Must have experience in
conformed.
handling people
3. Ensures that skills match
6. Must be a resident of the
the process requirements of
community where the milling
the operations, and facilitate
and processing facility is
training if necessary.
P a g e 55 | 93
 located 4. Responsible for managing
7. Can work overtime if the financial resources of
needed. the company and
communicate the financial
performance of the business
with the members and
stakeholders.
5. Represent the cooperative
in any agreement, contract,
business dealings and in any
other official business
transaction as maybe
authorized by BODs
Cashier 1. Male or female of legal age 1. Handles monetary transactions;
2. With good moral character 2. Received/ collects payments and
3. Preferably with knowledge
deposits
in accounting procedure
4. Preferably College 3. Responsible for money received
graduate or level with good and expended
hand writing
5. Must be a member of the
organization if possible
6. Can work overtime if
possible
7. Must have 2 years
experience in cooperative
operations
Book keeper 1. Male or female of legal age Responsible for handling the
2. With good moral character fundamental aspects of the coop’s
3. Preferably with knowledge financial recordkeeping, managing
in bookkeeping and accounts payable and receivable,
accounting procedure reconciling bank statements, and
4. Preferably college completing annual tax forms.
graduate or level with good
hand writing
5. Must be a member of the
organization if possible
6. Hard working and with
dedication to his/her work
7. Can work overtime if
needed
8. Must have a 2 year
experience in cooperative
P a g e 56 | 93
 operation
Load Dispatcher 1. Preferably Male 1. In-charge of dispatch schedule of
2. With good moral character vehicles in coordination with the
3. With experience in cargo Marketing Officer
forwarding and scheduling
3. Can Work overtime and
with less supervision
4. Must be physically fit
Farm Technician 1. Preferably male of legal 1. Submit monthly report to
age the Manager as to the status
2. With good moral character of the production area.
3. Preferably with knowledge 2. Monitors, evaluate and
and experienced in field assist growers on technical
work aspect of banana
4. Preferably College production.
graduate or level in 3. Supervises and monitor
agriculture related courses banana production area.
5. Can work overtime with 4. Recommend to the farm
less supervision owners needed inputs for
production
Store Incharge 1. Male or female of legal age 1. Facilitate, supervise and monitor
2. With good moral character the washing and packing process
3. Must have knowledge in and ensure that safety standards
warehouse operation are being observed
4. At least college level or
highschool graduate
5. Must be a member of the
organization if possible
6. Can work overtime if
needed with less supervision
7. Must be physically fir
Marketing Officer 1. Male or Female of 1.Responsible for the proper
legal age implementation of the day-to-day
2. With good moral operation of the marketing
character department in accordance with the
3. Must be a member of appertaining policies and
the organization, if guidelines;
possible 2.Lead in planning out marketing
4. College graduate or expansion strategies in
level with experience coordination with the manager;
in marketing 3.Responsible in the market
5. Can work overtime if transactions with identified buyers
needed
P a g e 57 | 93
Driver 1.Male of legal age 1.Drive the vehicle of the
2. With good moral character cooperative in transporting the
3. Preferably with knowledge product
in handling hauler truck 2.Delivers fresh Lacatan banana in
4. Must have a valid wooden crates and cartoon boxes
professional driver’s license going to designated ports/airports
5. Must be a member of the 3. Ensure the safety of the vehicle
organization if possible and the delivery of the products
6. Hard working and with
dedication to his/her work 4. Properly and efficiently utilized
7. Can work overtime if and check the condition of the
needed. vehicles
8. Must be physically fit
Laborers 1. Male of legal age 1. Working force for hauling
2. With good moral character (loading and unloading) banana
3. Must be a member of the crates
organization if possible
4. Hardworking and with
dedication to his/her work.
5. Can work overtime if
needed.
6. Must be physically fit
7. Can work with minimal
supervision
Packing Crew 1. Preferably female of legal 1. In-charge of washing/cleaning
age and classifying banana fruits
2. With good moral character 2. Packed classified bananas in
3. Physically fit wooden crates and cartoons
4. Can work with minimal
supervision
Store In-charge 1. Preferably male of 1. In-charge in the day to day
legal age operation of the store outlet
2. With good moral 2. Monitor supply inventory of the
character banana
3. College graduate or 3. Coordinate closely with the
level with experience main office (Muaan) regarding the
in cooperative transactions/activities undertaken
operations especially
4. Can work overtime if
needed and with less
supervision
Broker 1. Male of legal age 1. In-charge of finding and
2. With good moral negotiating with prospective
P a g e 58 | 93
 character buyers of the product
3. College graduate or 2. Monitor and supervise the
level with experience supply of banana to institutional
in dealing/negotiating buyers
with buyers/traders 3. Coordinate to the manager all
4. Can work with less activities/transactions relating to
Supervision the product
5. Must be physically fit

Illustration 1. Enterprise Structure

Farmer Farmer Farmer

MFPC

VARIOUS CUSTOMERS

5.2. Resources and Production:

Resources

The buy and sell of Lacatan Banana is the enterprise that MFPC has ventured as a
cooperative while the production of fresh lacatan bananas which MFPC buys is the
initiative/undertaking of individual farmers and contracted growers. The fresh Lacatan
banana will be coming directly from the production areas of farmer members in
various barangays of Kidapawan City which will be consolidated by the cooperative to
supply the demand of its institutional buyers. In the succeeding years of operation,
production expansion areas will include the neighboring Municipalities of Magpet and
Makilala.

P a g e 59 | 93
Production Cycle

Presently, the cooperative has 85 hectares of production are planted with

lacatan bananas that are already fruit-bearing. The farmer members of the
organization has undergone several trainings including the Good Agricultural
Practices (GAP) conducted by the Department of Agriculture to ensure that the
produce will be of premium quality of “Class A” standard. From planting to harvesting,
it would take 8-10 months for the tissue cultured banana plant before harvesting and 6
months for the follower banana plant. The length of time for harvesting the banana
varies depending on the production site and the kind of seedlings planted. If the area is
in the elevated level then harvest time waiting is longer than the area in the plain/lower
elevation.

One complete production cycle of banana is more or less 12 months for the 1 st
year using tissue cultured seedlings and 6-8 months in the succeeding years considering
that the farmers will not be planting again but will make use of the follower/suckers
that has grown out of the mother plant.

Diagram 3. Production Cycle

Land Preparation

harvesting/cutting
Follower
Planting

Monitoring

Input Applications
including weeding &
Wrapping deleafing

Facilities and Equipment

The cooperative has an office building located in Brgy. Muan, Kidapawan City
wherein official business of the cooperative is being transacted and important
documents are being kept . It is the first facility the coop has established since its
operation. It is being manned by competent staff headed by the manager. Along with
this is a 3,500 sqm lot which was donated by the coop’s chairman with notarized deed
of donation. It is also where the warehouse is being constructed and the site of the
P a g e 60 | 93
packing house. The building is a grant from the Department of Agriculture thru the City
Government of Kidapawan.

In order to fastrack the trading transactions of Mua-an, hauling trucks and

plastic crates were requested from PRDP . While waiting for this additional facilities and
equipment to be realize, the coop is using a makeshift for its classifying, washing and
packing activities. It is expected that by the end of this year the construction of the
warehouse/packing house from the Department of Agriculture RFO XII will be
completed. Target date of operation will just be in time for the start of the enterprise.

Table. 29. Equipment Capacity

PARTICULARS QTY. DESCRIPTION CAPACITY

Hauling Trucks 1 4 Toner Capacity, brand new 114 crates
Hauling Truck 2 6 Toner Capacity, brand new 229 crates
Hauling Truck 3 6 tonner capacity, brand new 229 crates

Table 30. Equipment Specification

Equipment Unit Quantity Specifications

Hauling Truck(6 Forward 1 Engine Displacement 3,908, Max. Output Ps/rpm
133/2,500, Max. Torque N-m/rpm 370/1,600,
Tonner)
Width mm. 1,995, Length mm. 7,210, Ground
clearance mm. 210, Tire size 750 r16 14pr, No. of
Tires wth spare 7, Load Capacity Kg. 6,000
minimum, Passenger 3, Fuel Diesel, Tank Capacity
lits. 100

Hauling Truck(6 Forward 1 Engine Displacement 3,908, Max. Output Ps/rpm

110/2,900, Max. Torque N-m/rpm 275/1,600,
Tonner, with
Width mm. 2,035, Length mm. 6,120, Ground
front drive) clearance mm. 210, Tire size 750 r16 10pr, No. of
Tires wth spare 7, Load Capacity Kg. 6,000
minimum, Passenger 3, Fuel Diesel, Tank Capacity
lits. 100,

Hauling Truck(4 Forward 1 Engine Displacement 3,908, Max. Output Ps/rpm

110/2,900, Max. Torque N-m/rpm 275/1,600,
Tonner)
Width mm. 1,695, Length mm. 4,660, Ground
clearance mm. 200, Tire size 750 r15 12pr, No. of
Tires wth spare 5, Load Capacity Kg. 2,500
minimum, Passenger 2, Fuel Diesel, Tank Capacity
lits. 70,

DIAGRAM 4. Utilization Schedule

P a g e 61 | 93
 UTILIZATION SCHEDULE OF EQUIPMENT

Receipt of Request
Form (Hauling/Delivery

Hauling/Delivery of fresh Lacatann Banana will be done by Mua-

Scheduling of
an from the Production Areas to Warehouse/packing house.
Hauling/Delivery
After packing, it will be immediately transported to designated
ports/airports for shipment to various destinations

Loading of fresh
banana

Hauling trucks are provided primarily to free the farmer-beneficiaries from

hauling expenses as well as to easily capture delivery of end products to prospective
buyers. Fuel of the hauling truck will be shouldered by the cooperative of which it will
based on the existing market price of fuel in Kidapawan City . Chart 3 below shows that
for the truck to operate efficiently, it should undergo scheduling to avoid conflict and to
accommodate all requests, respectively. The same schedule will be followed even when
the first truck purchased is fully depreciated and a new truck is purchased on Year 8.

It is most advantageous to the PG to acquire trucks considering the nature of

their operation wherein the cooperative will be hauling the bananas directly from the
production area of the farmer members as part of their services. It is very difficult to
find for rent transportation since most of the owners of trucks have their own business.
Hauling service of the PRDP truck will be free as part of the coop’s augmentation to its
farmer members.

5.4 Operations

The business operation is seem simple trading enterprise which will involve buying
bananas primarily from its farmer/members. Truth is, banana enterprise is quite
meticulous since quality and appearance is the name of the game. Buyers especially
those who have been in the higher level, quality and appearance of the product is the
top priority since it will be the things that their customers are looking into. If one has to
engage in this enterprise, from the land preparation to planting and input
implementation until harvesting it should conform strictly with the standards in quality
control. This way the produce banana will meet the specifications of institutional buyers
and will be able to compete in the market in terms of demand and price. That is why the
presence of a technician is a must especially with the projected expansion for the

P a g e 62 | 93
succeeding years. The Office of the City Agriculturist of Kidapawan focal person for
High Valued Crops will augment in the technical people needed by the cooperative. This
is to ensure that proper technology application including the implementation of Good
Agricultural Practices is strictly followed.

The hauling trucks, once acquired, will be utilized in hauling bananas from the
production areas down to the packing house for packing and delivery to ports for
shipment to various destinations until it reached to the buyers. Hauling operation in
Manila will start from the pier where the ck up by the PRDP truck going to the rented
warehouse where it will be sorted by volume and classification going to the buyers
location. Delivery of bananas to the buyers follow a strict schedule since it is perishable.
After the first delivery it will go back to the warehouse for the second, third, fourth and
so on delivery. As presented in the EFA, the PRDP truck will run almost hours to
complete its delivery cycle. This happened every time supplies are needed with a
frequency of 3 times a week whole year round.

Considering the continuous and throughout the year trading activities of the
coop, the proponent group sees no idle time for the equipment to be utilized in any
other activity outside Mua-an.

Chart 3.. Hauling Services

Tentative Date of Implementation

Activities J F M A M J J A S O N D

Hauling of Fresh Banana                

DIAGRAM 5. Farming Process Flow

MAINTENANCE/MONITORING HARVESTING
III. PRODUCTION * Cutting of matured banana
* Input application
*Land Preparation
IV. * Monitoring of possible bunch
*Planting
pest/disease infestation * Debunching
* Classifying

HAULING TO PORTS PACKING

*Transporting bananas going * Washing/Cleaning HAULING
to designated ports/airports * Classifying *Loading of banana fruits
for shipment * Packing to wooden crates using plastc crates to the
and cartoon box packing house

SHIPMENT HAULING TO WAREHOUSE DELIVERY to Institutional

* Bananas are shipped on * Unloading of bananas in the Buyers
refregirated vans/dry vans warehouse for sorting
P a g e 63 | 93
 The operational cycle of the enterprise starts from the land preparation of the
production area which includes several tedious activities like plowing, provision of
canals and soil conditioning/treatment. Critical stage in the banana production is from
six (6) months up to harvesting. Farmer must be able to maintain enough number of
leaves in order to support fruit development. As rule of thumb, a banana plant must
have at least fifteen (15) leaves upon shooting and five (5) functional leaves upon
harvest. It will ensure that the banana fruit being produce will not ripen prematurely
while in transit. Please note that bananas produce under such conditions have a shelf
life of two (2) weeks under normal room temperature. If handled and packed properly
and placed in a room with controlled coldness, it can last even for several months. MFPC
management is looking into the possibility of providing the pests and disease control
services to farmer growers by acting as service provider in pesticide application using
modern machineries like boom spray or drones. This will ensure that the bananas are
being applied with the right kind of pesticides, right amount and in the right timing. This
will guaranty that the bananas produced can conform to the MRL for food safety
consequently acceptability by the consumers. Each hectare of lacatan banana farm can
be planted with one thousand eight hundred ninety (1,890) hills of tissue cultured
seedlings. Farmers prefer tissue culture banana planting materials as it is free from
diseases or contamination and have high rate of survivability. However, due to farm
condition that varies from each location, farmers always provide twenty percent (20)
mortality from the time of planting up to the fourth (4) month. Farmers have to replant
during this period to insure that population is maintained. Between the fifth (5 th) month
up to harvesting, a realistic mortality rate (20) of twenty percent (20) is factored in as
infestation of pests and diseases will spike from vegetative to fruit production stage.
Note that some banana diseases have longer incubation time resulting to late reaction
and control measures being implemented. Under normal conditions, no prolonged
drought, typhoon, flooding or severe diseases infestations like “panama” and “moko”, a
farmer grower of MFPC can produce and average of thirty (30) tons of fresh bananas
per hectare during the first year and sixty (60) tons per hectare on the succeeding
production year, if he/shewill religiously follow the correct cultural practices being
taught to them. During the fruiting of the banana plant between sixth to eight (6 th -8th)

P a g e 64 | 93
month, the farmer must implement fruit care protocols including bud inject or bunch
spray to prevent spread of thrips and freckles that will damage the fruit peel, debelling
(removal of bell or “heart”), de flowering, bagging and tagging. Bagging is necessary to
protect the fruits from being attacked by insects like fruit flies, scurrying weevil and
others while tagging is part of the monitoring and recording to keep track on the day of
harvest and the quantity of bananas to be harvested on the certain date. The harvesting
dates must be reported to the MFPC Office so that the marketing specialist can already
program his/her booking of orders from customers based on the expected volume of
bananas to be harvested. During harvest, the thirty (30) tons harvested bananas from a
hectare of land will be classified under Class A-18.2 tons, Class B-9 tons, Class C-2.2 tons
and Reject- .8 tons. Please note that the harvesting in a one (1) hectare land will run to
at least several weeks depending on the maturity of the bananas.

After harvesting it will be hauled directly to the packing house for classification,
washing/cleaning and packing. Part of the packing process is labelling. Labelling is the
tracking system and control of the coop to record important data such as name of the
farm owner, harvest date . It will be transported immediately to designated ports for
shipment to various destinations. From ports it will be hauled going to the rented
warehouse for sorting before delivering to various buyers

Implementation Plan

Table 31. Tentative Production Schedule

Farm Plan and activities in the production of Lacatan banana production can be found
in Annex B of this Business Plan

Tentative Date of Implementation

Activities
J F M A M J J A S O N D
Training (technology
transfer)                        
nd
Land Preparation         1st         2    
Fertilization                        
Planting                        
Weeding                        

Foliar Application             1st         2nd

P a g e 65 | 93
 Field Monitoring                        
1s
Harvesting   2nd             t      

The fresh banana production will follow the cropping calendar system, thus, the 1 st
cropping will fall down in the months of August-October and 2 nd cropping is within the
months of January-March of the succeeding year. Hence, the trading and hauling will be
coming together with harvesting. While hauling going to the ports/airports will start
right after packing. Another hauling activity will undertake during the arrival of the
shipment to its destination. It will be hauled by the truck from PRDP (in Manila) and
rented vehicles for Boracay and Cebu shipment going to the buyers.

Compliance to National and Local Regulations

Mua-an FPC is duly registered at the Cooperatives Development Authority

(CDA) and with certificates from DTI and BIR. It is also operating legitimately with
Business Permit from the City Government of Kidapawan renewable every year.

Table 32. Detailed Total Investment Cost of the Project

Total Detailed Total LP GOP CLGU PG Equity
Investme Items (60%) (20%) (20 Cash In Kind
nt
Cost/ Enterprise
Amount Operation
of
Business Trading 900,000 540,000 1800,000 1800,000
Plan Capital
Forward 2,405,000 1,443,000 481,000 481,000 1,600,000
Truck(6 Ton
Capacity)
Forward 2,022,800 1,213,680 404,560 404,560
Truck(6 Ton
Capacity)
Forward 1,892,800 1,135,680 378,560 378,560
Truck
( 4Ton
Capacity)
Plastic 100, 000 60,000 20,000 20,000 200,000
Crates
Total 7,320,600 4,392,360 1,464,120 1,464,120 200,000 1,600,000
Investment
Cost

P a g e 66 | 93
VI. SOCIAL AND ENVIRONMENTAL SAFEGUARDS

1. Subproject Beneficiaries

Table 33 . Summary of Beneficiaries

Name of no. of HH Non-IP IP

Coop/PG Male Female Male Female
MUAAN FPC
Year 1 49 8 17 7 17
Year 2 15 12 3
Year 3 15 9 6
Year 4 15 12 3
Year 5 15 10 5
Year 6 15 10 5
Year 7 15 13 2
Year 8 15 11 4
Year 9 15 11 4
Year 10 15 8 7
TOTAL 184 104 56 7 17

2. Indigeneous Cultural Community/ Indigeneous People(ICC/IP)

Majority of the coop’s member are Christians but there are also members who
belong to the Manobo Tribe. Brgy. Ilomavis is located at the foot of Mt. Apo and home
to the Manobo Tribe and also adjacent to the production areas, the reason why some of
them take the risk and opportunity to venture in banana farming. Majority of the
production areas are situated in Brgys. Mua-an and Manonggol, a low land to sloppy
area in the municipality which are not situated in any declared Ancestral Domain.
Majority of IP residents/constituents residing in Brgy. Ilomavis are engage in high
value crop production of rubber and coconuts and also vegetable growing.

3. Site and Right of Way Acquisition

There will be no site and road right of way acquisition both to the warehouse site
and the production area. First, the infrastructure will not be funded by PRDP but of DA
XII regular fund to complement with the enterprise need. Second, the road going to the
P a g e 67 | 93
facility site is an FMR while the banana plantation land are owned by the farmer-
members. Deed of Donation to prove the ownership of the coop over the area is
attached to Volume VI of annexes.

Map 5. Production Site

4. Damage to Standing Crops, Houses and/or Properties

The Enterprise will not cause damage to standing crops, houses and/or
properties in any of the sites where the enterprise will have its operation. The site of
the packing/warehouse is an agricultural area and clear from any existing structures.
The only thing to be cut during the clearing are the weeds and withered fruit trees (2
rambutan trees) . The production areas are existing banana farms of farmers both
members and non-members.

P a g e 68 | 93
 5. Physical and Economic Displacement of Persons

The project site to which the infrastructure coming from the Department of
Agriculture will be established is owned by the Proponent Group through donation from
the chairman of the coop himself, Mr. Luis Chua. The site will also be the garage of the
hauling trucks. The cooperative will established a modest garage facilities coming from
the coop’s fund to properly safekeep the equipments. The site is not inhabited by any
household nor any person occupying space in the lot for personal usage. Houses
around the area are in a safe distance from the facilities to ensure that residents outside
the perimeter area will not be affected of any environmental impacts that will cause
any dislocation and relocation of settlements. Thus, the issue on resettlement and
possible displacements are not applicable.

The establishment of such facility is an opportunity for employment and

additional income especially during harvest/peak season. They can be employed as
temporary laborer or packer.

On the production area of 85

hectares of banana plantation, the
area is an existing banana farm area
majority being tended personally by
the owner and some hires a
maintainer to oversee. Anent this,
there is no loss of livelihood nor
sources of livelihood of the farmer
and even add up to the income of the
maintainer.

The presence of traders in

the area will also be minimized since
the farmer member can sell their
harvest to the coop who will be
capacitated with the intervention of
PRDP through provision of additional trading capital. Added to this is the stable buying
rate of the coop compared to the traders and strikers. The forward trucks from PRDP
will pick-up their produce going to the warehouse. Even in this case, these traders will
not lost their livelihood since they can still trade other agri- products or other banana
variety such as cardava which is also abundant in the entire province.

Therefore, there will be no displacement or loss of revenue for the

abovementioned group of people.

Grievance Redress Mechanism

P a g e 69 | 93
 This mechanism is a vital part of the project purposely to solicit feedback and
complaints on project activities and performance. Through an Executive Order no.
Series015 of 2015 signed by the City Local Chief Executive last May 18, 2015, the
procedure is legal, complete and effected for the CLGU as their counterpart for MFPC.
The composition of the Committee are the various component heads /focal person of
the Economic Development Team and Enterprise Development Team of the LGU headed
by the CPMIU, Engr. Divina Fuentes . This is intended to gather and resolve project
related issues and concerns raised during the project implementation for ensuring
quality performance in all stages.

Households or groups of households wishing to provide feedback and/or

complain about the effects of PRDP activities on their property, production system,
economic well-being, spiritual life, environmental quality, or any other assets of their
lives shall make their complaint using the standard complaint form provided by the
GPPs. The Grievance Investigation and Resolution process is outlined below:

a. Step 1: Feedback/Complaint Form will be accomplished by beneficiaries, affected

persons (APs), households (AHs) or groups of households and sent to the GPP of the
relevant body (PSOs, RPCOs or LGUs).

b. Step 2: Feedbacks and complaints will be recorded in the registry. In cases of

complaints, the GPP will assess the validity of the grievance. If evaluated as valid, within
10 days from the date the complaint is received, the relevant CLGU’s GPP will organize
meetings with the relevant agencies/PG to discuss how to resolve the matter. All
meetings will be recorded and copies of the minutes of meetings will be provided to
beneficiaries or APs/AHs.

c. Step 3: The relevant LGU Governor/Mayor’s Office shall take such mitigation
measures as agreed in meetings from step 2 within 10 days, or some other period
acceptable to the parties referred to in step 2.

d. Step 4: When the complaint is resolved, the Complaint Form shall be signed by
complainant/head of household, the relevant CLGU Mayor’s Office and annotated at
each stage of process by the relevant LGU with copies to be sent to the concerned RPCO.

e. Step 5: If no understanding or amicable solution is reached, or if no decision or

mitigation measure is received from the relevant CLGU Mayor’s Office within 15 days
after the registration of complaint, the APs/ AHs can appeal to the relevant RPCO GPP.
The concerned RPCO will decide and take mitigation measures within one month of
receiving the appeal.

f. Step 6: When the complaint is resolved, the Complaint Form shall be signed by
complainant/head of household, the relevant CLGU, the RPCO, and annotated at each
stage of process by the GPP of the PSO.

g. Step 7: If no understanding or amicable solution is reached, or if no response is

received from the relevant RPCO within 15 days after the registration of complaint, the
APs/ AHs can appeal to the PSO GPP. The PSO will provide a decision and take
mitigation measures within one month of receiving the appeal.
P a g e 70 | 93
h. Step 8: When the complaint is resolved, the Complaint Form shall be signed by
complainant/ head of household, the relevant LGU, the PSO and annotated at each stage
of process by the GPP of the NPCO.

i. Step 9: If no understanding or amicable solution is reached, or if no response is

received from the relevant PSO within 15 days after the registration of complaint, the
APs/ AHs can appeal to the NPCO GPP. The NPCO will provide a decision and take
mitigation measures within one month of receiving the appeal.

j. Step 10: When the complaint is resolved, the Complaint Form shall be signed by
complainant/ head of household, the relevant LGU, and the NPCO with copies to be sent
to WB.

k. Step 11: If the AP/AH is still not satisfied with the decision of the PSO in the absence
of any response within the stipulated time, the AP/AH as a last resort may submit
his/her case to the court, in which decision is final.

Further, MFPC have long been effected this mechanism embodied in their By-
laws, Art. V- Section 7 Mediation and Conciliation Committee. It has actually appointed
3 members of the Mediation and Conciliation Committee purposely to settle all conflicts
involving cooperative members in the organization’s operation related issues and
concerns.

B. Environmental Assessment

1. Environmental Safeguard Assessment

The observation and application of RA10587 or the Law on Environmental

Planning of 2013, also known as urban and regional planning, city planning, town and
country planning, and/or human settlements planning, that refers to the multi-
disciplinary art and science of analyzing, specifying, clarifying, harmonizing, managing
and regulating the use and development of land and water resources in relation to their
environs, for the development of sustainable communities and ecosystems is being
adopted and implemented by the clgu.

It is along this juncture that the subproject is being anchored to give importance
to the observation of the said law.

2. Natural Habitat

Production Area

Majority of the production area or farmlands are located in Barangays Mu-an and
Manonggol where most of the members of the cooperative also resides. Some areas are
scattered in other adjacent barangays within the municipality also. Cropping season in
the first year of operation will start nine to ten (9-10) months after planting using tissue
cultured seedlings. The second cropping (for the follower banana)will be 6-7 months

P a g e 71 | 93
after harvest of the first cropping . Time for the second harvest is short compare to the
first cropping because it will no longer plant a tissue cultured seedlings but instead rely
on the second generation of the plant. The so called “follower” plant of the banana can
be utilized during the succeeding croppings as long as it bears and produces good
bananas. This way the farmers can save from the planting material expensive which is
costly.

Protected areas were also observed to be far from the project sites, thus, no
encroachment within the declared protected areas will be made and no presence of
wildlife especially endangered species within the vicinity of the project will be affected.

Facility

The site of which the additional facility will be constructed do not encroach on
natural habitat or forest lands and other ecosystems that are home to endangered and
other important species of flora and fauna. The building provided by the Department of
Agriculture will be use as warehouse and packing house of the banana.

The 85 hectares production areas are already existing. Majority of the areas
are being rented by the farmer members from private individuals. The target additional
areas in the succeeding years will involved interested farmers from the cooperative
aimed to increase the area of production and involved more of its members within the
municipality and the neighboring municipalities.

3. Physical Cultural Resources

As presented in the geo-tagged pictures of the location of the facilities of the

project, there are no physical cultural resources on the site that would be affected by the
project, thus, there would be no adverse impacts on the existing resources.

On the other hand, the existing production areas planted with banana do not
pose threat nor harm to the existing landscape since these are the same areas planted
of the same crop and so as with the foreseen expansion areas.

In the event that there are occurrences of chance finds during the subproject
implementation, the PRDP procedures on how to handle these incidents will be
adopted.

4. Hazards and Risk Assessment

In terms of erosion potential, the soil is generally compact in the project site and
production site . Based on the landside susceptibility map of the Province and of the
municipality, the project falls under the moderately susceptible condition. Thus this is a
clear indication that production areas are not hazardous or threat to environment and
any negative impact that may arise from such subproject.
P a g e 72 | 93
 On the other hand, infrastructure support for the facilities, drainage is integrated
within the project site as water catch basin is included in the program of works.
Likewise, there is no occurrence of flooding as the site is elevated .

Several major potential impacts are being undertaken in the Environmental and
Social Management Plan though in this subproject there are no major issues as to the
environment and socio-cultural implications that will adversely affect the surroundings
and the people near the project. Since the area is classified as agriculture zone,
residential houses are very minimal and outlaying in the production site.

During the operation of the project, it will also ensure provision of Personal
Protective Equipments especially for its harvesters/packing crew/driver/helper/farm
technicians. They will be provided and obliged to wear protective mask, long sleeve
shirts to protect them from the heat of the sun and gloves and boots to protect their feet
from being wet all the time especially during the washing/cleaning and packing process.

Furthermore, future expansion of production areas will surely not encroach on

forest lands and reservation areas or on watersheds and ancestral domains following
the rules and regulations set for social and environmental preservation as well as in
accordance with the Comprehensive Land Use Plan of the municipality.

5. Terrain, Soil Type and Rainfall

Kidapawan City lies at the foot of the majestic Mt. Apo with the highest elevation
in Brgy. Ilomavis at 5,000 meters above sea level (MASL.).Brgy. Ilomavis is a home to
the tribal community of Manobo. The hilly to mountainous part are planted with high
valued crops and are productive. Eco-tourism is also alive and contributing to the city’s
income because of hot and cold springs from the volcano. It has a first class water
source from springs in Mt. Apo. Blessed with the abundance of fertile soil and a climate
suited for all types of plants, banana found a perfect place. The place has never
experienced typhoon because it is being protected by the mountain ranges
surrounding it. The risk of production losses due to calamity is minimal.

Majority of the soil type present in the areas planted with banana in Kidapawan
City are classified into Clay Loam category. This type of soil has a good texture with
medium to high presence of organic matter that is suited for agricultural purposes.

6. Status of Environmental Clearances

Though there is no significant impact for the environment regarding this

subproject still the processing of the ECC/CNC is being done at the Environmental
Management Bureau (EMB) of the Department of Environment and Natural Resources
(DENR) for compliance. The Proponent Group have already processed the Certificate of
Non-Coverage (CNC) with the EMB Bureau of the Department of Environment and
Natural Resources (DENR) last November 6, 2017. Copy of CNC Application Payment is
being attached to Volume IV –Attachments.
P a g e 73 | 93
VII. FINANCIAL PLAN

Table 34.Sources of Funds

Total Enterprise Cost

Fund Source Cost
Amount
Sharing
60
Loan Proceeds (LP) ₱ 4,452,360.00
%
20 81
Government of the Philippines (GOP) 1,484,120.00
% %
20
Provincial Local Government Unit (PLGU) 1,484,120.00
%
Subtotal ₱ 7,420,600.00 100%
Proponent Group (PG) Equity 1,700,000.00 19%
Total Project Cost ₱ 9,120,600.00 119%

Table 35. Capital Requirement

FUND SOURCES
Qty/
Components / Line Items Capacity Unit Unit Cost Total Cost LP GOP PLGU Proponent Group
Has
60% 20% 20% Cash In  Kind
Part I: ACQUISITION OF EQUIPMENT
Hauling Truck, four wheel drive 6 tonner 1 unit ₱ 2,405,000.00 ₱ 2,405,000.00 ₱ 1,443,000.00 ₱ 481,000.00 ₱ 481,000.00
Hauling Truck, rear wheel drive 6 tonner 1 unit ₱ 2,022,800.00 ₱ 2,022,800.00 ₱ 1,213,680.00 ₱ 404,560.00 ₱ 404,560.00
Delivery Truck, use in Manila 4 tonner 1 unit ₱ 1,892,800.00 ₱ 1,892,800.00 ₱ 1,135,680.00 ₱ 378,560.00 ₱ 378,560.00
Total Support for Equipment ₱ 6,320,600.00 ₱ 3,792,360.00 ₱ 1,264,120.00 ₱ 1,264,120.00 ₱ - ₱ -
Part II: Facilities/Processing Site
Land ₱ 1,500,000.00 ₱ 1,500,000.00
Total Support for Facilities/Processing Site ₱ 1,500,000.00 ₱ - ₱ - ₱ - ₱ - ₱ 1,500,000.00
Part III: Production Support
Plastic Crates ₱ 100,000.00 ₱ 60,000.00 ₱ 20,000.00 ₱ 20,000.00 ₱ 200,000.00
Total Support for Production ₱ 100,000.00 ₱ 60,000.00 ₱ 20,000.00 ₱ 20,000.00 ₱ 200,000.00 ₱ -
Part IV: Working Capital
Trading Capital ₱ 1,000,000.00 ₱ 1,000,000.00 ₱ 600,000.00 ₱ 200,000.00 ₱ 200,000.00
Total Trading Capital & Admin Cost ₱ 1,000,000.00 ₱ 600,000.00 ₱ 200,000.00 ₱ 200,000.00 ₱ - ₱ -

Enterprise Cost ₱ 8,920,600.00 ₱ 4,452,360.00 ₱ 1,484,120.00 ₱ 1,484,120.00 ₱ 200,000.00 ₱ 1,500,000.00

Grand Total ₱ 8,920,600.00 ₱ 4,452,360.00 ₱ 1,484,120.00 ₱ 1,484,120.00 ₱ 200,000.00 ₱ 1,500,000.00

P a g e 74 | 93
Table 36.Financial Projections

The existing farm area is 85 hectares with existing hills ready for harvest at the start of 1st year.
Expansion of farm area per year is 15 hectares every year starting the 2nd year.
For 1 hectare of farm area, 1,890 hills is planted with 20% mortality rate, and so, growth of 1,512 hills is expected.
For 1 tree, the expected average harvest is 20 kg.
In 1 hectare of farm area, a total expected harvest would be 30,240 kg or 30.24 MT (1,512 hills x 20 kg).
It takes 1 year from planting of hills to harvest, and subsequently, it takes 6 months for a follower from growth to harvest.
Harvest is classified into 4 groups: class A (60% of harvest), class B (30%), class C (7%), and reject (3%).
Buying price for each class based on farm gate price are: P20.00 for class A and B, and P10.00 for class C.
Expected spoilage and reject is 20% every delivery.
Inflation rate is 3.1%.
The useful life of the 3 trucks is 10 years and its residual value is 10% of the cost of the trucks.
Harvests are packed in cartons and crates and are allocated by the ff.:
in cartons - demand of Rustans, Shopwisw and Wellcome
in crates - Divisoria outlet, Cebu and Boracay
Sales is based on the annual demand of the institutional buyers as shown in Supply and Demand Tables.
Annual demand is expected to increase by 3% each year based on PSA, FIES 2012.
Deliveries are brought to Manila by ship or air, and are allocated by the ff.:
by air (used for emergencies, 20% of volume to Rustans) 20% demand volume of Rustans,
Shopwise and Wellcome
by ship the rest of deliveries

Table 37. Salaries and Wages Schedule

P a g e 75 | 93
Salaries and Wages
No. Monthly Yearly Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Honorarium 300,000.00 3,600,000.00 3,600,000.00 3,711,600.00 3,826,659.60 3,945,286.05 4,067,589.92 4,193,685.20 4,323,689.44 4,457,723.82 4,595,913.25 4,738,386.57

Technician 1 6,490.00 77,880.00 77,880.00 80,294.28 82,783.40 85,349.69 87,995.53 90,723.39 93,535.81 96,435.43 99,424.92 102,507.10
Admin Staff 5 6,490.00 77,880.00 389,400.00 401,471.40 413,917.01 426,748.44 439,977.64 453,616.95 467,679.07 482,177.13 497,124.62 512,535.48
Warehouseman 1 6,490.00 77,880.00 77,880.00 80,294.28 82,783.40 85,349.69 87,995.53 90,723.39 93,535.81 96,435.43 99,424.92 102,507.10
Driver 3 8,000.00 96,000.00 288,000.00 296,928.00 306,132.77 315,622.88 325,407.19 335,494.82 345,895.16 356,617.91 367,673.06 379,070.93
Helper 3 7,000.00 84,000.00 252,000.00 259,812.00 267,866.17 276,170.02 284,731.29 293,557.96 302,658.26 312,040.67 321,713.93 331,687.06
Total Salaries and Wages 1,085,160.00 1,118,799.96 1,153,482.76 1,189,240.72 1,226,107.19 1,264,116.51 1,303,304.12 1,343,706.55 1,385,361.45 1,428,307.66

SSS Benefits
No. Monthly Yearly Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Technician 1 478.80 5,745.60 5,745.60 5,745.60 5,745.60 5,745.60 5,745.60 5,745.60 5,745.60 5,745.60 5,745.60 5,745.60
Admin Staff 5 478.80 5,745.60 28,728.00 28,728.00 28,728.00 28,728.00 28,728.00 28,728.00 28,728.00 28,728.00 28,728.00 28,728.00
Warehouseman 1 478.80 5,745.60 5,745.60 5,745.60 5,745.60 5,745.60 5,745.60 5,745.60 5,745.60 5,745.60 5,745.60 5,745.60
Driver 3 589.30 7,071.60 21,214.80 21,214.80 21,214.80 21,214.80 21,214.80 21,214.80 21,214.80 21,214.80 21,214.80 21,214.80
Helper 3 515.70 6,188.40 18,565.20 18,565.20 18,565.20 18,565.20 18,565.20 18,565.20 18,565.20 18,565.20 18,565.20 18,565.20
Total SSS Benefits 79,999.20 79,999.20 79,999.20 79,999.20 79,999.20 79,999.20 79,999.20 79,999.20 79,999.20 79,999.20

PhilHealth Benefits
No. Monthly Yearly Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Technician 1 100.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00
Admin Staff 5 100.00 1,200.00 6,000.00 6,000.00 6,000.00 6,000.00 6,000.00 6,000.00 6,000.00 6,000.00 6,000.00 6,000.00
Warehouseman 1 100.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00
Driver 3 125.00 1,500.00 4,500.00 4,500.00 4,500.00 4,500.00 4,500.00 4,500.00 4,500.00 4,500.00 4,500.00 4,500.00
Helper 3 100.00 1,200.00 3,600.00 3,600.00 3,600.00 3,600.00 3,600.00 3,600.00 3,600.00 3,600.00 3,600.00 3,600.00
Total PhilHealth Benefits 16,500.00 16,500.00 16,500.00 16,500.00 16,500.00 16,500.00 16,500.00 16,500.00 16,500.00 16,500.00

P a g e 76 | 93
 No. Monthly Yearly Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
1 100.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00
5 100.00 1,200.00 6,000.00 6,000.00 6,000.00 6,000.00 6,000.00 6,000.00 6,000.00 6,000.00 6,000.00 6,000.00
1 100.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00
3 100.00 1,200.00 3,600.00 3,600.00 3,600.00 3,600.00 3,600.00 3,600.00 3,600.00 3,600.00 3,600.00 3,600.00
3 100.00 1,200.00 3,600.00 3,600.00 3,600.00 3,600.00 3,600.00 3,600.00 3,600.00 3,600.00 3,600.00 3,600.00
15,600.00 15,600.00 15,600.00 15,600.00 15,600.00 15,600.00 15,600.00 15,600.00 15,600.00 15,600.00

No. Yearly Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
1 6,490.00 6,490.00 6,691.19 6,898.62 7,112.47 7,332.96 7,560.28 7,794.65 8,036.29 8,285.41 8,542.26
5 6,490.00 32,450.00 33,455.95 34,493.08 35,562.37 36,664.80 37,801.41 38,973.26 40,181.43 41,427.05 42,711.29
1 6,490.00 6,490.00 6,691.19 6,898.62 7,112.47 7,332.96 7,560.28 7,794.65 8,036.29 8,285.41 8,542.26
3 8,000.00 24,000.00 24,744.00 25,511.06 26,301.91 27,117.27 27,957.90 28,824.60 29,718.16 30,639.42 31,589.24
3 7,000.00 21,000.00 21,651.00 22,322.18 23,014.17 23,727.61 24,463.16 25,221.52 26,003.39 26,809.49 27,640.59
90,430.00 93,233.33 96,123.56 99,103.39 102,175.60 105,343.04 108,608.68 111,975.55 115,446.79 119,025.64

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
1,085,160.00 1,118,799.96 1,153,482.76 1,189,240.72 1,226,107.19 1,264,116.51 1,303,304.12 1,343,706.55 1,385,361.45 1,428,307.66
3,600,000.00 3,711,600.00 3,826,659.60 3,945,286.05 4,067,589.92 4,193,685.20 4,323,689.44 4,457,723.82 4,595,913.25 4,738,386.57
112,099.20 112,099.20 112,099.20 112,099.20 112,099.20 112,099.20 112,099.20 112,099.20 112,099.20 112,099.20
90,430.00 93,233.33 96,123.56 99,103.39 102,175.60 105,343.04 108,608.68 111,975.55 115,446.79 119,025.64
4,887,689.20 5,035,732.49 5,188,365.12 5,345,729.37 5,507,971.90 5,675,243.95 5,847,701.44 6,025,505.11 6,208,820.69 6,397,819.06

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Table 38. Projected Income Statement

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Sales - Class A and B 139,779,517.25 169,544,332.10 201,020,237.35 247,438,326.54 299,867,839.25 355,143,670.88 413,381,595.68 474,701,191.93 539,225,927.00 607,083,241.49
Sales - Class C 8,732,505.60 10,592,015.62 12,558,423.32 14,636,569.36 16,831,491.82 19,148,433.73 21,592,850.98 24,170,420.45 26,887,048.49 29,748,879.70
Sales - Spoilage/Reject 14,985,753.30 18,176,837.24 21,551,367.07 25,117,649.81 28,884,331.22 32,860,408.82 37,055,245.38 41,478,582.96 46,140,557.37 51,051,713.28
Total Sales 163,497,776.15 198,313,184.95 235,130,027.74 287,192,545.72 345,583,662.30 407,152,513.43 472,029,692.03 540,350,195.34 612,253,532.86 687,883,834.48

Beginning Inventory - - - - - - - - - -
Purchases - Class A and B 92,534,400.00 112,238,784.00 133,075,914.25 155,097,085.10 178,355,682.60 202,907,264.83 228,809,645.36 256,122,979.60 284,909,854.49 315,235,381.44
Purchases - Class C 3,598,560.00 4,364,841.60 5,175,174.44 6,031,553.31 6,936,054.32 7,890,838.08 8,898,152.88 9,960,338.10 11,079,827.67 12,259,153.72
Total Goods Available for Sale 96,132,960.00 116,603,625.60 138,251,088.69 161,128,638.41 185,291,736.92 210,798,102.91 237,707,798.24 266,083,317.69 295,989,682.17 327,494,535.16
Less: Ending Inventory - - - - - - - - - -
Less: Unsold Spoilage/Reject
Class A and B 4,626,720.00 5,443,200.00 6,259,680.00 7,076,160.00 7,892,640.00 8,709,120.00 9,525,600.00 10,342,080.00 11,158,560.00 11,975,040.00
Class C 179,928.00 211,680.00 243,432.00 275,184.00 306,936.00 338,688.00 370,440.00 402,192.00 433,944.00 465,696.00
Cost of Banana Lakatan 91,326,312.00 110,948,745.60 131,747,976.69 153,777,294.41 177,092,160.92 201,750,294.91 227,811,758.24 255,339,045.69 284,397,178.17 315,053,799.16
Other Variable Cost
Packing Costs 11,384,747.00 13,808,991.30 16,372,670.29 19,082,026.94 21,943,552.73 24,964,234.51 28,151,029.13 31,511,498.59 35,053,264.02 38,784,246.85
Shipping Costs 34,148,710.73 41,420,377.37 49,110,070.43 57,236,719.47 65,820,025.98 74,880,493.00 84,439,455.94 94,519,114.42 105,142,565.41 116,333,837.50
Rent Expenses 19,946,304.00 24,193,693.44 28,685,252.63 33,432,038.34 38,445,558.25 43,737,788.20 49,321,190.22 55,208,731.16 61,413,901.97 67,950,737.78
Total Cost of Sales 156,806,073.73 190,371,807.71 225,915,970.04 263,528,079.17 303,301,297.88 345,332,810.62 389,723,433.53 436,578,389.87 486,006,909.57 538,122,621.29

Gross Profit 6,691,702.42 7,941,377.24 9,214,057.70 23,664,466.55 42,282,364.42 61,819,702.80 82,306,258.50 103,771,805.47 126,246,623.30 149,761,213.18
Fixed Operating Costs
Fuel Expenses 312,043.20 321,716.54 331,689.75 341,972.13 352,573.27 363,503.04 374,771.64 386,389.56 398,367.63 410,717.03
Repairs and Maintenance 114,000.00 117,534.00 121,177.55 124,934.06 171,742.69 177,066.71 182,555.78 188,215.01 242,562.09 250,081.51
Total Fixed Operating Costs 426,043.20 439,250.54 452,867.31 466,906.19 524,315.96 540,569.75 557,327.41 574,604.56 640,929.72 660,798.54

Operating Income 6,265,659.22 7,502,126.70 8,761,190.39 23,197,560.35 41,758,048.46 61,279,133.05 81,748,931.09 103,197,200.91 125,605,693.58 149,100,414.64

Selling and Administrative Expenses

Salaries and Wages 1,085,160.00 1,118,799.96 1,153,482.76 1,189,240.72 1,226,107.19 1,264,116.51 1,303,304.12 1,343,706.55 1,385,361.45 1,428,307.66
Honorarium 3,600,000.00 3,711,600.00 3,826,659.60 3,945,286.05 4,067,589.92 4,193,685.20 4,323,689.44 4,457,723.82 4,595,913.25 4,738,386.57
Employee Premiums and Benefits 112,099.20 112,099.20 112,099.20 112,099.20 112,099.20 112,099.20 112,099.20 112,099.20 112,099.20 112,099.20
13th Month Pay 90,430.00 93,233.33 96,123.56 99,103.39 102,175.60 105,343.04 108,608.68 111,975.55 115,446.79 119,025.64
Insurance Expense 20,000.00 20,620.00 21,259.22 21,918.26 22,597.72 23,298.25 24,020.50 24,765.13 25,532.85 26,324.37
Permits and Licenses 10,000.00 10,310.00 10,629.61 10,959.13 11,298.86 11,649.13 12,010.25 12,382.57 12,766.43 13,162.18
Total Selling and Administrative Expenses 4,917,689.20 5,066,662.49 5,220,253.95 5,378,606.75 5,541,868.48 5,710,191.33 5,883,732.19 6,062,652.81 6,247,119.97 6,437,305.62

Depreciation Expense 505,080.00 505,080.00 505,080.00 505,080.00 693,206.03 693,206.03 693,206.03 693,206.03 905,767.02 905,767.02

Net Income 842,890.02 1,930,384.21 3,035,856.44 17,313,873.61 35,522,973.95 54,875,735.69 75,171,992.87 96,441,342.06 118,452,806.58 141,757,342.00

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Table 39. Cash Flow

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Beginning Cash Balance - 2,158,677.98 - 5,378,093.77 - 8,340,269.33 2,127,340.27 28,053,654.99 74,574,788.72 140,543,947.62 226,934,223.72 332,338,504.57

Cash Inflow:

Investing Activities:
LP 660,000.00
GOP 220,000.00
LGU 220,000.00
Proponent Group 200,000.00
Total Investing Cash Inflow 1,300,000.00 - - - - - - - - -

Operating Activities:
Income from Sales of Class A and B 139,779,517.25 169,544,332.10 201,020,237.35 247,438,326.54 299,867,839.25 355,143,670.88 413,381,595.68 474,701,191.93 539,225,927.00 607,083,241.49
Income from Sales of Class C 8,732,505.60 10,592,015.62 12,558,423.32 14,636,569.36 16,831,491.82 19,148,433.73 21,592,850.98 24,170,420.45 26,887,048.49 29,748,879.70
Income from Sales of Spoilage/Reject 14,985,753.30 18,176,837.24 21,551,367.07 25,117,649.81 28,884,331.22 32,860,408.82 37,055,245.38 41,478,582.96 46,140,557.37 51,051,713.28
Total Operating Cash Inflow 163,497,776.15 198,313,184.95 235,130,027.74 287,192,545.72 345,583,662.30 407,152,513.43 472,029,692.03 540,350,195.34 612,253,532.86 687,883,834.48

Total Cash Inflow 164,797,776.15 198,313,184.95 235,130,027.74 287,192,545.72 345,583,662.30 407,152,513.43 472,029,692.03 540,350,195.34 612,253,532.86 687,883,834.48

Cash Outflow:

Investing Activities:
Purchase of Assets - - - - 2,090,289.26 - - - 2,361,788.76 -
Total Investing Cash Outflow - - - - 2,090,289.26 - - - 2,361,788.76 -

P a g e 79 | 93
Operating Activities:
Purchases - Class A and B 92,534,400.00 112,238,784.00 133,075,914.25 155,097,085.10 178,355,682.60 202,907,264.83 228,809,645.36 256,122,979.60 284,909,854.49 315,235,381.44
Purchases - Class C 3,598,560.00 4,364,841.60 5,175,174.44 6,031,553.31 6,936,054.32 7,890,838.08 8,898,152.88 9,960,338.10 11,079,827.67 12,259,153.72
Packing Costs 11,384,747.00 13,808,991.30 16,372,670.29 19,082,026.94 21,943,552.73 24,964,234.51 28,151,029.13 31,511,498.59 35,053,264.02 38,784,246.85
Shipping Costs 34,148,710.73 41,420,377.37 49,110,070.43 57,236,719.47 65,820,025.98 74,880,493.00 84,439,455.94 94,519,114.42 105,142,565.41 116,333,837.50
Rent Expenses 19,946,304.00 24,193,693.44 28,685,252.63 33,432,038.34 38,445,558.25 43,737,788.20 49,321,190.22 55,208,731.16 61,413,901.97 67,950,737.78
Fuel Expenses 312,043.20 321,716.54 331,689.75 341,972.13 352,573.27 363,503.04 374,771.64 386,389.56 398,367.63 410,717.03
Repairs and Maintenance 114,000.00 117,534.00 121,177.55 124,934.06 171,742.69 177,066.71 182,555.78 188,215.01 242,562.09 250,081.51
Salaries and Wages 1,085,160.00 1,118,799.96 1,153,482.76 1,189,240.72 1,226,107.19 1,264,116.51 1,303,304.12 1,343,706.55 1,385,361.45 1,428,307.66
Honorarium 3,600,000.00 3,711,600.00 3,826,659.60 3,945,286.05 4,067,589.92 4,193,685.20 4,323,689.44 4,457,723.82 4,595,913.25 4,738,386.57
Employee Premiums and Benefits 112,099.20 112,099.20 112,099.20 112,099.20 112,099.20 112,099.20 112,099.20 112,099.20 112,099.20 112,099.20
13th Month Pay 90,430.00 93,233.33 96,123.56 99,103.39 102,175.60 105,343.04 108,608.68 111,975.55 115,446.79 119,025.64
Insurance Expense 20,000.00 20,620.00 21,259.22 21,918.26 22,597.72 23,298.25 24,020.50 24,765.13 25,532.85 26,324.37
Permits and Licenses 10,000.00 10,310.00 10,629.61 10,959.13 11,298.86 11,649.13 12,010.25 12,382.57 12,766.43 13,162.18
Total Operating Cash Outflow 166,956,454.13 201,532,600.74 238,092,203.30 276,724,936.11 317,567,058.32 360,631,379.70 406,060,533.13 453,959,919.24 504,487,463.26 557,661,461.45

Total Cash Outflow 166,956,454.13 201,532,600.74 238,092,203.30 276,724,936.11 319,657,347.58 360,631,379.70 406,060,533.13 453,959,919.24 506,849,252.02 557,661,461.45

Total Net Cash Flow - 2,158,677.98 - 3,219,415.79 - 2,962,175.56 10,467,609.61 25,926,314.72 46,521,133.72 65,969,158.90 86,390,276.10 105,404,280.85 130,222,373.03

Ending Cash Balance - 2,158,677.98 - 5,378,093.77 - 8,340,269.33 2,127,340.27 28,053,654.99 74,574,788.72 140,543,947.62 226,934,223.72 332,338,504.57 462,560,877.59

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Table 40. Balance Sheet

Pre-Operation Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Assets
Current Assets
Cash 7,620,600.00 - 2,158,677.98 - 5,378,093.77 - 8,340,269.33 2,127,340.27 28,053,654.99 74,574,788.72 140,543,947.62 226,934,223.72 332,338,504.57 462,560,877.59
Total Current Assets 7,620,600.00 - 2,158,677.98 - 5,378,093.77 - 8,340,269.33 2,127,340.27 28,053,654.99 74,574,788.72 140,543,947.62 226,934,223.72 332,338,504.57 462,560,877.59

Fixed Assets
Land 1,500,000.00 1,500,000.00 1,500,000.00 1,500,000.00 1,500,000.00 1,500,000.00 1,500,000.00 1,500,000.00 1,500,000.00 1,500,000.00 1,500,000.00
Hauling Truck (6T), four wheel drive - 2,405,000.00 2,405,000.00 2,405,000.00 2,405,000.00 4,495,289.26 4,495,289.26 4,495,289.26 4,495,289.26 6,857,078.02 6,857,078.02
Hauling Truck (6T), rear wheel drive - 2,022,800.00 2,022,800.00 2,022,800.00 2,022,800.00 2,022,800.00 2,022,800.00 2,022,800.00 2,022,800.00 2,022,800.00 2,022,800.00
Delivery Truck (4T), use in Manila - 1,892,800.00 1,892,800.00 1,892,800.00 1,892,800.00 1,892,800.00 1,892,800.00 1,892,800.00 1,892,800.00 1,892,800.00 1,892,800.00

Less: Accumulated Depreciation - 505,080.00 1,010,160.00 1,515,240.00 2,020,320.00 2,713,526.03 3,406,732.07 4,099,938.10 4,793,144.13 5,698,911.16 6,604,678.18

Total Fixed Assets 1,500,000.00 7,315,520.00 6,810,440.00 6,305,360.00 5,800,280.00 7,197,363.23 6,504,157.19 5,810,951.16 5,117,745.13 6,573,766.86 5,667,999.84

Total Assets 9,120,600.00 5,156,842.02 1,432,346.23 - 2,034,909.33 7,927,620.27 35,251,018.22 81,078,945.91 146,354,898.78 232,051,968.84 338,912,271.43 468,228,877.43

Liabilities and Equity

Owner's Equity
Beg. Balance - 8,920,600.00 4,956,842.02 1,232,346.23 - 2,234,909.33 7,727,620.27 35,051,018.22 80,878,945.91 146,154,898.78 231,851,968.84 338,712,271.43
Initial Investment 8,920,600.00

Net Income - 842,890.02 1,930,384.21 3,035,856.44 17,313,873.61 35,522,973.95 54,875,735.69 75,171,992.87 96,441,342.06 118,452,806.58 141,757,342.00
Loss from Spoilage & Reject 4,806,648.00 5,654,880.00 6,503,112.00 7,351,344.00 8,199,576.00 9,047,808.00 9,896,040.00 10,744,272.00 11,592,504.00 12,440,736.00
End. Balance 8,920,600.00 4,956,842.02 1,232,346.23 - 2,234,909.33 7,727,620.27 35,051,018.22 80,878,945.91 146,154,898.78 231,851,968.84 338,712,271.43 468,028,877.43

Total Equity 8,920,600.00 4,956,842.02 1,232,346.23 - 2,234,909.33 7,727,620.27 35,051,018.22 80,878,945.91 146,154,898.78 231,851,968.84 338,712,271.43 468,028,877.43

Total Liabilities and Equity 8,920,600.00 4,956,842.02 1,232,346.23 - 2,234,909.33 7,727,620.27 35,051,018.22 80,878,945.91 146,154,898.78 231,851,968.84 338,712,271.43 468,028,877.43

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 The Balance Sheet shows a summary of assets, liabilities and owner’s equity of
the proposed project. It is a measurement of the financial position of the proposed
business endeavor. To ascertain the financial position of the proposed enterprise,
several financial indicators are used. The most common indicators are the net worth,
liquidity and solvency.

The Net worth is the difference between the assets and liabilities of the proposed
project. A positive net worth indicates that assets are higher than liabilities. On the
other hand, Liquidity is the ratio of current assets over current liabilities with an ideal
ratio of 2.0 and above. Liquidity shows the capacity of the business to settle short-term
financial obligations as they fall due. On the other hand, solvency can be computed
using the debt-asset ratio and debt to net worth ratio. For a business to be considered
solvent, it should have an ideal ratio of less than 1. Solvency spells out the capacity of
the business to have a long-term financial sustainability and can withstand financial
setbacks.

Since the proposed enterprise does not have any liabilities, it can therefore, be
considered as liquid and solvent at the same time.

Financial Indicators

An investment analysis is done to determine the profitability of a certain

business enterprise considering the time value of money. A certain rate of interest is
being factored in the formula which is based on the current lending rate in the financial
system. It is done to enable the investor to decide whether or not to invest in a certain
business. One method used is the Net Present Value (NPV). The NPV shows the present
values of the proposed business enterprise’s future stream of incomes. Another method
is the Internal Rate of Return (IRR). The IRR is the actual rate of return of the proposed
business undertaking,

The result of an investment analysis shows an NPV of P 178,106,494.63. By

concept, a business will be considered as profitable if the NPV is positive and more than
its investment cost. This is satisfied by the NPV value which P178,106,494.63 for the
next 10 years of operation which is very much higher than the investment cost of P
9,120,600. In addition, the IRR is 86%. As a rule, IRR value should be greater than the
interest rate/lending rate. The result shows higher profitability since the IRR is 86%
which is very much higher than the interest rate of 15%. Hence, the proposed
enterprise is very profitable.

In addition, the payback period is also used to gauge how long the investment
will be recovered. It is measured in the number of years. Based on the result, the
proposed enterprise will be able to recover the investment in 2 years and 7 days/in
2.44 years and

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 an ROI (Return of Investment ) at 618.74%. This is a good indication since the investment can be recovered in a very short
period of time. As a rule, investments with shorter payback periods are more attractive to investors.

Table 41. Payback Period

Payback Period
Total Capital
8,920,600.00
Investment

Years Net Cashflow Cummulative Total

0
1 ₱ (2,158,677.98) ₱ (2,158,677.98)
2 ₱ (3,219,415.79) ₱ (5,378,093.77)
3 ₱ (2,962,175.56) ₱ (8,340,269.33)
4 ₱ 10,467,609.61 ₱ 2,127,340.27
5 ₱ 25,926,314.72 ₱ 28,053,654.99
6 ₱ 46,521,133.72 ₱ 74,574,788.72
7 ₱ 65,969,158.90 ₱ 140,543,947.62
8 ₱ 86,390,276.10 ₱ 226,934,223.72
9 ₱ 105,404,280.85 ₱ 332,338,504.57
10 ₱ 130,222,373.03 ₱ 462,560,877.59
TOTAL PROJECT COST ₱ 8,920,600.00
PAYBACK (2.44)
PERIOD 2 Years, and 18 Days

Payback period
Y1 Year Number before you break-even / number of years
before you rech break-even year
X1 Cummulative total at year before you breakeven
X2 net income at break-even year
Payback period Y1+(total capital-X1)/X2 MONTHS DAYS
(2.44) 0.05 0.60
0.60 18.00

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P a g e 84 | 93
Table 42. Break Even Analysis

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Sensitivity Analysis

Sensitivity analysis is a method used in determining the effect of a certain dependent variable if there are changes in values of
independent variables. In this subproject, this tool is used to measure the effects on the Net Present Value, Internal Rate of Return,
Benefit-Cost Ratio and Return on Investment if there will be increases and decreases in both the revenues and costs associated with the
consolidation, processing and marketing of coco nuts. Based on the results, the proposed subproject will still be earning profits even if
there are possible decreases in revenues and increases in costs for the next 10 years of its operation.

Table 43.Sensitivity Analysis

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Capital Investment
PHP 8,920,600.00

BASE CASE
Investment Cost
YEAR Revenue Net Cash Flow
and Operating Cost
Year 0 ₱ 8,920,600.00 ₱ (8,920,600.00)
Year 1 ₱ 163,497,776.15 ₱ 162,149,806.13 ₱ 1,347,970.02
Year 2 ₱ 198,313,184.95 ₱ 195,877,720.74 ₱ 2,435,464.21
Year 3 ₱ 235,130,027.74 ₱ 231,589,091.30 ₱ 3,540,936.44
Year 4 ₱ 287,192,545.72 ₱ 269,373,592.11 ₱ 17,818,953.61
Year 5 ₱ 345,583,662.30 ₱ 309,367,482.32 ₱ 36,216,179.98
Year 6 ₱ 407,152,513.43 ₱ 351,583,571.70 ₱ 55,568,941.72
Year 7 ₱ 472,029,692.03 ₱ 396,164,493.13 ₱ 75,865,198.90
Year 8 ₱ 540,350,195.34 ₱ 443,215,647.24 ₱ 97,134,548.10
Year 9 ₱ 612,253,532.86 ₱ 492,894,959.26 ₱ 119,358,573.60
Year 10 ₱ 687,883,834.48 ₱ 545,220,725.45 ₱ 142,663,109.03
FNPV ₱ 178,106,494.63
FIRR 86%
BCR 1.12
ROI 618.74%

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Recording System

The Books of Accounts are to be recorded separately from the Books of other
business operation of the cooperative. All pertinent financial transactions to the project
will be recorded by the Bookkeeper manually in accordance to Management’s rules and
regulations and in pursuance to the Philippine Financial Reporting Standards (PFRS).
This includes implementing and maintaining control relevant to the preparation of
financial statements that are free from material misstatement, whether due to fraud or
error, selecting and applying appropriate accounting policies and making accounting
estimates that are reasonable in the circumstances.

Transactions will be recorded on a historical cost basis and are presented in

Philippine Pesos, which is the Project’s functional currency. All values represent
absolute amounts unless otherwise indicated. Financial Statements will be prepared on
a going concern basis, which contemplate the realization of assets and settlement of
liabilities in the normal course of business.

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P a g e 89 | 93
VIII. ECONOMIC IMPACT

Table 44. Farmers Income

Farmers' Income Year

1 2 3 4 5 6 7 8 9 10
Class A and B
No. of Harvest per Hectare (kg) 60,480.00 60,480.00 60,480.00 60,480.00 60,480.00 60,480.00 60,480.00 60,480.00 60,480.00 60,480.00
Multiplied by: Percentage of Class A and B 0.90 0.90 0.90 0.90 0.90 0.90 0.90 0.90 0.90 0.90
No. of Class A and B Harvest per Hectare (kg) 54,432.00 54,432.00 54,432.00 54,432.00 54,432.00 54,432.00 54,432.00 54,432.00 54,432.00 54,432.00
Buying Price for Class A and B 20.00 20.60 21.22 21.85 22.51 23.19 23.88 24.60 25.34 26.10
Income for Class A and B per Hectare 1,088,640.00 1,121,299.20 1,154,938.18 1,189,586.32 1,225,273.91 1,262,032.13 1,299,893.09 1,338,889.88 1,379,056.58 1,420,428.28

Class C
No. of Harvest per Hectare (kg) 60,480.00 60,480.00 60,480.00 60,480.00 60,480.00 60,480.00 60,480.00 60,480.00 60,480.00 60,480.00
Multiplied by: Percentage of Class C 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07
No. of Class C Harvest per Hectare (kg) 4,233.60 4,233.60 4,233.60 4,233.60 4,233.60 4,233.60 4,233.60 4,233.60 4,233.60 4,233.60
Buying Price for Class C 10.00 10.30 10.61 10.93 11.26 11.59 11.94 12.30 12.67 13.05
Income for Class C per Hectare 42,336.00 43,606.08 44,914.26 46,261.69 47,649.54 49,079.03 50,551.40 52,067.94 53,629.98 55,238.88

Reject
No. of Harvest per Hectare (kg) 60,480.00 60,480.00 60,480.00 60,480.00 60,480.00 60,480.00 60,480.00 60,480.00 60,480.00 60,480.00
Multiplied by: Percentage of Class C 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03
No. of Class C Harvest per Hectare (kg) 1,814.40 1,814.40 1,814.40 1,814.40 1,814.40 1,814.40 1,814.40 1,814.40 1,814.40 1,814.40
Buying Price for Class C 5.00 5.16 5.31 5.48 5.65 5.82 6.01 6.19 6.38 6.58
Income for Class C per Hectare 9,072.00 9,353.23 9,643.18 9,942.12 10,250.33 10,568.09 10,895.70 11,233.46 11,581.70 11,940.73

Incentives (.50 per kilo) 29,332.80 29,332.80 29,332.80 29,332.80 29,332.80 29,332.80 29,332.80 29,332.80 29,332.80 29,332.80

Total Income per Hectare 1,169,380.80 1,203,591.31 1,238,828.42 1,275,122.93 1,312,506.58 1,351,012.04 1,390,672.99 1,431,524.09 1,473,601.06 1,516,940.69

Production Cost per Hectare:

Production Cost for 1st Harvest - 466,459.45 480,919.70 495,828.21 511,198.88 527,046.05 543,384.47 560,229.39 577,596.50 595,502.00
Hectares for 1st Harvest - 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00
Production Cost for Follower 517,692.00 533,740.45 550,286.41 567,345.28 584,932.99 603,065.91 621,760.95 641,035.54 660,907.65 681,395.78
Hectares for Follower 85.00 85.00 100.00 115.00 130.00 145.00 160.00 175.00 190.00 205.00
Total Hectares for Production 85.00 100.00 115.00 130.00 145.00 160.00 175.00 190.00 205.00 220.00

Average Production Cost per Hectare 517,692.00 523,648.30 541,238.57 559,093.31 577,305.32 595,939.05 615,042.97 634,656.11 654,811.71 675,539.39

Net Income per Hectare per year 651,688.80 679,943.01 697,589.85 716,029.62 735,201.26 755,072.99 775,630.02 796,867.98 818,789.35 841,401.30
Net Income per Hectare per cycle 325,844.40 339,971.50 348,794.92 358,014.81 367,600.63 377,536.50 387,815.01 398,433.99 409,394.68 420,700.65

P a g e 90 | 93
 Mua-an exists in the trading, and lending business for quite sometime. This
successful venture would not be possible without the mind and heart of competent
people managing it.

With the coming of PRDP interventions , the workforce of the cooperative will
increase to manage the transactions,, funds and recording of the enterprise separate
from that of the existing transactions of the cooperative. This is to ensure that PRDP
funds and equipments will be used for its purpose. Important personnel needed in the
enterprise shall receive an honorarium depending on the jobs they shall be assigned.
More importantly, a marketing officer shall be given a higher honorarium compared to
other personnel since he/she shall focus entirely on the operation of the enterprise. The
table below shows a number of jobs being generated with the entry of PRDP
intervention

IX. SUSTAINABILITY MECHANISM

MFPC is looking at keeping the enterprise for the next ten (10) years and
growing at an average of thirty percent (30%) per year. This will ensure that the
vehicles will be fully utilized properly and efficiently during its useful life. It also need
to have a retainer mechanic to do regular checking of the vehicles and make sure its in
good running condition.

Sustainability mechanism is installed to guarantee the continuity of the project in

achieving its goals of economic upliftment the banana farmers in the municipality. Aside
from the regular conduct of general membership meeting, where the whole operation is
reported, the cooperative will also submit a copy of its project financial operation to the
LGU and the regional office of the DA/PRDP.

Secondly, the functionalities of the structure given by the Department of Agriculture

from its regular funding will be utilized by MFPC to conduct its trading operations.
Repairs and maintenance of the said structure will be borne by the cooperative.

MFPC is looking at keeping the enterprise for the next ten (10) years and growing at an
average of thirty percent (30%) per year. This will ensure that the vehicles will be fully
utilized during its useful life. The BOD of MFPC has to come up with a policy on how to
utilize the income generated from the trucking activities. It must also create a separate
to oversee the operation of the trucking business. This must be headed by in
individual/member who is knowledgeable or has a background in trucking business.

On the marketing side, due to production surplus on the 4 th year, the PG is looking at
going into the export market preferably China and Russia where there is huge market
waiting for our bananas.

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 Technical Support

Table 4: Enterprise Technical Support

Agency Nature of Technical Estimated Source of Timeline

assistance Cost Funding
DA Capacity 50,000 DA PRDP 2nd Quarter 2018
Enhancement
DTI/DA- Training on Product 25,000 DA-ATI/DTI 2nd Quarter 2018
ATI Promotions
DA XII Pest Control 30,000 DA/PLGU 1st Quarter 2018
Management OPAG
DTI/DA- Training on Product 10,000 DTI/DA-AMAD 3rd Quarter
ATI Enhancement and 2018
Entrepreneurship
DA XII Financial Mgt. & 25,000 DA-PRDP 2nd Quarter
Simple Bookeeping 2018
DA XII Participation to 100,000 DA XII/MFP On invitation
Congress and Trade (Usually 2-4
Expos times a year)
TOTAL 250,000

As exemplified in Table 46 several trainings and capability buildings are being in

stored for the project beneficiaries. Amount being seen are the possible expenses
amounting to Php250,000.00 for the mentioned trainings with funding coming from the
DA, PLGU, DTI and LGU. This is to show the partnership and collaboration with other
funding agencies comprising the project implementers that signify their strong support
for the project. Technological transfer is ensured in this system to further capacitate
the rice farmers in keeping pace with good agricultural practices.

Furthermore, it would also be emphasized in the varied trainings and technical

assistance that would strengthen this practice to the farmer/adopter and to sustain
their interest in the production.

On Capability Enhancement, the need for such trainings ranging from the value
formation to operational and financial management until its handling of post harvest
facilities notwithstanding its cultural management would prove to be detrimental to the
maturity of the beneficiaries with regards to the enterprise. It would surely open
windows for them and make them see the nature of the project as well as the
responsibility that they will have for the enterprise. It would also make them realize the
importance of managing the project and their wholehearted support for the endeavor.

P a g e 92 | 93
 Future Innovations
MFPC will ensure that all production areas after 2 years will be GAP certified
and will strive to look into the possibility of exporting the product in China and Russia
where there is a huge demand for Lacatan Banana with the assistance of the Marketing
Division of the Department of Agriculture.

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