Alternative Profit Models: The Case of Greenbounty Farm

Date

6-2023

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Juan Paulino S. Trespalacio, Junior

Committee Member

Jeanette Angeline B. Madamba, Glenn N. Baticados, Mar B. Cruz

Abstract

Rice is one of the main staple food in the Philippines. It is also the most consumed food product among Filipinos. Also, most of the farms in the Philippines are being planted with rice and raising livestock such as pigs, chickens, cows, and goats, among others. There are many farmers where farming is their source of income. And in the Philippines, there are a lot of small-scale or backyard farmers.

GreenBounty Farm is a farm located in Brgy. Maalas-As, Rosario, Batangas. It was established in 2018 and plants rice as its only crop. Eventually, due to the low profitability of rice farming, they envisioned integrated farming production. Thus, they engaged in different types of livestock production, such as goats and cows, to be able to increase the farm’s profitability. The farm only sold milled rice at their retail store and slaughtered cows and goats. And it was seen that only goats had a good indicator of profitability. As such, tapping into different industries such as pigs, chicken, fish etc. would be able to help the farm. Thus, this study was conducted to develop and recommend different alternative profit models with different combinations of Cash-Generating Units to utilize the land of GreenBounty Farm.

The specific objectives of the study were: a) Present the business profile and historical background of the farm; b) Define the external environment of the farm; c) Assess the existing business segment and sales mix of the farm; d) Explore the different options on alternative profit models; e) Recommend a profit model on the functional areas of GreenBounty Farm. With this, data were collected through interviews with the owner, Mr Zosi Noriega and the manager, Ms. Ody Noriega. Also, financial statements were provided by the farm. Other data was collected through various sources on the internet. With this, the collected information was analyzed through external analysis and PESTLE analysis. Also, the financial statements or profit model of GreenBounty farms was analyzed through segment reporting and break-even points in sales.

With the analysis of the internal and external environment, there was a lack of planning in which Cash-Generating Units were profitable enough and lack of human personnel for production and marketing aspects, and the chosen commodities had high maintenance costs in terms of technologies, inputs, and labor. And, also, rice and cow commodities had a slow profit generation where only one cow was slaughtered per year and a low profitability for rice which led the farm to have a major problem in profitability. Thus, retaining or omitting Cash-Generating Units was the deciding factor for the farm.

Through the analysis, it was found that all the Cash-Generating Units (rice, goat, and cows) had a positive segment margin, therefore all must be retained as the Cash- Generating Units. But, to solve the profitability problem of GreenBounty Farm, additional commodities were added such as mungbean (crop rotation), cowpea (crop rotation), pig, fish, chicken, and duck. With this, 39 alternative profit models were proposed with different combinations of all of the Cash-Generating Units. The APMs were assessed through its sales, net profit, percentage increase in net profit, break-even analysis, and additional costs such as marketing and production labor. There were issues presented in the top 5 APM based on net profit. However, the Rice (1x) - Cowpea (2x) - Cow - Goat - Pig – Combination (APM 33) was chosen as the alternative profit model because of its high net profit, high percentage increase in net profit compared to the current model, and less additional Cash-Generating Units.

Language

English

LC Subject

Farm produce—Quality

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993 2023 M17 S87

Notes

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Document Type

Thesis

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