"Feasibility Study of Establishing an Ube (Dioscorea alata Linn.) Farm " by Kim Cyrill L. Inojales

Feasibility Study of Establishing an Ube (Dioscorea alata Linn.) Farm in Tadhana Agriventures Farm in Brgy. Sumucab, Cavinti, Laguna

Date

5-2024

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Juan Paulino S. Trespalacio, Junior

Committee Member

Dia Noelle F. Velasco, Jeanette Angeline B. Madamba, Melodee Marciana E. De Castro

Restrictions

Restricted: Not available to the general public and for consultation with the author/thesis adviser. Access is available only to those bound by the confidentiality agreement.

Abstract

Ube (Dioscorea alata) is a highly demanded staple crop on both the domestic and global markets. Despite this, purple yam production in the Philippines is dwindling, resulting in shortages. Hence, there is an opportunity to address the shortages of ube in the market. The general objective of the study entitled, "Feasibility Study of Establishing an Ube (Dioscorea alata Linn.) Farm in Tadhana Agriventures Farm in Brgy. Sumucab, Cavinti, Laguna," is to determine and assess the viability of establishing a one-hectare ube farm in Brgy. Sumucab, Cavinti, Laguna. This research is intended to guide investors or farm owners in navigating agribusiness, taking calculated risks, and making sound business decisions. With that, the study aimed to (a) present the ube farm project and its planned area of operation; (b) assess the market, operations, organizational, and financial viability of establishing an ube farm; (c) analyze the potential risks, problems, and opportunities in venturing into ube production; and (d) formulate recommendations for the identified problems.

For this feasibility study, the researcher conducted face-to-face and online semi-structured interviews and surveys with respondents to gather first-hand data. Secondary data from Cavinti LGU, San Pablo City LGU and Department of Agriculture were also utilized in the analysis. The analysis tools that were employed are descriptive analysis, target market analysis, Competitive Profile Matrix (CPM), marketing mix, comparative analysis, capital budgeting techniques, and sensitivity analysis.

The property that is going to be developed for the ube farm is located in Brgy. Sumucab, Cavinti, Laguna and is owned by A. Nocon Realty and Development Corporation. This project is in line with the company's growing interest in agribusiness.

The violet-fleshed ube will be marketed in San Pablo City, Laguna. This is due to the growing numbers of ube processors in the area. Based on the computation, the market demand for violet-fleshed ube is 22,100 kilograms per month. The estimated demand for ube is higher than then capacity of the project so the market aspect is feasible. Sett is the from of planting material that will be used since it is time and cost effective. The planting of ube will be from March to April to account for the sett preparation and dormancy of the crop. The crop will be harvested from November to December and the estimated yield per hectare is 30,078 kilograms every season. Based on the soil analysis, the soil in the site is rich in organic matter. However, there is a need to correct the soil pH level of the soul in the site using agricultural limestones because it is slightly more acidic than the requirement of the crop. The project will operate under Tadhana Agriventures, a planned business unit under ANRDC. The people who will initially manage the development of the project are Mr. Noel Nocon and Mr. Emmanuel Argosino. They will eventually hire a farm manager and a caretaker once the pre-operation activities have commenced. Most of the labor will be hired in contractual arrangements and only the farm manager and the caretaker will be the regular employees.

To assess the financial viability of this project, financial projections and sensitivity analysis were performed. Net Present Value (NPV), Internal Rate of Return (IRR), and Payback Period (PP) were the basis of the acceptability of the project. The initial investment to establish a one-hectare ube farm is valued at Php 1,172,175. There were 8 scenarios that were simulated to determine how the business will perform in varying economic conditions. Based on the result of sensitivity analysis, the project is feasible in Base Scenario, Scenario 1 (Optimistic), Scenario 7 (Intercropped with Coconut), and Scenario 8 (Increasing Production Capacity). On the other hand, the project is slightly acceptable in Scenario 2 (Most Likely) and Scenario 6 (Intercropped and Maize). The project was found to be viable when the yield is at the expected level of production and the yield was decreased by 27%. The investment can be recovered in 1.803 years at the very least and 2.871 years at most for feasible scenarios. Moreover, the project was found infeasible in Scenario 3 (Pessimistic), Scenario 4, and Scenario 5 (Intercropped with Banana). The payback periods in the infeasible scenarios range from 5.461 years to 69.338 years which is either near to the end of the project life or exceeds the project life.

Even if the project was determined to be feasible in some scenarios there are still risks and problems that could arise in the four aspects or functions of the business. Strategies, such as aligning the selling price to the prevailing market price, offering discounts, regular pest and disease scouting, communicate with LGU for the development of farm-to-market roads, fostering good relationships with the workers and the community, and penalties for delayed payments were recommended to manage the possible risks and problems.

Language

English

LC Subject

Selling--Crops, Crops--Philippines--Statistics

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993 2024 M17 I53

Document Type

Thesis

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