Analysis of the Business model of "Manok Mabuhay": A backyard broiler contract growing project of Punla Sa Tao Foundation

Date

2010

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Reynaldo L. Tan

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Abstract

Manok Mabuhay Project is the developed business model of the Punla Sa Tao Foundation for the rural farmers. It aims for the empowerment of the people living in the rural areas to free them from poverty. This project gives them income by becoming contract growers of large chicken companies which are traditionally for commercial farmers only. The backyard contract growing scheme that is being implemented by the project is patterned closely to the scheme of Balay Mindanaw Foundations Inc., the inventor of it. Manok Mabuhay’s pilot area is Cavinti, Laguna wherein it has 13 farmers in the first cycle then expanded to 18 farmers when the 2nd cycle arrived. The target of the project is to open to new site for every start of new cycle of contract growing operations. The project is composed of four entities: Punla Sa Tao Foundation, Bounty-Agro-Ventures Inc., SIKAP BIDANI and the Cavinti farmers. In this study, the objectives are the following: 1. To present the status of broiler contract growing industry; 2. To provide comparison between Manok Mabuhay and its successful origin, Manok Mindanaw and determine its similarities and differences in terms of operations and business model; 3. To provide information on the four key participants on the business model of Manok Mabuhay in terms of their business/foundation description, function and level of significance in the business model; 4. To describe and assess the flow processes in the supply chain of the Manok Mabuhay business model specifically: flow of information, flow of inputs and products and flow of funds and also; 5. To identify the problems/constraints encountered in the supply chain and operation of the project and provide some recommendations and guidelines on improving Punla's Business Model. There are two research designs that were used on this study which are descriptive, and action-oriented research design. A total of 62.5 hours were spent by the author in actual exposures to the operation of the operation to have a firm grasp of the project. Other primary data aside from the actual exposures to the project were the actual interviews in the four entities of the project. Secondary data came from the different useful documents of the stakeholders also such as financial statements, operations manual and contracts. Data are analyzed using Problem Identification and Analysis, SWOT Analysis, Impact Assessment and Value Chain Analysis. The study provided a brief history about the contract growing industry. The first poultry contract growing operation was implemented in Taminadu, India which totally gave a boost to the industry. The top players in the contract growing industry are San Miguel Foods Inc., Vitarich Corp., and Bounty Agro-Ventures Inc. There is a positive future trend for the broiler contract growing industry because of the continuous increase in the demand for poultry products. To further be introduced with Manok Mabuhay project, the origin of the project which is the Manok Mindanaw in Ginoog, Misamis Oriental was also discussed in the study. The comparisons were based on the purpose of their establishment, on their respective business models, on the supply chain process, their major problems encountered and their current

operation and status. It can be concluded that the operation of Manok Mindanaw is more stable because of the tenure and financial capacity of Balay Mindanaw Foundations Inc. The four entities of the business model of Manok Mabuhay are Punla Sa Tao Foundation (PSTF) itself, Bounty Agro-Ventures Inc.(BAVI), Cavinti farmers and SIKAP BIDANI Development Foundation. BAVI is the chicken company who owns the contract growing operation and who provides inputs such as chicks, medicines and vaccines. They are concluded as the strongest entity of the business model because of its high bargaining power. PSTF is the one who holds the contract with BAVI and thus very responsible with the performance of farmers. This entity is the most important because it acts as a bridge to the other three entities. Cavinti farmers are the growers in the contract growing operation. They are the main benefactor for the existence of the project but they are yet the weakest entity because they do not have any bargaining power to dictate price of chickens. And lastly, SIKAP BIDANI is the microfinance institution who provides capital for the poultry houses of power and also has low involvement in the project. The flow of processes in Manok Mabuhay which are the flow of information, flow of inputs and products and flow of funds were discussed on this study. The flow of information discussed the process on how the project was created and how the information flows from BAVI to the farmers. Other things such as the corporate social responsibility and expansion plan of the project were also discussed on this part. The flow of inputs and products explained the transformation of inputs into consumable products such as Chooks- to-Go. In the flow of funds, it thoroughly discussed the grower’s fee from BAVI which then is transferred to PSTF to allocate to the farmers. The Value Chain Analysis showed that the production operation of the farmers is the part that added the highest value in the product of the contract growing arrangement which is the broiler chicken. On the other hand, the impact assessment of the project reveals that BAVI has the most benefit and farmers have the lowest one. In the identification of different problems in the project, it shows that problem concentrated on the production stage wherein the farmers are the main entity. The main problems identified in the project are poor cash inflow, logistics problem and poor community organization. These problems were found out to be the effects of some unlink relationship in the project’s business model, most importantly, the BAVI and farmers. The study recommended a new design of the business model wherein the focus will be more on the farmers. It was found out to be very beneficial to all entities in the business model because it will result to a more improved production of the farmers. Since it will result to a win-win situation to all of the entities, the sustainability of the project will then be secured.

Language

English

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993 2010 M17 M67

Document Type

Thesis

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