Download - Jatropha Curcas Farming - Proposal to Investors

8/3/2019 Jatropha Curcas Farming - Proposal to Investors

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EXECUTIVE SUMMARY

The beneficiaries of this project are the POOR UPLAND FARMERS andMARGINALIZED FISHERMEN in the Province of Palawan,

Philippines, who subsist on slash and burn farming and some are engagedon illegal fishing just so their families would survive.

PROJECT TITLE : Jatropha Curcas Diversified Farming

LOCATION : Province of Palawan, Philippines

AREA COVERED : 1,000 hectares

PROJECT COST : USD $1.7 Million

BENEFICIARIES : Upland Farmers and Marginalized Fishermen

PROPONENT : Federation of Upland Farmers Cooperatives

I - RATIONALE : Thepoor, which comprise majority of the population,

becomes a burden to society because of inequity ofopportunities to improve their quality of life.

This project proposal aims to help the poor by giving themopportunity to develop their potentials and utilize theresources in their communities to make themproductive and contributeto the development of the country.

II - VISION: Empowered people happily harnessing and protecting thenatural resources of their communities for livelihood, and in the processgrow economically, intellectually and physically healthy to become truly freefrom social bondage.


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III - OBJECTIVES : Jatropha farming, particularly in the upland areas will:

1. Provide sustainablelivelihood to upland farmers and marginalized fishermen toimprove their quality of life; and empower them by providing opportunities togrow economically, intellectually and physically healthy to become truly free

from social bondage.

2. Stop environmental destruction (caused by slash and burn farming) andenhance and protect the natural resources from further degradation.

3. Provide alternative, renewable and clean source of energy to minimizedependence from oil importation.

4. Entice Investors to undertake Jatropha Farming as a profitable business while atthe same time care for the environment and help in slowing down global

warming.

IV - STRATEGY:

In a nutshell, our strategy is to empower the poor by providing them opportunity todevelop their potentials and utilize the resources of their communities to make themproductive and responsible citizens, and become instrument of progress.

Many ventures involving the poor were unsuccessful because investors failed toempower them; instead, they used the poor as tools for their business rather than asequal partners for development.

The initial capital provided for farm in-puts and other needs of the family will serveto inspire and actualize their dreams and aspirations, and will energize productivity.This will be reinforced with continuous trainings on farming technology, literacy,health care, family life and moral recovery program for the total development of ahuman person: physical, emotional, intellectual and spiritual well-being; healthy inmind, body and spirit, with economic freedom these are indispensible elements forsuccess and empowerment.

As partners, and with the financial assistance given to them, the poor are expected towork diligently because they own their farms and are not merely laborers; the degreeof their economic growth is in their hands - the driving force that assures success!


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V FINANCIAL ANALYSIS:

A. Production and Revenue - one hectare of jatropha farm (on the 5th year) canproduce 5,000 - 7,500 kgs of seeds, based on the average of world jatropha

production. For this proposal, an average of 6,000 kgs will be used. One metricton of good quality seeds can produce 350-400 liters ( 350 ltrs for thisproposal) of biofuel, plus other by-products. The estimated economic benefitsfrom one metric ton of jatropha seeds, from biofuel would be about USD$388.50 at an estimated price of $1.11/liter. Plus (35%) from other by-products= $135.98. The total economic benefit from one metric ton of Jatropha seeds isUSD $524.48 or USD $3,146.85 per hectare.

Applying the computation above, the gross revenue, expenses and grossincome for one ton ofJatropha seeds is simplified in the matrix below:

REVENUE COMNPUTATION OF ONE TON OF JATROPHA SEEDSOIL REVENUE $388.50

BY-PRODUCTS $135.98

GROSS REVENUE $524.48

PAYMENT TO FARMERS $155.55

EXPENSES FOR OIL EXTRACTION $32.00

SHARE OF PROPONENT: 20% of the Gross Revenue for operation exp starting the 3rdyear

$104.90

GROSS INCOME $232.03

One ton of jatropha seeds has a gross income of$232.03; for one hectare ofjatropha farm with 6 tons of yield, gross income would be USD $1,392.18; for1,000 hectares = USD $1,392,180.00.

PRODUCTION AND REVENUE PROJECTION FOR 1,000 HECTARES TO THE 5TH YEAR

YEARPROD'TN PROD/TONS OIL PRODUCTION BY-PRODUCTS GROSS

PER HEC 1,000 HECS 35% OIL @ 1.11/LTR 35% OF OIL REVN REVENUE

1st 0.4 400 140 $155,400.00 $54,390.00 $209,790.00

2nd 1.5 1,500 525 $582,750.00 $203,962.50 $786,712.50

3rd 3.0 3,000 1,050 $1,165,500.00 $407,925.00 $1,573,425.00

4th 5.0 5,000 1,750 $1,942,500.00 $679,875.00 $2,622,375.00

5th 6.0 6,000 2,100 $2,331,000.00 $815,850.00 $3,146,850.00


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REVENUE, EXPENSES AND INCOME PROJECTIONS - 1,000 HECTARES 1st to 5th year

YEARGROSS FARMERS OPN EXP XTRACT EXP GROSS TAX NET

REVENUE $155.55/TON 20% OF GR $.0354/kgs INCOME SAY 30% INCOME

1st $209,790.00 $62,220.00 $41,958.00 $14,160.00 $91,452.00 $27,435.60 $64,016.40

2nd $786,712.50 $233,325.00 $157,342.50 $53,100.00 $342,945.00 $102,883.50 $240,061.50

3rd $1,573,425.00 $466,650.00 $314,685.00 $106,200.00 $685,890.00 $205,767.00 $480,123.00

4th $2,622,375.00 $777,750.00 $524,475.00 $177,000.00 $1,143,150.00 $342,945.00 $800,205.00

5th $3,146,850.00 $933,300.00 $629,370.00 $212,400.00 $1,371,780.00 $411,534.00 $960,246.00

PAYBACK PERIOD for each 1,000-hectare module

Payback period is achieved on the 4

th

year coming from income and loanrepayments.

Total funding = $1.7 Million; Total payback on the 5th year = $1,717,905.90.

YEARGROSS TAX NET FARMS' LOAN AMORTIZATION TOTAL PAYBACK

REVENUE SAY 30% INCOME PRINCIPAL AMORTIZATION BALANCE TO INVESTORS

1st $91,452.00 $27,435.60 $64,016.40 $445,000.00 $0.00 $445,000.00 $64,016.40

2nd $342,945.00 $102,883.50 $240,061.50 $445,000.00 $44,500.00 $400,500.00 $304,077.90

3rd $685,890.00 $205,767.00 $480,123.00 $445,000.00 $89,000.00 $311,500.00 $828,700.90

4th $1,143,150.00 $342,945.00 $800,205.00 $445,000.00 $133,500.00 $178,000.00 $1,717,905.90

5th $1,371,780.00 $411,534.00 $960,246.00 $445,000.00 $178,000.00 $0.00 $2,811,651.90

6TH $1,371,780.00 $411,534.00 $960,246.00 $445,000.00 $0.00 $0.00 $3,949,897.90

We have this beautiful idea we have our lands and we can provide labor butwe lack the funds for farm inputs to start the project. The loan financing that theInvestors would provide can change the lives of thousands of poor people, and

provide the Investors profitable business as shown in this project proposal.


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A. - SUMMARY: BUDGETARY REQUIREMENT - see details in the main proposal

PARTICULARS/DESCRIPTION AMOUNT

First Year Operation

1. Capital Outlays $185,000.00

2. Maintenance and Operating Expenses $51,000.00

3. Personnel Expenses (Management Staff) $43,200.00

4. Farm Expenses $485,000.00

TOTAL FARM AND MANAGEMENT EXPENSES FOR 1,000 HECTARES $764,200.00

PROCESSING PLANT FOR OIL EXTRACTION - NOT INCLUDED

Second Year Operation






TOTAL BUDGET FOR 2 YEARS OPERATION $1,528,400.00

PLUS 5% OVERHEAD EXPENSES $152,840.00

TOTAL BUDGET FOR 2 YEARS OPERATION FOR 2,000 HECTARES $1,681,240.00

S A Y - - - - - - - - - - - - - - $1,700,000.00

NOTE:1. Project Management is simplified: all activities relating to seed production

are the responsibility of the Proponent: All expenses for maintenance and

operating expenses, personnel salaries, including training expenses and stipendsof Coop Officerswho will be monitoring and supervising the actual works in thefields, shall be the responsibility of the Proponent, charge to 20% share fromgross revenue beginning on the 3rd year.

2. All activities relating to oil extraction and processing are the responsibility ofthe Investor.

FEDERATION OF UPLAND FARMERS COOPERATIVESPuerto Princesa City, Philippines


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PROJECT PROPOSAL

JATROPHA CURCAS FARMING FOR SUSTAINABLE LIVELIHOOD,RENEWABLE AND CLEAN SOURCE OF ENERGY

AND ENVIRONMENTAL PROTECTION

I - BACKGROUND:

Upland farmers have been practicing slash and burn farming orkaingin in many of the public lands/forest in the Philippines and in other thirdworld countries. This practice of farming to make a living is so destructive; fireconsumes everything trees, plants, and even animals and even more, becauseas Mother Nature rejuvenates the upland farmers return after a year, again tocut the trees and burn so they can plant.

This project of Jatropha farming will solve this problem, as it willprovide livelihood and reforest the denuded mountainside destroyed bykaingin. In Palawan, large areas in the mountainside have been subjected tokaingin and are ideal for jatropha farming.

The province of Palawan has a land area of l,489,655 hectares; brushlands andgrasslands account for 337,129 hectares*. These areas are upland usually at thefoot of the tropical forest, subjected to kaingin, and could be made available

for jatropha farming. These upland farmers have land titles, others havetenural instruments and stewardship contracts (3 to 5 hectares each), that givethem the right to develop their respective areas productively. Agriculturalareas accounts for 205,405 hectares, a portion of which may also be used for

jatropha farming. * land cover PCSD (PTFPP report map on land cover)

The rural barangays (villages) can easily make available more than 200,000hectares for jatropha farming. If the lowland areas are included, these can easilydouble the available area since many of these areas are also underdeveloped.These villages have upland farmers who have been organized into aCooperative for the first module of this project as pilot area.


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II - RATIONALE: Thepoor, that comprises majority of the population, becomesa burden to society because of inequity of opportunities toimprove their quality of life.

This project proposal aims to help the poor by giving themopportunity to developtheirpotentialsandutilizethe resourcesin their communities to make them productive and contribute to thedevelopment of the country.

III - VISION: Empowered people happily harnessing and protecting thenatural resources of their communities for livelihood, and in the process

grow economically, intellectually and physically healthy to become truly freefrom social bondage.

IV - OBJECTIVES: Jatropha farming, particularly in the upland areas will:

4.1. Provide sustainable livelihood to upland farmers and marginalizedfishermen to improve their quality of life; and empower them by providingopportunities to grow economically, intellectually and physically healthy to

become truly free from social bondage.

4.2. Stop environmental destruction (caused by slash and burn farming) andenhance and protect the natural resources from further degradation.

4.3. Provide alternative, renewable and clean source of energy to minimizedependence from oil importation.

4.4. Entice Investors to undertake Jatropha Farming as a profitable businesswhile at the same time care for the environment and help in slowing downglobal warming.


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V - STRATEGY:

In a nutshell, our strategy is to empower the poor by providing themopportunity to develop their potentials and utilize the resources of their

communities to make them productive and responsible citizens, and becomeinstrument of progress.

Many ventures involving the poor were unsuccessful because investors failedto empower them; instead, they used the poor as tools for their businessrather than as equal partners for development.

The initial capital provided for farm in-puts and other needs of the familywill serve to inspire and actualize their dreams and aspirations, and willenergize productivity.

The financial in-puts will be reinforced with continuous trainings on farmingtechnology, literacy, health care, family life and moral recovery program forthe total development of a human person: physical, emotional, intellectualand spiritual well-being; healthy in mind, body and spirit, with economicfreedom.

Continuous training and learning, hard work and dedication, family andsocial responsibility, are indispensible elements for success and

empowerment.

As partners, and with the financial assistance given to them, the poor areexpected to work diligently because they own their farms and are not merelylaborers; the degree of their economic growth is in their hands - the drivingforce that assures success!

VI PROJECT DESCRIPTION: - establishment of Jatropha CurcasFarming, with intercropping of food crops, particularly in the upland toreforest the areas, to provide sustainable livelihood to the poor upland farmers;protect and enhance the environment; and provide alternative, renewable andclean source of energy for the country.


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6.1. Pilot Project Area The proposed Pilot Project area (1,000 hectares)will be located in the southern municipality of Espaniola. This PilotProject Area will serve as seed farm and demonstration farm toeducate the farmers the right technology and method in cultivation andproduction. This will be the model and the first module to be replicated in

other municipalities.

6.2. Jatropha Farming On the first year of operation, each family-beneficiary of this Project with at least 3 working members, shall plantat least 3,000 jatropha trees (equivalent to about 2 hectares); on thesecond year, another 1,500 trees ( 1 hec) will be planted making a totalof 4,500 trees (or about 3 hecs). Since the proposed areas are sloping andhave irregular contours, it is impossible to adopt a 2 x 3 meters interval;the number of jatropha planted will be the basis instead of hectares.

Similarly, on the succeeding years the same scheme may be followed untilthe Farmers increase their coverage to the level of their effective capacity.For purposes of this study, each family (with 3 working members) shallplant a minimum of 3 hectares or 4,500 trees.

This would be the scenario for every Project Area in each village,undertaken by the Cooperative. In essence, one Project Area can operateindependently, so it would be easier to manage and identify problemsaffecting a certain area.

6.3. Diversified farming with inter-cropping of food crops to complement,and rationalize farm and soil management, while increasing income ofthe farmers. Food and cash crops intercropped between rows of jatrophasuch as: mongo beans, peanuts, watermelons, etc.

6.4. Research Efforts ( lifted from: www.wikipedia.com )Research on jatropha farming worldwide, show the viability of jatrophafarming in the tropical countries, and considering that the Philippines has

similar features with these countries, it is assumed that this project proposalis considerably accurate. India has so far the largest area of Jatrophafarming and has very ambitious program of planting 11million hectares as its national mission. Many countriesworldwide are now embarking on jatropha farming as a new


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source of biofuel. Global energy supply is currently mainly based on fossilfuels, which have many disadvantages.

Study of the Department of Agriculture in its Cagayan de Oro project, putsjatropha seed production between 2-3 kgs per plant or an average of

6,000 kgs per hectare. On the other hand, actual investigation of wildjatropha growing in Palawan, the plant yields more than 3 kgs per tree/year,confirming the study of the Dept of Agriculture in Mindanao.

a. Analysis: Jatropha Farming versus Upland Rice ProductionStudy of upland rain fed rice farming in Palawan, placed the produceto approximately 40 to 60 cavans per hectare or an average of 50cavans (one cavan is about 50 kilos of unmilled rice), or 2500 kgs perhectare.

If milled, this will translate to 1,500 kgs rice (60% returns), at P30 perkg = P45,000, plus other benefits (rice grits, etc), say another P1,500,or a total of P46,500 per hectare. Rice production is tedious andneeds to be done yearly; while in jatropha farming, the major work isdone on the first year, and only minimum work from 2nd year onwards.

Jatropha farming would give the farmers an average income ofP42,000 per hectare, plus about the same amount from intercroppingwith approximately P84,000 per hectare with less work from thesecond year onwards.

6.5. Jatropha Curcas and its ApplicationsThe Jatropha Curcas plant (local name, tuba-tuba) is easy to establishand can adapt to a wide range of climates; it can grow almost on any typeof soil whether gravelly, sandy or saline and thrives even on the pooreststony soils and rock crevices and drought resistant. It is a wonder crop forwastelands under rain-fed condition and requires very little management.

It generally does not face problems from pests and diseases.

Recommended planting rates of Jatropha Curcas are 2,500 plants perhectare (2.5 acres) at 2m x 2m spacing. It is easily propagated by seeds orcuttings. After the first year, it needs minimal caring: weeding, pruning,fertilizer application and little cultivation. It can live up to 40-50 years.

n


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The plant comes to yield in ten months, generates adequate yield by thethird year, and reaches maximum yield by the fifth year onwards. It givesan economic yield for 30 years. Farmers can therefore go in for Jatrophafarming, replacing the existing rice and other crops.

Jatropha seeds contain about 35% of non-edible oil and 65% seed cake orbiomass. Jatropha oil isenvironmentallysafe, cost-effective, renewablesource of non-conventional energy and a substitute for diesel fuel andoils.

The diagram below shows the uses of jatropha seeds.

JATROPHA PLANT/FARM

RAW SEEDS

OIL EXPELLING FACILITY

SEEDCAKEOIL

PRODUCTION OF:

BiogasFertilizer

Briquettes, etc.

CONVERSION TO:

BiodieselLubricantsVarnish, candles

Bio-glycerol forPharmaceuticalsSoap making, etc

Direct use inCoking stovesOil lamps, etc.

Another special featureof jatropha lies in itshigh level of carbonabsorption from theatmosphere reducing

pollution.


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The oil can be processed and converted into bio-fuel. The cake can also beused after detoxification as an animal feed. Another by-product, bio-glycerol,can be used for pharmaceuticals, soap making, etc. Jatropha oil is also usedfor making candles, and varnish and as lubricant, hydraulic oil etc.

References used in this paper: Tamil Nadu Agricultural University, Coimbatore, India,

www.cia.gov/cia/publications/; www.areed.org/country/tanzania/, www.jatrophaorganics.com;www.jatrophaworld.org; www.jatrophacurcasplantations.com www.wikkipedia.com;www.ecoworld.com;Prospects for Jatropha Biofuels in Developing Countries: An analysis for Tanzania with Strategic NicheManagement By: Janske van Eijck, Project Leader Biofuels, Diligent Tanzania and Henny Romijn, Eindhoven

Centre for Innovation Studies; www.hedon.info/goto.php/;www.eia.INVESTORSs.gov/;

6.6. What is Bio Diesel?The concept dates back to 1885 when Dr. Rudolf Diesel built the first dieselengine with the full intention of running it on vegetative source. He first

displayed his engine at the Paris show of 1900 and astounded everyone whenhe ran the patented engine on any hydrocarbon fuel available.

The process of converting vegetable oil into biodiesel fuel is calledTransesterification and is less complex than it sounds. Chemically, thismeans taking a triglyceride molecule, or a complex fatty acid, neutralizing thefree fatty acids, removing the glycerin, and creating an alcohol ester. Thisliquid is then mixed into the vegetable oil. After the mixture has settled,Glycerin is left on the bottom and methyl esters, or biodiesel is left on top and

is washed and filtered. The final product, Bio-Diesel fuel, when used directlyin a Diesel Engine will burn up to 75% cleaner than mineral oil Dieselfuel. from: www.jatrophabiodiesel.org

Recent environmental and economic concerns have prompted resurgence inthe use of biodiesel throughout the world. This was covered by the KyotoProtocol under the United Nations Framework Convention on ClimateChange (UNFCCC), which was adopted at the Earth Summit in Rio deJaneiro in 1992. Based on the agreement, industrialized countries committhemselves to reducing their collective emissions of six key greenhouse

gases by at least 5%. These six greenhouse gases are carbon dioxide,methane, nitrous oxide, sulfur hexafluoride, hydrofluorocarbons (HFCs) andperfluorocarbons (PFCs). Each countrys emissions target must be achievedby the period 2008-2012.


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6.7. Effects on the environment of jatropha biodiesel:The use of jatropha biodiesel reduces air pollution; it has zero sulfuremission. Tests by the United States Environment Protection Agency(USEPA) have shown that the use of biodiesel from jatropha almostcompletely eliminates lifecycle carbon dioxide (CO2) emissions. It is lessneutral in its net addition to global warming because whatever CO2 releasedin combustion is already sequestered when growing the crop. Indeed,

jatropha plantations sequestering CO2 would acquire an additional attractionas sources of CO2 emission credits that could be purchased by countriesthat are unable to reduce their CO2 emission reduction targets.

Cleaner Air: Biofuels burn more cleanly than gasoline and diesel. Using

biofuel means producing fewer emissions of carbon monoxide, particulates,and toxic chemicals that cause smog, aggravate respiratory and heart disease,and contribute to thousands of premature deaths each year.

Less Global Warming: Biofuels contain carbon that was taken out of theatmosphere by plants and trees as they grew. The Fossil fuels are addinghuge amounts of stored carbon dioxide (CO2) to the atmosphere, where ittraps the Earth's heat like a heavy blanket and causes the world to warm.Studies show that biodiesel reduces CO2 emissions to a considerable extentand in some cases almost nearly to zero

VII- PROJECT IMPLEMENTION STRATEGIES:

7.1. Project Management is simplified:7.1.1.Production is the responsibility of the Proponent all activities

relating to seed production and all expenses for maintenance andoperation, personnel salaries, including training expenses and stipends ofCoop Officerswho will be monitoring and supervising the actual works in

the fields, shall be the responsibility of the Proponent, charge to 20%share from gross revenue beginning on the 3rd year.

7.1.2.All activities relating to oil extraction and processing is theresponsibility of the Investor.


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7.2. Roles of the Proponent, Investors and the Farmers - the hereinProponent, the Investors and the Farmers, shall jointly establish a relationshipfor a successful outcome of this project:

7.2.1.Roles of the Proponent:a. Link-up with Investors for a joint venture to undertake this Project;b. Organize the upland farmers into a Cooperative to undertake

jatropha farming, using their lands and providing labor.c. Train and empower the farmers to become knowledgeable,

responsible, and inspired workers by providing training on transfer oftechnology, family life program, moral recovery and spiritualenlightenment. Healthy workers, both mind and body, are theguarantee for the success of this endeavor.

d. Implement and manage the project through the Farmers Cooperativesand shall be responsible and accountable to the Investors for thesuccess of the project.

e. Production shall be the primary responsibility of the proponent. AsManaging Partner, shall be responsible for planning, organizing,directing and evaluating all aspects of project implementation with theend in view of maximizing production.

f. Set-up Management Office and strategically located in the projectarea, an operating center, to serve as office, staff house, training center,and multi-purpose center.

g. Link up with agencies and organizations involved in biofuel andenergy ventures for a comprehensive development of this project.7.2.2.Roles of theInvestors:

a. Provide loan financing without interest to the Farmers through theCooperatives for farm in-puts and implements, and sustenance of thefarmers, to be amortized beginning on the 5th year onwards;

b. Buy all the products from the Farmers (jatropha seeds) for processingto biofuel.

c. Oil extraction and processing shall be the responsibility of theInvestor.

d. Set-up Biodiesel Processing Plant to extract and process jatropha oilto biodiesel and by-products.

e. Marketing of finished product (biofuel).


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7.2.3.Roles of the Farmers and Cooperatives:

a. The Farmers organized into Cooperatives to use their lands andprovide labor for jatropha farming.

b.The Cooperatives - under the guidance and supervision of theProponent, implement and do the actual works in the farms through itsmembers who shall do the day-to-day work in the fields.

c. The Cooperative Management Team (CMT) - (from the CoopBoard of Directors and Coop Officers) will be responsible for thesupervision of the day-to-day activities of the farmers in theirrespective areas of responsibility (AOR);

d. Set-up Multi-purpose Center at the project site to serve as OperationCenter: office, meeting area and temporary warehouse for the seeds,before transfer to the Processing Plant.

e. Attend all trainings and activities designed for the holisticdevelopment of the members: physical, social, intellectual and spiritualwell-being.

f. Members - pay all dues (loan amortization) and other fees that may berequired by the Cooperative pursuant to its mandate

g. Other responsibilities and accountabilities as may be mandated by theCooperative.

7.3. Training Program (Proponents responsibility) - this component willdevelop Farmers into well-rounded healthy individuals, ( socially, mentally,

physically and spiritually healthy) both for their benefits and for that of theproject. Pursuing economic upliftment alone, without developing themembers into well-rounded healthy individuals, will not ensure success in aCooperative undertaking. In essence, we provide food for the stomach to

touch the heart so we can inspire and educate the mind, nurture the

healthy body and purify the spirit to develop healthy and empoweredworkers for the Project. Expenses for this training shall come from portionof the operation expenses, and shall be the responsibility of the Proponent.

Ignorance deters progress! Empowered and happy workersequated with increased production.

Technology of Participation scheme (TOP) will be used to providefarmers with intellectual empowerment to ensure good production; human


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resource should first be developed through literacy and moral recoveryprogram.

7.3.1.Livelihood Training - training on jatropha farming to include allaspects of cultivation and post-production, with special emphasis on

sloping agricultural land technology (SALT). Enhancement,protection and care of environment will also be included.

Training would include, seed quality testing, establishing a healthynursery, nursery management, setting up large plantations,cultivation methods, disease diagnosis and management methods, typeof pruning, harvesting and storage, etc.

7.3.2.Literacy, Family Life and Moral Recovery Training Program -education as indispensable tool for the success and well-being of a

person. Provide basic health care, like personal hygiene, sanitation,nutrition, family planning, responsible parenting, etc. Assist themembers of the Cooperative to become members of Phil health andSocial Security System.

There is a need for a moral recovery training to ensure the success ofthe project, particularly when dealing with Cooperative. Our socialand moral fiber have so deteriorated that the psyche of the poor

has become obstacle to progress. This needs to be

addressed!

7.4. The Production Scheme and Risk Analysis Farmers to providelands for jatropha farming and do the actual tasks of planting and cultivating

jatropha until harvest and ready for processing.

7.4.1.Production scheme each working family member shall plant at least3,000 jatropha trees in the first year. Intercropping of cash crops(cassava, mongo beans, peanuts, watermelon, etc.) in between the rows of

the jatropha plantation to complement and augment the income of thefarmers.


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In the Philippines, the ideal planting starts in June when the rainy seasonbegins. Cultivation follows until harvest on the 10th month after planting,and thereafter intermittent harvesting as the seeds mature.

Production will be the primary responsibility of the Proponent

through the Cooperatives. Production is the life of this business.Beginning on the 3rd year, 20% of the gross revenue shall be theshare of the Proponent for operation expenses (management and

production expenses) so that the Investor will only concentrateon oil extraction and processing.

7.4.2.Production Risk Analysis:Production involves a number of factors that would determine thesuccess or failure of the project: people, land security, soil quality,weather, quality of planting materials, planting and cultivation, postharvest facilities, financing, project implementation and managementscheme.

People the most difficult to manage and crucial component of theproject. The Proponent (who is the organizer of the Cooperatives), withmore than 30 years of exposure in managing people would beresponsible for this aspect. People should be provided with training andbasic needs of the family for them to become productive and

empowered. This is addressed in the training program outlined inparagraph 7.3. hereof;

Land security the prospective Cooperative members who areoccupying the proposed area intended for this project have land titles ortenural instruments (3 to 5 hecs. each) that give them the right todevelop their lands productively. A 25-year agreement may be executedbetween the Investors, the Federation and the individual members of theCooperatives, and will be included in the MOA.

However, those who want to join the project, but no instruments ofownership on their cultivated lands may avail of seeds and fertilizers, aslong as they are members of the Cooperative and the latter willguarantee payment of their loans.


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Soil quality the proposed area have been used by upland farmers forrice and corn production; and judging from the outcome of their producefor several years, these areas could very well suited for jatropha farming.PCSD data (prepared by the PTFPP) indicates that the area covered by

this proposal has good soil cover.

Weather Palawan has moderate climate and seldom visited bytyphoon. Dry season usually occurs from February to May, butintermittent rain comes every now and then during this period. This kindof weather in Palawan is suited for jatropha farming.

Quality of planting materials the proposal calls for a procurement ofhigh quality yield jatropha seeds from Australia. One box containing25,000 seeds costs $845 USD, including airfreight. Bigger volume

would have lesser price proportionally. Initial procurement of highyielding seeds from Australia will be used in the Seed Farm that willeventually provide the needs for the entire project.

Post harvest facilities Multi-purpose Center to serve both as StaffHouse and as Field Office, with drying facility and temporarywarehouse of seeds before transporting to the Processing Plant.

7.5. Financing Schemeand Risk Analysis:7.5.1.Financing Scheme - Investors to provide loan financing to Farmers

through the Federation with no interest, payable on the 2rd to 5th yearof operation and on a scheme to be determined by both the Proponent andthe Investors.

Loan financing - A farmer can avail a loan equivalent to P1.00 perplant, or approximately P1,500 per month, or approximately P20,000

per hectare or USD $445 per year. For each tree planted, a farmerwill quality to loan certain amount for farm in-puts and for sustenanceof the family while working in their farms.


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7.5.2. Risk Analysis as long as there is production, there is norisk on theloan repayments of farmers, because amortization will be deducted beforepayments of seeds are made. As far as misuse of funds in the initialproject implementation, this is addressed below:

Funds Security - in order to secure the funds, measures will beadopted to include among others:

Loan releases shall be on a need basis, properly evaluated bythe Proponent and approved by the Investors and backed up byprogram of works and detailed expenses.

The Cooperative shall open a joint checking Bank accountfor this project. Signatories shall be the CooperativeManager, the Coop Treasurer and the Proponent as the

representative of the Investors.

On-line Investors approval of funds releases - Arrangementsmay be made between the Investors, the Proponent, and theBank to use internet on funds releases. Proponent recommendsfund releases thru email, and upon approval, Investors alert theBank thru email of such approval as previously arranged.

The Investors may create an external audit team that shall doactual performance and financial audit of the project.

7.6. Processing of Seeds to biodiesel and by-products the Investors shallprovide all the infrastructure. machineries and equipment for theprocessing of jatropha seeds to biodiesel and by-products.

7.7. Marketing Scheme: - Investors shall buy the seeds from the farmers foroil extraction and processing.

The Government has the mandate to buy all biodiesel produced locally. It isassumed that marketing of by-products would posed no problem since thereare several entities engaged on manufacturing that would need chemical from

jatropha by-products.


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VIII FINANCIAL ANALYSIS:

8.1. Jatropha Curcas Farming - one hectare of jatropha farm (on the 5thyear) can produce 5,000 - 7,500 kgs of seeds, based on the average of world

jatropha production. For this proposal, an average of 6,000 kgs will be used.One metric ton of good quality seeds can produce 350-400 liters ( 350 ltrs

for this proposal) of biofuel, plus other by-products. The estimatedeconomic benefits from one metric ton of jatropha seeds, from biofuelwould be about USD $388.50 at an estimated price of $1.11/liter. Plus (35%)from other by-products = $135.98. The total economic benefit from onemetric ton of Jatropha seeds is USD $524.48 or USD $3,146.85 per hectare.

Applying the computation above, the gross revenue, expenses and grossincome for one ton ofJatropha seeds is simplified in the matrix below.

REVENUE COMNPUTATION OF ONE TON OF JATROPHA SEEDSOIL REVENUE $388.50

BY-PRODUCTS $135.98

GROSS REVENUE $524.48

PAYMENT TO FARMERS $155.55

EXPENSES FOR OIL EXTRACTION $32.00

SHARE OF PROPONENT: 20% of the Gross Revenue for operation exp startingthe 3rd year

$104.90

GROSS INCOME $232.03

One ton of jatropha seeds has a gross income of$232.03; for one hectare ofjatropha farm with 6 tons of yield, gross income would be USD $1,392.18; for1,000 hectares = USD $1,392,180.00.

PRODUCTION AND REVENUE PROJECTION FOR 1,000 HECTARES TO THE 5TH YEAR

YEARPROD'TN PROD/TONS OIL PRODUCTION BY-PRODUCTS GROSS

PER HEC 1,000 HECS 35% OIL @ $1.11/LTR 35% OF OIL REVN REVENUE

1st 0.4 400 140 $155,400.00 $54,390.00 $209,790.00

2nd 1.5 1,500 525 $582,750.00 $203,962.50 $786,712.503rd 3.0 3,000 1,050 $1,165,500.00 $407,925.00 $1,573,425.00

4th 5.0 5,000 1,750 $1,942,500.00 $679,875.00 $2,622,375.00

5th 6.0 6,000 2,100 $2,331,000.00 $815,850.00 $3,146,850.00


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REVENUE, EXPENSES AND INCOME PROJECTION FROM 1ST TO THE 5TH YEAR

YEARGROSS FARMERS OPN EXP XTRACT EXP GROSS TAX NET

REVENUE $155.55/TON 20% OF GR $.0354/kgs INCOME SAY 30% INCOME

1st $209,790.00 $62,220.00 $41,958.00 $14,160.00 $91,452.00 $27,435.60 $64,016.40

2nd $786,712.50 $233,325.00 $157,342.50 $53,100.00 $342,945.00 $102,883.50 $240,061.50

3rd $1,573,425.00 $466,650.00 $314,685.00 $106,200.00 $685,890.00 $205,767.00 $480,123.00

4th $2,622,375.00 $777,750.00 $524,475.00 $177,000.00 $1,143,150.00 $342,945.00 $800,205.00

5th $3,146,850.00 $933,300.00 $629,370.00 $212,400.00 $1,371,780.00 $411,534.00 $960,246.00

PAYBACK PERIOD for each 1,000-hectare module.

Payback period is achieved on the 6th year coming from net income and loan repayments.

Total actual funding = $1.7 Million; Total payback on the 4th year = $1,717,905.90. Butconsidering that expansion will be going on each year, the succeeding areas will have noexpenses for management and for setting-up Processing Plant until the 5th year when there isa need for additional machineries to cope up with more production.

YEARGROSS TAX NET FARMS' LOAN AMORTIZATION TOTAL PAYBACK

REVENUE SAY 30% INCOME PRINCIPAL AMORTIZATION BALANCE TO INVESTORS

1st $91,452.00 $27,435.60 $64,016.40 $445,000.00 $0.00 $445,000.00 $64,016.40

2nd $342,945.00 $102,883.50 $240,061.50 $445,000.00 $44,500.00 $400,500.00 $304,077.90

3rd $685,890.00 $205,767.00 $480,123.00 $445,000.00 $89,000.00 $311,500.00 $828,700.90

4th $1,143,150.00 $342,945.00 $800,205.00 $445,000.00 $133,500.00 $178,000.00 $1,717,905.90

5th $1,371,780.00 $411,534.00 $960,246.00 $445,000.00 $178,000.00 $0.00 $2,811,651.90

NOTE:

a. All farm expenses beginning on the 3rd year will be charged to the 20% share of theProponent as the management partner, since production is his responsibility. Ineffect, Investors would only wait for the jatropha seeds at the Processing Plant withoutworrying for production.

b. Production is the life of the business and since this is the primary responsibility of theProponent as Management Partner, a 20% share from the Gross Revenue is allocatedfor this purpose.

c.

Processing Plant, machineries and equipment shall be provided by the Investors.Management of the seeds processing to biofuel shall be the Investors responsibility


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8.2. Intercropping of mongo beans, peanuts and other cashcrops

For purposes of computation, one (1) hectare, will be a 100 m by 100 m

track of land: with 2 m x 3 m interval of jatropha plants, there will be atleast 33 rows with 3 m interval between rows. The area between rowsplanted with jatropha could be used for intercropping. This about 66% or6,600 sq. m. of available space for intercropping.

Recommended crops for intercropping with Jatropha are peanuts and mongobeans because these plants will also serve as natural fertilizer and easier tocultivate with lesser expenses.

Mongo beans during flowering stage can be harrowed to serve as natural

replenishment of soil nutrients; this has been a traditional practice of goodfarmers who learned this technique from the traditional wisdom of the ages.The flowering mongo beans are known to possess nutrients that fertilize thesoil when harrowed and made to decay in the ground.

On the other hand, the budding peanut on the early stage of producing itsseeds, just like the mongo beans, also serve as natural fertilizer for the soil.

8.2.1. Peanuts - in between each row of Jatropha , there will be two rows ofpeanuts with interval of 3 plants per meter. Each row of 100 m can beplanted with 300 plants or a total of 19,200 plants in one hectare; less

10% casualty (1,920 plants), or an average of 17,280 plants per hectare.

If 4 plants can produce one kg, then 17,280 plants will have 4,320 kgs of

raw, unpeeled peanuts; and with remaining 45% weight after peeling

and drying, will have 1,944 kgs per hectare, priced at P40 per kilo =

P77,760, less 50% (P38,860)for production cost = P38,880 or $864

income per hectare.

8.2.2.Mongo beans - in between each row of Jatropha (3 m by 100 m), or 300sq. m.; 60% of the available area or 6,000 sq. m. can be planted withmongo beans. For every sq. m., 10 mongo beans can be planted (one

plant per sq ft) or 60,000 plants. If 30 plants can produce 1 kg, then

60,000 plants can produce 2,000 kgs, priced at P40 per kg = P80,000, less


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50% (P40,000) for production cost, income would be P40,000 or $888.80

per hectare.

Farmers total yearly income from Jatropha farming and intercropping is about

$1,800 per hectare.

IX FINANCIAL PLAN - for 1,000-hectare module First Year Operation

A. BUDGETARY REQUIREMENTS First Year of operation.1. Capital Outlays - for project mobilization


1. Field Ofice (office space w/ sleeping quarters) and as temporary wharehouse of seeds P3,000,000.00

2. One Cargo Truck (6 wheelers) P1,500,000.00

3. One 4 x 4 pick-up serice vehicle (toyota hi -lux or mitsubishi strada) P1,400,000.00

4. Four motor cycles (for monitoring and coordination) P320,000.00

5. Three (3) Farm Tractors P1,800,000.00

6. Office equipment (Coordinating Offi ce at the City proper and a t the Field Offi ce) P150,000.00

7. Furniture and Fixtures P100,000.00

TOTAL CAPITAL OUTLAYS P8,270,000.00

USD - 1:45 conversion $183,777.78

S A Y - - - - - - - - - - - - - - $185,000.00

2. Personnel ComponentThe Management Staff


1 - Project Manager/Proponent @ P25,000/month P300,000.00

1 - Field Operations Officer @ P18,000/month P216,000.00

1 - Admin Officer (in-charge of office) @ P18,000/month P216,000.00

1 - Financial Officer/Cashier @ P18,000/month P216,000.00

1 - Programmer/Computer Technician-Encoder @ P15,000/month P180,000.00

4 - Project Field Inspectors @ P12,000/month P576,000.00

2- Drivers @ P10,000/month P240,000.00TOTAL PERSONNEL EXPENSES P1,944,000.00

USD- CONVERSION 1:45 $43,200.00


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3. Maintenance and Operating ExpensesPARTICULARS/DESCRIPTION AMOUNT

1. Fuel and Oil (1 service vehicle = estd @ 10/ltrs/day; 1 cargo trucks= estd @ 20 ltrs/day

- fuel (320 working days a year) = 21,200 liters @ $1.11/liter, plus fuel for 4 motorcycles P1,060,000.00

- oil (change oil every 2 months: oil and oil filters) P150,000.00

2. Spare parts and tires (estimates only) P200,000.00

3. Office Supplies P100,000.00

4. Traveling Expenses P200,000.00

5. Communications Expenses: Internet and official call s P100,000.00

6. Training Expenses (plus supplies and stipend for trainors)

- Farmers training (before the start of the project - technology transfer) - 6 Coops P158,000.00

( Training team of 3 members each team/one week for every Coop = 6 weeks to fini sh)

(trainors' stipend P500/day/trainor; food & lodging of 6 trainors for 6 weeks @P500/day/person

- Continous moral recovery trainingprogram* - every weeke nd - after technology P120,000.00

transfer traini ng (for 40 weekends - stipend P500/day; meal s and lodging P500/day)

- Traini ng equipment and supplies (computer and accessories, projector, etc) P200,000.00

TOTAL MAINTENANCE AND OPERATING EXPERNSES P2,288,000.00

USD - 1:45 conversion $50,844.44

S A Y - - - - - - - - - - - - - - -- $51,000.00

4. FARM EXPENSES -PARTICULARS/DESCRIPTION AMOUNT

A. Setting-up of 10 hectares Demonstration/Seed Farm:

1. Land Preparation (clearing and digging of pits - 40 laborers/P250/day for 60 days P600,000.00

2. Planting and cultivation - 20 laborers/P250/day for 200 working days P1,000,000.00

3. Fertilizers - say P100,000 for 10 hectares P100,000.00

4. Seeds - 1 box, 25 kgs, 25,000 seeds imported from Australia ($850). P38,250.00

TOTAL EXPENSES FOR 10 HECS SEED FARM P1,738,250.00

B. Loan to farmers: - for farm implements, fertilizers, plastic bags (for seedlings), works in

the farm (clearing, digging, planting, cultivation), and some amounts for sustenance of

farmers while waiting for production - at least P20,000 per hectare ($445.00). P20,000,000.00

TOTAL FARM EXPENSES FOR 1,000 HECTARES P21,738,250.00

USD CONVERSION RATE 1:45 $483,072.22

S A Y - - - - - - - - - - - - - - - - - $485,000.00


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B. PROCESSING PLANT - CAPITAL OUTLAYS NOT INCLUDED IN THEPROPOSED BUDGET AS THIS IS INVESTORS RESPONSIBILITY


LUMP SUM; ROUGH ESTIMATES ONLY (subject to detailed pricing) $1,500,000.00

1. Land acquisition (5 hectares)2. Land clearing, ground preparation, drainage system, etc

3. Infrastructure - buildings, staff houses, wharehouses, etc

4. Generating set

5. 10 units Seed Crushing and Oil Extraction Equipment

6. 5 units Biomass pressing machines

7. 5 units Drying machines

8. Eight (8)) units 6-tonner cargo trucks to be able to transport 12,000 tons

of seeds in 180 days. 12,000 tons = 12 million kgs = 240,000 bags at

50 kgs per bag = 750 bags a day for 180 workings a year = 5 truckloads a day

for 6-tonner trucks, hauling 150 bags per trip = 5 units 6-tonners trucks needed

C. SUMMARY: BUDGETARY REQUIREMENT IN U.S. $, CONVERSION 1:45PARTICULARS/DESCRIPTION AMOUNT

First Year Operation





TOTAL FARM AND MANAGEMENT EXPENSES FOR 1,000 HECTARES $764,200.00BUDGET FOR PROCESSING PLANT FOR OIL EXTRACTION - NOT INCLUDED

Second Year Operation






TOTAL BUDGET FOR 2 YEARS OPERATION $1,528,400.00

PLUS 5% OVERHEAD EXPENSES $152,840.00

TOTAL BUDGET FOR 2 YEARS OPERATION FOR 2,000 HECTARES $1,681,240.00S A Y - - - - - - - - - - - - - - $1,700,000.00


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X- ORGANIZATIONAL STRUCTURE

PROPONENT:

Organizer, Palawan Jatropha Farmers CooperativesPuerto Princesa City, PalawanPhilippinesEmail:[email protected]

Mobile: 00639174991525See Proponents Resume on the last two pages.

COOP BOARD OF DIRECTORS(COOP MANAGEMENT TEAM)

COOPERATIVES FARMER-MEMBERS

COOPERATIVES

PROJECT MANAGEMENT

INVESTORS PROPONENT

SEED PRODUCTION(Farm Production)Mana ement Partner

SEED PROCESSING(Oil Extraction Plant)PLANT IN-CHARGE

HAULING OPNS SEED EXTRACTIONand

PROCESSING


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See satellite mapshowing PalawanIn relation to thePhilippines Location of100,000 hectaresJatropha Project

!

Palawan

Palawan

Palawan

Palawan - Courtesy of Google Earth

Proposed Project AreaSouthern Palawan


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PROPONENTS RESUME

I PERSONAL CIRCUMSTANCES:

1. Federico Nunez Virgo, Jr., Filipino, male, 63 yrs old, married with three (3) children;

all professionals.2. Address: Residing at Casa Di Bambini, 188 Wescom Rd., San Miguel, Puerto Princesa City;

Philippines. Telephone No. (006348) 434-4715; cell phone 006391749915253. Born on August 5, 1947 at Bago City, Negros Occidental, Philippines.4. Height: 165 cms; Weight: 67 kgs; medium built. .

II EDUCATIONAL AND EXTRA-CURRICULAR BACKGROUND:

1. Bachelor of Science in Commerce, major Banking and Finance.2. Earned 21 masteral units leading to MPA).3. Consistent Mathematician of the year from elementary grades to college.

III - WORK EXPERIENCES:

1. Entered government service asClerk in the Office of the Governor on August 1, 1968and resignedon March 16, 1986 because of change of political leadership in the Philippines. During that period,had served on various capacities: from a lowly clerk to action man to trouble shooter; from communityorganizing to project implementation; from supervisor to middle manager; from administrative toexecutive works; served as alter ego of the Governor of Palawan from 1981 to 1986.

2. From December 2, 1987 to September 15, 1995 employed with the Philippine Amusement andGaming Corporation (Philippine Casinos); served as Sr Branch Surveillance Officer and one of thepioneers in installing Closed Circuit Television (CCTV) as vital security measures in casinooperations.

3. From September 16, 1995 to December 15, 2000 Provincial Administrator of Palawan ran theday-to-day governmental functions of the Provincial Government; and as alter ego of the Governor,representing the later in different councils, meetings, and in various public functions.

4. Opted for early retirement at the age of 52 and went on part-time job of designing and supervisingconstruction of residential houses.

5. Consultancy works.

IV TRAININGS:

Completed more than 1000 hours of relevant trainings on various fields/courses; few worthmentioning are:

1. Public Service Excellence Program (PSEP)2. Total Quality Management (TQM);3. Supervisory Training for Effective Administrative Management (STREAM);


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4. Junior Executive Training (JET);5. Civil Security Management Course;6. Six-ways Casino Gaming and Closed Circuit Television Monitoring Course;7. First Aid and Life Saving Course;8. CMO Intelligence Course;9. Personnel Management Course;

10.Local Government Legal Education Course.

V SPECIAL SKILLS:

1. Computer Literacy and troubleshooting; systems analyst (design of functional computer programsparticularly on government operations);

2. Swimming and Life Saving Instructor;

3. Simplified Martial Arts instructor;4. Trainor and lecturer on various subjects, particularly in the field of management and security.

VI - CHARACTER REFERENCES:

1. BGen Romeo S. David (Ret), former President of Phil Amusement and Gaming Corp (PAGCOR); andformer Chairman, Clark Development Corporation; Tel. (02) 842-4296

2. Dr. Heracleo D. Lagrada, Director IV, Commission on Higher Education Cel: 09209092089

PROPONENT:

Puerto Princesa City

Palawan, Philippines

Download - Jatropha Curcas Farming - Proposal to Investors

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