Jatropha Curcas Farming - Proposal to Investors

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<ul><li><p>8/3/2019 Jatropha Curcas Farming - Proposal to Investors</p><p> 1/30</p><p>1</p></li><li><p>8/3/2019 Jatropha Curcas Farming - Proposal to Investors</p><p> 2/30</p><p>2</p><p>EXECUTIVE SUMMARY</p><p>The beneficiaries of this project are the POOR UPLAND FARMERS andMARGINALIZED FISHERMEN in the Province of Palawan,</p><p>Philippines, who subsist on slash and burn farming and some are engagedon illegal fishing just so their families would survive.</p><p>PROJECT TITLE : Jatropha Curcas Diversified Farming</p><p>LOCATION : Province of Palawan, Philippines</p><p>AREA COVERED : 1,000 hectares</p><p>PROJECT COST : USD $1.7 Million</p><p>BENEFICIARIES : Upland Farmers and Marginalized Fishermen</p><p>PROPONENT : Federation of Upland Farmers Cooperatives</p><p>I - RATIONALE : Thepoor, which comprise majority of the population,</p><p>becomes a burden to society because of inequity ofopportunities to improve their quality of life.</p><p>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.</p><p>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.</p></li><li><p>8/3/2019 Jatropha Curcas Farming - Proposal to Investors</p><p> 3/30</p><p>3</p><p>III - OBJECTIVES : Jatropha farming, particularly in the upland areas will:</p><p>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</p><p>from social bondage.</p><p>2. Stop environmental destruction (caused by slash and burn farming) andenhance and protect the natural resources from further degradation.</p><p>3. Provide alternative, renewable and clean source of energy to minimizedependence from oil importation.</p><p>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</p><p>warming.</p><p>IV - STRATEGY:</p><p>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.</p><p>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.</p><p>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.</p><p>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!</p></li><li><p>8/3/2019 Jatropha Curcas Farming - Proposal to Investors</p><p> 4/30</p><p>4</p><p>V FINANCIAL ANALYSIS:</p><p>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</p><p>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.</p><p>Applying the computation above, the gross revenue, expenses and grossincome for one ton ofJatropha seeds is simplified in the matrix below:</p><p>REVENUE COMNPUTATION OF ONE TON OF JATROPHA SEEDSOIL REVENUE $388.50</p><p>BY-PRODUCTS $135.98</p><p>GROSS REVENUE $524.48</p><p>PAYMENT TO FARMERS $155.55</p><p>EXPENSES FOR OIL EXTRACTION $32.00</p><p>SHARE OF PROPONENT: 20% of the Gross Revenue for operation exp starting the 3rdyear</p><p>$104.90</p><p>GROSS INCOME $232.03</p><p>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.</p><p>PRODUCTION AND REVENUE PROJECTION FOR 1,000 HECTARES TO THE 5TH YEAR</p><p>YEARPROD'TN PROD/TONS OIL PRODUCTION BY-PRODUCTS GROSS</p><p>PER HEC 1,000 HECS 35% OIL @ 1.11/LTR 35% OF OIL REVN REVENUE</p><p>1st 0.4 400 140 $155,400.00 $54,390.00 $209,790.00</p><p>2nd 1.5 1,500 525 $582,750.00 $203,962.50 $786,712.50</p><p>3rd 3.0 3,000 1,050 $1,165,500.00 $407,925.00 $1,573,425.00</p><p>4th 5.0 5,000 1,750 $1,942,500.00 $679,875.00 $2,622,375.00</p><p>5th 6.0 6,000 2,100 $2,331,000.00 $815,850.00 $3,146,850.00</p></li><li><p>8/3/2019 Jatropha Curcas Farming - Proposal to Investors</p><p> 5/30</p><p>5</p><p>REVENUE, EXPENSES AND INCOME PROJECTIONS - 1,000 HECTARES 1st to 5th year</p><p>YEARGROSS FARMERS OPN EXP XTRACT EXP GROSS TAX NET</p><p>REVENUE $155.55/TON 20% OF GR $.0354/kgs INCOME SAY 30% INCOME</p><p>1st $209,790.00 $62,220.00 $41,958.00 $14,160.00 $91,452.00 $27,435.60 $64,016.40</p><p>2nd $786,712.50 $233,325.00 $157,342.50 $53,100.00 $342,945.00 $102,883.50 $240,061.50</p><p>3rd $1,573,425.00 $466,650.00 $314,685.00 $106,200.00 $685,890.00 $205,767.00 $480,123.00</p><p>4th $2,622,375.00 $777,750.00 $524,475.00 $177,000.00 $1,143,150.00 $342,945.00 $800,205.00</p><p>5th $3,146,850.00 $933,300.00 $629,370.00 $212,400.00 $1,371,780.00 $411,534.00 $960,246.00</p><p>PAYBACK PERIOD for each 1,000-hectare module</p><p>Payback period is achieved on the 4</p><p>th</p><p>year coming from income and loanrepayments.</p><p>Total funding = $1.7 Million; Total payback on the 5th year = $1,717,905.90.</p><p>YEARGROSS TAX NET FARMS' LOAN AMORTIZATION TOTAL PAYBACK</p><p>REVENUE SAY 30% INCOME PRINCIPAL AMORTIZATION BALANCE TO INVESTORS</p><p>1st $91,452.00 $27,435.60 $64,016.40 $445,000.00 $0.00 $445,000.00 $64,016.40</p><p>2nd $342,945.00 $102,883.50 $240,061.50 $445,000.00 $44,500.00 $400,500.00 $304,077.90</p><p>3rd $685,890.00 $205,767.00 $480,123.00 $445,000.00 $89,000.00 $311,500.00 $828,700.90</p><p>4th $1,143,150.00 $342,945.00 $800,205.00 $445,000.00 $133,500.00 $178,000.00 $1,717,905.90</p><p>5th $1,371,780.00 $411,534.00 $960,246.00 $445,000.00 $178,000.00 $0.00 $2,811,651.90</p><p>6TH $1,371,780.00 $411,534.00 $960,246.00 $445,000.00 $0.00 $0.00 $3,949,897.90</p><p>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</p><p>provide the Investors profitable business as shown in this project proposal.</p></li><li><p>8/3/2019 Jatropha Curcas Farming - Proposal to Investors</p><p> 6/30</p><p>6</p><p>A. - SUMMARY: BUDGETARY REQUIREMENT - see details in the main proposal</p><p>PARTICULARS/DESCRIPTION AMOUNT</p><p>First Year Operation</p><p>1. Capital Outlays $185,000.00</p><p>2. Maintenance and Operating Expenses $51,000.00</p><p>3. Personnel Expenses (Management Staff) $43,200.00</p><p>4. Farm Expenses $485,000.00</p><p>TOTAL FARM AND MANAGEMENT EXPENSES FOR 1,000 HECTARES $764,200.00</p><p>PROCESSING PLANT FOR OIL EXTRACTION - NOT INCLUDED</p><p>Second Year Operation</p><p>1. Capital Outlays $185,000.00</p><p>2. Maintenance and Operating Expenses $51,000.00</p><p>3. Personnel Expenses (Management Staff) $43,200.00</p><p>4. Farm Expenses $485,000.00</p><p>TOTAL FARM AND MANAGEMENT EXPENSES FOR 1,000 HECTARES $764,200.00</p><p>TOTAL BUDGET FOR 2 YEARS OPERATION $1,528,400.00</p><p>PLUS 5% OVERHEAD EXPENSES $152,840.00</p><p>TOTAL BUDGET FOR 2 YEARS OPERATION FOR 2,000 HECTARES $1,681,240.00</p><p>S A Y - - - - - - - - - - - - - - $1,700,000.00</p><p>NOTE:1. Project Management is simplified: all activities relating to seed production</p><p>are the responsibility of the Proponent: All expenses for maintenance and</p><p>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.</p><p>2. All activities relating to oil extraction and processing are the responsibility ofthe Investor.</p><p>FEDERATION OF UPLAND FARMERS COOPERATIVESPuerto Princesa City, Philippines</p></li><li><p>8/3/2019 Jatropha Curcas Farming - Proposal to Investors</p><p> 7/30</p><p>7</p><p>PROJECT PROPOSAL</p><p>JATROPHA CURCAS FARMING FOR SUSTAINABLE LIVELIHOOD,RENEWABLE AND CLEAN SOURCE OF ENERGY</p><p>AND ENVIRONMENTAL PROTECTION</p><p>I - BACKGROUND:</p><p>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.</p><p>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.</p><p>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</p><p>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</p><p>jatropha farming. * land cover PCSD (PTFPP report map on land cover)</p><p>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.</p></li><li><p>8/3/2019 Jatropha Curcas Farming - Proposal to Investors</p><p> 8/30</p><p>8</p><p>II - RATIONALE: Thepoor, that comprises majority of the population, becomesa burden to society because of inequity of opportunities toimprove their quality of life.</p><p>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.</p><p>III - VISION: Empowered people happily harnessing and protecting thenatural resources of their communities for livelihood, and in the process</p><p>grow economically, intellectually and physically healthy to become truly freefrom social bondage.</p><p>IV - OBJECTIVES: Jatropha farming, particularly in the upland areas will:</p><p>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</p><p>become truly free from social bondage.</p><p>4.2. Stop environmental destruction (caused by slash and burn farming) andenhance and protect the natural resources from further degradation.</p><p>4.3. Provide alternative, renewable and clean source of energy to minimizedependence from oil importation.</p><p>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.</p></li><li><p>8/3/2019 Jatropha Curcas Farming - Proposal to Investors</p><p> 9/30</p><p>9</p><p>V - STRATEGY:</p><p>In a nutshell, our strategy is to empower the poor by providing themopportunity to develop their potentials and utilize the resources of their</p><p>communities to make them productive and responsible citizens, and becomeinstrument of progress.</p><p>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.</p><p>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.</p><p>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.</p><p>Continuous training and learning, hard work and dedication, family andsocial responsibility, are indispensible elements for success and</p><p>empowerment.</p><p>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!</p><p>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.</p></li><li><p>8/3/2019 Jatropha Curcas Farming - Proposal to Investors</p><p> 10/30</p><p>10</p><p>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</p><p>other municipalities.</p><p>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.</p><p>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.</p><p>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.</p><p>6.3. Diversified farming with inter-croppi...</p></li></ul>