Can farmers learn business planning? A feasibility study

ARAMAL, SAN FABIAN: Here is Saturnino Distor, General Manager of the Aramal-Tocok Multi-Purpose Cooperative of San Fabian, Pangasinan yesterday, Saturday, 15 March 2014, speaking at the conclusion of the 11-module training program we have been conducting since August 2013 for Agrarian Reform Beneficiaries Organizations (ARBOs) in La Union and Pangasinan. GM Distor is talking about our consultancy services for common service facilities (CSF) for production & processing, agri-technology and agri-extension services within the Agrarian Reform Community Connectivity and Economic Support Services (ARCCESS) Project of the Department of Agrarian Reform (DAR). For all that language, UMIC's part of Project ARCCESS is  market-oriented, meaning the farmers must produce and process for the market and profit from all that.

Specifically, GM Distor is talking about the 3-day Workshop on Cooperative Business Planning held at the ATI Training Center in Santa Barbara on 26-28 February 2014. We of UMIC International sponsored the workshop to provide hands-on one-on-one experience on preparing an agri-business plan, no matter if you didn't call it by that name.

I have already written about the training, I being one of the UMIC consultants, a Training Specialist (see my "Agrarian coops empowered? Ilocos Farmers-Entrepreneurs Training,"(05 August 2013, Nagkaisa, blogspot.com). Yesterday was memorable as it was the last of the training sessions for the Central Pangasinan cluster of ARBOs led by Aramal-Tocok MPC.

UMIC La Union-Pangasinan Team Leader Butchoy Espino had asked GM Distor to share with the participants his experience during the 26-28 February 2014 Santa Barbara workshop, which was attended by 27 officers and members of Region 1 ARBOs under Project ARCCESS. Naturally, UMIC officials, staff and the 4 project teams were there. Also attending the workshop were provincial and municipal staff of DAR, resource persons from UP Los Baños, and representatives of the Sustainable Development Solutions (SDS), which is monitoring UMIC's implementation of its ARCCESS share of services.

In the Santa Barbara workshop, the lead ARBOs were expected to come up with 3 outputs:

(a)   Business plan for the ARBO

(b)   CSF operationalization and management plan

(c)    Farm production plan.

Could you do all that in 3 days? I didn't think so, that's why before that I did a good research on the essentials of business planning myself, all the more to help guide the workshop when and if necessary. That is how in the middle of the workshop, I felt that the workshopppers would be overwhelmed unless we scaled down the expected outputs, and that's when I had the insight that we were going to ask each lead ARBO to prepare a business plan for only 1 machinery, not the whole pool of CSF equipment that they had, that is, any one and not all of these: 4-wheel big tractors, 2-wheel small tractors, combine, thresher, hand tractor (kuliglig), and transplanter.

At the start of the workshop, Ms Maridel Dizon, President of UMIC International, challenged the farmers to be good at their business planning, considering that the ASEAN Free Trade Agreement (AFTA) will become fully operational next year, which means that rice and corn in the ASEAN countries will be freely traded, which further means that if Filipino farmers cannot become efficient in their farming, they will lose to the famers of, say, Thailand and Vietnam, who already are exporting rice to the world, including the Philippines.

AFTA calls for smart, not lazy agriculture. That is to say, if Filipino farmers know their agri but not their business, they stand to lose to business-minded farmers of Thailand, Vietnam, Indonesia, Malaysia, and India, not to mention China. They must not only increase yields but must reduce costs and grab marketing opportunities. Which reminds me: The Chinese introduced rice farming in the Philippines; so why didn't Filipino farmers ever learn from the Chinese about farming as a business?

In the workshop, the 1st resource speaker, from the University of the Philippines Los Baños (UPLB), Professor Normito Zapata Jr of the College of Economics, presented the 10 important components of a coop business plan (with my annotation):

(1)         Background of the business project – Where are you coming from?

(2)         Objectives – What do you want to happen?

(3)         Overview of the industry – Where does your project belong in the scheme of things?

(4)         Profile of the cooperative – Describe your cooperative, especially its strengths.

(5)         Market – Do you know whom you're selling to?

(6)         Operation – How will you go about what you want to happen?

(7)         Organization and management – Who will compose your project team?

(8)         Finance – What about costs & returns?

(9)         Analysis of potential risks and problems – If something went wrong, what would it be?

(10)     Recommendations and future plans – What else needs to be done? What if you failed, or succeeded?

That's as practical as you can get. Your plan tells you what to produce, process and market, and why you have to do what you have to do.

The 2nd resource speaker, Professor Romulo Eusebio, of the UPLB Agricultural Machinery & Testing Center, gave pointers on the proper operation, repair and maintenance of the ARBO pool of farm machines that include all those CSF equipment listed above.

The 2 resource speakers added to what a member of Team La Union-Pangasinan, Dormie del Carmen knew about the subject of business planning. (Our UMIC team is composed of Butchoy Espino as Team Leader, Dormie del Carmen as Crop Specialist, and I as Training Specialist.)

The workshop was on the last 3 days of February. Today is 2 weeks later; about his experience, this is what Santa Barbara workshop participant Aramal-Tocok MPC GM Distor said, more or less:

Let us remember that farming is a business, so we farmers have to learn how to do business. A business plan is actually a feasibility study. Thanks to UMIC, in the Santa Barbara workshop, they invited experts who were very knowledgeable on their subject, so the resource persons and consultants taught us one-on-one how to prepare a business plan for our farming. They were good.

I was particularly worried that those 3 days were not enough for us to do the business plan for our CSF with so many machineries to include, so I'm glad to report that UMIC decided to spread the work by asking each lead ARBO to just work on one machinery or equipment. That made everything doable. We thank UMIC for all that.

The Santa Barbara workshop included participants only from lead ARBOs from Ilocos Norte, Ilocos Sur, La Union and Pangasinan; our team had ARBOs from La Union (Rissing MPC and San Jose MPC) and from Pangasinan (Aramal-Tocok MPC and Atlas-Mabuna MPC). GM Distor was one of the most active workshoppers and one of those who stayed late in the evenings to work on business planning. Indeed, we can look at the workshop as a feasibility study on whether farmers can do business planning, and we found that they can when they put their head and heart to it.

The DAR Project ARCCESS means business; the UMIC consultants mean business; so agrarian reform farmers must mean business – so that we can all succeed together.