Business Proposal

for an Onion Farm

Prepared by Jonathan Froi Llapitan Capulong

Prepared for:

Department of Agriculture-Region III

Executive Summary
This report was prepared as a requirement for the Department of Agriculture program entitled,
‘Young Agripreneurs Loan Program (YALP).’ As quoted from DA Secretary William Dar, “We
have to replace aging farmers with younger blood – our Pinoy millennials – who are the future of
Philippine agriculture.”

My project is in response with what Secretary Dar mentioned during his interview about the
monitoring of garlic and onion production in our country, “We must define and operationalize
medium- to long-term strategy that will, among others, provide the necessary support and
counterfunding with organized farmers’ groups, accredited importers and traders, and local
government units.”

The project involves starting an onion farm which is a basic cooking necessity in every
household. Because of this, it is certain that the market value is stable as it is widely used.
Having a farm that produces onions locally will also make sure that the demand and supply ratio
is being balanced. This is to avoid importing the product from nearby countries that will severely
impact the local farmers and our local economy.

Because of the abovementioned points, when it comes to the financial forecast of my project, it
will be assured that this is a long-term type of a plan and it will yield fruitful results.

This business proposal will give the needed information on how having an onion farm will help
our local agriculture and provide jobs to people who are in need.

Market Analysis and Opportunity

For 2018-2019 cropping season that is not shown on the table, local farms produced 240.2
thousand metric tons but there was still an importation of the crop specifically the yellow variety
for a total of 11.4 thousand metric tons.
The problem in production arises when the farmers cannot keep up with the demand perhaps due
to natural disasters or they may lack the capital to continue with the operation that is why it is
essential to have another onion farm that would back up or serve as a buffer.

In this case, I am planning to lease a four-hectare land that is expected to yield about 12 000
kilograms of onions per hectare and we will adopt one cropping season per year. There are two
types of bulb onion grown in the Philippines; the yellow and the red onion. As such, the two
hectares shall cater to the yellow variety and the other two will be for the red variety or
depending on the demand, the allocation of land to the variety could change.

Financial Plan
To fully execute the plan, I will be needing 500 000 pesos to launch the project and to make sure
it will be maintained.

The land target shall be in Talavera, Nueva Ecija that is near Sangitan, Cabanatuan City NE
which is the target market area thereby lessening transport cost of the goods. The cost of the
lease would be 20 000 per hectare per cropping season. In total, it would amount to 80 000 pesos
per year.

Labor cost and materials (seeds, fertilizer, etc.) would cost a total estimate of 100 000 pesos per
hectare. The breakdown of the cost is shown below:

ESTIMATED COST PER HECTARE OF ONION

A. Labor (P250/MD); (P300/MAD)

Seedbedding Seedbed preparation (5 MD) 1,250

Plot preparation (3 MD) 750

Seed sowing (2 MD) 500

Collection & placement of rice hull on plot (5MD) 1,250

Care & maintenance of seedlings (2MD) 500

Weeding of seedbed (5 MD) 1,250

 Daily watering of seedbed (5 MD) 1,250

Plowing (3 MAD) 1,050

Harrowing (2 MAD) 600

Manure application (10 MD) 2,500

Pulling of seedlings (10 MD) 2,500

Planting (15 MD) 3,750

Irrigation (15 MD) 3,750

Side dressing (10 MD) 2,500

Spraying (20 MD) 5,000

Weeding (20 MD) 5,000

Harvesting (10 MD) 2,500

Miscellaneous activities (20 MD) (bagging, cleaning, sorting,final bagging) 5,000

Sub-Total: 40, 900.00

B. Materials

Seeds (400 kgs) 15,000

Animal Manure (100 bags) 15,000

Fertilizer:

14-14-14 (3 bags) 5, 400

16-20-0 (2 bags) 5,400

0-0-60 (3 bags) 4,600

Urea (1 bag) 1,400

Chemical sprays 5,000

Fuel and oil 5,000

Miscellaneous activities (10 MD) (harvesting, hauling, etc.) 2,500

Sub-Total P59,300.00

Grand Total P100, 200.00/hectare

RETURN ANALYSIS

Philippine Star reported on January 3, 2020 that the red onions are at a high of 195.00 pesos per
kilo for wholesale. In retail, prices range from 180 to 250 pesos per kilo. This only shows the
high demand because of its price.

If we will adjust the rate for farmer to market price, the following would be achieved for the
gross and net income:

P20.00/kilo x 12 000kg/ha x 4 = P960, 000.00 (Gross Income)

P960, 000.00 – P480, 800.00 = P479,200.00 (Net Income)

The numbers show a great return of investment and the loan could be paid much sooner
than the provided plan.

Onions should always be available to every Filipino who loves to cook and every household
that needs it as an alternative medicine. This project will make it happen.

Online sources cited:

http://rfo02.da.gov.ph/2020/01/31/da-young-agripreneuers-to-get-up-to-500k-php-loan-with-0-interest/

https://pia.gov.ph/news/articles/1033292

https://psa.gov.ph/sites/default/files/Marketing%20Cost%20Onion.pdf

https://www.philstar.com/business/2020/01/03/1981794/philippines-import-red-onions-amid-high-prices