CHAPTER 1

AGRICULTURAL ENTREPRENEURSHIP IN RETROSPECT

By: CLODUALDO V. VELASCO

ENTREPRENEURSHIP: WHAT DOES IT MEAN? 

❑ Entrepreneurship is about taking the risks of starting, owning  and managing a

small business  
❑ Entrepreneurship is primarily innovation ; "it is the ability to  create and build
something from practically nothing”, “it is the  process of creating value by putting
together a unique package of  resources to exploit an opportunity”. It is a force that
mobilizes  other resources to meet unmet market demand”,  
❑ Entrepreneurship refers to the ability of an individual to perceive  the kind of
products or services that others need and to deliver  these at the right time, to the right
place, to the right people and  at the right price2  
 
THE ENTREPRENEUR AS A PERSON 
❑ The entrepreneur is viewed as a person who either creates new  combinations of
production factors such as new methods, new products,  new markets, finds new sources
of supply and new organizational forms;  
❑ An entrepreneur is is a person who is willing to take risks; or a person  who, by
exploiting market opportunities, eliminates disequilibrium  between aggregate supply
and aggregate demand, or as one who owns  and operates a business.  
❑ An entrepreneur is a person who has possession of a new enterprise,  venture, or
idea and assumes significant accountability for the inherent  risks and the outcome.  
❑ Entrepreneurial people therefore, are those who are able to perceive  and take
advantage of economic opportunities; innovate and develop  new products and
services; and those who invest their time, money and  efforts to run a business. 

THE ENTREPRENEUR AS A PERSON 

❑ Entrepreneurs are frequently thought to be individuals who discover  market needs and
launch new firms to meet those needs.  
❑ They are risk takers who provide an impetus for change, innovation, and  progress in
economic life3.  
❑ The entrepreneur assumes both the risk and reward for his/her effort.  Practically, he
mobilizes resources to run a business and make money  out of it.  
❑ As opposed to getting a job, an individual is acting as an entrepreneur  every time
he/she becomes involved in a way to independently make  money.  
❑ For a business activity to take place therefore, someone has to mobilize  economic
resources such as land, labor and capital to produce goods  and/or services. The individual
is recognized as the entrepreneur, and  his activity is called entrepreneurship 

COVERAGE OF ENTREPRENEURSHIP 
❑ Entrepreneurship may not be limited to business activities performed by an individual. It  may
be also an undertaking performed by a group of individuals (normally with legal  entity) as in the
case of partnership, corporation or cooperative type of business  organizations.  
❑ Although most entrepreneurs come from the private or household sector,  entrepreneurship
per se is not purely a private undertaking. The government also does  entrepreneurship through
its government-owned controlled corporations (GOCCs) and  public service agencies such as
State Colleges and Universities (SUCs) and Research  Institutions. To augment their
institutional budget, these SUCs and Research agencies  operate various income-generating
projects and commercialize their developed  technologies, respectively to generate internal
funds.  
❑ Commercializing developed technologies and transforming them into business is called 
techno-entrepreneurship. Any income or savings generated from entrepreneurial ventures  of
these institutions are then flowed back to their clienteles through the provision of  additional
school facilities and equipment or for the purpose of improving its research and  academic-
related services.  
❑ The business of operating income-generating ventures for service-enhancement purposes 
by government or non-government organizations (NGOs) is called institutional 
entrepreneurship.  
 
ENTREPRENEURSHIP AND ECONOMIC GROWTH 

❑ Economic development has always been linked to  entrepreneurship.  

❑ The government often sees entrepreneurship as a strategic  intervention that
could accelerate the country’s economic  growth and development..  
❑ The Philippines, like other developing countries, recognizes  the importance of
entrepreneurship as a vehicle and growth  enhancer to speed up its development
process. In its quest to  become a modern and prosperous nation, it is now banking
on  entrepreneurs as catalysts in lifting the economy onto an  upward trail4.  

SOCIO-ECONOMIC CONTRIBUTIONS OF ENTREPRENEUR

❑ Entrepreneurs utilize and mobilize resources for national 

productivity  
❑ Entrepreneurs improve the quality of life of the people 
❑ Entrepreneurs create employment  
❑ Entrepreneurs contribute to more equitable distribution of  income and
therefore ease social unrest.  
❑ Entrepreneurs create backward and forward business linkages.  
❑ Entrepreneurs bring social benefits through the government.   

WHY ENGAGE IN ENTREPRENEURSHIP? 

❑ The primary reasons for becoming an entrepreneur is to make  the world a
better and a meaningful place to live in.  
❑ Secondary reasons include the following:  
⮚Profit- financial gain proportionate to personal achievement 
⮚Independence- power to make own business decision 
⮚Freedom- escape from an undesirable situation
⮚Personal Satisfaction- enjoyment of a satisfying way of life 
⮚Personal Fulfillment- contribution to the community    
   
PERSONAL BENEFITS FROM ENTREPRENEURSHIP 

❑ Successful entrepreneur enjoys a position of prestige in  the community

because of his many contributions to  society especially in terms of providing
jobs to people and  providing needed goods and services. These services are 
equally, if not more important than those performed by  lawyers, doctors,
teachers, or accountants.    
❑ Aside from material profit, entrepreneurs are rewarded by  a sense of
accomplishment for having created something  out of nothing. For many of
them, the psychological  rewards far outweigh the materials ones.  
 
WHAT IS AGRICULTURAL ENTREPRENEURSHIP 
❖ Agriculture or farming is a business. It is similar to other types of business  that requires
management and risk-taking activities. The tools of trade  (production, marketing, finance,
and corporate planning) are equally  interrelated functions of agriculture; hence doing
business related to  agriculture is called Agricultural Entrepreneurship.  
❖ Like any other type of businesses, agricultural entrepreneurship can be  viewed as an
investment, which normally involves factors of production  such as land, labor and capital
including the time and effort of the  entrepreneur. As an investment therefore,  
❖ Agricultural entrepreneurship can be defined as an investment activity that requires both
science and art of mobilizing, utilizing and managing the factors of production to produce
agricultural goods and/or services for the satisfaction of consumers or business clients and
to generate fair return to entrepreneurs’ total investment.

AGRICULTURE AND THE AGRO-INDUSTRIAL AND  SERVICE SECTORS 

The Agricultural Sector is engaged mainly in the cultivation of the soil, planting of
crops,  raising of fish, poultry and livestock, and growing of fruits and forest
products.  Generally, the agricultural sector is composed of four major sub-
sectors, namely:  
 (1) Crop, (2) Poultry and Livestock, (3) Fishery, and (4) Forestry.  
  

The Agro-industrial Sector is composed of agro-industries or enterprises that

process food  and fiber using agricultural products as raw materials. These may
include meat, fruit,  fish, cereal and vegetable processors as well as
manufacturers of feeds, sacks, rubber  and textile processors. The degree of
processing can vary tremendously, ranging from  simple cleaning and grading of
mangoes, milling of rice, to the cooking, mixing and  chemical alternation of a
textured food and non-food items.  
  
The Service Sector includes those enterprises that are involved in the provision of
utilities  (e.g electricity, water, fuel, communication, etc), construction works,
health and  education, financing, transport, warehousing and storage, promotion
and  advertisement, product packaging, wholesale and retail trade, hotels and
restaurants,  research, extension, training and education, and other related
services and social  works 

NATURE OF AGRICULTURAL ENTREPRENEURSHIP 

A. ”On-farm” - covers farming of crops, poultry and   livestock, fishes and forest products  

B. “Off-farm” - covers value-adding activities beyond   farming, which includes food and fiber  
processing, marketing and distribution.   It likewise covers the manufacturing of farm   inputs
and provision of other agriculture-   related services such as financing, storage,   transport and
others.  

ON-FARM AGRICULTURAL ENTREPRENEURSHIP

OFF-FARM AGRICULTURAL ENTREPRENEURSHIP:AGRO INDUSTRIES/FOOD PROCESSING

OFF-FARM AGRICULTURAL  
ENTREPRENEURSHIP:AGRO-SERVICES: Key Elements/Concerns of Sustainable 
Agricultural Entrepreneurship   

 ECONOMIC SUSTAINABILITY 
 SOCIAL SUSTAINABILITY 
 ENVIRONMENTAL SUSTAINABILITY 

⮚ Idealist. The idealist entrepreneur is the most common type of entrepreneur.

He/she  likes innovation and enjoys working on something new or something
personally  meaningful.  

⮚ Optimizer. The optimizer entrepreneur is someone who comes in a close second

and is  content with the personal satisfaction of simply being a business owner.  

⮚ Hard Worker. The hard worker entrepreneur is someone who enjoys putting in long 
hours to build a larger and more profitable business. He/she likes the challenges and 
reaps the most rewards if the business turns out to be a success.  

⮚ Juggler. The juggler entrepreneur is someone who likes the business concept and 
wants to handle everything by himself. They are usually people with lots of energy
and  exist on the pressure of meeting deadlines, paying bills and of course making
payroll.  
TYPES OF ENTREPRENEURS 

⮚ Sustainer. The sustainer entrepreneur is someone who likes the thought of balancing 
work and personal life. Most often, they are those who do not wish the business to grow 
too large where it will cut into their personal life too much.  

⮚ Artisan (or craftsman. The artisan entrepreneur is an individual who has normally 
technical and job experience, but may lack communication skills and managerial training. 
A mechanic who starts an independent auto repair shop, a factory worker who operates a 
village-based meat processing business, a fish vendor who establish his/her own supply 
chain, or a former hog farm laborer putting up his own piggery are typical examples of 
artisan entrepreneurs.  
⮚ Opportunistic. The opportunistic entrepreneur is an individual who supplements his/her 
technical knowledge and experiences with trainings or extra studies of non-technical  subjects
as economics, law, business, accounting or management. An example of  opportunistic
entrepreneur is a small fruit processor who adopts a relatively sophisticated  approach to
management, including detailed accounting and budgeting, internet access,  and systematic
consumer survey or market research. He/she uses systematic  management procedures
resembling a “scientific” approach.  
  
TYPES OF ENTREPRENEURS 
 
REQUISITE FOR ENTREPRENEURSHIP   
❖Entrepreneurial Drive  ❖Entrepreneurial Capability  ❖Entrepreneurial Risk Bearing Capacity 
❑ Commitment and Determination- entrepreneurs are tenacious, decisive and  persistent in
problem solving;  
❑ Leadership- entrepreneurs are self-starters and team builders and focus
on  honesty in their business relationships;  
❑ Opportunity Obsession- entrepreneurs are aware of market and
customer  needs;  
❑ Tolerances of Risk, Ambiguity and Uncertainty- entrepreneurs are
risk  takers, risk minimizers and uncertainty tolerators;  
❑ Creativity, Self-reliance, and Adaptability- entrepreneurs are open-
minded,  flexible, uncomfortable with the status quo, and quick learners;
and  
❑ Motivation to Excel- entrepreneurs are goal oriented and aware of
personal  strengths and weaknesses.  

Professor’s Note: 

“Entrepreneurship is not only about taking risks;  

it is also about mitigating  and managiNg risks”.

CLASS ACTIVITY NO. 1 

Please watch different agribusiness websites in the  internet that showcase latest innovations and 
technologies in agriculture, food processing and  marketing. You may Google and/or watch YouTube 
and list down at least 5 business prospects that  capture your interest as a young entrepreneur and 
future agribusiness graduate of CLSU. Do not forget  to specify in your report the reason why you 
choose each and what is the file name, program  title or website that you used as reference in 
complying with your activity No. 1.    

DUE DATE: MARCH 15, 2021

CHAPTER 2: PREPARING YOURSELF FOR A BUSINESS

WHATA IS BUSINESS?

❑Business pertains to all the work involved in providing people with goods and services for a
profit. 

❑ Profit, simply put, is the money leftover from all sums received from sales after expenses has
been deducted. 

❑ The element of profit is the foundation of our economic system. It is indeed, the whole point-
the “bottom line” for most businesses and enterprises1. 

❑ Business firms however operate not totally for profit to have economic sustainability. They
have also certain social and environmental responsibilities that often conflict with the profit
motive; hence, the social sustainability and environmental sustainability of any business are
equally important.

FORMS OF BUSINESS ORGANIZATION

❑ Sole proprietorship- is a business owned by just one person. 

❑ Partnership- is a legal association of two or more persons who acts as co-owners of

the business. It combines the skills of several people, each of whom has a direct interest
in the success of the business. Partnerships combine the talents of several partners and
often enjoy good profits. 

❑ Corporation- is an artificial person with unlimited lifespan, empowered by a state to

carry on a specific line of business, owned by shareholders or stockholders who are
liable for damages only to the extent of their holdings. 

❑ Cooperative- is an association of people or small companies with similar products,

services, or interests, formed to obtain greater bargaining power or gain from larger
economies of scale.

BASIC DISTINCTION

Form of   Chief   Advantages  Disadvantage

Organization Characteristic 

Sole   Single owner; no legal  Little capital needed  to Talent pool restricted; 
Proprietorship  requirements. begin; owner in  complete liability unrestricted;  credit
control, and  benefits from   difficult to  obtain; business
flexibility, secrecy  and tax had  unlimited lifespan
savings.

Partnership At least two owners;  Easy to form; can  bring General partners have 
written agreements together many  skilled unlimited liability;  ever-
usual   persons; good  credit present danger of  conflict
 though not necessary. obtainable. between  
partners; built-in size 
limitations; lifespan 
somewhat limited

Corporation May have few or many  Owners have limited  Public disclosure  often
owners (stockholders);   liability; has   required; cost of 
incorporated by law investment liquidity;  has incorporation can be  high;
under   unlimited life span heavy tax  
formal charter with burden on small  
bylaws. corporation.

Cooperatives Association of several  Increase bargaining  power; Conflict of interest  among

person or companies tax-exempt  and benefits members is  common; non-
with  common bond of from  economies of scale;  service  patronage may lead
interest  better credit   to  organizational failure. 
opportunities;
members receive  patronage
refund.

SIZE OF BUSINESS ENTERPRISE

SIZE OF ENTERPRISE NO. OF EMPLOYEES TOTAL ASSET

A. MICRO 1-9 Less than P3.0M
B. SMALL 10-99 Greater than P 3.0 M up to P
15.0 M
C. MEDIUM 100-199 Greater than P 15.0 M up to P
100.0 M
D. LARGE 200 and above Greater than P 100.0 M
Adapted from Barangay Micro Business Enterprise (BMBE) 2002

ORGANIZATIONAL BUSINESS ARRANGEMENT

•Joint Ventures •Franchising Operations •Contract Arrangements •Horizontal Integration •Vertical

Integration •Diversification •Merger •Supply Chain.

Joint venture is an approach where two or more companies establish a new company to pursue a
mutual goal. It can be in the form of technical partnerships, in which one company buys a chunk of
another’s stock so that the two can team up on new technologies and product. The other form is
through syndicates where companies form temporary associations of two or more firms for mutual
investment

Contract Growing is being resorted to by an established processing firm with individual farmers or group
of small farmers to ensure quality, volume and reliable supply of raw materials.  This is also done to
escape from the high cost involved in developing and maintaining farms.  Moreover, because of social
considerations, contract growing is resorted to by some firms to assist small farmers by providing them
financing and technological assistance, and an assured market outlet for their produce at relatively
acceptable prices.

Contract Marketing is being resorted to by individual farmers or group of small farmers (with limited
access to market) with an established marketing firm (or several marketing firms) by entering into a
marketing contract with an established processing firm for them to supply the raw material needs of the
processing plant. The farmers to assure themselves of a market for their produce, and assure
themselves of favorable earnings because purchase price is being stipulated may do contract marketing.

Contract Processing is practiced by export traders that have access to export market information (more
specifically product information).  It is also being practiced by several established domestic marketing
firms who would rather contract processors than put up their own processing plants.  Contract
processing is being resorted to by several marketing firms because of the high cost involved in putting
up processing plants and the technical expertise involved in processing. One disadvantage of this set-up
(from the point of view of the marketing firm) is when the processing plant decides to produce the same
product (s) and do their own marketing.

Some notes on contract arrangement

Any of the contract arrangements will be viable only (in the long run) if the terms and conditions and
financial benefits are favorable to both contacting parties.  Otherwise, contract arrangements will
never materialize.

Franchising is a marketing system involving a legal agreement, whereby the franchisee conducts
business according to terms specified by the franchisor.  The franchisor is the party in a franchise
contract that specifies the methods to be followed and the terms to be met by the other party. The
franchisor lends his trademark or trade name and a business system to his franchisee.  The franchisee
on the other hand, is an entrepreneur whose power is limited by a contractual relationship with a
franchisor. He pays royalty and often an initial fee for the right to do business under the franchisor’s
name and business system.

Horizontal Integration is an enterprise growth and expansion strategy that involves the grouping
together of association or business units with similar business activities under the control of the same
firm or management. The main motive of this approach is to expand the business coverage to larger
service areas. Horizontal integration may also refer to the “acquisition of additional business activities
at the same level of the value chain.  Horizontal growth can be achieved by internal expansion or
external expansion through mergers or acquisition of firms offering similar level of activity with the
same products or services”.

ADVANTAGE OF HORIZONTAL INTEGRATION

Accessibility to the use of more capital;  Broader service and/or market coverage;  Better quality
control;  Better scheduling of production and marketing;  Elimination of competitive wastes 
Improved business practices; and  Broader source of inputs.

Vertical Integration is a growth and expansion strategy that focuses on the extension by an association
of business activities (either backward or forward integration) to another stage of operation.  In
agribusiness, this involves the addition of services in the subsequent or successive stages in the process
as in the movement or flow of the product from the farm to the table.  “The degree to which a firm
owns its upstream or downstream buyers (or suppliers) is referred to as vertical integration”.

ADVANTAGE OF VERTICAL INTEGRATION

 Prevents duplication and competition of functions  Reduces cost through better and more
economical utilization of factors of the production;  Effective coordination and control of agribusiness
activities or units;  More efficient and orderly flow of commodities from the producers to the buyers; 
Better utilization of by-products;  Assured market outlets and input source  Higher productivity and
profitability.

Diversification is and expansion and growth strategy that involves the broadening of the range or
services specifically by adding new lines of service.  It involves adding product, services, location,
customers and markets to your company’s portfolio.  ”Diversification is closely related to horizontal
integration. In fact the two processes are complimentary and one strengthens the other.  In a way but
not necessarily, diversification may also be viewed as conversion of a specialized agribusiness firm into a
multi-purpose type.

ADVANTAGE OF DIVERSIFICATION

 Increased volume of business and higher opportunity to earn profit;  Effect economy in operations
through reduced overhead costs per unit.  Reduced risk of failure since other business units can offset
the losses incurred by the other units.

MERGER-  Although companies commonly expand from within, in many instances companies choose
to acquire other companies as a means of growth. The most common form of acquisition is the sale of
one company to another company, with the purchasing company remaining dominant. This form of
business combination is called merger.

Merger has different forms, namely:  (1) Horizontal Merger,  (2) Vertical Merger, and  (3)
Conglomerate Merger.

Horizontal merger, which is similar to horizontal integration, is the combination of competing

companies performing the same functions.  The purpose of which is to achieve economies of scale and
to prevent cutthroat competition.

Vertical Merger, which is similar to vertical integration, is an approach wherein a company involved in
one phase of business operation absorbs or joins a company involved in another phase of that business.
 The aim of vertical merger is to guarantee a supplier or a customer and/or ensure supply of inputs or
ensure sales of output of merging companies.

Conglomerate mergers- The union of two or more companies whose operations are unrelated is called
Conglomerate Merger.  Conglomerate mergers offer tempting benefits:  massive expansions of
market  consolidation of management, and  better chance in foreign markets.

SUPPLY CHAIN

A supply chain is “the network of vendors, distributors, manufacturers (or producers), retailers and
other entities that are directly and indirectly linked for the purpose of serving the same customer.  This
inter-connected and synchronized chain allows services and products to reach a large number of
consumers, both nationally and internationally.  ”The supply chain can be also called the “value chain”
since as the commodity goes up the “ladder”, there is an expected “value-adding activity.

Supply-chain management includes managing supply and demand, sourcing raw materials and parts,
manufacturing and assembly, warehousing and inventory tracking, order entry and order management,
distribution across all channels, and delivery to the customer11 .  Effective and efficient vertical
coordination or corroboration among industry players is actually the essence of supply chain
management.

SUPPLY CHAIN FRAMEWORK DRAW

SOME NOTES ON VARIOUS GROWTH AND EXPANSION STRATEGIES

Vertical and horizontal integration requires huge capital investments, especially if one firm will
shoulder everything. Current practice of many agribusiness firms is to instead integrate with other
agribusiness firms (e.g. cooperatives, trade associations, processing plants, input suppliers, etc) to
escape from the huge capital outlay or fixed asset investments.  Horizontal integration usually
proceeds from and is the basis of vertical integration. It has been utilized more extensively by
agribusiness firms than vertical integration to broaden market or service coverage.  Horizontal
integration is usually achieved through federation of agribusiness firms with similar nature of operation.
Horizontally integrated firms normally have better competitive advantage than an individual firm. 
Diversification and horizontal integration usually go hand in hand and the former strengthens the
other.  Too much vertical integration usually demands a more complex management and requires
more capital support.  Combination of vertical and horizontal integration gain more competitive
advantages than adopting only a single approach.  The successful setting up and formation of
countryside agribusiness enterprises always require a careful examination of the following:

•Markets for raw and processed agricultural commodities as well as forest and sea-based resources.
•Availability of matured agricultural and agro-industrial technologies which can be adopted at the small
farmers’ and entrepreneurs’ level. • Viability of Farmer’s Organizations and their interface with local
trade and industry association. • Financing sources, revenue generation and capital build up mechanism.
• Availability of support services and infrastructure projects from the government. • Business
networking of small agricultural enterprises with multi-national firms. Short and long-range vision of the
farmer-entrepreneurs.

STARTING YOUR BUSINESS

A. Preliminary Activities

 Conduct environmental scanning - Identify environmental/business opportunities

 Assess yourself and your enterprise - Identify your enterprise’ strengths and weaknesses

 Decide what to do - What product or service to offer? - What innovation or improvements should be
done to tap the business opportunities? - Rationalize or justify what business would you like to do.

B. Actual Planning Activities

 Study your market  Set your marketing plan  Prepare your production and/or technical plan 
Prepare your organization and management plan  Prepare your financial plan  Decide where the
money to finance the business will come from  Estimate the expected earnings and expenses of the
proposed business over the years  Estimate expected cash receipts and cash disbursements and
determine the adequacy and timeliness of cash flows of the business over the years  Assess the overall
viability of your proposed business  Decide whether to reject or implement your business proposal.

WHAT IS AN ENTREPRENEURAL OPPORTUNITY?

Entrepreneurial opportunity is an economically attractive and timely opportunity that creates value for
prospective customers and the firm’s owner alike, which involves much more than merely having a good
business idea.

 To capture an entrepreneurial opportunity requires critical resources; (1) people, such as suppliers,
customers, accountants, lawyers, and board members; (2) assets, such as inventories, equipment, and
buildings; and (3) the needed capital to finance the venture. “An entrepreneur needs to be creative
and resourceful in gaining control of these resources.”

AGRIBUSINESS OPPORTUNITIES WITH INVESTMENT PROSPECTS

Among the agricultural commodities that have bright market prospects are:  Beef and dairy cattle 
Goat meat and milk  Hogs and poultry (including the native chicken),  coffee, calamansi, coconut,
sugar, banana, mango, papaya, pineapple, bangus, hybrid rice and some vegetables, including
“malunggay” because of the health benefits derived from it.

• Meat and Poultry • Biscuits • Animal Feeds • Fruit Juices • Veterinary Products • Ice Cream and frozen
Novelties • Freshwater Fishes • Confectionaries • Snack Foods • Food Mixes and Condiments • Noodles
and Pastas • Fast foods

SOURCES OF CAPITALIZATION FOR AGRICULTURAL ENTREPRENEUR

 Outside Equity  Retained Earnings  Shared Ownership  Strategic Alliances/Networking  Parental

or Family Financing  Local Banks  Government Institutions or Programs:  Young Farmers Program
(YFP)  Quedan and Rural Credit Guarantee Corporation (QUEDANCOR)  Agricultural Competitiveness
Enhancement Fund (ACEF).

Young Farmers Program (YFP)

• It aims to assist young agricultural entrepreneurs and graduates of fisheries and agriculture to instill
among young graduates the dedication and commitment to the development of agriculture and
fisheries.

• It endeavors to equip them with appropriate technical skills, provide production and marketing
support and assist them in capital formation with the hope that they may contribute to nation’s food
security, generate employment and help the sector face the challenges of globalization.

• Also, in response to AFMA, it has the theme of turning agriculture and fisheries graduates into
entrepreneurs and viable partners in modernization.

Quedan and Rural Credit Guarantee Corporation (QUEDANCOR)

It is one of the leading supporters of the Young Farmers Program6. It currently offers financing
assistance to existing, new or startup agribusiness projects. This involves crops, livestock, fisheries,
aquaculture, processing, operation and management of agricultural machinery and equipment, post-
harvest facilities, and other agribusiness projects.

HIGHLIGHTS OF THE QUEDANCOR AND YOUNG FARMERS PROGRAM

•Who are the Eligible Borrowers?

• Graduates of Agriculture/Agribusiness courses who are presently unemployed;

• College graduate of any course who are currently engaged in agribusiness; and

• Un-enrolled college undergraduate currently engaged in agri-fishery projects/activities.

General Eligibility Requirements

• Must be 18-38 years old  Must be identified/indorsed by the Regional Agriculture and Fishery
Council (RAFC) Selection Committee and/or other participating government agencies

• Must be experienced/knowledgeable about and/or willing to undergo training on the project;

• Must have undergone technical briefing/training by concerned government agencies, if necessary;

• Must have attended the Values Orientation Seminar; and Must pass QUUEDANCOR’s Background and
Credit Investigation.

What Project is Eligible?

• Crops, livestock, fisheries and aquaculture production and processing;

• Operation and management of agricultural machinery, equipment and postharvest facilities

THE QUEDANCOR AND YOUNG FARMERS PROGRAM LOAN DETAILS

Amount of loan - Equivalent to 60% of the total project cost but shall not exceed P300,000 per
borrower. The project shall be funded as: (a) Loan from QUEDANCOR (60%); (b) Grant portion from YFP
(25%); and (c) Borrowers Equity (15%).

Terms of Payment - Working capital loan is payable within three years inclusive of one year grace
period; loan intended for acquisition of facilities, machinery and equipment is payable within five years
inclusive of one year grace period; and loan intended for construction/upgrading of warehouses and/or
other agrifishery facilities is payable within seven years inclusive of two years grace period. Fruit crops
or other high value crops with long gestation period is payable within eight years inclusive of four year
grace period. A longer term or grace period may be recommended, depending on the project

Interest Rates - Interest on loan is 4.75% flat rate for production loans below 6 months; 9.5% per annum
for production loan above 6 months; and 9.5% per annum for working capital, acquisition/upgrading of
facilities, machinery and equipment; and construction or upgrading of warehouse and/or agrifishery
facilities.

Mode of Payment - Loan can be paid semi-annual, annual or depending on the cash flow of the project.

Manner of Release - Loan releases can be in the form of cash or through Purchase Order (P.O) and/or
Job Order (J.O); in full or in tranches as determine by QUEDANCOR-CAG. The loan portion shall be only
released after the grant portion has been released by DA-NAFC.